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VMware’s Virtualization Empire:

Rise, Upheaval, and What Comes Next

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From Pioneer to King of Virtualization

VMware was founded in 1998 with a bold idea – virtualizing the x86 computer architecture. In the early 2000s, VMware introduced its ESX hypervisor and vMotion, making it possible to run multiple virtual machines on one physical server and even move running VMs between hosts (PlanB, n.d.). This was revolutionary in an era when data centers ran “one application per server,” resulting in low hardware utilization and sprawling server farms (U.S. Environmental Protection Agency [EPA], n.d.). By virtualizing servers, VMware enabled massive consolidation: companies could replace dozens of underutilized physical machines with a few hosts running many VMs, slashing hardware and energy costs. IT teams embraced VMware for the newfound agility – deploying servers in minutes, improving disaster recovery, and achieving high availability without dedicated hardware (PlanB, n.d.; EPA, n.d.). VMware quickly became the industry standard for virtualization, essentially the “cornerstone of modern infrastructure” in enterprise IT (PlanB, n.d.).

As the first commercially successful x86 virtualization company, VMware gained a dominant market position. By the late 2000s, analysts reported that most large enterprises had virtualized the majority of their workloads, with Gartner noting that by 2016, enterprises typically had more than 75% of workloads running on virtual machines (EPA, n.d.). Industry reports also suggested that over 80% of enterprise workloads overall were virtualized by the late 2010s, underscoring VMware’s central role in the market (Market.us, 2023). Competitors like Microsoft (with Hyper-V) and open-source hypervisors (Xen and KVM) eventually emerged, but VMware’s feature set and reliability made it the gold standard. Organizations large and small adopted VMware vSphere to cut costs and improve uptime. In short, VMware’s innovation transformed the IT industry: virtualization became ubiquitous, paving the way for today’s cloud computing. The company’s success also made it an attractive asset, leading to a series of corporate ownership changes in the decades that followed.

Changes in Ownership: EMC, Dell, and Broadcom

VMware’s journey to the top also involved changing owners and corporate parents. In 2004, storage giant EMC acquired VMware for $625 million, though VMware continued to operate relatively independently (EMC, 2004). Under EMC, VMware kept innovating (introducing tools like vCenter management and new features like fault tolerance) and held a successful IPO in 2007. Fast forward to 2016, EMC (and by extension VMware) was acquired by Dell Technologies as part of Dell’s massive $67 billion EMC purchase. Suddenly, VMware was part of a hardware company, raising concerns among some partners – but Dell largely allowed VMware to run as an independent software firm. In fact, products like Dell VxRail appliances combined Dell servers with VMware’s software, showcasing the synergy of the merger (Furtado, 2021).

However, by 2021 Dell decided to spin off VMware as an independent company again. This spin-off unlocked value (VMware’s valuation was higher outside of Dell’s umbrella) and allowed VMware more freedom in partnerships and acquisitions (Furtado, 2021). Dell, for its part, wanted to reduce debt from the EMC deal and focus on its core business, while maintaining a close strategic alliance with VMware in sales and support. Michael Dell emphasized that the companies would remain “full speed ahead” as partners in areas like multi-cloud and edge computing despite the separation (Furtado, 2021). Indeed, VMware’s business was thriving around this time – it had a strong share of the virtualization market and was expanding into new arenas (like Kubernetes container platforms and multi-cloud management) to address changing IT trends.

The biggest shake-up came in 2022–2023 when Broadcom announced and completed its acquisition of VMware for a staggering $61–$69 billion (Compass Lexecon, 2023; Vogel, 2024). Broadcom, a semiconductor and infrastructure software conglomerate led by CEO Hock Tan, had a history of buying enterprise tech firms (CA Technologies in 2018, Symantec’s enterprise division in 2019) and aggressively streamlining them for profit. The VMware purchase closed in November 2023, after which VMware was folded into Broadcom’s software division (rebranded as “VMware by Broadcom”) (Vogel, 2024). This marked the start of a new era – one that has brought significant changes to VMware’s strategy, products, and relationship with customers.

Broadcom’s Strategy: From Perpetual Licenses to Price Hikes

Broadcom’s takeover of VMware has been nothing short of transformative – and controversial. Immediately, Broadcom began reshaping VMware’s business model and product offerings in ways that sent shockwaves through the IT world. One of the first major moves was ending VMware’s perpetual licensing model in favor of all-subscription licensing (Vogel, 2024; Hale, 2024). In fact, VMware announced it would no longer renew support for existing perpetual licenses after December 2023, effectively forcing customers to convert to subscription if they want continued updates and support (Vogel, 2024). Selling standalone perpetual licenses for individual products also ceased – instead, VMware (now under Broadcom) introduced new bundled subscription suites (like an all-in-one VMware Cloud Foundation package) as the only way to purchase VMware going forward (Vogel, 2024).

For many longtime VMware customers, these changes meant sudden price shocks. By eliminating pay-as-you-go and perpetual options and requiring multi-year subscriptions, Broadcom reportedly increased VMware licensing costs by 8x to 15x (800%–1500%) for many organizations (Hale, 2025a). Hale (2025a) cites the European Cloud Competition Observatory (ECCO) likening the new pricing to “paying for full, continuous usage regardless of actual consumption”. Some customers found themselves forced into three-year contracts paid upfront, even if they previously had flexible arrangements (Hale, 2025a). On social media, IT admins shared horror stories – one cited a 6600% cost increase, another said their VMware renewal quote jumped from $8 million to $100 million (Maddison, 2024; Hale, 2025a). Such examples, while extreme, underscore the sticker shock felt by many. Broadcom also killed some free or entry-level offerings, even reportedly axing the free ESXi hypervisor edition that labs and smaller shops used (Maddison, 2024).

Broadcom justified these changes as “simplification” and industry-standard practice. The company argues that subscriptions provide more value over time and that bundling products streamlines the portfolio (Hale, 2024; Gross, 2025). Indeed, VMware had signaled a shift toward subscription/cloud offerings for years, but customers never expected a forced march quite this abrupt. Broadcom’s “value-driven” spin did little to calm nerves, and even Broadcom’s CEO Hock Tan acknowledged “some unease” among the customer base about the new model (Hale, 2024). Nonetheless, Broadcom’s early financial results suggested success – by late 2024, infrastructure software revenue (including VMware) was surging, and Tan credited VMware for contributing to strong 20%+ growth (Hale, 2025e). In Broadcom’s view, customers were grudgingly accepting the new normal.

The Drive Behind VMware’s Changes

Why is Broadcom overhauling VMware so dramatically? The motives are a mix of financial strategy and adapting to broader tech trends. First and foremost, Broadcom paid about $61–69 billion for VMware, one of the biggest tech acquisitions ever (Compass Lexecon, 2023; Vogel, 2024). To justify that price, Broadcom is leveraging its playbook of boosting profitability. In past acquisitions, Broadcom famously slashed costs and raised prices to increase margins – it appears to be doing the same with VMware. By pushing high-margin subscription bundles and cutting lower-margin offerings (and likely reducing VMware’s internal R&D and sales overhead), Broadcom aims to turn VMware into a cash cow. Industry observers noted that Hock Tan’s strategy “strips out layers of cost” even at the expense of customer goodwill (Hale, 2024). In VMware’s case, ending channel partner payouts and focusing on direct sales to big accounts was one such cost-cutting move (more on the partner backlash shortly).

Another driver is the broader software industry trend of subscriptions and cloud-based delivery. Many software giants (Microsoft, Adobe, etc.) have transitioned from selling perpetual licenses to recurring subscription models – Broadcom is positioning VMware to follow this trend, albeit in an aggressive manner. Broadcom argues that this is simply bringing VMware in line with “industry-standard pricing models” and that customers will benefit from continuous access to the full VMware stack (Gross, 2025). Additionally, Broadcom saw VMware as a strategic entry into the enterprise hybrid-cloud market. VMware’s technology spans on-premises data centers and public clouds, which fits Broadcom’s vision of offering end-to-end infrastructure solutions. By bundling VMware’s compute, storage, and networking virtualization (vSphere, vSAN, NSX) into one Cloud Foundation package, Broadcom hopes to make VMware’s platform even stickier – a one-stop solution for multi-cloud IT (Hale, 2024; Gross, 2025).

Finally, it’s worth noting that VMware also faced pressure from new computing paradigms like containers and cloud-native apps. Even before Broadcom, VMware had been expanding into Kubernetes (with its Tanzu portfolio) and offering VMware-on-cloud services, because the traditional vSphere business was maturing. The Broadcom regime has doubled down on core big enterprise customers (who still rely heavily on VMs) and on integrating VMware’s numerous products into a cohesive platform. In doing so, however, they have de-emphasized or sold off some side divisions – for example, Broadcom plans to sell VMware’s End-User Computing (EUC) business (virtual desktop and mobile tools) to private equity firm KKR for $3.8 billion (Maddison, 2024). VMware’s security product Carbon Black is being folded into Broadcom’s existing Symantec division (Vogel, 2024). These moves show Broadcom concentrating on VMware’s core data center and cloud infrastructure offerings and shedding the rest. It’s a very different approach from VMware’s past “growth mode” under EMC/Dell, and it has profound consequences for customers.

Fallout for Customers: Backlash and Legal Battles

The response from VMware’s customer base to Broadcom’s changes has been mixed – ranging from reluctant acceptance to outright rebellion. On one end, many large enterprises have felt they have no choice but to stay the course. VMware’s software often underpins mission-critical operations – for example, according to Hale (2025c), UK retailer Tesco runs ~40,000 server workloads on VMware to power everything from point-of-sale systems to back-end servers. Replacing VMware in such environments is no trivial matter (we’ll discuss the challenges shortly). TechRadar Pro further explains that Broadcom touts that 87% of VMware’s top 10,000 customers have already signed up for the new VMware Cloud Foundation subscriptions, implying that most big clients have, however grudgingly, gone along with the new licensing (Hale, 2025e). Indeed, Broadcom has been keen to lock in top accounts to multi-year deals quickly.

On the other end, there has been significant backlash, especially from customers who feel burned by broken promises. Several organizations have taken the fight to court (Hale, 2025c). Notably, Tesco sued Broadcom in 2025 for breach of contract, seeking £100 million in damages. Tesco had purchased VMware licenses in 2021 with five years of support (to 2026) and an option to extend – but Broadcom’s policy change meant that support was cut off at the end of 2023, in violation of the original contract. Tesco argues it is being forced to “pay excessive and inflated prices for software for which [it] has already paid” due to the subscription shift. Importantly, Tesco’s lawsuit warns that losing VMware support could disrupt its operations (hence the urgency for damages or a remedy). And Tesco isn’t alone – telecom giant AT&T, Germany’s Siemens, and others have reportedly filed similar suits over VMware’s retired perpetual licenses (Hale, 2025c). Beyond lawsuits, customer outrage has surfaced in public forums and through industry channels. European cloud associations and regulators have taken note. In Europe, the CISPE (Cloud Infrastructure Services Providers) group filed an official complaint with the EU, alleging Broadcom’s VMware takeover and licensing practices are anti-competitive (Hale, 2025c). A German IT users’ association (VOICE) also lodged a complaint with the European Commission, highlighting the punitive nature of VMware’s new terms (Hale, 2025c). These groups point out that cloud providers and hosting firms who built services on VMware are now facing massive cost increases, threatening their viability (Hale, 2025c). According to ECCO’s report, some European cloud providers had decade-long VMware contracts that Broadcom abruptly terminated, leaving them scrambling to sign new, far more expensive deals or risk service outages (Hale, 2025a). CISPE’s Secretary General blasted Broadcom for showing “no interest in finding solutions” and taking an “increasingly litigious approach” toward customers and partners (Hale, 2025c).

Channel partners – the consultancies and resellers that implement VMware for clients – have also felt the squeeze. Broadcom initially moved to eliminate VMware’s traditional partner program, aiming to deal directly with the top 2,000 customers and cut out middlemen (Vogel, 2024; Hale, 2025d). This sent smaller VMware partners (and their mid-market customers) into panic, as many received termination notices (Hale, 2025d). One report described it as a major “channel partner shake-up” that would be “bad news for smaller firms” dependent on those resellers (Hale, 2025d). If a customer’s long-time VMware provider was not invited to Broadcom’s new, consolidated partner program, that customer could suddenly lose support resources and face service interruptions or renewal hassles (Hale, 2025d). Facing backlash, Broadcom partially walked back this approach in late 2024 – it announced it would reverse course and keep 1,500 of the top 2,000 accounts with partners, only selling direct to about 500 of the largest customers (Hale, 2024). Broadcom even offered a 15% services rebate on VMware contracts to encourage partners to stay engaged and help customers transition to the new bundles (Hale, 2024). This U-turn was effectively an effort to stop a customer exodus by leveraging partners’ ability to offer discounts or value-add services (Hale, 2024). Analysts viewed it as a necessary concession – Broadcom had realized alienating the broader channel was driving some clients to consider leaving VMware entirely (Hale, 2024).

Despite these attempts to smooth things over, customer satisfaction has clearly been dented. A Gartner analyst remarked that under Broadcom, VMware has become widely seen as “too expensive and pervasive to replace” – likening it to a new mainframe in terms of lock-in (Gross, 2025). In September 2025, Gartner went further to predict that over one-third of VMware workloads could migrate to other platforms by 2028 due to the “widespread dissatisfaction” with Broadcom’s ownership (Hale, 2025e). Many CIOs have been actively asking how to reduce dependence on VMware (Gross, 2025). However, leaving is easier said than done, as we’ll explore next.

The Dilemma: Stick with VMware or Switch?

Organizations now face a tough choice: continue with VMware (and absorb the higher costs and new terms) or attempt the daunting task of migrating to an alternative. Both paths carry risks. Sticking with VMware means betting that Broadcom’s promises of a simplified, all-in-one platform pan out – and that costs eventually level off. For many large enterprises, VMware’s technology still delivers clear value: it’s stable, feature-rich, and most IT staff are deeply familiar with it. “VMware works as advertised, but [customers] have a problem with how Broadcom changed the way you purchase and use VMware,” as one analyst put it (Gross, 2025). In other words, the complaints are largely about pricing and business practices, not the technology itself. This gives VMware significant inertia: even unhappy customers acknowledge that few competitors can match VMware’s comprehensive feature set (compute, storage, networking, management, disaster recovery, etc. all integrated) (Gross, 2025). This “platform stickiness” is exactly what Broadcom is banking on – that most customers will endure pain to avoid the even greater headache of replacing VMware.

On the other hand, the urge to escape vendor lock-in has never been higher. Many CIOs see Broadcom’s stance as a warning sign and are planning long-term exit strategies from VMware (Gross, 2025). In fact, surveys in late 2024 found over half of VMware customers (52%) were looking to switch platforms due to the changes (Hale, 2025b). But intentions often meet reality: Gartner research indicates that migrating a large VMware environment can take 18 to 48 months and cost millions of dollars (Hale, 2025b; Gross, 2025). Each virtualized application might need retesting on a new platform, and each VM could cost an estimated $300–$3,000 to transition when you factor in labor and downtime; for a big enterprise running hundreds or thousands of VMs, that math is sobering (Hale, 2025b). Additionally, VMware isn’t just a hypervisor – many organizations use VMware’s extended ecosystem (NSX for virtual networking, vRealize for management, Site Recovery Manager for DR, etc.). Fully replacing those capabilities might require stringing together multiple vendors’ solutions, increasing complexity (Gross, 2025). It’s a bit like replacing an IBM mainframe – doable, but the business risk is high and success might simply mean “no one notices a difference” in operations (Gross, 2025).

For smaller companies or those with lighter VMware usage, migration is more attainable – and indeed some have already jumped ship. But large enterprises often conclude that the cost and risk of change outweigh the benefit (aside from escaping future price hikes). This has led to a stalemate of sorts: customers are unhappy yet hesitant to leave, which ironically lets Broadcom push the envelope further. As one Gartner analyst warned, Broadcom’s early success may encourage other enterprise software firms to mimic this strategy (Gross, 2025). This dynamic is why many view VMware’s situation as analogous to the mainframe: it’s an indispensable technology that, once entrenched, gives its vendor enormous leverage over customers.

Nonetheless, companies are not sitting idle. Mitigation strategies have emerged. Some organizations locked in longer-term VMware contracts before Broadcom’s changes fully hit, to buy time. Others are negotiating hard – seeking custom discounts or flexibilities from VMware sales teams (Broadcom has given partners leeway to craft “better deals” in some cases to retain business) (Hale, 2024). Where possible, customers are also optimizing their VMware usage: for instance, rightsizing VM footprints, cleaning up idle workloads, and delaying upgrades – anything to minimize new license needs. A few have even leveraged legal pressure (as seen with Tesco and others) to seek relief or compensation.

Crucially, many organizations are evaluating alternative platforms in parallel. Even if they don’t rip out VMware overnight, they might start new projects on different infrastructure to gradually diversify their dependence. This could mean running a pilot on Hyper-V or KVM, moving a subset of workloads to public cloud, or deploying containers on bare metal. Gartner noted that about 70% of those eager to leave VMware were considering KVM- or Xen-based hypervisors as alternatives (Hale, 2025b) – essentially open-source virtualization often seen as cheaper (if less polished) than VMware. The prudent course for enterprises is to have a Plan B, even if Plan A remains “stick with VMware for now.” As one expert advised, if you think you might migrate in the future, it’s wise to start planning early – before another round of price increases hits (Hale, 2025b).

Competitors Seizing the Opportunity

The turmoil at VMware has not gone unnoticed by its competitors, who are eager to present themselves as viable alternatives. A variety of vendors – from traditional rivals like Microsoft to niche players – are courting VMware customers with promises of lower cost and smoother sailing. Let’s cover some of the notable competitive responses and options, both on-premises and in the cloud, next.

Microsoft Hyper-V and Azure

Microsoft’s Hyper-V, included with Windows Server, has long been the second-place hypervisor in enterprises. Microsoft is emphasizing that its licensing remains more predictable. For example, a Windows Server Datacenter license (per-core) allows unlimited VMs on a host, which can be cost-effective for Windows-heavy shops. Moreover, Microsoft encourages VMware customers to consider Azure Cloud or Azure Stack HCI. Azure Stack HCI is an on-premises hyperconverged solution using Hyper-V that integrates with Azure services – it provides a path to gradually shift toward cloud-style infrastructure. While Microsoft hasn’t explicitly run an anti-VMware campaign, it’s positioning Azure as an obvious destination if customers decide to repatriate or transform their VMware workloads. (Notably, Microsoft itself uses a subscription model for many products, but the key difference is that Azure’s costs scale with usage, whereas Broadcom’s VMware bundles forced large upfront commitments.) For organizations already invested in the Microsoft ecosystem, consolidating on Hyper-V/Azure is an attractive route to simplify vendors.

Nutanix

Hyperconverged infrastructure (HCI) vendor Nutanix has emerged as a major beneficiary of VMware’s customer angst. Nutanix offers a full HCI platform with its own native hypervisor (AHV, based on KVM) and integrated storage/networking – essentially a direct alternative to VMware’s vSphere/vSAN/NSX stack. In early 2025, Nutanix reported a surge in new customer wins and revenue growth (16% YoY) partly attributed to “disgruntled VMware customers who jumped ship” (Mellor, 2025). Nutanix’s CEO said many enterprises are evaluating Nutanix during hardware refresh cycles or when VMware contracts come up, and are finding it the “best alternative” in the wake of Broadcom’s changes (Mellor, 2025). Nutanix has been aggressive in courting VMware shops – even launching migration promo programs (Weiss, 2025). They highlight simpler pricing (Nutanix often touts per-node or capacity-based pricing, and flexibility like bring-your-own-license models) (NSI, 2025). Technically, Nutanix lets customers run VMs on AHV or even continue running vSphere on top of Nutanix hardware, giving a flexible path. Many VMware customers are also using this moment to reconsider architecture: moving from traditional 3-tier infrastructure to Nutanix’s hyperconverged model, and adopting Nutanix’s management tools to handle both VMs and container workloads across on-prem and public cloud (Mellor, 2025). Essentially, Nutanix is pitching a modernized stack that can do what VMware does and more, often at lower cost.

Red Hat / Open Source KVM

Red Hat Virtualization (RHV, based on KVM) and other KVM-based platforms (like oVirt, Proxmox VE, or even Oracle Linux KVM) present another route. These solutions appeal especially to Linux-centric organizations or those with strong in-house IT expertise. The open-source hypervisor KVM is free; enterprises typically pay for support and management tooling. Red Hat in the past offered RHV as a VMware alternative and some organizations have migrated segments of their workload to it to save on licensing. However, Red Hat has shifted focus to Kubernetes and cloud (OpenShift), and RHV’s future is limited – it’s actually slated for end-of-life in favor of OpenShift virtualization. Still, KVM is the hypervisor underpinning many public clouds and is proven at scale. Some companies may adopt Proxmox or other KVM distributions for smaller deployments to cut costs, accepting a trade-off in advanced features. The Gartner suggestions included Red Hat virtualization and public clouds as options if leaving VMware (Hale, 2025e). It’s clear that for workloads that can be re-platformed or where ultra-high performance isn’t critical, open-source virtualization can be “good enough” and far cheaper.

Public Cloud Providers

One straightforward alternative to running VMware on-prem is to migrate workloads to public cloud services – such as Amazon EC2, Microsoft Azure, or Google Cloud. This doesn’t mean taking VMware with you (though VMware-on-cloud options exist); rather, it means refactoring or rehosting applications on the cloud’s native infrastructure. For some new projects, companies are simply skipping VMware entirely and using cloud VMs or container platforms. The cloud providers have every incentive to capitalize on VMware’s woes: they can argue that instead of paying massive VMware subscriptions plus hardware costs, customers could put those workloads in the cloud and pay as they go. Of course, cloud costs can also accumulate, but the key selling point is agility and no hardware/software maintenance. Interestingly, VMware had partnerships to run its stack on AWS, Azure, etc., but Broadcom’s policies may be undermining those. Gartner noted that hyperscalers can no longer directly sell VMware to customers – now customers must go through Broadcom to license it, making it less convenient (Hale, 2025e). This indicates some tension between Broadcom and the cloud giants. Indeed, cloud providers might prefer customers not bring VMware but instead convert to cloud-native deployments. Migrating to cloud is a form of “escape” from VMware’s grip, though it introduces cloud lock-in trade-offs of its own. Many enterprises are taking a balanced approach: moving certain workloads (especially new and less complex ones) to cloud, while keeping legacy or performance-sensitive systems on-prem on VMware or another hypervisor.

Niche Players

There are other competitors and solutions trying to woo ex-VMware customers. Hewlett Packard Enterprise (HPE), for example, acquired a cloud management platform called Morpheus and is marketing it as a cost-effective virtualization solution. At HPE Discover 2025, HPE introduced Morpheus Platform editions priced per socket (around $600 per socket for a basic edition) – explicitly pitching it against VMware’s per-core model which “penalizes scale” (Williams, 2025). HPE is telling its hardware customers: take the “red pill” and leave VMware. While Morpheus is a newer player, HPE’s backing and a simpler pricing (flat per socket, no matter how many cores) have attracted interest from cost-conscious shops (Williams, 2025). Similarly, Citrix (now mainly focused on application and desktop virtualization) still has Citrix Hypervisor (based on Xen) which some Citrix-centric organizations might use instead of VMware for VDI workloads. Oracle offers Oracle VM (Xen-based) and now positions Oracle Cloud and VMware Cloud on Oracle Cloud as options – Oracle interestingly has been one of the hyperscalers still partnering on VMware services, perhaps more amicably than AWS/Azure after the Broadcom deal.

Competition summarized

In summary, the competitive landscape is crowded with alternatives, but each comes with pros and cons. No single competitor has a plug-and-play replacement that matches VMware feature-for-feature. This is why many enterprises are adopting a hybrid strategy: they might keep some workloads on VMware, put some on an alternate hypervisor, and others into cloud or containers. The chaos caused by VMware’s changes has at least pushed IT leaders to reevaluate their long-term infrastructure roadmap – and competitors are happy to assist in that evaluation with free assessments, migration tools, and enticing offers.

Notably, even Broadcom’s VMware team acknowledges customers “do have choices”. VMware’s cloud infrastructure marketing VP, Prashanth Shenoy, said they encourage customers to do an “apples-to-apples” comparison of technology and total ownership cost – claiming that in almost every case VMware still “comes out on top” when fully evaluated (Gross, 2025). It’s debatable whether customers agree, but VMware is clearly trying to defend its turf by emphasizing technical strengths and the cost of disruption. Meanwhile, rivals like Nutanix report that the “VMware migration opportunity” is real but tends to align with customers’ natural refresh cycles – meaning we may see a steady trickle rather than a stampede of migrations, as firms take a phased approach (Mellor, 2025).

Looking Ahead: How Will This Play Out?

With VMware’s future at a crossroads, there are a few plausible ways this saga could unfold in the coming years. While no one can predict exactly how it will end, we can make some educated guesses based on the incentives and pressures on each player. Let’s discuss some of these scenarios.

Scenario 1: VMware as the New Mainframe (Customers Stay)

In this outcome, VMware remains entrenched as the de facto standard for on-prem infrastructure in large enterprises, despite the higher costs. Broadcom continues its high-margin strategy, essentially turning VMware into a highly profitable, if lower-growth, business. Customers grumble but pay up because the pain of switching outweighs the pain of writing bigger checks. Over time, VMware could become like IBM’s mainframe: a legacy platform that is mission-critical and “hard to get off”, with a shrinking but loyal customer base willing to pay a premium (Gross, 2025). Broadcom would likely continue optimizing costs, possibly investing less in innovation and more in extracting value from support renewals. The risk here for customers is vendor lock-in gets even worse (as alternate skillsets atrophy) and they become dependent on Broadcom’s favor. The risk for VMware/Broadcom is that this breeds long-term resentment and slow erosion – much as mainframes eventually did lose ground for new workloads.

Scenario 2: Mass Migration (VMware Loses Significant Share)

In this scenario, the discontent reaches a tipping point and VMware experiences a steady bleed of customers to alternatives. Gartner’s prediction of a 35% workload loss in 3 years could come true (Hale, 2025e). Key triggers might be: Broadcom overplays its hand with another round of price hikes, or competitors drastically lower the barriers to migration (for instance, an automated conversion tool that moves VMs to another platform with minimal effort). If multiple Fortune 500 companies publicly switch away from VMware, it could encourage others by proving it’s feasible. A faster-than-expected shift to cloud or containers could also make traditional hypervisors less relevant. In this outcome, VMware’s dominance diminishes and Broadcom might respond by moderating its policies (too late) or focusing VMware on a narrower set of big customers. Competitors like Nutanix, Microsoft, Red Hat, and cloud providers would collectively carve up the market. However, given the current state, a sudden mass exodus seems unlikely – it would more likely be a gradual attrition as IT refresh cycles play out. Mitigation for Broadcom in this case would require re-winning customer trust – maybe bringing back more flexible licensing or reinstating some free offerings to stem the outflow.

Scenario 3: A Balanced Reset

A more optimistic middle ground could see VMware and its customers reaching a new equilibrium. Broadcom, seeing the backlash, might further adjust policies to be more customer-friendly (beyond the partner program U-turn already done). For example, Broadcom could introduce more flexible subscription tiers for smaller businesses or allow some form of consumption-based pricing to compete with cloud models. They might also invest in VMware’s technology to ensure it remains cutting-edge (for AI workloads, edge computing, etc., as Shenoy mentioned (Gross, 2025)). If customers perceive that VMware does deliver superior technology (performance, security, integration) and that Broadcom is willing to negotiate on big deals, they may be willing to stay, and even new workloads (like containerized apps or AI training clusters) might continue to run on VMware. This scenario requires Broadcom to balance profit goals with customer satisfaction – essentially not killing the goose that laid the golden egg. Meanwhile, customers in this scenario pursue multi-vendor strategies as a safety net: for instance, adopting Kubernetes that can run on VMware or on another cloud, thus keeping VMware in check by having alternatives ready if needed. The end state might be that VMware remains a key part of enterprise IT, but with a smaller footprint as certain workloads move off, and pricing negotiations become a normal part of every renewal.

Scenario 4: Transformation via Cloud

Another way things could end is that the cloud wins out decisively. VMware’s whole value proposition could diminish if, say, by 2030 most enterprise workloads run in public clouds or cloud-native platforms, with only a legacy rump on-prem. VMware is trying to stay relevant in a cloud-centric future (through offerings like VMware Cloud on AWS, multi-cloud management, and Tanzu for containers). But Broadcom’s stance of not treating hyperscalers as strategic partners (Hale, 2025e) suggests a rocky relationship. If cloud providers successfully convince enterprises to migrate off VMware and onto their platforms (perhaps using the Broadcom tumult as a push factor), VMware could see a faster decline. In such a case, Broadcom might pivot VMware to focus purely on hybrid cloud software (management tools, networking, security across clouds) rather than on being the virtualization layer itself. Mitigation strategies for customers leaning into cloud include re-architecting applications for cloud services or using container orchestration that abstracts away the VM layer. Over time, the question might shift from “VMware vs alternative hypervisor” to “on-prem vs cloud” decisions. This future isn’t mutually exclusive with the others – it could happen in parallel that as VMware raises costs, it inadvertently accelerates the industry’s move to cloud and cloud-based alternatives.

In reality, elements of all these scenarios will likely play out simultaneously across the diverse VMware customer base. Large enterprises might behave like Scenario 1 (sticking mostly with VMware, begrudgingly), mid-sized companies might gradually shift some portion of their estate to Scenario 2 or 4 (moving to competitors or cloud), and smaller organizations could abandon VMware entirely in favor of simpler solutions. The outcome for VMware as a company will depend on how well Broadcom can execute the “retain and upsell the big fish” strategy versus how much competitors and changing technology nibble away at VMware’s install base from below.

Conclusion: Mitigating the Risks and Navigating the Future

As organizations navigate this period of change, a few mitigation strategies and best practices have become clear. Let’s review these next.

Assess and Optimize Current Usage

Companies are conducting thorough audits of their VMware environments. Eliminating unused VMs, consolidating workloads efficiently, and rightsizing licenses can reduce exposure to VMware’s new costs. The leaner and cleaner your virtualization footprint, the more leverage you have – either to negotiate with VMware or to migrate portions elsewhere with less effort.

Lock In Predictable Terms (Where Possible)

If you’re committed to VMware for the next few years, it may be wise to secure a multi-year agreement now. Some customers managed to get VMware (pre-Broadcom) to agree to pricing protections for a few years; others might use Enterprise License Agreements (ELAs) to bundle and cap costs. While Broadcom ended perpetual licenses, they have offered custom deals to certain clients to ensure they stay. It’s a buyer’s market for those willing to sign longer contracts – paradoxically, Broadcom wants the revenue certainty and might concede discounts. Customers should approach renewals as a negotiation, exploring if they qualify for any transition credits or service entitlements (like the 15% services offer via partners) (Hale, 2024).

Stay Informed and Join Forces

The VMware user community (VMUG and others) has been very active in sharing information. Being part of such networks helps companies learn how peers are handling the changes. Collectively, large customers can also apply pressure – for instance, if enough big European firms voice issues, it attracts regulator attention (as we saw with CISPE’s complaint). There may even be strength in numbers to demand better terms or at least receive clarity on VMware’s roadmap under Broadcom.

Develop a Plan B (Evaluate Alternatives)

Even if you don’t jump ship now, evaluate at least one alternative platform in a sandbox. Whether it’s setting up a small Hyper-V cluster, a Nutanix trial, or moving a dev/test workload to the cloud, gaining familiarity with another environment is invaluable insurance. It reduces the fear of the unknown and prepares your team in case a rapid switch ever becomes necessary. Gartner’s advice is to start planning migrations sooner rather than later – even if you end up remaining, you’ll be in a stronger position having done due diligence on other options (Hale, 2025b). In some cases, just demonstrating to Broadcom that you could leave may improve your bargaining hand.

Modernize Strategically

Use this disruption as an opportunity to modernize applications and infrastructure. If you have an app that can be containerized, doing so might reduce reliance on a specific hypervisor underneath. Similarly, if a refresh is due, consider HCI solutions or cloud deployments that align with your long-term digital strategy. As Nutanix’s CEO noted, when forced to reevaluate VMware, many customers are also reexamining their whole IT stack – possibly moving some systems to cloud or adopting more cloud-native architectures (Mellor, 2025). This kind of transformation can yield benefits beyond just escaping VMware’s costs – it can improve agility and resilience if done thoughtfully.

The End Game

In the end, VMware’s reign as “king of virtualization” is at a turning point. The company that once revolutionized data centers now finds itself in an unaccustomed position: facing user backlash and aggressive competition. Yet, its technology remains deeply woven into the fabric of enterprise IT, and that won’t disappear overnight. The likely outcome is a continued balancing act – enterprises will retain VMware where it makes sense, but they will be far more vigilant about cost and risk management, and far more open to alternatives than before. Competitors will nibble away, but they too must prove they can handle the scale and features VMware spent decades perfecting.

For VMware (under Broadcom), the challenge will be to demonstrate to customers that it can still innovate and deliver value that justifies the premium, rather than simply relying on lock-in. If it can’t, the market will correct the imbalance over time as customers vote with their feet (or wallets). For customers, the key will be to stay strategic: avoid knee-jerk reactions, but also avoid complacency. By proactively exploring options, optimizing current investments, and collaborating with peers, IT leaders can ensure they have leverage no matter how VMware’s saga unfolds.

One thing is certain: the next few years will be pivotal in determining whether VMware’s empire remains mighty or gradually fades, and that outcome will be decided collectively by the responses of its customers and the moves of its competitors. In the words of one industry observer, “the cautionary tale for CIOs is that this is just the beginning” – the VMware situation has set a precedent, and now everyone is watching to see how both the vendor and its users navigate these uncharted waters (Gross, 2025). The final chapter of this story is still being written, but with careful planning and open eyes, enterprises can be ready for whatever twists lie ahead.

References

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