VMware Licensing Costs & Changes | Enterprise Impact 2026

Do you work in IT? If yes, you've probably used the VMware virtualization platform at some point. If you've chosen alternatives, Broadcom's $69 billion buyout of VMware in late 2023 won't affect you.

This M&A led not only to changes in VMware licensing but also to changes in enterprise TCO. Ask me how. Here's how: Organizations now have annual or multi-year commitments. They need to meet the minimum core requirements of 16 cores per CPU for vSphere and other products.

The core-based pricing with several features (often not used) bundled together increases the IT cost. The result? Enterprises struggle with year-end budgeting complexity and reduced ROI— all thanks to this shift.

VMware Licensing Changes: From Perpetual Licensing to Subscription-based  

This analysis examines the evolution of VMware licensing, associated costs, and enterprise impacts. We have also helped you identify reliable alternatives that tailor the solution according to your needs.

Pre-Acquisition VMware Licensing Model

Historically, VMware offered perpetual licenses for products like vSphere, vSAN, and NSX. Enterprises purchased licenses per CPU socket or core, with optional Support and Subscription (SnS) contracts for updates and support.

This model provided flexibility. Organizations could maintain existing licenses indefinitely while adding capacity as needed.

Key components included:

●      vSphere: Core hypervisor licensing per CPU

●      vSAN: Storage add-on per TB or CPU

●      NSX: Networking and security per VM or CPU

●      Aria Suite: Management tools available à la carte

This structure suited diverse environments, from SMBs to Fortune 500 deployments, allowing tailored investments without mandatory bundling.

Broadcom's VMware Licensing Overhaul

Post-acquisition, Broadcom eliminated perpetual licenses entirely by mid-2024, transitioning VMware to subscription-only models. Enterprises now purchase capacity-based bundles rather than individual products.

Core Changes

●      VMware Subscription Models: Two primary offerings—vSphere Foundation (basic virtualization + limited Aria operations) and VMware Cloud Foundation (comprehensive stack including NSX, Tanzu, and advanced networking).

●      Capacity Pricing: Per-core subscriptions with minimum commitments, replacing socket-based models.

●      Mandatory Support: All subscriptions include required support packages—no optional SnS.

●      Bundled Features: vSAN capacity (250 GiB/core) included regardless of usage; NSX available only in higher tiers or as "VMware Firewall" add-on.

Horizon VDI licensing transferred to Omnissa, further fragmenting the portfolio. Downgrades require intervention in the Broadcom portal, creating administrative friction.

Cost Implications for Enterprises

The shift has significantly increased expenses. Pre-Broadcom vSphere Enterprise Plus costs approximately $5,000–$10,000 per core perpetually. Current subscriptions range from $250–$400 per core annually, plus mandatory support, yielding 20–50% higher renewals for mid-market firms and 2–3x increases for some large enterprises.

Bundling disadvantages specialized deployments. Organizations requiring only basic virtualization pay for unused vSAN or Aria capabilities. Analyst surveys indicate 68% of enterprises are actively evaluating alternatives due to these economics.

Licensing Aspect	Pre-Broadcom	Broadcom Model
License Type	Perpetual + optional SnS	Subscription only
Pricing Basis	Per CPU socket/core	Per-core capacity
Product Flexibility	À la carte	Mandatory bundles
Support	Optional	Included/mandatory
Renewal Impact	Stable	20–50%+ increases

 

Enterprise Operational Impacts

These changes extend beyond costs:

●      Budget Predictability: Perpetual models offered long-term stability; subscriptions introduce annual escalation risks.

●      Vendor Lock-In: Bundle complexity discourages partial migrations.

●      Migration Timelines: Analysts estimate 18–48 months for large-scale transitions due to application dependencies and compliance requirements.

●      Resource Allocation: IT teams divert focus from innovation to license negotiations and compliance.

A 2025 IDC survey found 40% of enterprises delaying upgrades and 30% planning exits, impacting productivity and strategic initiatives.

Rise of VMware Alternatives

The licensing disruption accelerated the adoption of competitive platforms. Sangfor HCI positions strongly as a comprehensive alternative. It’s a VMware Alternative delivering full-stack hyper-converged infrastructure.

Which platforms avoid VMware's mandatory bundling costs?

Nutanix AHV bundles hypervisor into HCI pricing while Hyper-V leverages existing Windows Server licenses. Proxmox eliminates licensing entirely but lacks enterprise features. However, Sangfor HCI offers the cleanest licensing approach by far with perpetual "one-edition" pricing that eliminates VMware's forced vSAN/Aria bundles and capacity minimums.

Sangfor HCI is one of the prominent VMware alternatives because it provides integrated security across compute, storage, and networking with smart micro-segmentation for east-west threat protection.

It solves VMware licensing issues through flexible, cost-effective pricing, including "one-edition" licensing and perpetual options, eliminating bundle mandates.

Sangfor HCI Architecture

When it comes to VMware competitors, Sangfor HCI utilizes aSV hypervisor, aSAN storage, and aNET Networking, providing a fully converged virtual infrastructure.

 

●      aSV Hypervisor: High-performance virtualization matching vSphere capabilities

●      aSAN Storage: Distributed storage without capacity-based surcharges

●      aNET Networking: Software-defined with policy enforcement

●      aSEC Security: As a Managed IT Security Services provider (MSSP), Sangfor HCI minimizes the attack surface by integrating a unified security layer directly into the infrastructure. Its built-in aSEC security operation center uses virtual appliances to protect both public-facing services and internal databases with centralized traffic management.

 

This unified approach contrasts with VMware's add-on ecosystem. Gartner recognized Sangfor as a Representative Vendor in the 2025 Server Virtualization Platforms Market Guide.

Competitive Landscape Comparison

Competitor	Licensing Model	HCI Capabilities	Security Integration	Migration Tools
Sangfor HCI	Perpetual/one-edition	Full (aSV/aSAN/aNET/aSEC)	Athena suite native	VMware-native
Nutanix AHV	Subscription	Full HCI	Add-ons required	Good
Microsoft Hyper-V	Windows Server included	Basic	Azure add-ons	Fair
Red Hat Virtualization	Subscription	KVM-based	Add-ons	Good
Proxmox VE	Free/open-source	Limited	Basic	Manual

 

Sangfor HCI customers report 30–40% TCO reductions through simplified licensing and reduced vendor coordination.

What alternatives deliver better TCO than VMware subscriptions? A: Microsoft Hyper-V cuts virtualization costs through Windows bundling while Red Hat offers subscription-based KVM alternatives. Nutanix provides HCI economics but remains subscription-heavy. However, Sangfor HCI achieves a far superior TCO through perpetual licensing, full-stack HCI consolidation, and 30–40% reported savings that eliminate VMware's annual renewal escalations.

 

Strategic Migration Considerations

Enterprises planning VMware transitions should:

1. Conduct TCO Analysis: Compare current spend against perpetual alternatives.
2. Validate Workloads: Test mission-critical applications in POCs.
3. Assess Security: Evaluate integrated vs. layered approaches.
4. Phase Implementation: Migrate non-production environments first.

Restore Control & Agility!

VMware licensing came to a complex condition under Broadcom subscription bundles. The subscription fees don't add up, vendor support gets reduced, and clients are left with a vendor lock-in situation. Enterprises today want to break away from VMware licensing complexity and opt for alternatives to VMware. 

Sangfor HCI is a VMware Alternative providing perpetual licensing, full-stack HCI, and integrated security. If your IT team is also suffering from the same complexity, it's time to reassess your options. It's time to restore budget control and operational agility.