The changes in VMware following Broadcom’s acquisition are impacting a wide range of organisations, but the hardest hit are mid-sized enterprises and SMEs who meet five critical criteria:
ONE: You heavily rely on VMware
Organisations that have built most or all of their virtualisation stack on VMware—especially using perpetual licences—are now facing abrupt cost increases and licensing model changes.
TWO: You don’t have deep in-house virtualisation teams
Organisations without large IT teams or specialist VMware knowledge may struggle to understand, re-architect, or negotiate in the new environment—especially with the shift toward bundles like VMware Cloud Foundation and the challenge that messaging and commercial structures keep changing.
Is your minimum licensing now 72 cores? Is it 16? Will it change again?
THREE: You operate in a cost-sensitive sector
Sectors like healthcare, education, retail, and not-for-profits—where IT budgets are tight and changes take longer to push through—are feeling the most pain.
The removal of standalone SKUs means many are forced into expensive bundles that include features they don’t need. Even with short-term reprieve, your long-term future is uncertain.
FOUR: You run critical systems on legacy VMware infrastructure
Broadcom’s rapid roadmap changes have created uncertainty around product support and roadmap clarity. Organisations that depend on a stable, well-supported stack for mission-critical workloads are now exposed.
FIVE: You are subject to renewal cycles this year
If your VMware renewal is up soon, you’re likely already in discussions (or battles) about massive price hikes, fewer product choices, and tighter contract terms.
The Bottom Line
Organisations that can’t easily absorb cost increases, migrate quickly, or navigate vendor negotiations are the most vulnerable.
That’s why many are now reassessing their platforms—either to optimise what they have or explore hybrid or full migration options.
It’s not just mid-sized organisations and SMEs that are affected, but it is much harder when you don’t have a direct line into a critical supplier.
It can be further complicated by the huge amount of noise created in the market by competitive vendors and integrators all seeking to profit from the stressful uncertainty.
No matter what size your business is, you need a plan. In this environment, more than ever, the value of truly independent advice is critical.
Change is always challenging—but it’s nothing new
We’ve done this before, so we have a blueprint on how to stay resilient.
If your organisation relies heavily on virtualisation from VMware, then it might feel like this heavyweight move has rocked your world.
Broadcom snapping up VMware changes many things. But it’s not new. In 2019, IBM’s acquisition of Red Hat had many people feeling the same way. Yes, on a smaller scale—but the changes give us a roadmap and blueprint to learn from.
In the end, there’s nothing new under the sun. While these deals are great for shareholders, they can wreak havoc among CEOs, CIOs and CTOs—especially in mid-sized organisations and SMEs.
If your business relies on virtualisation to stay nimble, secure and cost-effective, it’s time to reassess. Because what worked last year may not work tomorrow.
In this blog, we’ll unpack what’s changed, what it means for your business, and how to pivot your virtualisation strategy without losing your marbles (or your budget).
The VMware-Broadcom Shake-Up: Less Flex, More Stress
Subscription Shock
Broadcom’s moved fast to ditch perpetual licences in favour of subscription-only models. That’s pushed some pricing up by over 1000%—no joke.
Mid-sized organisations used to predictable spend now face ballooning costs for the same (or fewer) features.
The Bundle Bind
VMware’s offerings are now tightly bundled into suites like VMware Cloud Foundation (VCF). Great if you need the whole kitchen sink.
But most mid-sized organisations don’t—and end up paying for features they’ll never use.
Innovation? On Pause.
With Broadcom laser-focused on margins, there are real concerns around ongoing innovation and customer support. That’s a red flag for mid-sized organisations who rely on fast fixes, roadmap clarity, and timely upgrades.
IBM + Red Hat: A Settled Shift
IBM’s acquisition of Red Hat back in 2019 was a strategic move to dominate the hybrid cloud market.
Red Hat OpenShift Virtualisation offers a unified platform for managing containers and virtual machines, making it an attractive option for SMEs seeking flexibility across multi-cloud environments.
Red Hat’s open-source roots provide mid-sized organisations with a vendor-agnostic alternative to proprietary solutions like VMware. This aligns with modern operating models, enabling portability and scalability without vendor lock-in.
IBM’s hybrid cloud strategy emphasizes security, scalability, and efficiency—key components of business resiliency.
For instance, Red Hat OpenShift Virtualisation enables seamless migration of workloads across cloud environments, reducing downtime risks.
What SME Leaders Should Be Thinking About Now
- Avoid the Single Supplier Trap
Vendor consolidation = fewer choices and bigger risks. Here’s how to hedge your bets:
- Mix open-source platforms like Proxmox or OpenShift with the likes of VMware or Nutanix.
- Explore multi-cloud options to reduce dependency on any one stack or supplier.
- Balance Cost vs Capability
Budgets are tight. Features must earn their keep:
- Question whether bundled platforms like VCF align with your actual needs.
- Consider value-alternatives like Proxmox VE, KVM, Nutanix AHV or Azure Stack.
- Negotiate contracts proactively to lock in favourable terms before renewal deadlines.
- Rethink Your Operating Model
Modern IT models demand agility and resilience:
- Leverage hybrid cloud platforms for seamless workload management across environments.
- Regularly test disaster recovery plans to ensure rapid restoration during disruptions caused by vendor changes or cyber threats.
Real-World Examples: Adaptation in Action
- Chesterfield Royal Hospital Streamlines Operations with Nutanix
Faced with an ageing three-tier infrastructure, Chesterfield Royal Hospital turned to Nutanix to simplify operations and cut costs.
The shift to the Nutanix Enterprise Cloud Platform enabled them to virtualise all remaining physical servers, improve resilience with active/active failover, and significantly reduce their data centre footprint.
By adopting Nutanix AHV, they avoided costly third-party virtualisation licences—all while freeing up headroom for future growth.
Read the full case study
- Sahibinden.com Scales Fast with Red Hat OpenShift
Turkey’s largest online classifieds platform, Sahibinden.com, modernised its infrastructure by migrating over 3,000 virtual machines to Red Hat OpenShift Virtualisation.
The result? A 97% reduction in system reliability incidents, faster time to market for new services, and improved developer productivity—all while embracing a scalable, open-source foundation.
Read the full case study
- University Reduces Lock-In Risk with KVM
When licensing changes from Broadcom triggered alarm bells, one university implemented a phased exit from VMware, migrating core workloads to KVM.
The move reduced cost pressures and gave the IT team greater flexibility to manage infrastructure on their terms. While the transition is ongoing, early results show improved control without service compromise.
View the post on LinkedIn
What You Can Do Right Now
Our Virtual Platform Assessment covers people, process, tools, data and security to give you a clear-eyed view of where you stand—and where you can go.
Here’s a start:
- Run a vendor risk check-up – How exposed are you to pricing shocks or support gaps?
- Scope the alternatives – Look at Red Hat, Proxmox, Nutanix AHV and KVM side-by-side.
- Negotiate from a position of strength – Don’t wait for the renewal notice.
- Train your team for hybrid – The tech’s only as strong as the people running it.
- Join the conversation – Our expert-led webinars break down the chaos into clear actions.
Join Our Upcoming Webinar with blueAPACHE
We’re excited to be joining forces with leading MSP blueAPACHE for an upcoming 45-minute webinar focused on helping Australian mid-sized organisations make smarter decisions about their virtualisation strategy.
blueAPACHE have recognised the growing complexity in this space and the value of independent advisory services. That’s why they work closely with us here at IT Architecture as a Service (ITAaaS)—and we’re thrilled to be speaking at their event.
In this session, we’ll break down the three real choices every SME needs to consider:
- Make it work – Stick with your current stack and optimise what you’ve got
- Hybrid love – Keep production where it is, but explore smarter options for dev/test
- Break up – Find the best-fit alternative to VMware and move on with confidence
No fluff. No sales pitch. Just straight-talking advice from people who live and breathe this stuff.
Don’t settle for breadcrumbs. It’s time to decide—stay, improve, or move on.
Register now