Got a VMware renewal notice? Why businesses shouldn’t be too quick to sign

Since the takeover of VMware by Broadcom, licensing for their portfolio range has changed dramatically. For new customers, perpetual licenses are a thing of the past, and the range has been reduced to a small number of foundation products offered as a subscription. Many companies are also seeing their bills rise considerably at the time of renewal. Service contracts are expiring, support offered by VMware is ending and, at first glance, there seems to be no alternative to the new subscriptions. This is when taking a step back is worthwhile, as many businesses sign their renewal contract without actually knowing what their remaining options are.

The crucial mistake: thinking that there is no way around VMware subscriptions

This is an assumption we are currently coming across in nearly every VMware project. It is indeed true that Broadcom now sell subscription licenses only and that their price tag is based on the number of cores, CPUs or other license metrics. But this doesn’t mean that existing VMware perpetual licenses are no longer valid. Companies that already hold such licenses maintain ownership and can continue operating their infrastructure throughout its technical lifecycle. This changes everything – the question is no longer how fast they must switch to the new subscription model, but what is the smartest financial and technical strategy for the business itself.

Broadcom ends support

Many of the conversations we have had show that the crux of the matter isn’t actually the license itself. Companies are usually feeling the heat because the official Broadcom support for their existing licenses is ending. As a result, many businesses fear being left out in the rainand are deciding to switch to the new subscription model even though they could continue operating their VMware productively for several more years. And yet, established third-party support providers have positioned themselves on the market to offer reliable assistance even after the software company’s support has ended. This means new room for manoeuvre: instead of having to take a strategic decision on a whim, businesses now have time to reassess the economics and plan their virtualisation strategy carefully.

More capacity, more CPU cores: is it really necessary to switch to a subscription straight away?

Another common mistake is to believe that any additional VMware needs must be covered by Broadcom proper. Under applicable legislation, VMware perpetual licenses can still be bought on the second-hand market. This means that it is indeed possible to increase capacity for an existing environment without having to switch entirely to a subscription model. Whether it’s about adding cores or CPU licenses doesn’t change anything to the fact that this is ultimately feasible. For many businesses, this means first and foremost that they will be able to benefit for much longer from any investments they have made in the past.

License pool, metrics and terms: take stock first, then decide

Every VMware environment is unique. While switching to VMware Cloud Foundation may be the right decision for some businesses, for others, itis worth continuing to operate their existing infrastructure and deciding of their own accord when it is the right time to complete the migration. This is why they should take careful stock of licenses under use and license metrics, which products and features will really be needed in future, which costs will be incurred under the Broadcom subscription model during the planned lifecycle and what cost-effective alternatives can be implemented thanks to used perpetual licenses or third-party support. When and only when these questions have been answered, can they make an informed decision about their future virtualisation strategy.

LizenzDirekt’s role in your VMware licensing

This is exactly when LizenzDirekt’s consultation service comes into play: our role is to help businesses analyse their VMware landscape taking into account all technical, legal and financial aspects. In order to do so, we examine the existing license pool, processor cores and license metrics as well as renewal offers from a business standpoint. We also consider whether it is worth purchasing used VMware perpetual licenses, assist with license compliance and proof of license and establish contact with experience third-party support partners. We also help our customers define a long-term virtualisation strategy from scratch. Our aim is not to push you in any particular direction but to help you gain clarity and find the solution that makes the most business sense.

The bottom line: VMware licensing in the Broadcom era requires a clear strategy

The VMware takeover by Broadcom has changed the playing field and licensing on the VMware market. However, businesses still have several options to choose from. Existing VMware perpetual licenses haven’t lost their validity. Combined with used licenses and professional third-party support partners, they offer attractive alternatives to an immediate switch to the subscription model. Knowing about these options essentially means gaining time to make informed decisions, get the most out of investments that have already been made and planning one’s future virtualisation strategy without feeling unnecessarily under pressure.

What you need to do before signing your VMware renewal

In this context, a renewal is much more than simply extending a contract as it will determine the future virtualisation platform’s cost structure and may tie businesses down to a given licensing model for an entire lifecycle. If you too are currently faced with this decision and are unsure whether the offer you have received is the most cost-effective solution for your business, then get in touch. Our LizenzDirekt experts will take a look at your existing VMware landscape, examine your renewal offer and explain any alternatives you have, from used VMware perpetual licenses to the right third-party support. Contact us today for a tailored and non-binding consultation on your individual situation – getting a second opinion doesn’t take much time and can help you reap considerable savings.