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Is VMware’s New 72-Core Licensing Rule a Financial Disaster for Small Businesses?
Big changes are coming for VMware users, and they’re not cheap. Starting April 10, 2025, VMware by Broadcom will require a minimum of 72 cores per CPU for licensing on products like vSphere Enterprise Plus, vSphere Standard, vSphere Foundation, and Cloud Foundation. This shift could mean massive cost increases for businesses, especially smaller ones. Let’s break it down.
The Core of the Problem
- Old Rule: Previously, licenses were required for CPUs with at least 16 cores.
- New Rule: Now, licenses must cover a minimum of 72 cores per CPU, regardless of actual usage.
- Impact: Businesses with fewer cores than the new threshold will still need to pay for the full 72-core license.
For example, if your system has only 32 cores but needs licensing, you’ll still pay as if you have 72. This change could lead to significant financial strain.
A Costly Leap
One IT service provider shared an alarming example:
- Under the old system, their licensing costs were around $40,000 per month.
- With the new rules? Their bill skyrocketed to $270,000 per month, or $3.1 million annually.
This isn’t just a price hike—it’s a financial earthquake.
Minimum Order Value
Broadcom is also introducing a minimum order value of €25,000 for prepaid and multi-year payment plans. Smaller customers who don’t meet this threshold may find themselves unable to purchase licenses at all.
Penalties for Late Renewals
Miss your subscription renewal deadline? Broadcom has added a 20% penalty to renewal costs for late customers. This adds another layer of pressure on businesses to stay compliant.
Confusion Over Licensing Terms
There’s some debate about what “72 cores” actually means:
- Some sources suggest it’s 72 cores per CPU.
- Others interpret it as 72 cores per order, which could still hurt small businesses with limited hardware.
Regardless of interpretation, the result is clear: higher costs and less flexibility.
What This Means for Small Businesses
It seems Broadcom is shifting its focus toward larger enterprise customers while making it harder for smaller businesses to afford VMware products. For small organizations with limited IT budgets, this could mean:
- Scaling back on VMware usage.
- Seeking alternative virtualization solutions.
- Facing unsustainable cost increases.
What Should You Do?
If you rely on VMware products, act now:
- Request Quotes Early: Reach out to your distributor or VMware contact before the changes take effect.
- Reevaluate Your Needs: Assess whether your current setup justifies the increased costs.
- Explore Alternatives: Consider other virtualization platforms that might better suit your budget and requirements.
These licensing changes are a wake-up call for businesses relying on VMware by Broadcom. If you’re not prepared, the financial impact could be devastating—especially for smaller organizations that don’t have deep pockets to absorb such steep increases.