The VMWare Exodus: Broadcom, Price Hikes, and What to Do Next

If you run a business on VMware, you've felt the ground shift beneath you. Ever since Broadcom completed its $69 billion acquisition of VMware in November 2023, the virtualization market has been in turmoil. Licensing costs have skyrocketed, products have been bundled and unbundled, and thousands of businesses are now asking the same question: is it time to leave VMware?

For businesses in Australia, the answer isn't always straightforward. VMware has been the gold standard for server virtualisation for two decades. But when your licensing bill suddenly doubles, triples, or even multiplies by ten, it forces a conversation that most organisations would rather not have.

Let's unpack what happened, what it means for your business, and what alternatives are worth considering.

The Broadcom Takeover: A Brief History

Broadcom's acquisition of VMware was announced in May 2022 and finally closed in November 2023 after prolonged regulatory reviews in the UK, EU, and China. The deal valued VMware at approximately $69 billion, including the assumption of $8 billion in VMware debt. It was one of the largest technology acquisitions in history.

For those unfamiliar with Broadcom's track record, the playbook is well understood. Under CEO Hock Tan, Broadcom has a history of acquiring technology companies, aggressively cutting costs, and extracting maximum revenue from the remaining customer base. They did it with LSI, Broadcom Corporation, CA Technologies, and Symantec's enterprise security division. VMware was next.

The changes came fast:

• Over 2,800 employees were laid off shortly after the acquisition closed.
• Perpetual licensing was eliminated in December 2023, barely a month after the deal closed. All products moved to subscription-only.
• Product lines were restructured into four divisions: VMware Cloud Foundation (VCF), Tanzu, Software-Defined Edge, and Application Networking and Security.
• Bundles were redefined. Products that could previously be purchased individually were rolled into larger, more expensive suites.
• The End-User Computing division (Horizon, Workspace ONE) was sold to KKR and rebranded as Omnissa.

Free Products and What Happened to Them

On a more positive note, Broadcom did make VMware Workstation Pro and VMware Fusion Pro free for personal use in May 2024, and then free for commercial use from November 2024. So if you're a developer running local VMs on your laptop, nothing much has changed. But if you're running production servers, the story is very different.

The Pricing Shock

The end of perpetual licensing was the single most disruptive change for VMware customers. Instead of buying a licence once and paying annual support, everyone was forced onto subscriptions. On its own, that might have been manageable. But Broadcom also:

• Bundled products aggressively. Instead of buying vSphere, vSAN, and NSX separately, you now need to buy the full VMware Cloud Foundation suite to get certain features.
• Increased minimum core counts. VMware used to license per-CPU (with a certain number of cores included). Broadcom moved to per-core licensing with higher minimums, dramatically increasing costs for smaller deployments.
• Eliminated the free vSphere Hypervisor (the free ESXi tier), forcing even small deployments onto paid subscriptions.

The result? Reports from the field consistently cite price increases of 2x to 5x on renewal. In some cases, particularly for customers who were pushed from individual products into the full VCF suite, the increases have been even steeper.

In March 2026, the Cloud Infrastructure Service Providers in Europe (CISPE) trade group filed a formal complaint with the European Commission, alleging that Broadcom's licensing practices had increased prices tenfold for some cloud service providers, with payment demanded upfront and products bundled regardless of customer need. The European Commission confirmed it was assessing the complaint. Broadcom has denied the allegations, calling CISPE "an organisation funded by hyperscalers."

Regardless of where you land on the debate, the practical reality for Australian businesses is clear: VMware costs significantly more today than it did two years ago, and the trajectory is not heading down.

The Alternatives

If you're considering moving away from VMware, you have more viable options today than at any point in the last decade. Here are the alternatives we believe are worth evaluating for Australian businesses.

1. Proxmox Virtual Environment (Open Source)

Proxmox VE is an open-source virtualization platform based on Debian Linux. It uses KVM for full virtualisation and LXC for lightweight containers, all managed through a single web-based interface. It is released under the GNU Affero General Public License (AGPL).

Key features:

• KVM-based full virtualisation and LXC-based containers on a single platform
• Live migration of running VMs between hosts
• Built-in high-availability clustering via Corosync
• Integrated software-defined storage via Ceph, ZFS, and LVM
• Built-in backup tool (vzdump) with optional Proxmox Backup Server for incremental backups
• VMware import wizard (since version 8.2) for migrating existing VMWare VMs
• Web-based management GUI, CLI, and REST API
• SDN support since version 8.1 with Secure Boot compatibility
• Active Directory, LDAP, OIDC, and multi-factor authentication support
• PCIe passthrough for GPUs and other devices

Feature gaps vs VMWare:

• No direct equivalent to vSphere DRS (distributed resource scheduling), though ProxLB provides workload balancing
• No NSX equivalent; SDN capabilities are newer and less mature
• No native vSAN equivalent; you build storage with Ceph, ZFS, or external SAN/NAS
• Management interface is functional but less polished than vCenter
• Smaller ecosystem of third-party integrations and certified hardware

Pricing: Proxmox VE itself is free and open source. Enterprise support subscriptions start at approximately €5 per month per CPU socket (about €10-50/month per host). Compare that to VMware's $1,000s per year per host, and the savings are substantial.

Who it's for: Organisations comfortable with Linux-based infrastructure. Teams that value control and cost savings over vendor support SLAs. Anyone running a lab, dev/test environment, or production deployment with modest support needs.

Notable: Proxmox VE is used on the International Space Station's Columbus module. It's battle-tested in environments where reliability is non-negotiable.

2. XCP-ng (Open Source)

XCP-ng is an open-source virtualization platform built on the Xen hypervisor. It emerged in 2018 as a community fork of Citrix XenServer after Citrix restricted features in the free edition. The project is now part of the Linux Foundation.

Key features:

• Xen-based type-1 hypervisor with strong isolation and performance
• Full API compatibility with Citrix XenServer (now simply "XenServer" again)
• Xen Orchestra (XO) provides a modern web management interface
• Pooling, live migration, and high-availability clustering
• Storage agnostic; works with local storage, NFS, iSCSI, and Ceph
• Support for GPU passthrough and UEFI boot
• VM import tools for migrating from VMware

Feature gaps vs VMWare:

• Similar gaps to Proxmox: no DRS, no NSX, no vSAN
• Windows guest support is good but may require additional licensing considerations
• Management tooling (Xen Orchestra) is web-based but some advanced features require the paid edition
• Smaller community and fewer tutorials than Proxmox

Pricing: XCP-ng is free and open source (GPLv2). Xen Orchestra (the management UI) has a free edition and a paid edition starting at around €50/year per host for premium features like backup, disaster recovery, and RBAC. Commercial support is available through Vates, the company behind XCP-ng.

Who it's for: Organisations already familiar with Xen or Citrix Hypervisor. Those who prefer a Xen-based architecture over KVM. Teams looking for a close API-compatible alternative to the Citrix/VMware ecosystem.

3. Microsoft Hyper-V

Microsoft Hyper-V is a type-1 hypervisor included with Windows Server. A free, standalone edition called Hyper-V Server was available (though Hyper-V Server 2019 was the last free standalone version; Hyper-V remains available as a role in Windows Server).

Key features:

• Deep integration with the Microsoft ecosystem (Active Directory, System Center, Azure)
• Enlightened I/O for Windows and Linux guests for near-native performance
• Live migration, failover clustering, and Hyper-V Replica for disaster recovery
• Software-defined networking via Hyper-V Virtual Switch and Network Virtualization
• Storage Spaces Direct for hyper-converged deployments
• Shielded VMs and encryption for security-sensitive workloads
• Nested virtualization for labs and development

Feature gaps vs VMWare:

• No live migration in the free standalone edition (requires Windows Server with failover clustering)
• Less flexible storage policy management compared to vSAN
• Linux guest support is good but can require more manual configuration
• No direct equivalent to vSphere's DRS (though System Center Virtual Machine Manager provides some similar functionality)
• Requires Windows Server licensing, which adds cost for Linux-only shops

Pricing: Hyper-V Server was free but is end-of-life. Hyper-V as a role in Windows Server requires Windows Server licences. If you already have Microsoft agreements through volume licensing (e.g., Microsoft Open Business or CSP), the incremental cost may be minimal. Standard edition covers two VMs per licence; Datacenter edition covers unlimited VMs.

Who it's for: Organisations already running Windows Server. Microsoft-centric shops with Active Directory and System Center investments. Teams that want a commercial vendor with established SLAs.

4. Nutanix AHV (Commercial)

Nutanix AHV (Acropolis Hypervisor) is a KVM-based hypervisor built into the Nutanix hyper-converged infrastructure platform. It's a commercial product but comes bundled with Nutanix's HCI software at no additional licence cost.

Key features:

• Built on KVM with enterprise hardening
• Integrated storage via Nutanix's distributed storage fabric (no separate SAN or vSAN needed)
• One-click upgrades for the entire stack (hypervisor + storage + management)
• Built-in disaster recovery, backup, and snapshots
• Strong VMware migration tools with the Nutanix Move and Xtract tools
• Single-pane-of-glass management via Prism

Feature gaps vs VMWare:

• Tied to Nutanix HCI hardware or certified nodes, not a standalone hypervisor
• Some advanced vSphere features (e.g., DRS with granular resource pools) are less flexible
• Not suitable if you want to run on existing SAN or standalone servers

Pricing: AHV itself is included with Nutanix's platform. Pricing depends on the Nutanix subscription tier. Generally reported to be 40-60% cheaper than the equivalent Broadcom VMware stack for HCI deployments.

Who it's for: Growing businesses looking to move to hyper-converged infrastructure. Organisations that want a simpler, integrated stack where one vendor handles compute, storage, and virtualization.

How the Alternatives Stack Up

Cost ranges are rough estimates based on typical Australian business deployments. Actual pricing varies significantly by configuration, support tier, and volume.

What You Lose (and What You Gain)

Let's be honest: moving away from VMware involves tradeoffs. The VMware ecosystem is mature, well-documented, and deeply integrated with enterprise hardware vendors. vCenter's DRS, resource pools, and performance monitoring are genuinely good tools. NSX provides capabilities that are hard to replicate in open-source alternatives.

But here's what you gain by moving:

• Predictable costs. No surprise renewal increases. No forced upgrades to more expensive bundles.
• Freedom from vendor lock-in. Your virtual machines are portable. You're not tied to a single vendor's licensing model or roadmap.
• Modern architectures. Platforms like Proxmox and XCP-ng are built on Linux and integrate naturally with containerisation, orchestration tools, and cloud-native workflows.
• Transparency. Open-source platforms let you audit the code, understand the security posture, and make informed decisions about your infrastructure.
• Community support. The open-source virtualization community is large, active, and increasingly enterprise-ready.

Migration Considerations

If you're considering a move, here are the practical steps we recommend.

1. Audit your current VMware deployment

Document exactly what you're using: which features (vMotion, DRS, HA, FT, NSX, vSAN), how many hosts and VMs, what guest operating systems, and what your current licensing costs are. This gives you a baseline for comparing alternatives.

2. Identify dealbreakers

Some VMware features are genuinely hard to replace. If you rely heavily on NSX distributed firewalling or advanced vSAN policies, evaluate whether the alternatives meet your requirements. In many cases, the answer is "close enough", but it pays to know upfront.

3. Pick your migration path

Most modern alternatives have VMware import tools. Proxmox VE 8.2+ includes a VMware import wizard. XCP-ng has conversion tools. Nutanix provides Move and Xtract for automated migrations. Plan a phased migration: start with low-risk workloads, validate performance, and move critical systems once you're confident.

4. Budget for training

Your team knows VMware. They don't know Proxmox (or XCP-ng, or Hyper-V). Factor in hands-on training time. The good news is that the concepts are the same — live migration is live migration, HA is HA, backups are backups. The interfaces and tooling are different, but the mental model transfers.

5. Run a parallel pilot

Set up a small cluster of 2-3 hosts running your chosen alternative alongside your existing VMware environment. Migrate some non-critical workloads. Test performance, backup/restore, and disaster recovery. Let your team build confidence before committing to a full migration.

5. The "Stay on VMware" Option: Public Cloud VMware Services

If your organisation is heavily invested in VMware and the complexity of migrating to a different hypervisor is too daunting, there is a middle path: move your VMware workloads to a public cloud provider that runs VMware natively. All three major cloud providers offer managed VMware services that let you run your existing VMware environment in their data centres.

Google Cloud VMware Engine (GCVE)

Google Cloud VMware Engine provides a fully managed, native VMware Cloud Foundation software stack running on Google Cloud infrastructure. You can provision a complete VMware SDDC (vSphere, vCenter, vSAN, NSX) in about 30 minutes across 24 global regions.

Key features:

• Full VMware compatibility with the same tools, processes, and policies as on-premises
• Up to 200 Gbps networking with 99.99% SLA
• Bring your own VMware Cloud Foundation licenses from Broadcom
• Integration with Google Cloud services like BigQuery, Cloud Storage, and Cloud AI
• Third-party ecosystem support including Veeam, Zerto, Cohesity, NetApp, and Dell
• Disaster recovery, virtual desktop infrastructure (VDI), and data centre extension use cases
• Storage-only nodes for cost-effective scaling

Pricing: Consumption-based with on-demand or 1/3-year committed use discounts. Three-node minimum. Single-node private clouds available for pilot testing. Pricing varies by region and node configuration but eliminates the need for upfront hardware capital expenditure.

VMware Cloud on AWS

Amazon Web Services offers VMware Cloud on AWS, which runs VMware SDDC software on dedicated AWS infrastructure. It provides seamless hybrid operations between your on-premises VMware environment and AWS, with the ability to use AWS services alongside your VMware workloads.

Key features:

• Same VMware tools and skill sets including vCenter, vSphere, NSX, and vSAN
• Direct integration with AWS services (S3, RDS, Lambda, etc.)
• Live migration of workloads between on-premises and AWS without modification
• Elastic DRS for automatic capacity scaling
• Disaster recovery and data centre extension

Azure VMware Solution

Microsoft's Azure VMware Solution runs VMware SDDC natively on Azure infrastructure. It integrates with Azure Active Directory, Azure Monitor, and Azure Backup, and provides a consistent VMware experience with the consumption model of Azure.

Key features:

• Native vSphere, vCenter, NSX, and vSAN in Azure
• Integration with Azure services and the Azure ecosystem
• Lift-and-shift migration with no application changes required
• Azure Hybrid Benefit for existing Windows Server and SQL Server licenses
• Disaster recovery via Azure Site Recovery or VMware SRM

Who this is for: Larger enterprises with deep VMware investments who are willing to pay a premium to avoid a hypervisor migration. Organisations that need a quick path to the cloud without retraining staff or rearchitecting applications. Businesses in highly regulated industries where compliance certifications matter.

The tradeoff: You stay on Broadcom-licensed VMware, which means you're still subject to Broadcom's pricing direction. The cloud providers handle the infrastructure, but the VMware licensing costs are still there, layered on top of cloud compute and storage charges. For many organisations, this means total cost of ownership can be significantly higher than either staying on-premises with alternative hypervisors or migrating to native cloud services. However, for the right use cases such as data centre exits, disaster recovery, and temporary capacity bursts, the convenience can justify the cost.

6. Going All-In on Public Cloud

For businesses that want to escape infrastructure management entirely, a direct migration to public cloud (running on native compute rather than VMware) is worth serious consideration. This is the most transformative path, but it also requires the most up-front investment in planning and rearchitecting.

Amazon Web Services (AWS)

AWS offers the broadest set of cloud services. You can migrate VMware VMs to EC2 using tools like AWS Migration Hub, Application Migration Service (formerly CloudEndure), or VM Import/Export. Once on EC2, you can modernise incrementally by adding RDS for databases, Elastic Load Balancing for traffic distribution, and Auto Scaling for elasticity.

Microsoft Azure

Azure provides Azure Migrate for assessing and migrating VMware workloads to Azure VMs. Deep integration with Active Directory and the Microsoft ecosystem makes it a natural fit for Windows-centric organisations. Azure Site Recovery handles disaster recovery, and Azure Backup provides managed backup.

Google Cloud

Google Cloud offers Migrate to Virtual Machines for lift-and-shift migrations from VMware to Compute Engine. Google's strength lies in data analytics (BigQuery), AI/ML services, and Kubernetes (GKE). For organisations already moving toward containerisation, Google Cloud provides a clear path from VMs to containers.

What to consider before going cloud-native

• Cost modelling. Cloud can be cheaper or more expensive than on-premises depending on workload patterns. Predictable, always-on workloads are often cheaper on-premises. Bursty, variable, or rapidly growing workloads favour the cloud. Do a proper total cost of ownership (TCO) analysis before committing.
• Egress costs. Moving data out of the cloud costs money. If you have large datasets or data-intensive workloads, factor this into your budget.
• Network latency. Your users and customers need fast, reliable connections to the cloud region you choose. Australia has cloud regions in Sydney and Melbourne, but latency to US or European regions can be significant.
• Skills and training. Cloud-native architectures (VPCs, IAM, managed services, Infrastructure as Code) require different skills than traditional VMware administration. Budget for training or hiring.
• Security and compliance. Cloud providers offer extensive compliance certifications, but shared responsibility means you're still accountable for securing your workloads. Understand the shared responsibility model before migrating sensitive data.
• Multi-cloud flexibility. All three major providers have strong offerings. Consider whether a multi-cloud strategy gives you negotiating leverage and resilience against vendor lock-in, just as you are evaluating now with VMware.

Going all-in on public cloud isn't the right answer for every business. But for organisations that want to get out of the data centre business entirely, it offers a cleaner break from VMware than any hybrid option.

The Bottom Line

Broadcom's acquisition of VMware has fundamentally changed the virtualization landscape. For many Australian businesses, the new pricing realities make VMware hard to justify, especially when viable, mature alternatives are available at a fraction of the cost.

Open-source platforms like Proxmox VE and XCP-ng have matured significantly. They're not perfect replicas of VMware, but they don't need to be. For the vast majority of business workloads (web servers, databases, file servers, application servers, and dev/test environments), they deliver comparable reliability and performance at a dramatically lower cost.

Commercial alternatives like Hyper-V and Nutanix AHV offer their own tradeoffs, but all share one thing in common: they're not Broadcom-owned VMware. If nothing else, the current market gives you choices you didn't have before.

The key is to make a deliberate, informed decision. Don't let a surprise renewal bill force you into a panicked migration. Take the time to evaluate, test, and plan. Your infrastructure and your budget will thank you.

If you're evaluating your options after the Broadcom changes, take the time to assess what makes sense for your organisation. The right choice depends on your specific workloads, team capabilities, and budget constraints.

This article is for informational purposes only. Pricing estimates are indicative and based on publicly available information and industry reports as of June 2026. Every organisation's technology needs are different, and infrastructure decisions should be evaluated with appropriate technical and legal guidance.