If your organization still relies on VMware, you may be among the last holdouts — and Broadcom just gave you another reason to reconsider. As of April 2025, VMware now requires a minimum license of 72 cores per product instance, regardless of how many cores you use.
This change is part of a broader trend: Broadcom is aggressively restructuring VMware to serve only the largest enterprise clients — leaving mid-market businesses to foot oversized bills or scrambling for alternatives.
The New Licensing Model at a Glance
Broadcom now requires:
- 16 cores licensed per physical CPU
- A 2-CPU minimum per physical server
- And a 72-core minimum per product license, even if your actual usage is far lower
For example, a single modest server with 32 cores still gets billed as if it has 72 — with no option to scale down. On top of that, there’s a 20% penalty for late renewals.
Why This Matters to Business Owners
Leapfrog’s Chief Technology Officer, Emmett “Trey” Hawkins III, sums it up: “These aren’t technical quirks — they’re business decisions with financial consequences.”
- You’re paying more for the same infrastructure — or worse, for infrastructure you don’t even use.
- Broadcom’s strategy signals a shift away from cost-conscious mid-market clients in favor of fewer, bigger customers.
- Your IT investments are now subject to unpredictable pricing, vendor mandates, and dwindling product flexibility.
If that feels like déjà vu, it’s because many businesses already left VMware in 2024, after Broadcom gutted the product line, discontinued popular offerings, and ended support for smaller customers.
Still using VMware? You’re Not Alone — But You’re on Borrowed Time
Some organizations held on last year, hoping things would stabilize. This latest move proves otherwise. Your peers — across the mid-market — have already begun transitioning:
- To Microsoft Hyper-Vfor core virtualization with no artificial minimums.
- To Azure Stack HCI or Azure ARCto manage hybrid environments without VMware’s licensing complexity.
- To native cloud applications, avoiding the overhead of running virtual servers altogether.
As Trey Hawkins puts it, “These moves aren’t just about cost-cutting — they’re about flexibility, sustainability, and control.”
What Should You Do Now?
If your organization is still running VMware, it’s time to do three things:
- Assess Your Exposure
Determine how many cores you’re using versus what Broadcom now requires you to license. - Model the Alternatives
Compare what it would cost to migrate to Microsoft-based platforms or public cloud versus sticking with Broadcom’s model. - Make a Strategic Plan
Whether it’s a complete move to Hyper-V or a hybrid model with Azure, the best time to start your exit ramp is before your next renewal quote locks you into inflated costs.
The Bottom Line
Broadcom isn’t shy about its direction: fewer clients, bigger deals. If you’re a mid-sized company still relying on VMware, you’re now an outlier — and paying the price for it.
Many organizations already made the jump in 2024. If you did not, consider this your second wake-up call.
Leapfrog is actively helping our clients navigate VMware’s transformation and plan their next steps. As a trusted IT partner, we provide expert guidance, execute transition strategies, manage IT based on proven methodologies, and ensure security at every stage. With over 25 years of experience, Leapfrog specializes in helping organizations adapt to changing provider business models. If your organization needs support navigating these challenges, reach out to Leapfrog today.
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