Extreme VMware Price Increase: AT&T Highlights Broadcom's 1050% Proposal

Felix Dubois

4 min read

Post on May 18, 2025

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Broadcom's Acquisition and the Proposed VMware Price Increase

Broadcom's takeover of VMware, finalized in late 2022, has sent shockwaves through the IT industry. While the acquisition itself wasn't unexpected, the subsequent proposed price adjustments have been met with widespread concern. Reports, including those from AT&T, indicate a potential increase of a staggering 1050% in VMware licensing costs. This isn't a small bump; it's a seismic shift that could cripple IT budgets.

The impact isn't uniform across all VMware products. The proposed VMware price increase affects various licensing models and products differently, with some experiencing far steeper increases than others.

• vSphere: Reports suggest significant increases in licensing costs for this core virtualization platform.
• vSAN: Similar substantial increases are anticipated for this crucial virtual storage area network.
• NSX: The networking and security virtualization layer is also expected to see substantial price hikes.
• Existing Customers: Businesses with existing contracts are particularly vulnerable, facing steep renewal costs potentially exceeding their initial investments.

These drastic changes have also ignited serious antitrust concerns, with regulators scrutinizing the potential for monopolization in the virtualization market.

AT&T's Concerns and Public Statements

AT&T, a major VMware user, has been exceptionally vocal about this dramatic VMware price increase. Their public statements highlight the potentially crippling financial implications for their vast infrastructure. As a telecommunications giant, AT&T's reliance on VMware is substantial, making the potential cost increase a critical operational concern.

Their outspoken stance underscores the widespread unease among large corporations. Many other major businesses likely face similar challenges, quietly grappling with the potential for massive budget overruns. AT&T's public voice gives these otherwise silent concerns a powerful platform.

The Impact on Businesses and the IT Industry

The ramifications of this VMware price increase extend far beyond AT&T. Businesses of all sizes, from small enterprises to large corporations, are now forced to contend with significantly inflated IT costs. This could lead to:

• Shift to Alternatives: Many organizations are likely to explore alternative virtualization solutions to avoid the steep VMware price increase.
• Budgetary Strain: IT budgets will face unprecedented pressure, forcing difficult choices and potentially delaying or canceling other crucial projects.
• Increased Justification: IT departments will face intense scrutiny, needing to meticulously justify every VMware-related expense.

The situation also presents the potential for increased consolidation within the virtualization market. Smaller players might struggle to compete, while larger companies could use this opportunity to expand their market share. This shift could lead to further changes in pricing and service offerings within the industry.

Here are some cost-saving strategies businesses can explore:

• Negotiate Contracts: Attempting to negotiate lower prices with VMware directly.
• Optimize Deployments: Improving efficiency by consolidating resources and optimizing existing VMware deployments.

Strategies for Mitigating the VMware Price Increase

Facing this significant VMware price increase, businesses need proactive strategies. Several options can help mitigate the impact:

• Negotiate with VMware: Explore the possibility of renegotiating existing contracts or securing more favorable terms for new agreements.
• Explore Alternatives: Consider switching to alternative virtualization technologies like open-source solutions (e.g., Proxmox VE, oVirt), or platforms offered by other vendors such as Citrix or Microsoft Hyper-V.
• Optimize Existing Deployments: Improve the efficiency of your current VMware environment by consolidating VMs, optimizing resource allocation, and right-sizing deployments.
• Cloud Migration: Explore migrating some or all of your workloads to the cloud, potentially utilizing cloud-native virtualization services.

[Link to a comparison chart of virtualization solutions]

Conclusion: Navigating the Extreme VMware Price Increase – A Call to Action

The dramatic VMware price increase, highlighted by AT&T's concerns, presents a major challenge for businesses worldwide. The potential for a 1050% increase underscores the urgency for proactive planning and strategic decision-making. Ignoring this significant change could lead to crippling financial consequences and operational disruptions. It's crucial to research alternative solutions, actively negotiate with VMware, and carefully evaluate your current VMware spending in light of this unprecedented situation. Don't wait; take action now to secure your organization's future and avoid the devastating impact of the "VMware Price Increase."