Following the acquisition by Broadcom, the VMware Cloud Foundation bundle has become the focal point of the vendor’s software portfolio. The shift to a subscription- and core-based licensing model directly alters cost structures for enterprise users. Market analysis highlights key cost drivers and evaluates strategic alternatives for affected organizations.
The licensing structure for VMware Cloud Foundation (VCF) has undergone fundamental changes following Broadcom’s acquisition. Perpetual licenses with separate maintenance contracts have been replaced by a recurring subscription model billed per physical processor core.
Package Architecture and Minimum Rules
VCF operates as a complete stack for software-defined data centers. The bundle integrates four primary components: vSphere virtualization, vSAN storage, NSX networking, and Aria/VCF Operations for management and automation, alongside administrative tools like SDDC Manager.
An alternative option is VMware vSphere Foundation (VVF). This streamlined tier includes virtualization, storage, and basic management, but excludes NSX and the SDDC Manager. List pricing for VVF is approximately 40 to 50 percent lower per core than VCF.
Both licensing models require a minimum billing threshold of 16 cores per physical CPU. Processors with fewer cores are automatically billed at the 16-core minimum. Included vSAN storage capacity is proportional to core counts: VCF provides approximately 1 TiB per core, while VVF includes roughly 0.25 TiB. Additional storage capacity requires separate add-on licenses.
Primary Cost Factors and User Strategies
The bundling of components means organizations frequently pay for modules—such as advanced networking or orchestration—that are not active in their environment. Combined with core minimums and subscription transitions, overall expenditure often increases substantially compared to former maintenance models.
Independent advisory firms like ProLicense highlight several operational approaches to manage software budgets:
- Rightsizing Bundles: Choosing lower tiers like VVF when advanced networking is unnecessary.
- Third-Party Support: Retaining existing perpetual licenses with third-party support services to defer subscription commitments and improve negotiation leverage.
- Platform Migration: Utilizing used software assets or migrating to alternative hypervisors such as Nutanix to fully exit the subscription model.
ProLicense: Third-Party Support, License Trading, and the Path to Nutanix
“Many companies pay for network and management components in VCF that they never actually put into operation. The first step is always to honestly assess what’s really needed from the bundle. Often, the lower tier is sufficient, and that alone significantly reduces costs,” says Christian Grave, Managing Director of ProLicense.
ProLicense helps companies switch to third-party VMware support and resells used VMware software. As a Nutanix partner, ProLicense also paves the way for a smooth, cost-effective migration to Nutanix, thereby permanently avoiding the expensive VMware subscription. Those who want to stay with VMware don’t have to sign up for the subscription right away: With existing perpetual licenses and third-party VMware support, a company can establish a much stronger negotiating position for subscription talks with VMware.
“There are two good ways out of the VCF cost trap. Either the planned switch to Nutanix, which we, as a partner, will smoothly facilitate, or staying with perpetual licenses and third-party support, which noticeably strengthens the negotiating position with VMware. Both options prevent the customer from paying the full subscription fee,” says Markus Oberg, a partner at ProLicense.
Dr. Jakob Jung is Editor-in-Chief of Security Storage and Channel Germany. He has been working in IT journalism for more than 20 years. His career includes Computer Reseller News, Heise Resale, Informationweek, Techtarget (storage and data center) and ChannelBiz. He also freelances for numerous IT publications, including Computerwoche, Channelpartner, IT-Business, Storage-Insider and ZDnet. His main topics are channel, storage, security, data center, ERP and CRM.
Contact via Mail: jakob.jung@security-storage-und-channel-germany.de