It is that time again for VMware customers. With another major renewal cycle approaching and a new wave of contracts set to expire in early 2027, organizations are once again weighing whether the platform remains worth the cost—and what options exist if it does not.
Higher costs open VMware environments to potential migrations
For MSPs, cloud providers, and infrastructure partners, those conversations are creating new opportunities. Customers facing higher licensing costs and contract renewals are increasingly looking for guidance on everything from optimization and cost control to partial migrations and alternative virtualization platforms.
While VMware’s position in the server virtualization market remains solid, cracks have persisted since the acquisition in late 2023, with Broadcom continuing to raise prices at a far faster pace than the market.
Broadcom pricing squeezes smaller customers
The same themes continue to be raised by customers: pricing changes, licensing complexity, and uncertainty around VMware’s partner strategy.
In a similar fashion to how Broadcom shifted the direction of CA Technologies and Symantec after their acquisitions in 2018 and 2019, respectively, it has focused VMware on higher profitability from its largest customers.
The next wave of renewals matters more to VMware and Broadcom than previous cycles because of changes in both what customers want from their infrastructure provider and the emergence of modern virtualization platforms that offer simplicity and predictable pricing.
To this end, even though VMware remains deeply embedded in enterprise IT systems, its hold has weakened among smaller customers, MSPs, and cloud service providers, who continue to reassess whether VMware is still built for them and whether they can shift some of their systems away from it.
VMware alternatives pitch simplicity and flexibility
This is where the opportunity for alternatives presents itself, as the Broadcom enterprise software playbook suggests it is willing to sacrifice the interests of “lower-value” customers to reap more profit from those most indebted to VMware. This was one of the main worries before the acquisition, as experts predicted price increases and the alienation of certain customers.
Nutanix, Scale Computing, Platform9, Red Hat, and others are increasingly selling more than just a “cheaper” alternative to VMware, with migration paths, reduced lock-in, Kubernetes alignment, and hybrid-cloud flexibility pitched to disillusioned VMware customers.
Migration complexity limits clean breaks
Even with all these VMware alternatives on the market, there is no single solution that can fully replace VMware.
Some of the hyperscalers do a good job of bringing tools together into a single solution, such as Azure Virtual Machines and Google Compute Engine, but for now Broadcom’s bet that it can increase costs by more than 300 percent since the acquisition and still retain many customers appears to be holding true, even with customer protests.
Moving away from VMware is also harder due to migration challenges, as the software is typically tied to backup, networking, security, compliance, and other operational systems.
Channel partners can guide the renewal strategy
That means even if a customer is fed up with VMware, they will typically partially migrate some systems or run them on dual platforms, rather than make a clean break.
This creates a strong channel opportunity for those who can seize it. Guiding customers through the renewal process can open up new prospects, whether in the form of new workloads at the edge or in smaller clusters, or full migration efforts to shift away from VMware.