The VMware renewal is no longer just an IT decision

For years, VMware renewals were routine. CIOs reviewed the quote, negotiated a discount, signed, and moved on.

That playbook has changed. Since Broadcom acquired VMware, many organisations have had to reassess subscription licensing, product bundles, per-core pricing and renewal terms. Broadcom announced the end of sale of perpetual licences and related support renewals in December 2023, alongside a simplified portfolio centred on VMware Cloud Foundation (VCF) and VMware vSphere Foundation (VVF). Broadcom’s announcement and VMware’s licensing update explain the transition.

For organisations approaching renewal, this is no longer simply a procurement exercise. It is a chance to reassess infrastructure strategy, operating costs and the role of modern cloud services.

The real issue is not just the licence price

Licence costs matter, and some customers have reported substantial increases. However, the impact varies by contract, product mix, core count, entitlements, discounts and renewal circumstances. A headline percentage should never be treated as a universal forecast.

The bigger question is what the renewal forces leaders to examine:

• Are we paying for capabilities we do not use?
• How many virtual machines (VMs) are idle, duplicated or oversized?
• What does the VMware estate really cost after hardware refresh, data-centre space, power, support and specialist operations are included?
• Does it make sense to keep investing in the current platform, or is this the right moment to modernise?

A recent AWS-published analysis of a specific customer scenario estimated that VMware software represented 42% of the annual on-premises cost in that model. Hardware amortisation, data-centre facilities and administration accounted for the balance. This is an illustrative case, not a benchmark for every organisation, but it highlights why a licence-only comparison can be misleading. Read the AWS analysis.

The renewal quote is only one line in the total cost of running your infrastructure.

Why a VMware renewal can become an AWS tipping point

A renewal creates a natural decision point. Organisations can renew and continue with their current environment, move VMware workloads to AWS while retaining a VMware-based operating model through Amazon Elastic VMware Service (Amazon EVS), or use the transition to modernise workloads onto AWS-native services.

Option 1: Renew and optimise the existing estate

For some businesses, renewing remains the right choice. The applications may be tightly coupled to VMware, migration risk may be high, or the commercial terms may still make sense. Even then, it is worth rightsizing VMs, removing unused workloads and validating the licence footprint before committing.

Option 2: Move VMware workloads to Amazon EVS

Amazon EVS lets eligible customers run VMware Cloud Foundation on AWS infrastructure. It can be relevant when the priority is data-centre exit or infrastructure relocation while retaining familiar VMware operations. It does not, by itself, remove the VMware subscription consideration: licensing and service eligibility must be checked carefully.

Option 3: Modernise selected workloads on AWS

For workloads that are suitable, AWS-native destinations can include Amazon EC2, managed databases, containers and serverless services. This can reduce dependency on the full VMware stack and create opportunities for automation, resilience and more efficient operations.

The best answer is often a portfolio decision rather than a single-platform decision. Some applications may be rehosted, others replatformed, and some retired. A hybrid outcome can be sensible.

A practical way to start

1. Map the estate. Build an inventory of applications, VMs, dependencies, data flows, owners and business criticality.
2. Find the waste. Identify idle VMs, oversized instances, duplicate environments, unused storage and workloads nearing end of life.
3. Choose the right treatment per workload. Not every VM needs to become a container. Decide which workloads to retain, rehost, replatform, refactor or retire.
4. Model the full cost. Compare renewal, hardware, facilities, operations, licensing, migration effort and target-state running costs over a consistent period.
5. Plan migration waves. Start with lower-risk workloads, validate security and operating processes, then move higher-value systems in controlled waves.

The question leaders should ask

Not simply: “Should we leave VMware?”

But: “If we were making this infrastructure investment today, would we design it the same way?”

For some organisations, the answer may still be yes. For others, the renewal could be the trigger to reduce technical debt, modernise applications and create a more flexible foundation for analytics, AI and faster product delivery.

The renewal deadline is no longer just a procurement event. It may be the strongest business-case moment to evaluate cloud modernisation.

What is your organisation planning at its next VMware renewal?

Are you renewing, moving VMware workloads to AWS, or rethinking the estate application by application? A structured assessment can help compare the options before a commercial deadline makes the decision for you.