In December 2023, the tech behemoth Broadcom acquired VMware for almost $61 billion – the largest enterprise software acquisition in history.
Since then, Broadcom has made significant adjustments to VMware’s Cloud Service Provider (VCSP) program – and on November 1, 2025, even more policy changes are scheduled to take effect. With no perpetual licensing, fewer licensed partners, and fewer product bundles, the new VMware licensing ecosystem will be practically unrecognizable.
But what do those changes look like on a granular level? And how should Intelisys Sales Partners (and end customers) react?
Below, we take a deep dive into VMware’s new model – and then lay out an action plan for organizations to follow.
What Is VMware – and Why Is it So Important?
VMware is the world’s largest provider of cloud computing services and visualization software. It’s a vital component of the modern cloud ecosystem, providing much of the software that underpins cloud computing.
Businesses across industries have come to rely on VMware’s software to optimize their IT infrastructure. That’s why the recent licensing changes have such massive implications.
11 Major Changes: What’s New From Broadcom and VMware in 2025
Since the merger with Broadcom, VMware has significantly altered its partner program – aiming to maximize simplification, consistency, and innovation. By prioritizing VCSPs that are committed to building cloud services on VMware, they offer greater value and a more streamlined experience, making the product a stronger alternative to Hyperscaler Public Cloud Providers.
This shift in emphasis has produced 11 major changes that organizations and Intelisys Sales Partners should understand:
- Shift from Perpetual to Subscription Licensing. Broadcom no longer sells VMware perpetual licenses, with the company moving instead to a subscription-based model. (Existing perpetual licenses remain valid, but support services cannot be renewed unless a pre-existing contract is in place.)
- Increased Minimum Core Requirement. All VMware products now require a minimum of 72 cores per purchase or license – up from the previous minimum of 16 cores. This will force smaller organizations with modest IT infrastructures to pay for significantly more cores than they need.
- End of White Label program. October 31, 2025 will mark the end of the White Label model, which allowed smaller VCSPs (those consuming less than 3,500 cores) to purchase licenses through higher-level Pinnacle or Premier partners. For many smaller cloud service providers, this effectively eliminates the route to market with VMware.
- Late Renewal Penalties. Customers who do not renew their subscription licenses by their anniversary date face penalties of 20-25% (sources vary on the exact percentage).
- Contract Expiry Rules. Contracts can no longer be renewed early with fewer cores.
- Reduced Product Bundles. VMware has moved from approximately 168 product bundles to just 4: VMware Cloud Foundation (VCF), VMware vSphere Foundation (VVF), VMware vSphere Standard (VVS), and VMware vSphere Essential Plus (VVEP).
- Significant Increase in Licensing Costs. Customers have reported substantial price increases (8X – 15X) – and with no perceived increase in value for the customer.
- Reduction in Partner Ecosystem. In April 2025, Broadcom reduced the number of authorized VMware Cloud Service Providers (VCSPs) from over 4,500 globally to a much smaller number – including only 12 Pinnacle partners and 300+ Premier partners in the US. July 2025 brought further reductions (down to 13 VCSPs), along with a rebranded program (the “VMware Advantage Partners VCSP program”). Partners who were not invited to the new program can only transact until October 31, 2025. After that, they can only service existing VCSP commitment contracts for the remainder of their current term.
- Increased Audits and Cease-and-Desist Letters. Perpetual license holders with expired support contracts have received cease-and-desist letters, warning them to stop using any updates or patches issued since the expiration of their support.
- Shift Toward Hyperscale Private Compute. Broadcom envisions a new future for private compute, with VMware Cloud Foundation (VCF) 9 underpinning a small number of hyperscale private cloud platforms in each region. VCF-managed services now require the VCSP partner to offer VCF software, managed services, and hardware, delivered either as a public or hybrid cloud offering.
- VCSP Route-to-Market Lanes. This Broadcom initiative gives VMware Cloud Service Provider distinct channels within the Broadcom Advantage Partner Program – a change intended to streamline support for partners.
Together, these changes create an entirely new reality for VMware’s customers.
Navigating the New VMware Reality – How Organizations Should Move Forward
When a company as consequential as VMWare undergoes such major changes, organizations need to respond strategically.
What’s the optimal path to cloud computing in this new environment? It’s likely different than it was in 2023, before the Broadcom-VMware merger.
Here’s how organizations should respond to VMware’s new policies.
Review Current VMware Licensing and Environment
Start by evaluating the organization’s existing setup, including:
- The current licensing model (perpetual vs. subscription)
- The total CPU core count across all deployments (including edge/remote offices)
- The status of current VMware partners (since many were uninvited from the rebranded VMware Advantage Partners VCSP program).
- Upcoming renewal dates.
Also, be sure to assess the direct financial impact of the 72-core minimum – which is especially costly for SMBs – and calculate the anticipated increase in renewal fees on the overall IT budget.
Ultimately, the goal is to decide whether it’s worth continuing with VMware. Determine the incremental costs of staying, and then consider whether the enhanced features in the new bundles add enough value to offset any increased costs.
Explore Virtualization and Cloud Options
Thanks to the new VMware policies, organizations find themselves at a fork in the road. How should they address their cloud computing needs from now on?
Options include:
- Staying with VMware. This is more likely to be optimal if businesses can consolidate to servers with higher core counts per CPU (since that should reduce costs). If a business’s VMware partner has been uninvited from the rebranded partner program, they will need to transition to an authorized VMware VCSP partner that can provide continued support.
- Migrating to Public Cloud. Platforms like AWS, Azure, and Google Cloud Platform offer scalability, but they come with potential issues – including vendor lock-in, migration complexity, and higher costs (especially for stable workloads or those not suited for cloud-native architecture).
- Alternative Hypervisors. Options include Microsoft Hyper-V/Azure Stack, Nutanix AHV, Red Hat OpenShift, OpenStack, Proxmox, Xen, and KVM. (Nutanix AHV is closest to a like-for-like replacement.)
- Modernizing to Containers. With platforms like Red Hat OpenShift, you can migrate VMs to containerized environments.
- A Hybrid Cloud Model. Already popular, this model calls for assessing which workloads are best suited for a private cloud, a VMware-based CSP, public cloud, or SaaS.
No matter the choice, strategic planning is essential. A simple “lift and shift” migration to the public cloud can produce inefficiencies and inflated costs.
Leverage Partners and Service Providers
Before a cloud migration, businesses should evaluate their IT team’s readiness. Does the team have the expertise to perform the migration and manage a new platform?
One way to bridge any expertise gap is by leveraging experienced IT partners or VMware Cloud Service Providers (VCSPs). The best providers, especially those in VMware’s “Advantage Partners,” offer flexible licensing options, fixed pricing terms, and migration assistance.
Organizations should also consider getting an Application Assessment from a VCSP. This will provide recommendations on where to deploy specific workloads, data, and services across the “Hybrid Enterprise” spectrum – optimizing for cost, performance, and security along the way.
VMware Solutions In the Intelisys Portfolio
The recent VMware licensing and partner program changes have left many organizations facing unprecedented complexity, cost pressures, and uncertainty. As one of the few remaining VMware Pinnacle Partners in the U.S., TierPoint has deep expertise in helping companies navigate this shifting landscape — whether they plan to stay on VMware or explore new paths forward.
For organizations moving to VMware Cloud Foundation (VCF) 9, TierPoint offers hands-on support to ensure smooth migrations, hardware readiness assessments, and proactive planning ahead of the VCF 8 end-of-support deadline in October 2027. With our history of building and operating VCF-based private clouds long before it became mandatory, we help businesses avoid surprises and modernize with confidence.
For those reassessing their long-term strategy, TierPoint provides cloud-agnostic guidance across leading platforms, including Managed Azure Services, Azure Local, AWS Managed Services and hybrid multicloud environments. We’ve successfully migrated more than 10,000 VMware workloads and manage hundreds of private clouds across industries, giving customers a trusted partner to evaluate options without vendor lock-in.
Whether customers are looking to:
- Stabilize after losing their VMware partner
- Optimize costs under Broadcom’s new licensing model
- Upgrade to VCF 9 with minimal disruption
- Explore modernization through Azure, AWS, or hybrid cloud
…TierPoint meets them where they are and delivers a clear, practical roadmap to the right outcome.
“With so many partners removed from VMware’s program and licensing models shifting overnight, IT teams need clarity and flexibility,” said Chris Patterson, Director Product Management at TierPoint. “TierPoint provides both. We help customers decide whether to stay, modernize, or migrate — and execute their strategy seamlessly, without unnecessary cost or risk.”
Address Soon-Expiring Contracts
Organizations should prioritize any VMware contract that’s soon to expire. The remaining period before the expiry date is the time to evaluate whether they should (a) renew their existing subscription or (b) start a new one.
Optimize Hardware and Resource Utilization
With any core-based licensing, optimizing CPU core consumption is essential. Luckily, tools can assess a business’s IT environment to identify opportunities for optimization and right-sizing.
The result? More licensed cores allocated to running VMs (rather than being allocated to infrastructure overhead).
Consider Disaster Recovery (DR) Licensing
Under the new VMware model, organizations need to be especially mindful of licensing costs for DR environments.
Some CSPs offer a logical upgrade: DRaaS solutions where you don’t pay for hypervisor licensing for DR VMs when they’re not actively running.
Role for Intelisys Sales Partners: Guiding Customers Through the Transition
Intelisys Sales Partners are perfectly placed to act as trusted consultants in the wake of these VMware changes.
Many businesses are reeling from the sudden disruption of the cloud computing status quo. They require cloud infrastructure that will continue meeting their business needs, but they don’t know how to make it happen – especially without increasing costs.
By leading customers through the action plan outlined above, you can help them maintain – and even enhance – operational efficiency.
The Intelisys catalog includes multiple VMware suppliers, including “Pinnacle” tier VMware partners. That means you have both the knowledge and the resources to see your customers through this challenging transition.
Additional Resources
For more information about the recent VMware changes, reach out to your regional Solutions Engineer (SE).
Check out our one-pager on how to navigate the changes made to VMware, and reviews essential prospecting questions for your customers: Navigating VMware Changes: Essential Customer Questions. Also, be sure to leverage our VMware Campaign Kit – which includes customer-facing templates for emails, social media posts, and a brochure.