Stricter subscription models, higher prices
Broadcom is tightening customer retention for VMware. However, according to Capefoxx, third-party support and a booming market for used licenses offer an alternative.
Since Broadcom’s acquisition of VMware, the virtualisation market has undergone significant changes. Customers face rising prices, the discontinuation of perpetual licenses, and a mandatory shift to subscription-based models. Companies heavily reliant on VMware are particularly affected, as previously purchased perpetual licenses may suddenly seem worthless. Capefoxx, a provider specialising in license optimisation and used software licenses, promises a way out.
Used Licenses as an Alternative?
Capefoxx does not only sells used VMware licenses but also organizes third-party support. This combination offers a solution for VMware customers. “VMware no longer provides support for perpetual licenses. Those who want to stay independent need alternatives,” said Capefoxx CEO Thomas Huth in an interview with DataCenter-Insider. This is possible with the help of an “all-round package that Capefoxx can put together for customers”.
To support this, Capefoxx has acquired thousands of VMware licenses from a company in the Benelux region and is reselling them through its own distribution channels. By partnering with Origina, a software maintenance and support provider, Capefoxx aims to address the lack of support for these licenses. This allows companies to continue running their infrastructure independently of VMware’s subscription model or gain time to find an alternative solution.
A quick move away from VMware is not realistic for many organisations, and finding suitable alternatives takes time. In Huth’s view, Broadcom is taking advantage of the fact that “customers need months or years to prepare for a migration”. Other vendors, on the other hand, are more flexible when it comes to licensing models and more transparent when it comes to pricing.
Broadcom’s Pricing and Licensing Strategy
Broadcom is not granting any special exceptions to existing customers. VMware holds a dominant market share—67% in the hypervisor sector in Switzerland, for example. Huth accuses Broadcom of exploiting its market position, stating, “They are squeezing customers like a lemon.” Many companies had hoped Broadcom would introduce transitional benefits, but those expectations have been disappointed, making switching providers even harder.
Adding to the frustration, VMware’s new subscription models are significantly more expensive—often 150% to 300% higher, and in some cases, even more. Customers are being forced into suite-based structures, meaning they must purchase entire software packages rather than individual products, even if they don’t need all the features. This also increases costs.
This is particularly noticeable in the vSphere” products: These are now only available as Standard, Enterprise, Foundation or Cloud Foundation. “Cloud Foundation, the most expensive option, locks customers into the VMware infrastructure.
Market Dominance Encourages Alternatives
Huth sees this as part of a typical market cycle: “Today, VMware is the leader, but rising costs and increasing dissatisfaction will make alternatives more attractive.” He advises companies to develop long-term strategies rather than just seeking quick fixes. Used licenses with third-party support could serve as a bridge—giving businesses time to transition until a full migration is possible.
This is a translated version of the article. The original article by Paula Breukel on Datacenter Insider, can be read here.
