Beyond VMware: Strategic Alternatives in the Post-Broadcom Era

Executive Summary 

This research note is designed for CIOs, CTOs, Heads of Infrastructure, and Procurement Leads grappling with the fallout from VMware’s acquisition by Broadcom. Since the takeover, sweeping licensing and pricing changes have reshaped the virtualisation market, prompting many organisations to reassess their platform strategies. 

If you oversee virtualised environments or cloud infrastructure, this paper will help you grasp the scale of market shifts, evaluate associated risks and opportunities, and identify practical next steps. You will gain clarity on the technical and commercial impacts of VMware’s new licensing models, insight into alternative solutions, and recommendations for managing disruption while controlling costs. 

Key Findings 

1. Total Cost of Ownership (TCO) Increases of 100–200% - Since Broadcom’s acquisition, VMware has phased out perpetual licensing, moving to an all-subscription model. This shift has significantly raised costs for many customers, especially as previously optional components are now mandatory within bundles. 

2. Bundled Offerings Reduce Flexibility - Broadcom has reduced VMware’s product portfolio from over 160 offerings to just two core bundles: VMware Cloud Foundation (VCF) and VMware vSphere Foundation (VVF). While this simplification streamlines Broadcom’s internal operations, it limits customer choice, often forcing the adoption of unnecessary components. 

3. Architectural Misalignment with Cloud and Edge Strategies - Organisations pursuing hybrid, multi-cloud, or edge strategies increasingly find VMware’s integrated bundles mismatched to their environments. The tightly coupled VMware stack can be less adaptable, particularly for those using Kubernetes, containerisation, or cloud-native architectures. 

4. Emergence of Mature, Viable Alternatives - Viable alternatives, including Nutanix AHV, Microsoft Hyper-V / Azure Stack HCI, Red Hat OpenShift Virtualisation, AWS, and Rakuten Symphony, are now available — and, in some cases, preferable — depending on the organisation’s workload, scale, and technical ecosystem. 

Recommendations 

1. Undertake a Comprehensive TCO and Risk Review - Rebuild your three- to five-year cost models, accounting for the new VMware pricing, potential switching costs, retraining needs, and migration risks. Factor in both direct costs (licensing, support) and indirect costs (staffing, downtime, change management). 

2. Segment Workloads According to Business and Technical Needs - Not all workloads require premium enterprise virtualisation. Segment your applications — critical systems, legacy workloads, modern containerised services — and match them to the most appropriate platforms. 

3. Pilot Alternative Platforms Before Large-Scale Commitment - Run structured pilots with one or two alternative solutions. For example, test Nutanix AHV for hyperconverged environments, Microsoft Hyper-V or Azure Stack HCI for Windows-centric workloads, AWS for scalable cloud-first deployments, or Rakuten Symphony for telecom and edge scenarios. 

4. Develop a Phased Transition and Negotiation Roadmap - Avoid rushed migrations. Build a phased plan that aligns technology transitions with contract renewals, hardware refresh cycles, and broader transformation initiatives. Leverage your negotiating power with VMware and competitors by demonstrating informed market awareness. 

Analysis 

TCO Increases Are Reshaping Budgets 

With Broadcom eliminating perpetual licences, VMware customers now face mandatory recurring subscriptions for access, support, and updates. For many mid-market and enterprise customers, shifting to VMware Cloud Foundation — which bundles vSphere, vSAN, NSX, and Tanzu — means paying for components they may not need or use. Reports from the field indicate cost increases of 100–200%, placing heavy strain on IT budgets. 

Beyond financials, operational teams are grappling with broader impacts. Broadcom’s restructured partner and support ecosystem has reduced access to familiar technical channels, adding to the complexity and risk for customers navigating the transition. 

Bundles Undermine Architectural Flexibility 

Broadcom’s decision to simplify the VMware portfolio benefits large, vertically integrated customers but disadvantages organisations with heterogeneous environments. Previously, many customers used VMware’s hypervisor alongside third-party tools — alternative storage systems, backup solutions, or network overlays. Now, interoperability can be more challenging, and customers may be compelled to adopt VMware-native options that disrupt established architectures. 

For organisations prioritising cloud-native development, Kubernetes, or microservices, the tightly coupled VMware bundle is often seen as a poor fit, slowing innovation and creating friction with modern DevOps practices. 

Alternative Platforms Are Increasingly Competitive 

The landscape of VMware alternatives has evolved significantly: 

• Nutanix AHV offers hyperconverged infrastructure with a native hypervisor, eliminating separate hypervisor licensing costs while delivering strong integration and simplified management. 

• Microsoft Hyper-V and Azure Stack HCI provide robust support for Windows Server and Azure workloads, often at lower costs, especially for organisations with Microsoft enterprise agreements. 

• Red Hat OpenShift Virtualisation integrates virtual machines within Kubernetes, making it attractive for organisations prioritising container-first strategies and hybrid-cloud architectures. 

• AWS provides VMware Cloud on AWS — a jointly engineered service integrating VMware’s software-defined data centre (SDDC) stack with AWS’s global cloud infrastructure. This allows customers to extend or migrate on-prem VMware environments into the cloud with minimal risk and complexity, maintaining operational continuity and accelerating time-to-cloud. (aws.amazon.com) 

• Rakuten Symphony delivers cloud-native Open RAN and private 5G solutions through its Symworld platform, offering advanced automation and network orchestration. This is particularly relevant for telecom operators and enterprises seeking flexible, scalable edge and network virtualisation solutions with strong cost efficiency. (symphony.rakuten.com) 

Each platform has unique operational, performance, and commercial considerations, making it essential to align the choice with your workload profiles, technical requirements, and broader business strategy. 

Migration Risks Require Careful Roadmapping 

Shifting away from VMware is not a simple technical swap. Migration risks include downtime, application compatibility issues, retraining of staff, data migration challenges, and security validation. Organisations must take a phased approach, starting with non-critical workloads or greenfield deployments, allowing teams to develop operational confidence and resolve integration challenges gradually. 

Moreover, vendors are eager to capture VMware’s unsettled customer base. Many offer migration assistance, financial incentives, and competitive support agreements. Organisations that enter negotiations with a well-researched position can extract more favourable commercial terms and avoid being locked into disadvantageous long-term deals. 

Conclusion 

Broadcom’s acquisition has fundamentally reshaped VMware’s market positioning, introducing major cost increases, licensing shifts, and architectural realignments. For many Australian organisations, this marks a critical inflection point — one that demands a proactive, strategic reassessment of virtualisation platforms. 

By conducting a detailed TCO review, segmenting workloads appropriately, piloting credible alternatives, and mapping out a phased transition, technology leaders can avoid knee-jerk reactions, optimise both costs and performance, and position their infrastructure for long-term success. 

This is not merely a technical upgrade — it’s a strategic realignment that can define your organisation’s agility, resilience, and competitiveness in an increasingly cloud-driven world. 

About Sedha Consulting 

Sedha Consulting is a trusted technology advisory firm serving CIOs, CTOs, and technology leaders across Australia, New Zealand, and Southeast Asia. With over a decade of experience, Sedha specialises in helping organisations navigate complex technology transitions, optimise IT investments, and craft future-proof digital strategies. 

Our services cover virtualisation assessments, cloud migrations, infrastructure modernisation, cybersecurity, vendor management, and programme governance. We leverage partnerships with AWS, Microsoft, CrowdStrike, and other major vendors, combining cutting-edge tools and proven methodologies to deliver tailored roadmaps, cost-benefit analyses, commercial negotiation support, and seamless implementation. 

At Sedha Consulting, we don’t just help you manage change — we help you lead it. Reach out to discover how we can assist your organisation in turning disruption into strategic advantage.