VMware licensing changes on April 10 – What it means for your infrastructure

On April 10, 2024, VMware (now part of Broadcom) will implement a major change to its licensing model: the minimum number of cores per licensed CPU will increase from 16 to 72. For many organizations — especially those running small clusters — this means paying for cores you don’t actually have. Licensing costs will no longer reflect real-world usage.

What exactly is changing

Under the previous model, each CPU license covered a minimum of 16 cores — a practical fit for environments running CPUs with 8 to 16 physical cores. With the new model, each licensed CPU must now be counted as having 72 cores — even if the actual CPU only has 8 or 12.

Example: Cost per CPU (after typical enterprise discount)

Pricing elementOld model
(16 cores)		New model
(72 cores)
List price per core/year$350$350
Effective price (after ~45% discount)$192.50$192.50
Total cost per CPU/year$3,080$13,860
In short:

→ That’s a 4.5× cost increase for the exact same workload — no performance gain, no added value.
→ Miss your renewal deadline? Add 20% penalty on top.

 

Small vs large: who is affected? Small to mid-sized environments

Up to 5 virtualization nodes or fewer than 500 vCPUs.
Common in:

  • Edge or branch deployments

Regional service providers

  • Dev/Test clusters
  • SMB private clouds

→ These users will see significant cost increases for unchanged setups.

 

 

Large enterprise environments

Clusters with dozens of nodes, often using VMware Cloud Foundation (VCF). Common in:

  • Multinational corporations
  • Telco and finance
  • Healthcare and government clouds

→ For larger setups, the raised core minimum may not increase costs directly — but forced bundles and penalties like the 20% non-renewal fee can still have major financial impact.

Example: Licensing impact per server

ServersCores per serverOld model
(16-core min)		New model
(72-core min)		Increase
32×12 cores (24)144 cores licensed432 cores licensed+300%
11×8 cores16 cores licensed72 cores licensed+350%

 

“We’re seeing customers facing 3–5× higher costs for the exact same environment. This is the moment to rethink your stack before the next change hits.”

Aliaksei Malaletni, system engineer at Circle B

🎯 Try it yourself: VMware cost calculator (Excel)

Want to see how this affects your own environment?

We’ve created a free calculator to help you simulate the real-world impact of Broadcom’s new licensing rules.

  • Compare old and new VMware licensing models
  • Estimate annual cost increase for your setup
  • Includes visual chart and recommendations

📥 Download the VMware cost impact calculator (Excel) Or book a call with one of our engineers to review it together.

C8932F07-351D-41B7-AE78-EFD3BCEF3F74 Download the calculator

How Circle B can help

We design and deploy global IT infrastructure based on Open Compute Project (OCP) hardware — modular, efficient, and license-free.

Open hypervisor alternatives

We help you migrate away from VMware to, cost-effective platforms. Depending on your needs, we support:

  • Proxmox VE – KVM-based with intuitive UI, high availability, and integrated storage
  • KVM + automation – (Terraform, Ansible) lean and scalable for custom environments
  • XenServer – open-source, lightweight virtualization with broad community support
  • Virtuozzo – OpenStack-based platform; Circle B is a certified reseller and can provide licenses and support

 

Other virtualization platforms

  • OpenShift Virtualization – container-native and hybrid-cloud ready
  • Nutanix AHV – not open-source; available with commercial licensing (including limited Community Edition)

 

Open hardware, future-ready design

We build infrastructure using Open Compute Project (OCP) hardware — designed for modularity and flexibility. It can be tailored precisely to your workloads, deployment scale, and efficiency goals.

  • Modular and energy-efficient by design
  • Vendor-neutral, with full control over components
  • Adaptable to edge, datacenter, or hybrid environments

VMware vs Open Alternatives

FeatureVMware (new)Proxmox VEKVM (custom)VirtuozzoNutanix AHV
Licensing floor per CPU72 coresnonenonenonenone
Open sourceNoYesYesPartly*No
Required bundlesYesNoNoOptionalPartially
OCP hardware supportLimitedFullFullFullLimited
Cost scalabilityPoorGoodGoodGoodGood

*Virtuozzo is based on open-source components (OpenStack, KVM) but delivered as a supported commercial product.


Take back control

This licensing change makes one thing clear: VMWare is focused on large enterprises and long-term subscription bundles. If you’re not in that group, your costs and flexibility are likely to suffer — without any technical upside.

But you don’t have to follow that path.

At Circle B, we help you design and operate open infrastructure on your terms — without unnecessary lock-in. Whether you’re considering Proxmox, KVM, Virtuozzo, or other open alternatives, our engineers can help map the right path forward.

  • Book a 1:1 strategy session with a Circle B engineer
  • Get a tailored VMware cost comparison in one week
  • We deploy globally — based in the Netherlands

Need to know more?

 

Contact us today! s

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