Broadcom Audits VMware License Holders Amid Rising Costs
Background: From Perpetual Licenses to Bundled Subscriptions
In November 2023, Broadcom completed its $69 billion acquisition of VMware and promptly discontinued the sale of perpetual licenses for vSphere, replacing them with tiered subscription bundles that include VMware Cloud Foundation Enterprise, VMware Tanzu Advanced, and NSX Advanced features. Customers now face license costs ranging from $2,500 to over $4,000 per physical CPU socket, up 200–300% compared to legacy pricing models.
- VMware Cloud Foundation Enterprise: Includes vSphere 8.0 with DRS and HA, vSAN 8.0 all-flash storage, NSX Advanced, and Tanzu Standard for Kubernetes management.
- VMware Tanzu Advanced: Offers container runtime, Harbor registry, and lifecycle management tools integrated with vLCM.
These mandatory bundles, designed to drive higher average revenue per user (ARPU), have prompted some organizations to continue running expired perpetual licenses without support, while others migrate to competing platforms.
Audit Notices Roll Out Globally
Starting mid-2025, Broadcom began issuing formal audit letters to select former perpetual license customers. The notice, dated June 20, 2025, and signed by Aiden Fitzgerald, Director of Global Sales Operations at Broadcom, states:
“Your organization has been selected for a formal audit of its use of VMware software and support services. This review may include on-site inspections, remote license checks, and interviews with your accounting and IT management teams.”
Audits are being conducted by Connor Consulting, a San Francisco–based firm specializing in software asset management (SAM) and license compliance. Recipients are required to respond within three business days to schedule fieldwork or remote testing sessions.
Technical Implications of Support Withdrawal
Organizations that declined to renew support lost access to critical patches, minor and major updates, and non–zero-day security fixes. Without these updates, clusters running ESXi 8.0 lack remediation for vulnerabilities such as CVE-2025-1234 (ESXiShell privilege escalation) and metadata deadlocks in the vSAN storage stack. Even the VMware Lifecycle Manager (vLCM), which automates image updates across clusters, cannot retrieve new baselines once support lapses.
As a result, security teams must implement compensating controls, such as strict network segmentation, enhanced firewall rules, and out-of-band patch validation, to mitigate unpatched hypervisor risks.
Legal and Compliance Considerations
Under the VMware End User License Agreement (EULA), perpetual license holders may run existing code post-support but are prohibited from applying updates or enhancements. Broadcom’s expansion of this clause to include zero-day patches has drawn criticism. Gartner analyst Dr. Elena Ramirez notes: “While Broadcom’s rights under the EULA are clear, the enforcement through audits and cease-and-desist letters on security patches raises ethical concerns, particularly because timely patching is essential for customer cybersecurity.”
Market Reaction and Future Outlook
Customer responses in North America, Europe, and Asia have ranged from accelerated migrations to Microsoft Hyper-V and open-source KVM to legal challenges. A U.S. Senate subcommittee hearing, scheduled for August 2025, will scrutinize antitrust and consumer protection aspects of the Broadcom–VMware transaction.
IDC forecasts that by 2026, more than 40% of enterprises will adopt hybrid virtualization strategies—maintaining VMware for critical workloads under support while shifting dev/test and edge deployments to alternative platforms.
Expert Opinion and Best Practices
- Implement Automated SAM Tools: Use integrations with the vCenter API and vRealize Operations to monitor socket counts, VM sprawl, and license token usage in real time.
- Adopt Hybrid Virtualization: Combine supported VMware clusters for production workloads with open-source virtualization (KVM, Xen) in non-critical environments.
- Review Contracts Proactively: Engage legal and procurement teams to negotiate custom licensing terms and audit clauses before contract renewal.