Broadcom is killing off VMware perpetual licences and strong-arming users onto subscriptions

Broadcom is killing off VMware’s on-premises perpetual licenses – and getting set to strong-arm VMware customers onto subscriptions, by also ending the sale of Support and Subscription renewals for such customers.

VMware described this to customers as part of its plan to “complete the transition of all VMware by Broadcom solutions to subscription licenses.”

“We are [also] ending the sale of Support and Subscription (SnS) renewals for perpetual offerings beginning today” SVP Krish Prasad said in a FAQ.

VMware perpetual licences were described by its own Office of the CTO earlier this year in a short blog as its “most renowned licences.” The on-premises licences for the virtualisation software come with a licence key, with SnS separately licensing users for support and software updates. 

Perpetual licence keys never expire but the SnS lapses and now will not, seemingly, be renewed – meaning that customers reluctant to shift to an alternative licensing model will be left without support or updates.

"We encourage customers to review their inventory..."

VMware customers “may continue using perpetual licenses with active support contracts. We will continue to provide support as defined in contractual commitments. We encourage customers to review their inventory of perpetual licenses, including Support Services renewal and expiration dates,” Broadcom said rather menacingly, on December 10.

The company is also announcing a new “bring-your-own-subscription license option, providing license portability to VMware validated hybrid cloud endpoints running VMware Cloud Foundation,” it added, without initially sharing details. (Know more? Spill the beans.)

VMware perpetual licenses get the chop: Silver linings?

The company, bought by Broadcom for $69 billion in a deal that closed November 22, said December 10 that it is sweetening the pill by “helping more customers benefit from VMware Cloud Foundation by reducing the list price by half and including higher support service levels including enhanced support for activating the solution and lifecycle management.”

Among those actively pursuing some of VMware’s nervous customer base is Nutanix, whose CEO Rajiv Ramaswami recently said Broadcom’s “whole business model has been to maximize acquired assets in two to three years. VMware customers will feel this” – but critics say Nutanix is also costly and its documentation and complexity can mitigate against it.

Smaller users can also consider alternatives like Proxmox, the open-source XCP-ng and Canonical’s new MicroCloud offering.

(VMware’s on-premises customers have long been accustomed to a buy-once, use-forever model versus the cloud’s buy-never, pay-forever. Broadcom killing off the former may make the cloud look more alternative to VMware users with large numbers of perpetual licences.)

VMware has been on a journey to transition to a subscription model for more than a year now, and the industry has already embraced subscription as the standard for cloud consumption” VMware’s Prasad said: “The subscription model helps us deliver what customers want:

• “Continuous innovation.
• “Faster time to value.
• “Predictable investments.

“... Broadcom will work with customers to help them “trade in” their perpetual products in exchange for the new subscription products, with upgrade pricing incentives,” he added with an FAQ emphasising that "this is an excellent time for customers to assess their current state with VMware infrastructure and management products..."

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