VMware Cloud & Advanced Platforms Licensing Under Broadcom
Broadcom’s acquisition of VMware has reshaped the licensing model for VMware’s advanced platforms.
Instead of the flexible, component-based licensing that VMware customers were accustomed to, Broadcom is promoting bundled subscriptions across products like VMware Cloud Foundation, Aria, and Tanzu.
The emphasis is on selling these as integrated solutions – monetizing private cloud infrastructure (Cloud Foundation), cloud management (Aria), and modern app platforms (Tanzu) – rather than à la carte components.
The result is reduced flexibility and higher baseline costs for customers. Enterprises risk being forced into all-in-one bundles and paying for features they don’t need (shelfware) if they simply accept Broadcom’s default terms.
This analysis explains how Broadcom’s ownership is impacting VMware Cloud Foundation, Aria, and Tanzu licensing, and provides negotiation strategies to control costs and protect your organization.
VMware Cloud Foundation Licensing
Overview: VMware Cloud Foundation (VCF) is a bundled software stack that includes vSphere (compute virtualization), vSAN (storage), NSX (networking), and management tools. It’s essentially VMware’s private cloud-in-a-box.
Broadcom’s changes:
Under Broadcom, VMware Cloud Foundation licensing has shifted to an all-or-nothing bundle. Broadcom no longer encourages buying individual components of the stack as standalone products. If you want one part (like NSX or vSAN), you’re generally expected to purchase the full VCF suite.
Broadcom is also adjusting pricing models – for example, moving from per-CPU licenses to per-core licensing with high minimum core counts – which can raise costs for smaller deployments.
Overall, customers now have to license the entire Cloud Foundation package, which drives up the baseline cost if they only need a subset of the features.
Negotiation tips:
- Bundle discounts: If you are adopting VCF, consider negotiating it as a single package. Use the fact that you’re buying a full stack to get a discounted rate. Broadcom is pushing the bundle, so leverage that for a better overall price.
- Carve out unneeded components: If you don’t need every component in Cloud Foundation, push for a custom deal. For instance, ask Broadcom to remove or deeply discount any component you won’t use rather than paying full price for it.
- Lock expansion pricing: Include a clause that any future expansion (adding more servers or cores to VCF) will be at the same unit price you negotiate now. This protects you from price hikes when you scale up in the future.
VMware Aria Licensing
Overview:
VMware Aria (formerly vRealize Suite) is VMware’s cloud management platform, including tools for operations monitoring, automation, logging, and network insight.
In the past, you could buy Aria (vRealize) components outright (perpetual licenses) or as part of a suite, and even a SaaS version via subscription credits.
Broadcom’s changes:
Broadcom is now pushing VMware Aria toward a subscription-only licensing model. Standalone perpetual licenses for Aria products are being phased out, and the capabilities are being folded into broader subscriptions.
For example, Broadcom encourages customers to adopt the Aria Suite as a SaaS subscription or to get Aria functionality bundled with products like Cloud Foundation.
This means that customers with legacy on-premises vRealize licenses must consider migrating to a subscription model. Support for old perpetual licenses will wane, forcing a decision to convert to the new scheme.
Impacts:
The VMware Aria licensing impacts include reduced flexibility for those who only need one or two Aria modules. Typically, you must purchase the entire Aria Suite (or have it included in a larger bundle), potentially paying for features you won’t fully use.
Budget-wise, it also shifts spending from a one-time capital expenditure (CapEx) license to recurring operational expenditure (OpEx) subscription fees.
Negotiation tips:
- Convert existing value: If you already invested in Aria (vRealize) licenses, negotiate credit when moving to Broadcom’s subscription. For instance, consider negotiating a discounted rate or a complimentary period in the SaaS offering equivalent to the value of your existing licenses.
- Lock in multi-year rates: Try to secure pricing for Aria over a multi-year term. Broadcom may propose annual subscriptions; instead, consider a 3-year deal with fixed annual costs or capped increases to avoid surprises.
- Bundle for discounts: Consider bundling Aria into a larger Enterprise License Agreement. If you’re also renewing vSphere or Cloud Foundation, including Aria in that deal might win you a better discount than buying it separately. Use cross-product negotiations to your advantage.
VMware Tanzu Licensing
Overview: VMware Tanzu is VMware’s Kubernetes and modern applications platform. It was historically sold in several editions (Basic, Standard, Advanced) with various licensing metrics (per core, per cluster, etc.).
Broadcom’s changes:
Under Broadcom, VMware Tanzu licensing is likely to be simplified and integrated into broader offerings. Broadcom may integrate Tanzu capabilities into bundles like Cloud Foundation or vSphere+, rather than offering multiple separate Tanzu editions.
This means you could end up paying for Tanzu by default as part of a larger suite, even if your Kubernetes usage is limited. Because Tanzu is strategic for VMware, Broadcom is inclined to price it at a premium and ensure wide adoption through bundling.
Impacts:
If you have selective Kubernetes needs, this bundling can lead to cost spikes – you might effectively license Tanzu for your entire environment, even if you don’t actually use it. In short, the cost of adding Tanzu under Broadcom’s model can be significantly higher if it’s tied into every server or bundle.
Negotiation tips:
- License only what you use: Define the scope of Tanzu in your environment. Negotiate to license Tanzu only for the clusters or hosts that will run Kubernetes, rather than every VMware host you own. This prevents paying for Tanzu on infrastructure that won’t use it.
- Leverage bundle deals: When renewing vSphere or purchasing Cloud Foundation, use this opportunity to secure a better deal on Tanzu. Request that Tanzu be included at a favorable rate as part of the bigger agreement. Broadcom may accommodate this to secure your broader business.
- Use alternatives as leverage: Let Broadcom know you are considering other Kubernetes options (like Amazon EKS, Red Hat OpenShift, or vanilla open-source Kubernetes). Showing that you have viable alternatives puts pressure on Broadcom to offer more competitive Tanzu pricing or terms to keep you on the VMware platform.
VMware Cloud Services & Reserved Models
VMware’s cloud offerings (like VMware Cloud on AWS) still use a consumption model – you can pay on demand or commit to a reserved term for lower rates. VMware cloud licensing under Broadcom emphasizes these reserved subscriptions.
The biggest discounts come when you commit to a set amount of capacity or spend (e.g., a 1-year or 3-year term).
Broadcom is strongly encouraging customers to opt for reserved capacity because it provides predictable revenue. In practice, you’ll be offered much better rates for making an upfront commitment, while pure pay-as-you-go usage will be charged at a premium.
Negotiation tips:
- Reserve what you can predict: For workloads you know will run in VMware’s cloud steadily, negotiate a reserved capacity plan to save money. Committing to a baseline usage (for example, a specific number of hosts for a year) will significantly reduce your unit costs. Align your commitment with your actual needs to avoid overpaying for unused capacity.
- Seek enterprise commitment discounts: If you anticipate significant VMware Cloud usage, use that as leverage. Broadcom offers better pricing tiers for bigger commitments, so consider an enterprise cloud agreement (commit-to-spend). By pledging a higher annual spend across VMware Cloud services, you can secure a larger discount. Ensure you also discuss some flexibility (like spreading credits across services or regions) so that your commitment can adjust to real-world usage.
Hybrid Cloud Licensing Strategies
Previously, VMware offered hybrid licensing programs (like VMware Cloud Universal credits) that let customers apply their investments across on-premises and cloud deployments. Broadcom may restrict or eliminate such programs.
The new stance is more rigid – on-prem licenses are on-prem, and cloud subscriptions are separate.
This means that if you invest in traditional VMware licenses now, you may not receive any built-in credit or portability when migrating those workloads to VMware’s cloud later.
Negotiation tips:
- License portability clause: Push for contract language that allows converting on-premises licenses into cloud credits. For example, negotiate the right to apply a portion of your on-prem license value toward VMware Cloud services if you migrate. This ensures you don’t pay twice when shifting workloads to the cloud.
- Custom hybrid agreements: If Broadcom has eliminated formal hybrid programs, request a customized arrangement. You could propose a certain percentage of your spend be fungible between on-prem and cloud. Even if unofficial, obtaining a written commitment from Broadcom that they will work with you on hybrid transitions is valuable. It can save money if you decide to change deployment models during the contract.
Checklist – Must-Have Licensing Protections
When finalizing any VMware contract under Broadcom, include clauses that safeguard your interests. Here are key protections to negotiate:
- Expansion Price Lock: “Additional licenses for VCF components may be purchased at the same unit rate for 36 months.”
- License Portability: “Customer may convert on-prem Aria licenses into equivalent cloud credits at an agreed conversion rate.”
- Selective Tanzu Use: “Customer may license Tanzu only for designated clusters.”
- Support Fee Cap: “Support fees shall not increase more than 3% annually during the contract term.”
FAQs
Did Broadcom change VMware Cloud Foundation licensing?
Yes. Broadcom now requires customers to purchase Cloud Foundation as a full bundle (vSphere, vSAN, NSX, etc., all together) rather than licensing those components separately.
Is VMware Aria subscription-only now?
Essentially yes. Broadcom has moved VMware Aria (formerly vRealize) to a subscription-only model. Perpetual licenses are no longer available, so in the future, you must subscribe (to Aria Suite or via a bundle like VCF) to use those tools.
How can I negotiate Tanzu costs under Broadcom?
Only pay for what you need, and bundle Tanzu with bigger deals. License Tanzu just for the clusters that will run Kubernetes (not every server by default). Also, negotiate Tanzu as part of your broader VMware agreement (like your vSphere/VCF renewal) to get a better rate. Let Broadcom know you’re evaluating other Kubernetes platforms to apply pressure for a better offer.
What flexibility exists for VMware Cloud commitments?
Only what you negotiate, by default, committing to VMware Cloud (e.g., a set number of cloud hosts for a year) is inflexible – you pay for that whether you use it or not. To get flexibility, you must negotiate it explicitly (for example, the option to adjust capacity or repurpose unused credits mid-term). Broadcom typically won’t include such terms unless requested by the customer.
Related articles
- Licensing VMware Cloud Foundation Under Broadcom – What Buyers Should Know
- VMware Aria (vRealize) Licensing Under Broadcom – What Changed and What to Negotiate
- VMware Tanzu Licensing Under Broadcom – What Buyers Should Know
- Negotiating VMware Cloud Services with Broadcom – How to Secure Better Terms
- Broadcom Hybrid Cloud Licensing Tips – Managing On-Prem and VMware Cloud Together
5 Actionable Recommendations
Here are five actionable steps for enterprises to manage VMware licensing under Broadcom:
- Confirm bundled vs. standalone products: Identify which VMware products are now only sold in bundles (e.g., Cloud Foundation including vSphere/vSAN/NSX, Aria Suite) versus those available à la carte. Knowing this will shape your negotiation strategy.
- Negotiate carve-outs for unused components: If a Broadcom bundle includes features you won’t use, insist on removing them or getting a price reduction. Don’t pay for shelfware – for example, if you won’t use Tanzu in VCF, ask not to be charged for it.
- Secure license portability rights: Demand contract terms that let you convert on-premises licenses to cloud credits (and vice versa) if needed. This ensures you can shift to VMware Cloud later without forfeiting the value of your existing licenses.
- Lock in pricing and caps: Negotiate fixed pricing for future expansions and cap your annual price increases on subscriptions/support. Locking in expansion unit prices and capping renewal increases (such as 3% per year) will protect your budget over time.
- Use alternatives as leverage: Make it clear you have other options (public cloud, different hypervisors, open-source solutions) and are willing to consider them. The more credible your alternatives, the more incentive Broadcom has to offer you favorable terms to keep your business.
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