VMware Tanzu Licensing Under Broadcom
Introduction – Why Tanzu Matters in Broadcom Negotiations
VMware Tanzu is VMware’s Kubernetes and modern applications suite, a key part of enabling cloud-native workloads on-premises.
Now that VMware is under Broadcom’s ownership, Tanzu has become a focal point in contract negotiations. Broadcom’s plans for Tanzu remain unclear, and that uncertainty creates both risk and leverage.
CIOs and IT procurement teams must pay special attention to how Tanzu is licensed and priced under Broadcom, as it can significantly impact costs and future cloud strategy.
Broadcom is known for streamlining products and driving up margins. This means customers need to carefully evaluate Tanzu in their VMware agreements.
Tanzu may or may not continue to be bundled with other VMware products as it was previously. Broadcom could treat Tanzu as a premium add-on, potentially increasing its price or altering its packaging.
For a comprehensive overview, read our ultimate guide, ‘VMware Cloud & Advanced Platforms Licensing Under Broadcom: Aria, Cloud Foundation, Tanzu.’
Tanzu Licensing Before Broadcom
Before Broadcom’s acquisition, VMware offered Tanzu in multiple editions with different licensing approaches.
Understanding the historical packaging helps set the stage for potential changes:
- Tanzu Basic: The entry-level edition, often bundled with vSphere at no extra cost for customers. Tanzu Basic allowed vSphere users to run Kubernetes workloads on their existing infrastructure (via “vSphere with Tanzu”) without a separate license.
- Tanzu Advanced/Enterprise: Higher-tier editions licensed separately (not included for free). These offered richer capabilities (e.g., multi-cloud Kubernetes management and other enterprise features) and were sold as subscription licenses tied to resource usage. Organizations can deploy these editions only on specific clusters, leaving other clusters without Tanzu, thereby providing flexibility.
Tanzu Licensing Under Broadcom
With Broadcom in charge, VMware’s licensing is shifting to subscription-only models and larger bundles, which affects Tanzu:
- Bundling Changes: It’s uncertain if Tanzu Basic will remain bundled with vSphere as before. Early signs suggest Broadcom’s new bundles (like the vSphere Foundation subscription) include Tanzu Kubernetes functionality by default. This means if you subscribe to VMware’s infrastructure stack, Tanzu comes along as part of the deal. However, remember that you’re paying for the whole bundle – Tanzu isn’t truly “free” if it’s included. Always ask if Tanzu can be removed or if it’s mandatory in your package.
- Subscription-Only Editions: Advanced Tanzu capabilities will remain subscription-only. Broadcom has ended perpetual licenses across VMware’s portfolio, so any Tanzu edition beyond basic features will be a recurring subscription. Broadcom might streamline Tanzu editions (for example, combining Advanced and Enterprise into a single edition), which could reduce the number of choices. Fewer editions would mean less flexibility and could force you into a higher-cost tier to get the features you need.
- Potential Price Increases: Broadcom is likely to raise prices or change pricing metrics for Tanzu. This could be through direct subscription price hikes or by packaging Tanzu into pricier bundles. If Tanzu Basic continues to be included in something like VMware Cloud Foundation, Broadcom might bake that cost into the overall bundle price. Alternatively, if Tanzu is treated as a niche premium product, a full-featured Tanzu subscription could carry a significant premium. Be prepared for Tanzu costs to increase under Broadcom, and plan your negotiations accordingly.
- Roadmap Uncertainty: There is ongoing uncertainty about Tanzu’s future under Broadcom. VMware made Tanzu a strategic platform, but Broadcom’s focus is unclear. Some parts of Tanzu have already been cut (for example, the free Tanzu Community Edition was discontinued, and Tanzu Application Platform was reportedly shelved in 2024). Broadcom may tout new Tanzu versions, but it’s not clear how much innovation or support will continue. This uncertainty can be your negotiation leverage: if Broadcom can’t show a strong commitment to Tanzu, you’re justified in demanding better pricing and protections (or considering other options).
Read about VMware Aria licensing, VMware Aria (vRealize) Licensing Under Broadcom – What Changed and What to Negotiate.
Implications for Customers
Broadcom’s approach to Tanzu brings several risks and considerations for VMware customers:
- Paying for Unused Tanzu: With broad bundling, you might end up paying for Tanzu even if you don’t use it. Tanzu is included by default (e.g., in VMware Cloud Foundation or vSphere bundles), which means it may be potential shelfware. Ensure you’re not purchasing Tanzu licenses that will remain unused.
- Rising Costs: Subscription renewals may become more expensive. Broadcom tends to raise prices and eliminate discounts. If you rely on Tanzu, expect renewal quotes to jump unless you secure price protections. Even customers not using Tanzu could see higher base bundle prices simply because Tanzu is folded in.
- De-prioritization & Lock-In Risk: If Broadcom doesn’t prioritize Tanzu, its development and support may suffer. And if you’ve invested heavily, it’s harder to pivot to another platform later, potentially leaving you stuck.
In short, avoid paying for something you’re not using or getting locked into an expensive path.
Negotiation Strategies
The uncertainty around Tanzu can give you leverage to negotiate better deals. Consider these strategies depending on whether you plan to use Tanzu or not:
If you are NOT using Tanzu:
- Negotiate it out: If Tanzu is included in your VMware deal but you won’t use it, ask to remove it or get a cost credit. The contract should explicitly state that you won’t be charged for Tanzu unless you deploy it. This way you avoid paying for shelfware.
If you are USING Tanzu:
- Lock Multi-Year Pricing: Secure a multi-year subscription deal for Tanzu now, before Broadcom imposes any price hikes. Lock in today’s rates for 2–3 years if possible.
- Cap Renewal Increases: Negotiate a cap on price increases for when your Tanzu subscription renews (e.g. no more than 3–5% per year). This protects you from steep upticks later.
- Insist on Roadmap Visibility: Given the questions around Tanzu’s future, request regular roadmap updates or a commitment for ongoing support as part of the deal. You need confidence that the product will be supported and improved.
- Bundle for Discounts: If you’re signing a larger VMware ELA or bundle, include Tanzu in that package to take advantage of volume discounts. Broadcom may offer a better overall price if Tanzu is part of a bigger commitment. Just be careful not to overbuy—bundle Tanzu only if you truly intend to use it.
Insights on how to negotiate VMware services with Broadcom, Negotiating VMware Cloud Services with Broadcom – How to Secure Better Terms.
Leverage Alternatives
Remember that you have other options besides Tanzu, and Broadcom is aware of this. Use that as leverage. Mention that you’re evaluating alternatives, such as Red Hat OpenShift or managed Kubernetes services from AWS, Azure, or Google.
Broadcom doesn’t want to lose your business to these competitors, so even hinting at a switch creates pressure. Broadcom is more likely to be flexible if Tanzu isn’t your only option, so keep credible alternatives on the table to strengthen your position.
Checklist – Tanzu Licensing Protections to Negotiate
When finalizing your contract, try to include the following clauses to protect your interests regarding Tanzu:
- Tanzu Exclusion: “Customer shall not be required to license Tanzu unless deployed, and unused Tanzu components will not be invoiced.”
- Price Protection: “Annual Tanzu subscription fees shall not increase by more than 3%.”
- Roadmap Disclosure: “Broadcom shall provide annual updates on Tanzu development plans during the contract term.”
These provisions address key risks, including not paying for unused software, limiting future price hikes, and ensuring transparency on product direction. Use this checklist to ensure you cover all your bases in negotiations.
FAQs
Is Tanzu Basic still included with vSphere under Broadcom?
Broadcom now includes Tanzu Basic capabilities as part of certain VMware subscription bundles (like vSphere or Cloud Foundation). If you subscribe to those bundles, you get the right to use Tanzu Basic. However, it’s no longer a standalone free add-on – it’s now part of a paid package.
How is Tanzu priced now?
Tanzu is offered only as a subscription. You pay a recurring fee based on your usage (such as the number of Kubernetes clusters, nodes, or CPU cores managed by Tanzu). Broadcom often packages Tanzu into larger product bundles, allowing you to view it as part of an overall VMware subscription rather than a separate line item. In general, pricing is higher than it was previously, so expect to pay a premium if you need Tanzu’s full feature set.
What if I don’t use Tanzu, but it’s bundled in my deal?
Do not accept paying for something you won’t use. If Tanzu is included in your VMware agreement but you have no plans for it, consider negotiating its removal or obtaining a financial credit. Clearly communicate that you want no charges for Tanzu unless you actually deploy it.
Should I commit to Tanzu long-term?
Be cautious with long-term commitments. If you’re confident that Tanzu is critical to your strategy, then consider signing a multi-year deal with strong price locks and exit options. However, given the uncertainties, you might opt for a shorter initial contract to maintain flexibility. Don’t sign a 5-year Tanzu deal without protections – stick to a shorter term and re-evaluate later.
5 Actionable Tanzu Negotiation Tips
- Confirm Tanzu’s inclusion: Ask upfront if Tanzu is included in your VMware package.
- Eliminate shelfware costs: If you won’t use Tanzu, insist on removing it or getting a cost credit. Don’t pay for unused components.
- Secure pricing now: If you need Tanzu, lock in a multi-year price before Broadcom raises rates.
- Get it in writing: Get commitments in writing about Tanzu’s roadmap and support during your contract.
- Leverage alternatives: Let Broadcom know you’re considering other Kubernetes solutions (OpenShift, EKS, etc.) to pressure them for better terms.
By following these tips and strategies, you can effectively navigate VMware Tanzu licensing under Broadcom.
The key is to be proactive: scrutinize what you’re paying for, demand contractual protections, and remind Broadcom that you have choices.
Read about our Broadcom Licensing Advisory Services
