To the Changes to VMware licensing They transformed the virtualization platform's billing model: from licensing per physical CPU—with the 32-core rule introduced in 2020—to the definitive migration to a subscription model after the acquisition by Broadcom, completed in 2023 for US$69 billion. For companies with dense virtualized environments, these changes require a review of contracts, hardware inventory, and SAM governance before each renewal.
What has changed in VMware licensing: a timeline
Changes to VMware licensing are concentrated in three phases: billing per core block in 2020, the end of perpetual licenses after the Broadcom acquisition in 2023, and the portfolio reorganization in 2024.
| Year | Change | Practical impact |
|---|---|---|
| 2020 | CPU-based licensing will now consider blocks of 32 cores. | Additional licenses for CPUs with more than 32 cores. |
| 2023 | Broadcom completes acquisition (US$ 69 billion) and terminates perpetual licenses. | Mandatory migration to the subscription model. |
| 2024 | Sale of the EUC (Omnissa) division and free release of Workstation/Fusion Pro. | Portfolio and access reorganization |
Why did Broadcom change VMware licensing?
In 2023, Broadcom completed its acquisition of VMware for US$69 billion, one of the largest technology transactions of the decade. In December 2023, the company ended the sale of perpetual licenses and made subscriptions the only model available for products such as vSphere and VMware Cloud Foundation. The transition to recurring revenue requires organizations to review VMware licensing agreements, especially in robust VMware ESXi-based environments.
In practice, Broadcom has consolidated dozens of standalone SKUs into a few subscription packages, such as VMware Cloud Foundation (VCF) and VMware vSphere Foundation (VVF). For customers who previously used only isolated components, this repackaging can increase the total cost and requires a reassessment of what is actually being consumed.
The 32-core-per-CPU rule (2020)
The first major change occurred in 2020, when CPU licensing began requiring an additional license for each block of 32 cores. For processors with up to 32 cores, nothing changed; above that limit, each subsequent block required a new license. Since AMD and Intel already offered chips with 64 cores—and providers like AWS, Google, and Azure offer instances with 96 vCPUs—the impact on the cost of high-density data centers was immediate.
Changes to VMware products in 2024
In 2024, Broadcom sold its End-User Computing (EUC) division to the KKR group, which renamed the unit Omnissa. Around the same time, the company released VMware Workstation Pro and Fusion Pro for free personal use, expanding developers' access to local virtualization tools.
What are the impacts of the new VMware licensing for businesses?
The subscription model directly links hardware, data center, and cloud decisions to licensing costs. Without reliable inventory and SAM discipline, the company only discovers additional costs at renewal time. Hybrid cloud environments—including VMware Cloud on AWS and Google Cloud VMware Engine—need to be scaled considering the number of cores per host, at the risk of doubling the licensing cost.
Solutions like VMware vSAN and Cloud Foundation continue to support high availability and disaster recovery, while vSphere and ESXi provide the foundation for intensive workloads, including artificial intelligence. The continuity of these environments depends on planning licensing along with the technical architecture, not after migration.
How to plan VMware licensing renewal with governance.
The most effective defense against cost surprises is to treat VMware licensing as an ongoing asset governance discipline, not as a one-off renewal event. A Center of Excellence in Software and Cloud Governance (CCoE), supported by a unified platform, allows you to control both VMware data center and public cloud costs simultaneously.
- Map the processors, cores, and hosts of each environment.
- Review your current contracts, support, and usage rights.
- Assess the impact of the hybrid cloud on the number of licenses.
- Connect the technical architecture to the licensing strategy from the very beginning.
4MATT Tecnologia, a ServiceNow Elite Partner in Brazil and recognized with the Technology Excellence Partner Award 2024–2025, supports companies in VMware licensing governance with best practices. Software Asset Management (SAM) and IT Asset Management (ITAM), reducing risks and optimizing costs in hybrid environments.