Growth Drivers | January 7, 2025

VMware licensing changes and the road ahead

By Holland Barry, Field CTO, Cloud & Infrastructure, DXC Technology

VMware has played a key role in the technology world’s transition to the cloud, providing software that powers virtualization, multi-cloud management, infrastructure, networking, security and more.

But many organizations are now reevaluating their virtualization strategies following Broadcom’s acquisition of VMware in late 2023.

Their biggest concern has to do with new licensing changes, which involve consolidating more than 160 itemized products, bundles and editions into a handful of subscription-based products — meaning some customers are paying for features they don't use. For many, this means less pricing flexibility and higher costs.

Since Broadcom's acquisition of VMware, some clients are seeing a cost increase ranging from 150% to 1,250% for the same services.

Exploring their options

As the license renewal deadline draws closer, many IT leaders (especially those running large-scale VM environments) are re-analyzing their VMware private cloud and virtualization strategies.

And we urge them to look at this change as an opportunity to approach IT differently and consider alternatives from a business continuity and technical perspective.

Whether companies choose to stay on VMware or move to a different platform, the team at DXC can help them realize significant cost savings, freeing up resources for other critical IT initiatives.

Considering alternative private clouds

VMware, which made its name with tools that allow teams to run multiple virtual machines on a single physical machine, is dominant in the market and I’m sure plenty of customers will continue to reinvest in the technology under Broadcom’s ownership.

But clients can also consider alternative top-tier private cloud solutions, such as Microsoft Hyper-V, Azure Stack, Nutanix AHV, RedHat, SUSE and open-source solutions like KVM.

The team at DXC has conducted extensive assessments of all of these solutions for cost-effectiveness and workload compatibility, focusing on key criteria such as performance, scalability and integration capabilities.

By evaluating all the different factors, the DXC team can present customers with private cloud options that align with their specific workload needs and budgets.

Embracing a hybrid cloud approach

As many companies re-evaluate their cloud and virtualization strategies, we are seeing a tilt towards hybrid cloud solutions that blend the strength of public and private clouds and may offer more agility.

This might be the time to consider taking a more dynamic approach to your IT infrastructure by adopting a strategy that ensures the right workloads are running in the right venue at the right time.

If moving all your workloads into a public cloud is the best choice for your organization, keep in mind that DXC works with all the major public cloud service providers (e.g., AWS, Google Cloud, Microsoft Azure and Oracle Cloud), and we have a near-perfect (99.84%) cloud-migration success rate.

Whatever approach is best, our experts can help you develop effective strategies to balance the mix of public and private deployments.

DXC helped French train maker Alstom move 1K+ virtual machines to a Microsoft Azure while keeping others on-premises based on specific business cases.

As a result, 2K engineers can work from anywhere and implement state-of-the art systems, while clients can remotely connect to the platform and efficiently perform validation tests from their own environment.

Exploring multiple pathways to success

Businesses have the choice of extending VMware virtualization environments to the public cloud, combining VMware private cloud and public cloud, or modernizing virtualized VMware data centers.

And the good news is that DXC offers multiple routes to realizing the most value from each choice that’s made. For example, we can help those who purchase a VMware Cloud Foundation licensing model gain real cost savings and efficiencies by replacing functionality they’re paying for elsewhere in the IT estate with new components now available (e.g., logging, observability, automation, SDN, micro-segmentation and hyper-converged infrastructure solutions).

The DXC team can also ensure that customers appropriately realign their hardware footprints that underpin the VMware hypervisor platform to fully exploit the new 16-core-per-CPU socket minimum requirement (referring to the least number of cores that must be present on each physical socket within a system) and calibrate for optimal ratios between memory and CPU cores for best application performance.

Those companies that plan to stick with VMware’s hypervisor technology should note that DXC was the first global service provider to enter into a new contract with Broadcom as a VMware Cloud Service Provider partner, which allows us to secure the most competitive pricing.

The big picture

VMware's licensing changes have left many organizations facing difficult choices: either to allocate more funds to sustain their existing infrastructure or explore alternative solutions.

But there’s help. DXC has a team of more than 40,000 cloud- and VMware-certified professionals who can help customers make informed decisions about their infrastructure and future direction, including the best route to the cloud.