Broadcom enforces steep penalties for late VMware license renewals
- Arrow notified VMware partners of a significant increase in required cores for licenses from 16 to 72 cores as of April 10th.
- Customers with small server configurations will face additional costs as they will have to buy licenses for cores they don’t utilize.
- Broadcom's new penalty for late renewals may signal a shift in focus to larger, more profitable customer segments.
In France, the tech distributor Arrow has communicated significant price increases for VMware licenses to its partners as of April 10th. This change is substantial, raising the minimum number of cores required for VMware licenses from 16 to an overwhelming 72 cores. As a result, customers with a single eight-core processor will now be required to pay for 72 cores, meaning they will be billed for many unused cores. Alongside this increase in core requirements, Broadcom has introduced a 20 percent penalty for customers lacking renewed subscription licenses on their anniversary date. This ultimatum for license renewals signifies a clear moving away from resources allocated to smaller customers, forcing them to reconsider their virtualization strategies amidst rising costs. The shift suggests Broadcom aims to prioritize larger clients who generate more revenue. Reports from various social media and blogs have indicated that these changes reflect changes in Broadcom's overall approach to handling VMware's existing customer base, emphasizing financial returns from those entities. Continuing pressure to spend on licenses while managing infrastructure could result in smaller organizations feeling the crunch, buying into costly bundles that may not serve their needs adequately. This highlights a potential rift between Broadcom’s ambitions for larger sales volumes and the realities faced by smaller enterprises relying on VMware products.