When Broadcom completed its acquisition of VMware in November 2023, the industry expected changes. What few anticipated was the speed and depth with which this move would reshape the market, especially for SMBs. The official narrative spoke of “simplifying” the portfolio. In practice, the shift has meant abandoning perpetual licenses, consolidating products into suites, and redrafting the partner program. These three components, combined, have turned a one-time CAPEX expense into a recurrent OPEX that is more visible… and have pushed thousands of organizations out of their comfort zone: the. on-prem virtualization of always.
The first sign came early: end of perpetual licenses and transition to subscription. What was years ago a one-time payment per host or CPU has shifted to an annual fee tied to bundles like VMware Cloud Foundation (VCF) or vSphere Foundation (VVF). For many SMBs that only needed hypervisor, basic management, and high availability, paying for packages including SDN, software-defined storage, or lifecycle management increased the bill without immediate benefit. The core idea — aligning price with ongoing value — is defensible; but the consequence, in many cases, has been another: local virtualization has become more expensive.
This equation was further affected by a new channel program that tightens control over some traditional resellers and integrators. With fewer middle layers and a stronger focus on large multiyear deals, many small companies have realized they are no longer the target customer. The implicit message is clear: VMware is primarily for enterprise environments and large-scale hybrid deployments.
From strategy to tact: “cloud by necessity”
Anyone thinking this is just product rebranding misses the bigger picture. The pivot is strategic. If maintaining an on-prem cluster with VMware becomes financially strained, the escape route on the map is through the cloud. It’s not just about selling VCF or VVF: the real goal is redirecting workloads toward AWS, Azure, or Google Cloud, where VMware provides hosted services and managed platforms. The outcome: if on-prem costs are too high, you may end up virtualizing in someone else’s data center.
This is creating a split in the market:
- Enterprise level: large corporations with deep pockets and teams to sustain VCF, negotiate multi-year agreements, and orchestrate complex hybrids.
- Mid-market / SMBs: organizations with limited budgets, forced to migrate, adopt open hypervisors, or move workloads to public cloud.
The mid-tier space — historically a driver of flexibility and innovation — is shrinking. Independent virtualization and on-prem autonomy are beginning to seem like luxury items.
Winners, losers… and those who can turn it around
In the short term, the winners are Broadcom (predictable subscription revenue) and the hyperscalers (more workloads landing on their platforms). Among the losers are SMBs, MSPs, small clients relying on perpetual licenses and lightweight vSphere. That said, this reconfiguration also creates opportunities: the demand for neutral consulting, multi-cloud design, and alternatives is growing at a double-digit rate.
For consultants and integrators, the opportunities are clear:
- Independent assessment: Does paying for the full bundle still make sense, or should you rethink the tech stack?
- Cloud strategy: What to move (and what not), how to control costs, and how to secure data and identity across environments.
- Alternative platforms: When does it make sense to bet on open hypervisors (KVM/Proxmox VE), OpenStack, OpenNebula, or Hyper-V, and what are the real support, automation, and ecosystem implications?
- Hybrid security: Using federated identity, microsegmentation, and observability without giving up to a single vendor.
Real alternatives for those who want (or need) to do something different
The discussion about “exit routes” is no longer theoretical. There are production-supported paths:
- Proxmox VE (KVM + LXC): open-source hypervisor with web management, clustering, HA, replication, and backup. Over the last 18 months, it’s progressed from “cheap alternative” to production-grade for hundreds of SMBs and MSPs. Advantage: simple licensing and predictable support costs. According to David Carrero, cofounder of Stackscale (Grupo Aire), it’s becoming a popular migration destination from VMware.
- OpenStack: when a private cloud with multi-tenancy, APIs, and self-service is needed, it remains the de facto standard. It requires engineering and a capable partner; but, in return, it avoids lock-in and allows horizontal scaling. It’s also gaining market share in certain sectors like public cloud, according to Carrero.
- OpenNebula: a lighter private/edge cloud option, with KVM and vCenter as back-ends. Ideal for those seeking automation without the weight of OpenStack. Also based in Europe, it could surprise in the short term as a strong alternative.
- Hyper-V: in Windows-first environments, it remains a valid route—especially if the organization already has Software Assurance and wants to consolidate within the Microsoft ecosystem.
European private cloud and infrastructure providers, such as Stackscale, have specialized in migrations from VMware to Proxmox and offer managed deployments of OpenStack, OpenShift, Hyper-V, and OpenNebula. Their approach resonates with many SMBs’ core concerns: maintaining data sovereignty, paying for capacity, and not foregoing expert support.
What to scrutinize carefully (beyond price)
Leaving VMware isn’t just a matter of changing software. You need to assess thoroughly:
- Total cost of ownership (TCO) over 3 years: subscription/licenses, support, hardware, operation (patching, automation), backup/DR, energy, and training.
- Compatibility and ecosystem: drivers, appliances, image repositories, monitoring (Prometheus/ELK), SDN, and storage solutions (Ceph, vSAN alternatives, iSCSI/NFS).
- Operational impact: What changes in patching, KPIs, observability, and SLA? Who responds at 3 AM?
- Security and compliance: encryption, RBAC, auditing, PII, and retention. If regulated, the partner must provide official documentation.
- Exit plan: Even if staying with VMware, it’s wise to document the “last-resort” steps: what needs to be done, how long it takes, and what it costs to migrate if plans change or the contract is renegotiated.
A realistic 90-day migration plan
Days 0–15 — Discovery
Inventory of hosts, clusters, VMs, and dependencies (AD/DNS/PKI, licenses, snapshots, monitoring). Prioritize by criticality and RTO/RPO. Estimate costs under the new model.
Days 16–45 — Proof of concept
Set up a pilot cluster (e.g., Proxmox + Ceph or OpenNebula), migrate 10–15 representative VMs with V2V, and validate network, storage, backup, and HA. Measure latencies, p99, consumption, and costs.
Days 46–75 — Transition planning
Decide what to keep (and under which bundle/license) and what to migrate. Document runbooks, downtimes, and rollback. Finalize support agreements and design the DR plan.
Days 76–90 — Phase 1 execution
Migrate 30–40% of the less critical workloads, optimize automation (IaC), stabilize metrics, and prepare for phase 2 with core workloads if results match expectations.
What if I decide to stay?
Some clients find that VMware continues to be the right fit: SAP deployments, large-scale VDI, telco operators, multi-site environments with deep NSX and vSAN integration, or end-to-end vendor support. The key is to make an informed decision, not based on inertia, and to negotiate with the governing body that has shifted the rules.
A new era, not an epitaph
The virtualization market isn’t dying; it’s being rewritten. Less “buy and forget,” more subscription, bundled packages, and managed ecosystems. For SMBs, the solution lies in honest comparison and forward planning. For integrators, it’s about moving beyond selling boxes into advising with data and roadmaps. And for everyone, it’s about relearning a forgotten principle: there’s no inherently good or bad technology, only decisions well or poorly aligned with business needs.
Organizations that come out strengthened from this shift won’t necessarily be the biggest. They’ll be those that do their homework: understand their TCO, risk, dependency on third parties, and contingency plans. VMware, Broadcom, and the hyperscalers have moved; now it’s time to respond with discretion.
Frequently Asked Questions
What real alternatives exist to VMware for SMBs wanting to stay on-prem?
Today’s most common options are Proxmox VE (KVM) for simplicity and cost, OpenNebula for a lighter private cloud, and OpenStack for multi-tenant API-driven environments. In Windows-centric setups, Hyper-V remains viable. European private cloud providers like Stackscale offer migration and managed services for these platforms.
How do I calculate the 3-year TCO to compare VCF/vSphere versus an open alternative?
Include subscription/licenses, support, hardware, operations (patching, automation), backup/DR, energy, and training. Compare latency, p95/p99, SLA, and lock-in risk. A neutral partner can help model scenarios based on market prices and migration plans.
What about my existing perpetual VMware licenses?
They remain valid under their original terms, but no new sales or maintenance renewals will be made for that format. To expand or get updates, you must switch to subscription (VCF/VVF). It’s important to review your contract and expiration dates before any major upgrade.
Is it worthwhile to go straight to the public cloud instead of hypervisor migration?
That depends on egress costs, latency, compliance, and workload profiles. For peaks or exposed services, cloud may be more agile. For steady workloads with sensitive data, a well-managed private cloud or on-prem setup remains competitive. The choice should be driven by numbers and a feasible hybrid plan.