Two Years After Broadcom: VMware Is No Longer the Sole Center of Virtualization

Broadcom didn’t acquire VMware to keep all its customers happy. It bought it to hold onto the giants, streamline the catalog, increase contract values, and turn a ubiquitous virtualization platform into a much more profitable software unit. Two years later, the uncomfortable conclusion is that this strategy has worked for Broadcom, even though it has broken the trust of a significant portion of the market.

The acquisition closed in November 2023, and the change was almost immediate. The end of perpetual licenses, accelerated transition to subscription, catalog reduction, new commercial rules, and a clear shift toward VMware Cloud Foundation as the centerpiece. For many customers, the problem wasn’t just paying more. It was discovering that a platform that had been a technical decision for years had transformed into a business dependency that’s hard to control.

The result hasn’t been a smooth mass exodus to a single replacement. There’s no “new VMware.” What has emerged is something more interesting: a market that had spent too much time around an almost undisputed winner, and is now re-entering competition.

Broadcom makes money but loses trust

From a financial perspective, Broadcom can argue that the operation makes sense. Revenue continues to grow strongly, and the infrastructure software division, which includes VMware, has become a highly profitable part. The company didn’t need to keep all customers, just reinforce contracts with those who are most dependent, have larger scale, and less flexibility to migrate quickly.

The bitter part for customers is obvious. Many organizations have seen their buying flexibility disappear. The subscription model and bundles may look simpler on paper, but they don’t always fit environments that only needed part of the stack. When a company pays for more than it uses, simplification begins to feel very much like a price increase.

Still, it’s important to separate the company from the product. VMware hasn’t become bad. vSphere, vSAN, NSX, and VCF remain mature technologies, tested and capable of complex enterprise operations that many alternatives still can’t match. VMware Cloud Foundation 9 and vSphere Foundation 9 have added relevant improvements, including live patching evolution, more integrated lifecycle management, and a clearer private cloud proposition.

That’s the nuance that is sometimes lost. Broadcom didn’t destroy VMware as a technology. It destroyed much of the commercial model and the trust that surrounded it.

Nutanix and Red Hat, the enterprise winners

Nutanix is probably the clearest commercial winner of this phase. Not because it’s cheap, but because it offers many companies a credible, supported, enterprise-grade exit route. Its platform is no longer limited to classic hyperconvergence discourse. Its openness to external storage, with Dell PowerFlex, PowerStore, and NetApp ONTAP, has addressed one of its historical limitations: forcing customers to adopt its complete infrastructure vision.

That turn is significant. Many companies don’t want to dismantle all their storage just to move away from VMware. They want to reuse investments, separate compute and storage, and migrate with less trauma. Nutanix understands that VMware users aren’t always seeking an architectural revolution. Sometimes they want continuity, support, confidence, and a more predictable bill.

Red Hat OpenShift Virtualization takes another approach. Its proposal isn’t to replace vSphere with another traditional hypervisor, but to bring virtual machines and containers onto a single platform based on Kubernetes. For companies already moving toward cloud-native, it makes sense: it allows maintaining VMs while modernizing applications. For organizations that only want to continue running virtual machines without changing their operational model, it may be too much.

The practical conclusion is that customer profile matters more than brand. What’s an elegant exit for one company might be an unnecessary burden for another.

Proxmox stops being just a lab option

Proxmox is the most visible case in the open-source world. For years, it was a beloved platform for homelabs, small providers, and Linux-savvy sysadmins. After Broadcom, many companies started viewing it differently. Price helps, but it’s not everything. KVM, LXC, Ceph, Proxmox Backup Server, and relatively simple management have made PVE a real alternative for many scenarios.

The difference compared to two years ago is that it now covers gaps in enterprise needs. Proxmox Datacenter Manager is advancing as a centralized layer for multiple clusters. Proxmox VE 9.2 introduces Dynamic Load Balancer, SDN enhancements, and new operational features. Veeam now supports Proxmox VE, reducing a significant barrier where data protection is non-negotiable.

But Proxmox shouldn’t be marketed as just vCenter with a different skin. It still has fewer certifications, less formal training, fewer big-company references, and a support model different from large vendors. For teams with experienced Linux admins and internal capacity, it can be an excellent choice. But for a company that needs a provider to be available at any hour in any country or with any audit, a more cautious evaluation is needed.

Proxmox has gained credibility, but not by imitating VMware. It’s gained it because it offers a reasonable, open, cost-effective alternative for many workloads where VMware had become difficult to justify economically.

Specialists also have a place

Not all environments need a general-purpose platform. Scale Computing found its niche in edge, retail, factories, remote offices, and deployments with little or no local technical staff. Its proposition fits when the key is that the system boots, stays simple, and doesn’t require an IT team on-site. The partnership with Lenovo on ThinkEdge devices reinforces this angle.

VergeIO is another player to watch. Its platform, VergeOS, combines virtualization, storage, and networking in an integrated solution that’s an alternative to more complex VMware stacks. Public migration cases, including Topgolf, show it’s no longer just a curiosity. It’s still a small company compared to Nutanix, Red Hat, or HPE, but its growth is noteworthy: it wins not by inertia but because it solves specific problems.

XCP-ng and Vates serve a different niche. They appeal to those prioritizing independence, open source, and technological sovereignty. Based on Xen, they don’t follow the KVM mainstream but maintain a loyal community and a coherent proposition for companies wanting to avoid lock-in with another vendor.

The market has become more fragmented, but also healthier. Virtualization is no longer decided solely by comparing vSphere against “everything else.”

HPE makes an entry through cost

HPE Morpheus VM Essentials is one of the most interesting moves because it directly tackles VMware’s pain point: licensing costs. Its reference price, $600 per socket per year with support, shifts the conversation compared to core-based models that are becoming more expensive with modern servers and many-core CPUs.

The offering isn’t just a KVM hypervisor. HPE aims to combine management of new HVM clusters with the administration of existing VMware environments during transition. This can be appealing for companies that want to avoid traumatic migrations and need to operate in both worlds for months or years.

The challenge is timing. VM Essentials still needs to demonstrate maturity, references, ecosystem, support scale, and functional depth compared to platforms that have been in production for years. But HPE has some advantages many newcomers lack: channels, global support, presence with large accounts, and direct relationships with customers already buying its servers.

If HPE executes well, it could become a serious alternative. If it remains a quick commercial response to the Broadcom disappointment, it will be another promise the market will forget.

The lesson: diversify before it becomes urgent

Two years later, the lesson isn’t “abandon VMware.” Some companies still find VMware to be the best choice, even after Broadcom’s takeover. The technology is solid, operations are mature, and the cost of migration may be higher than renewing. The real lesson is more uncomfortable: no critical infrastructure should depend on a single vendor without a backup plan.

Broadcom succeeded because many customers couldn’t leave. They had technical dependencies, contracts, integrations, training, automation, backups, audit processes, and years of operation built around VMware. Exiting wasn’t impossible but slow, costly, and risky. That margin allowed Broadcom to change the rules.

The new virtualization market requires a different approach. It’s no longer just about choosing a hypervisor. It’s about deciding which workloads stay on VMware, which can move to Proxmox, Nutanix, OpenShift, HPE, or public cloud, which parts modernize with containers, what backups each platform supports, what teams will operate the environment, and what business dependence is acceptable.

Virtualization isn’t dead. Neither has it been replaced by Kubernetes or public cloud. What’s dead is the comfort of thinking a single platform could do it all for twenty years without strategic risk.

Broadcom didn’t kill virtualization. It forced it to compete again. And for customers, after two years of bills, migrations, doubts, and proof-of-concept tests, that might be the best news within an unforeseen crisis.

Frequently Asked Questions

Has Broadcom lost with the VMware acquisition?
Not financially. Broadcom has increased revenue and strengthened its infrastructure software business, albeit at the cost of significant trust erosion among many clients.

What’s the best alternative to VMware?
There’s no single answer. Nutanix fits well in enterprise, Proxmox in cost-sensitive environments with internal expertise, OpenShift for Kubernetes-oriented companies, HPE Morpheus for HPE customers, and OpenStack for large platforms with dedicated teams.

Can Proxmox already replace VMware?
In many scenarios, yes—especially if there’s Linux experience and reasonable requirements. But it’s not a clone of vCenter yet, nor does it offer the same enterprise ecosystem in support, certifications, and global references.

Does it make sense to keep using VMware?
Yes, if the workloads are critical, the environment is highly integrated, and the migration cost exceeds the savings. The key is not to renew blindly or abandon a backup plan.