As the dust settles on Broadcom's $61 billion acquisition of VMware in November 2023, CIOs are confronting a transformed landscape that demands urgent strategic reevaluation. The deal has introduced pricing volatility, licensing overhauls, and potential innovation stagnation, prompting many to question VMware's role in their IT portfolios. Gartner describes the acquisition as a "seismic disruption impacting infrastructure and operations (I&O)", advising CIOs to reassess procurement, implementation, and technological strategies to mitigate risks. With VMware's global customer base exceeding 300,000, as noted by IDC's Stephen Elliot, the implications are vast and far-reaching.
Market data amplifies the urgency. A 2024 CloudBolt survey found that 99% of IT decision-makers are uneasy about the acquisition, citing concerns over cost predictability and vendor lock-in. Forrester's 2024 Predictions forecast that 20% of enterprise VMware customers will begin migrating away from the platform this year, a trend expected to accelerate. Gartner further projects that by 2026, 50% of enterprises will initiate proofs-of-concept (POCs) for alternative distributed hybrid infrastructure products to replace VMware-based deployments. These statistics highlight a growing exodus driven by Broadcom's high-margin focus, which has led to reported cost increases of 300% to 1,050%, as cited by AT&T in Ars Technica discussions.
This blog outlines essential insights for CIOs navigating this shift before 2026. Drawing on research from Gartner, Forrester, IDC, and 451 Research, we'll examine pricing impacts, licensing changes, migration trends, and risk mitigation strategies. By understanding these elements, you can safeguard your organization's IT roadmap and turn challenges into opportunities for optimization.
The Pricing Overhaul: Escalating Costs and Budgetary Strain
Broadcom's business model has aggressively reshaped VMware's pricing, transitioning from perpetual licenses to subscription-based bundles. Numerous customers have reported 300% cost increases post-acquisition, with some hikes reaching 1,050%, according to Ars Technica and ServeTheHome. Gartner VP analyst Michael Warrilow has expressed fears that Broadcom will raise prices even higher in the future, potentially exacerbating financial pressures. A survey from Ars Technica and The Wall Street Journal reveals that 73% of respondents expect prices to more than double, 12% anticipate increases between 301–500%, and 1% foresee hikes of 501–1,000%.
Smaller managed service providers (MSPs) have been particularly affected, with some facing 10x cost jumps due to new minimum subscription commitments, pushing annual bills from $60,000 to over $650,000, as detailed in the Financial Times. Forrester's 2025 predictions add that VMware's largest 2,000 customers will shrink their deployment size by an average of 40%, driven by these escalating costs. IDC emphasizes the broader TCO implications, noting that rethinking vendor relationships is essential as these changes could inflate IT budgets by 30-50% for locked-in organizations.
For CIOs, this means conducting comprehensive TCO analyses that factor in not just direct costs but also opportunity losses from diverted funds. 451 Research warns that unplanned downtime during cost-driven migrations affects 44% of organizations, adding layers of financial risk. To prepare, model scenarios using independent calculators and prioritize contracts with predictable pricing.
Licensing Shifts: From Flexibility to Rigid Bundles
The acquisition has streamlined VMware's portfolio, consolidating 56 offerings into fewer bundles and eliminating perpetual licenses. This "take it or leave it" approach has sparked regulatory backlash, with European trade groups like CISPE calling for scrutiny under the Digital Markets Act, and the EU Commission investigating complaints from business associations and resellers, as reported by Reuters.
Gartner recommends identifying "exit ramps" in licensing agreements, points for pivoting to alternatives, while outlining migration costs and timelines. A Civo 2024 survey indicates 47% of VMware customers are actively evaluating alternatives, with 27% in POC stages, reflecting dissatisfaction with the new model. 451 Research highlights legacy system limitations, where data dependencies cause migration failures, emphasizing the need for careful planning.
IDC's analysis suggests these changes could increase TCO by 30-50% for organizations forced into unnecessary bundles. For CIOs, this underscores the importance of negotiating flexibility in renewals and exploring open standards to avoid lock-in. By 2028, Gartner predicts cost pressures will drive 70% of enterprise customers to migrate 50% of their virtual workloads, making proactive licensing reviews critical.
Migration Risks and Market Trends: Data-Backed Insights
Migrations are accelerating, but they're not without challenges. Forrester estimates 20% of customers will move in 2024, while Gartner projects 18-48 months for large-scale migrations involving 2,000+ VMs. 451 Research reports that 44% of organizations experience unplanned downtime during migrations, with average costs exceeding $300,000 per hour in lost productivity for large enterprises.
Trend data from Veeam 2024 shows cross-hypervisor migrations as a major priority for 2025, with many prioritizing low-risk transitions. IDC notes the market's scale amplifies risks, but successful migrations can yield 30-50% TCO savings through optimized alternatives. A Virtualization Review report, citing Gartner, states that by 2026, 50% of enterprises will initiate POCs for alternative distributed hybrid infrastructure.
CIOs should prioritize risk assessments, focusing on hardware compatibility and application refactoring. Incorporate analyst frameworks like Gartner's for hybrid infrastructure to guide decisions and minimize disruptions.
Strategic Planning and Risk Mitigation: Lessons for 2026
To build resilience, CIOs must integrate these insights into IT roadmaps. Diversify vendors to avoid lock-in, as advised by Gartner, and leverage tools for dependency mapping. 451 Research emphasizes planning for data loss risks, while Forrester highlights agile budgeting.
Regulatory considerations like the EU's investigation add uncertainty. It is essential to plan for flexibility to ensure you are not trapped when the time to act comes.
By 2026, the landscape will evolve. Those who act now, leveraging data from Gartner, Forrester, IDC, and 451 Research, will minimize disruptions and optimize IT investments.
In summary, the Broadcom era demands vigilance. Audit, plan, and diversify to secure your future.
