Extreme VMware Price Hike: AT&T Reports 1,050% Increase From Broadcom

Hugo van Dijk

4 min read

Post on May 23, 2025

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The Magnitude of the VMware Price Increase

AT&T's reported 1050% increase in VMware pricing isn't an anomaly; it's a stark illustration of the widespread impact of Broadcom's takeover. This isn't a minor adjustment; we're talking about a truly astronomical leap in expenditure for companies relying on VMware solutions. The cost difference between pre- and post-acquisition pricing is staggering, leaving many businesses scrambling to understand and adapt.

• Specific examples of VMware product price increases: Reports suggest increases exceeding 100% for core vSphere licenses, with similar or greater hikes across vSAN, NSX, and other key VMware products.
• Comparison of price increases across different VMware licenses: The impact varies depending on license type, contract terms, and existing agreements. However, across the board, users are facing substantially higher VMware costs.
• Impact of the price increase on various sized businesses: Smaller businesses are particularly vulnerable, facing potentially crippling increases that could strain budgets and hinder growth. Larger enterprises, while better positioned to absorb the cost, are still experiencing substantial financial pressure.

Broadcom's Acquisition and its Impact on VMware Pricing

Broadcom's $61 billion acquisition of VMware concluded in late 2022, significantly altering the landscape of the virtualization market. Broadcom, known for its aggressive business model and history of price increases in other acquired companies, has seemingly implemented a similar strategy with VMware. This raises serious concerns about the future of VMware pricing and its accessibility for businesses of all sizes.

• Details of the acquisition timeline and its financial aspects: The acquisition process was protracted, raising concerns about potential anti-competitive practices even before the price hikes began.
• Analysis of Broadcom's previous acquisitions and their subsequent pricing changes: Historical data shows a pattern of significant price increases following Broadcom's acquisitions of other technology companies, setting a worrying precedent for VMware customers.
• Expert opinions and market analysis on the implications of the acquisition: Market analysts predict further price increases and potential changes to VMware's product offerings as Broadcom seeks to maximize its return on investment.

The Implications for Businesses Using VMware

The dramatic VMware price increase leaves businesses facing a critical juncture. Many are grappling with budget constraints and exploring alternative solutions to avoid crippling VMware costs. Long-term strategies must be reconsidered to address this unexpected and substantial financial burden.

• Options for budget reallocation and cost optimization: Businesses are forced to re-evaluate their IT budgets, potentially delaying or canceling other projects to absorb the increased VMware cost.
• Potential alternatives to VMware virtualization technologies: Companies are actively exploring alternatives such as open-source solutions, cloud-based virtualization platforms, and other virtualization providers.
• Strategies for negotiating with VMware/Broadcom: Some businesses are attempting to negotiate with Broadcom to secure more favorable licensing terms or extended support contracts.
• Long-term cost projections based on the current price trends: Based on current trends, many businesses are projecting even greater VMware costs in the coming years, fueling the urgency to find alternative solutions.

Potential Legal and Regulatory Scrutiny of the VMware Price Increase

The significant and sudden increase in VMware pricing has raised concerns about potential antitrust violations and is likely to attract significant legal and regulatory scrutiny. The sheer magnitude of the price hike warrants investigation into whether Broadcom is abusing its market dominance.

• Mention of any existing or potential legal cases related to the price increase: While no major legal challenges have yet been filed, the potential for antitrust lawsuits and regulatory investigations is high.
• Discussion of relevant antitrust laws and regulations: Several antitrust laws and regulations could be applicable, depending on the specifics of Broadcom's pricing strategy.
• Analysis of the potential outcomes of regulatory investigations: Potential outcomes range from fines and mandated price reductions to more drastic measures, such as forced divestiture of certain VMware assets.

Conclusion

The dramatic VMware price increase following Broadcom's acquisition is a watershed moment for the IT industry. The 1050% surge reported by AT&T is not an isolated incident; it highlights the significant and widespread impact on businesses reliant on VMware solutions. The implications are far-reaching, forcing businesses to re-evaluate budgets, explore alternatives, and potentially face legal challenges. You must actively monitor the VMware price increase, plan for the VMware cost impact, evaluate VMware alternatives, and aggressively negotiate your VMware licensing to protect your organization's financial health and long-term IT strategy.