One of our clients paid roughly $200,000 for their VMware environment a few years ago. The renewal quote that arrived this spring was $2 million. That is not a typo. And this client is not an outlier. We are seeing similar ratios across our entire customer base.
AT&T is suing Broadcom over a 1,050 percent price increase. European cloud providers are reporting increases of up to 1,500 percent. Gartner predicts that by 2028, roughly 70 percent of enterprise VMware customers will migrate at least half of their virtual workloads to alternatives.
Here is what happened: Broadcom acquired VMware for $61 billion in late 2023 and immediately restructured the business. They eliminated perpetual licenses. They reduced 8,000 product SKUs to four. They forced bundling, so customers now pay for capabilities they do not need and cannot opt out of. The modular VMware that IT teams knew and relied on for two decades no longer exists.
We have stopped deploying VMware entirely. After 25 years of building datacenters, that is not a decision we made lightly.
What replaces it
The answer depends on what you are running and why it needs to be on-premises at all.
For many businesses, the honest answer is: not much needs to stay local anymore. CRM, accounting, email, collaboration, backup, security monitoring. All of it runs in the cloud now, and runs well. If your VMware environment is hosting workloads that have moved to SaaS, the question is not "what hypervisor should we switch to?" The question is "why are we running local servers at all?"
But some workloads genuinely belong on-premises. Core banking systems need local adjacency. Crime labs have evidence stores with data sovereignty requirements. Some applications have latency needs that cloud cannot meet economically. For those, we evaluate two paths:
Nutanix is the strongest enterprise alternative. Their hyperconverged platform starts with three server nodes linked by 25Gbps fiber and NVMe SSD storage, with real-time replication across nodes and the ability to scale to sixteen nodes. It handles both on-premises and cloud resources as one managed environment. Nutanix developed their product specifically for the hybrid world that VMware failed to adapt to.
Microsoft Hyper-V serves well where Nutanix is not the right fit, particularly for smaller deployments or where the budget is tight and the workload is straightforward.
The bigger point
VMware's pricing explosion is not an isolated event. It is a symptom of what happens when your entire infrastructure depends on a single vendor who decides to change the terms. The same pattern applies to Microsoft, to Google, to any provider who holds enough of your stack to make leaving painful.
The right response is not to pick a new single vendor and repeat the cycle. It is to design your technology so that every component is a choice you made deliberately, and every component is replaceable if the economics or the product changes. That means your identity layer, your collaboration platform, your security monitoring, your backup system, and your infrastructure should each be the best tool for that specific job, supplied by a vendor you chose for that specific reason.
When we work with clients on VMware migration, the conversation always starts broader than "which hypervisor?" It starts with "what actually needs to be here, what can move to the cloud, and how do we design this so we never get trapped again?"
The decision framework
When we evaluate a VMware migration with a client, we work through three questions in order.
First: what is actually running on this infrastructure, and does it need to be on-premises? We inventory every workload, every virtual machine, every service. In many cases, 40 to 60 percent of what a company runs on VMware has a SaaS equivalent that they are already paying for or could adopt. Email is already in M365. CRM is already in Salesforce or HubSpot. Accounting moved to the cloud two years ago. These workloads can simply be decommissioned from the local infrastructure.
Second: for the workloads that stay local, what do they actually require? High availability? Real-time replication? Specific storage performance? Integration with particular hardware? The answers determine whether Nutanix, Hyper-V, or a minimal standalone server is the right fit. We have deployed all three, depending on the situation. The client we mentioned earlier who was quoted $2 million for VMware ended up on a Nutanix cluster that cost a fraction of that quote and delivered better performance. Another client with simpler requirements went with Hyper-V and is running smoothly.
Third: how do we architect this so the same trap does not repeat in five years? That means documentation, vendor-neutral configurations where possible, and a technology plan that acknowledges the industry trend toward subscription pricing and planned obsolescence.
The timeline pressure
Many companies are discovering the VMware pricing change as their current agreements expire. If your renewal is coming up in the next six to twelve months, you have a window to evaluate alternatives while you still have some negotiating position. If you wait until the renewal deadline, you are negotiating under duress, and Broadcom knows it.
This is not just a VMware story
VMware's pricing explosion is the most visible example of a broader pattern. EMC SAN storage was acquired through Dell into Broadcom. Active Directory has not been updated meaningfully in 25 years. Software vendors across the industry have shifted from perpetual licenses to subscriptions and raised prices in the process.
The common thread: every core component of the traditional on-premises datacenter is either gone, prohibitively expensive, or on a path toward both. Businesses that built their infrastructure around any single vendor are discovering what happens when that vendor's incentives change.
The lesson from VMware is not "pick a different hypervisor." The lesson is "never again build your infrastructure so that a single vendor's pricing decision can put you in this position." That means designing technology where every layer (identity, collaboration, security, backup, infrastructure, connectivity) is a separate decision, supplied by the best vendor for that function, and replaceable if the economics change.
We have been building technology this way for our clients for years. The VMware crisis is validating the approach. If you are staring at a VMware renewal quote that makes your stomach drop, you are not alone. But you do have options, and the sooner you evaluate them, the more negotiating power you have. The worst position is renewing under duress because you waited too long to plan.