Extreme VMware Price Increase: AT&T Highlights Broadcom's 1050% Proposal

Kenji Nakamura

5 min read

Post on May 05, 2025

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The Staggering 1050% VMware Price Increase

The proposed Broadcom VMware acquisition has triggered a dramatic surge in VMware licensing costs. Reports, including those from AT&T, indicate a 1050% increase in the price of certain VMware licenses. This isn't a uniform increase across the board; the impact of the Broadcom VMware pricing changes varies depending on the specific VMware products and licensing models involved. This extreme VMware price increase affects not only the initial licensing cost but also ongoing maintenance and support agreements.

• Specific examples: While precise figures remain confidential in many cases, leaked internal documents and public statements from AT&T and other large enterprises suggest price increases for essential VMware vSphere licenses have skyrocketed. Specific examples are scarce due to non-disclosure agreements, but the scale of the increase is consistently reported as being in the range of 1000%+.
• Impact across product lines: The VMware price increase percentage isn't uniform across all VMware products. While vSphere appears to be most significantly affected, other products like vSAN and NSX are also experiencing substantial price hikes, although the exact percentages vary. This creates a complex pricing landscape making it difficult for businesses to accurately predict their future IT spending.
• Impact on different business sizes: The extreme VMware price increase disproportionately affects small and medium-sized businesses (SMBs). Larger enterprises with substantial VMware deployments might absorb the costs more easily, but for smaller organizations, this increase could represent a significant financial burden, potentially forcing them to reconsider their virtualization strategies.
• Broadcom's official stance: Broadcom has not publicly commented directly on the specifics of the 1050% figure, but their statements generally maintain that the acquisition will benefit customers in the long run. However, this claim is being heavily disputed by many significant VMware clients.

AT&T's Concerns and Public Response

AT&T, a major VMware customer and a significant player in the telecommunications industry, has publicly voiced its deep concern regarding the Broadcom VMware acquisition and the resulting extreme VMware price increase. Their public statements highlight the potential disruption to their IT infrastructure and the significant financial implications for the company. AT&T's opposition is significant, given their size and reliance on VMware technology.

• AT&T's official statements: AT&T executives have expressed serious reservations about the potential for a monopoly and the negative impact on competition within the virtualization market. They’ve stressed the unsustainable nature of the proposed price increases and their concern that this will limit innovation and choices for customers.
• Mitigation strategies: AT&T is likely exploring various strategies to mitigate the impact of the VMware price hike, potentially including negotiations with Broadcom, exploring alternative virtualization technologies, and potentially participating in any regulatory challenges to the acquisition.
• Impact on AT&T's infrastructure: The price increase threatens to significantly disrupt AT&T’s operational budget and IT infrastructure planning. The scale of their VMware deployment means even a modest percentage increase would represent a massive cost, while the reported 1050% figure points to potentially catastrophic financial implications.
• Potential legal action: While not explicitly stated, the intensity of AT&T's public opposition suggests they may be considering legal challenges or collaborating with regulatory bodies to address the concerns surrounding the Broadcom VMware acquisition.

Implications for Businesses and the Broader Market

The extreme VMware price increase has far-reaching implications for businesses and the broader IT market. The potential for market consolidation and the emergence of alternative virtualization solutions are key concerns.

• Impact on SMBs: For SMBs, the price increases pose a severe threat, potentially forcing them to switch to less feature-rich alternatives, compromise on security, or face crippling financial burdens. The cost of remaining on the VMware platform could become simply untenable for many.
• Impact on large enterprises: While large enterprises have more resources to absorb cost increases, the extreme VMware price increase still represents a substantial financial challenge and forces a reevaluation of IT budgets and long-term planning.
• Impact on cloud computing: The price hikes could lead to increased costs for cloud computing services, as many cloud providers rely on VMware virtualization. This will ultimately impact businesses that utilize cloud services, further propagating the effect of the price increases.
• Potential for a monopoly: The Broadcom acquisition, coupled with the dramatic price increase, raises serious concerns about the potential for a monopolistic market in virtualization technology, stifling innovation and competition.

The Search for VMware Alternatives

Faced with the extreme VMware price increase, businesses are actively seeking alternative virtualization solutions. This search is driving renewed interest in:

• Open-source virtualization: Projects like Proxmox VE and oVirt are gaining traction as cost-effective alternatives to VMware. These solutions offer a significant cost advantage, particularly for businesses with existing hardware.
• Competitors: Other commercial virtualization platforms like Microsoft Hyper-V and Citrix XenServer are also seeing increased interest, providing businesses with viable alternatives.
• Cloud-native approaches: The shift towards cloud-native architectures, which often rely less heavily on traditional virtualization, offers another avenue for businesses seeking to reduce their reliance on VMware.

Conclusion

The extreme VMware price increase following Broadcom's proposed acquisition represents a significant challenge for businesses of all sizes. AT&T's public concerns highlight the potential for a monopolistic market and the unsustainable nature of such dramatic price hikes. The long-term effects on the IT industry are still unfolding, but the necessity for proactive planning and exploration of alternative virtualization solutions is clear.

Are you concerned about the extreme VMware price increase? Learn more about the Broadcom acquisition and explore alternative virtualization solutions to protect your business from escalating costs. Research potential alternatives like open-source solutions or cloud-native architectures, and plan for the future of your virtualization infrastructure. Don’t be caught off guard by the extreme VMware price increase. Act now to secure your business's IT future.