Broadcom making moves again

Initially shared by Arrow, a Broadcom partner, the information appears to show a new attempt to increase revenues and push smaller customers away. The latter point, a move away from serving SMB customers, is part of Broadcom’s previously stated strategy. 

Increased purchase minimum 

The minimum number of core licenses that must be purchased by an organisation per product is soon to be increased from 16 to 72 – a 4.5x increase. However, after some initial uncertainty, the impact of these changes isn’t as large as initially thought.

Simply put, a business must buy at least 72 core licenses per product (e.g., VCF or VVF) at an organisational level, not per cluster/server/CPU. These can then be utilised across servers with a smaller number of cores, although the minimum of 16 core licenses per CPU remains. Furthermore, once that 72-core license minimum is met, customers do not need to acquire licenses in blocks of 72.

It does mean that organisations requiring fewer than this new minimum will be required to purchase more licenses than needed. If you have 2 such products, you’ll need to purchase a minimum of 72 cores of each – different versions cannot be combined to reach the threshold.

Late Renewal Penalty 

Broadcom have also introduced penalties for late subscription renewals – this will equal 20% of the first-year value and be applied retroactively. 

Make sure you have full visibility of recent and upcoming VMware contracts to avoid additional charges for late renewals.

Next Steps 

These are the latest in a list of changes and organisational impacts since Broadcom acquired VMware in 2023 – download our updated guide by filling in the form below for all the information.