Four years ago, when Broadcom announced the acquisition of VMware, analysts advised companies to prepare an exit strategy. Broadcom's track record with previous acquisitions—price hikes, reduced support, investment cuts—foretold the worst. And to a large extent, those fears have materialized: elimination of perpetual licenses, more expensive subscriptions, long-term contracts, increase in the minimum licensed cores from 16 to 72, forced bundling under Virtual Cloud Foundation (VCF), drastic reduction of resellers, and exclusive focus on the top 10,000 customers out of a total base of 300,000.

However, Broadcom has also invested heavily in VCF. The recent launch of VCF 9.1 presents it as a native private cloud platform for AI and Kubernetes with built-in security. Its CEO, Hock Tan, has defined VMware as the essential software layer that integrates CPU, GPU, storage, and networking into a high-performance private cloud environment, impossible to disintermediate or replace.

The numbers back him up. In the first quarter of 2026, Broadcom's revenue grew 29%, and VMware's grew 13% year-over-year, with recurring revenue growth of 19%. Tan boasted that more than 87% of its top 10,000 customers have already adopted VCF, reflecting success in converting perpetual licenses to full VCF stack subscriptions.

What about mass migration? Complexity slows exit

Virtually all customers have investigated alternatives, but the analysis is extremely complex. Paul Delory, an analyst at Gartner, notes that a medium-sized organization can take two years to untangle its dependence on VMware, and a large one up to four. The cost and complexity can negate any savings and introduce additional risks.

Keith Townsend, founder of The CTO Advisor, adds that the difficulties are not so much technical as operational: VMware is not just technology, it is the established operating model for the software-defined data center, covering everything from capacity management to procurement and audits. Any potential savings may not offset the operational risk or distraction from projects like AI infrastructure.

A CloudBolt survey confirms that 87% of respondents are actively reducing their VMware footprint, but only 4% have completed a full migration. Complexity and costs are the main obstacles. Naveen Chhabra, an analyst at Forrester, speaks of hundreds of customers: most reduce VMware usage as much as they can, but what is possible depends on the timing of license renewals and how many VMware tools are used. Companies with upcoming renewals and heavy usage have few options; those with more leeway and fewer tools are better positioned to migrate. For large enterprises, the reality is that they are simultaneously maintaining, migrating, and modernizing.

Real case: Simpson Thacher modernizes with Nutanix

Tim Conners, CTO of law firm Simpson Thacher & Bartlett, offers a different perspective. His firm built four new data centers in 12 months with Nutanix, with virtually zero downtime. The migration was not due to cost or dissatisfaction, but modernization: their hardware was at end of life, they needed to expand globally, and they wanted to simplify their three-tier architecture to an all-in-one hyperconverged model. By deploying new capacity in new locations, they did not have to move existing equipment, which eased the transition. Conners highlights that Nutanix's live migration tools made the process seamless and that support has been excellent.

Is Broadcom's strategy sustainable?

Broadcom says 87% of its top 10,000 customers renew with VCF. CloudBolt says 87% reduce their VMware usage. How can both be true? Chhabra explains: if all customers accepted huge price increases, VMware's revenue would grow much more than 13%. The reality is that customers renew but reduce their footprint; the average customer renews only 25% of their VMware environment.

Steve McDowell, chief analyst at NAND Research, notes that Broadcom's strategy prioritizes monetizing the existing base over expansion. It has generated solid short-term results, but is pushing many customers toward competitors. The key question for 2026 and beyond is whether higher average revenue per customer can continue to outweigh customer loss from aggressive pricing changes.

Broadcom is also betting that companies will continue investing in private clouds rather than migrating to the public cloud, and capitalizing on AI data centers. Chhabra doubts: how many companies can afford private AI infrastructure? How much energy is needed? The private cloud AI narrative is attractive, but its translation into VMware revenue remains to be seen.

Tan, in the latest earnings call, left the door open: the top 10,000 companies find value in VCF. Now they watch whether the next 20,000 or 30,000 mid-sized companies see the same. We'll have to stay tuned.

For IT professionals, this situation reinforces the importance of diversifying vendors and evaluating alternatives like Nutanix or even open-source solutions. Network security and autonomous database management are critical areas where single-vendor dependency can be risky. Additionally, digital transformation with Microsoft 365 and cloud and AI momentum in the channel show that the ecosystem is in motion. Even AI models like Nemotron 3 Ultra and Gemma 4 12B are redefining what is possible in infrastructure.

Original source: ComputerWorld. Analysis and adaptation by ForgeNEX.