Four years have passed since Broadcom announced its intention to acquire VMware, and analysts' initial warnings have largely come true. Fears of price increases, reduced support, and lower investment in innovation materialized: elimination of perpetual licenses, forced migration to more expensive subscriptions, long-term contracts, an increase in the minimum licensed cores from 16 to 72, and a mandatory package called Virtual Cloud Foundation (VCF). Additionally, Broadcom drastically reduced the number of resellers and focused its efforts on the 10,000 largest customers out of a base exceeding 300,000.

Financial Results: The Upside for Broadcom

However, from Wall Street's perspective, the strategy seems to be working. Broadcom's revenue in the first quarter of 2026 grew by 29%, and a 47% year-over-year increase is expected in the current quarter. Although much of that growth comes from chip sales, VMware revenue increased 13% year-over-year, with recurring revenue growth of 19%. CEO Hock Tan highlighted that more than 87% of the top 10,000 customers have already adopted VCF, describing it as “the essential software layer in data centers that integrates CPU, GPU, storage, and networking into a common high-performance private cloud environment.”

The Mass Migration: More Noise Than Reality

Despite the disruption, the mass migration to alternatives like Nutanix or the public cloud has not materialized. The technical and operational complexity is overwhelming. 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 years. The cost and risk can nullify any potential savings. Keith Townsend of The CTO Advisor adds that “VMware is not just a technology; it's the established operating model for the software-defined data center.”

A CloudBolt survey reveals that 87% of respondents are reducing their VMware footprint, but only 4% have completed a full migration. Complexity and costs are the main obstacles. Naveen Chhabra of Forrester confirms that many companies are reducing their VMware usage, but what is possible depends on the timing of license renewals and the number of VMware tools used.

Case Study: Simpson Thacher & Bartlett Migrates to Nutanix

An example of a successful migration is the law firm Simpson Thacher & Bartlett (STB). Its CTO, Tim Conners, states that “there is a lot of fear, but it's not as difficult as it's made out to be.” STB built four new data centers with Nutanix in 12 months, with zero downtime. The migration was not driven by cost but by the need to modernize infrastructure and simplify architecture. Conners highlights that Nutanix's live migration tools facilitated the transition and that support has been excellent.

Is Broadcom's Strategy Sustainable?

Broadcom boasts that 87% of the top 10,000 customers renew with VCF, but the CloudBolt survey indicates that 87% are reducing their VMware usage. Chhabra explains that this is possible if customers renew only a portion of their environment (on average, 25%). Steve McDowell of NAND Research warns that Broadcom's strategy prioritizes monetizing the existing base over expansion, generating strong short-term results but pushing many customers toward competitors. The key question is whether higher revenue per customer can compensate for customer loss in the long term.

Broadcom is also betting on AI-driven private cloud, but Chhabra questions how many companies can afford that infrastructure. Still, Hock Tan has noted that they are observing whether the next 20,000 or 30,000 mid-sized companies see the same value in VCF.

For enterprises, the decision to migrate or stay is not trivial. As explored in our article on Advanced Home Assistant for Office Automation, infrastructure modernization requires careful analysis. Similarly, the implementation of Generative AI in Workflows can be affected by platform choice. Security is also crucial, as discussed in Palo Alto Networks and AI Agent Security. And for those exploring alternatives, Time Tracking and Clocking can be a first step toward process optimization.

Original source: ComputerWorld. Analysis and adaptation by ForgeNEX.