1,050% VMware Price Hike: AT&T Sounds The Alarm On Broadcom's Proposal

Viktoria Ivanova

4 min read

Post on May 16, 2025

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The Proposed VMware Price Increase: A Deep Dive

Broadcom's proposed acquisition of VMware carries with it the potential for a seismic shift in VMware pricing. Reports indicate a potential VMware price increase percentage exceeding 1,050% for certain products and services. This isn't a uniform increase across the board; the impact varies depending on the specific VMware product and licensing model.

• vSphere: Early estimates suggest a drastic increase in licensing costs for vSphere, the core virtualization platform, potentially making it prohibitively expensive for smaller businesses.
• vSAN: Similar dramatic increases are anticipated for vSAN, VMware's software-defined storage solution.
• vRealize Operations: Management and monitoring tools like vRealize Operations are also expected to see substantial price increases.

The sheer magnitude of these projected increases is staggering. For example, a license costing $1,000 annually could potentially jump to over $10,000 – a 10x increase. This translates to a massive VMware cost increase for many organizations, potentially impacting their budgets and IT strategies. The lack of detailed, publicly available pricing information from Broadcom adds to the uncertainty and concern.

AT&T's Concerns and Public Statement

AT&T, a major player in the telecommunications and technology sector, has publicly voiced strong opposition to the proposed VMware price hike. Their concerns center around the potential for anti-competitive practices and the significant financial burden this would place on businesses like theirs, and subsequently, on their customers. AT&T's statement highlights the potential for reduced innovation and a stifled market due to such a substantial VMware price increase.

The weight of AT&T's concerns is significant due to its size and influence in the industry. As a large-scale user of VMware solutions, AT&T's opposition lends considerable credibility to the growing apprehension surrounding Broadcom's proposed changes. Their public stance underscores the potential impact on their operations and the ability to deliver cost-effective services to their customers. The specific details of AT&T's AT&T statement VMware remain to be fully disclosed, yet their opposition is a clear indicator of the serious concerns within the industry.

Potential Impact on Businesses and the Broader Market

The ramifications of this VMware price hike extend far beyond AT&T. Businesses of all sizes will feel the pinch. Smaller companies may find it financially impossible to continue using VMware solutions, forcing them to seek VMware alternatives like open-source options or other virtualization platforms. Larger enterprises, while potentially better equipped to absorb the cost, will still face significant budgetary challenges and may need to reassess their IT strategies.

The impact on the overall cloud computing costs and market competition could be substantial. A dominant player controlling VMware's pricing could stifle innovation and limit choices for businesses. This scenario could potentially lead to Broadcom antitrust investigations and regulatory scrutiny. This potential for a monopolistic situation warrants close attention from competition authorities.

Broadcom's Response and Justification

Broadcom has yet to release a detailed, comprehensive response to the widespread criticism. While some statements have been made regarding the acquisition's supposed benefits and synergies, a thorough explanation of the drastic VMware price increase remains absent. Their Broadcom response so far has largely lacked specific details regarding the rationale behind the proposed price changes, fueling speculation and concern within the industry.

Analyzing their potential justification for the Broadcom VMware strategy, it's crucial to look beyond surface level explanations and understand the potential consequences of allowing such a significant price hike to go unchecked.

Conclusion: Navigating the VMware Price Hike Crisis

The proposed VMware price hike of up to 1,050% is an unprecedented event with potentially far-reaching consequences. AT&T's strong objections highlight the seriousness of the situation and the potential for market distortion. Businesses must prepare for the possibility of significant cost increases and explore options to mitigate the impact. This includes investigating VMware alternatives, renegotiating contracts, and closely monitoring regulatory developments.

The long-term impact on the tech industry remains uncertain, but the immediate concern is the potential for a less competitive and more expensive cloud computing market. Stay informed about further developments concerning this VMware price hike, engage in discussions with industry peers and experts, and actively seek solutions to navigate this challenging situation. Understanding the implications of Broadcom's acquisition and the subsequent price increases is crucial for survival and success in the evolving landscape of cloud computing.