VMware Licensing Changes: The 72-Core Reversal & Migration Paths

Broadcom effectively evicted the SMB market with its recent pricing overhaul. The shift from perpetual to subscription was expected, but the aggressive bundling and minimum core counts introduced in 2025 made the new reality clear: if you aren’t big enough, you aren’t, probably, the target demographic.

Last year, the end of perpetual licensing killed predictable 3-5 year budget cycles. In early 2025, VMware attempted to enforce a 72-core minimum purchase per CPU, a move that would have quadrupled licensing costs for small clusters. While they walked it back, the intent is obvious.

Quick recap (2023-2024): How we got here?

As we covered in our January 2024 analysis, Broadcom dismantled the entry-level tier in three specific ways:

1. Perpetual is no more: You can no longer buy a license and run it for 5 years. If you stop paying the subscription, your hosts stop being managed. Existing support contracts (SnS) continue to expire but cannot be renewed, forcing customers to get onto subscription models whether they planned for that budget cycle or not.
2. Retirement of Essentials kits: The Essentials Plus kit (the go-to option for small 3-host clusters) was phased out. Those users are now pushed toward vSphere Foundation, which often costs 3-5x more because it bundles features (like Aria/vRealize) that small shops often don’t use.
3. Product bundles (Foundation and VCF): You can no longer buy just “vSphere Enterprise Plus.” You must buy a bundle. If you only need the hypervisor, you are paying for shelfware. As a result, vSphere 9+ is only sold as part of these bundles, and all other “Standard” or “Enterprise Plus” editions up to v8 have been retired.

Most recent changes

The “72-Core” Controversy

In April 2025, VMware announced a controversial licensing change: every product purchase would require a minimum of 72 licensed CPU cores, regardless of the customer’s actual usage.

 

Figure 1: An SMB Admin. 72-core processor packs have made many edge/mini cluster owners think twice.

 

The math was brutal. Previously, the minimum was 16 cores per CPU. If you ran a 2-node compact/edge cluster (single-socket, 16 cores per node), you simply bought 32 cores of licensing.

Under the proposed rule, Broadcom would not sell a license pack smaller than 72 cores. This meant that for your 32-core cluster, you would be forced to buy 72 cores, paying for 40 cores you couldn’t use. For these 2-node clusters with 32 cores total, this represented a 125% price hike for no additional value.

The decision triggered immediate backlash from SMBs, ROBO sites, municipal and government data centers with fixed yearly budgets, test labs, and the broader virtualization community. Analysts widely criticized the move as financially unsustainable for small environments.

The Reversal. The backlash was immediate because it effectively made vSphere financially toxic for Edge and ROBO (Remote Office/Branch Office) deployments. VMware reversed the decision later in 2025, returning to the 16-core minimum.

However, the direction is set. The company is optimizing for massive, dense enterprise clusters, not your 2-node branch office.

Product lineup simplification in 2025

The SKU list is now incredibly short. vSphere 9 is sold in two flavors:

• vSphere Foundation (VVF): The “mid-tier” bundle.
• VMware Cloud Foundation (VCF): The full stack.

The old “Standard” and “Enterprise Plus” SKUs are effectively gone for new contracts. Any new vSphere purchase must be one of these two bundles. Combined with VMware’s broader licensing direction, these changes clearly prioritize large enterprises and make traditional SMB buying patterns significantly harder.

Alternatives to explore

With the pricing floor rising, “staying on VMware” is now a luxury decision. Many conversations on IT forums show that hypervisor migrations are happening at a big scale in real production environments. Here is the reality of the migration paths:

Proxmox VE

An open‑source KVM hypervisor with no per‑CPU license fees. It has become a primary VMware exit path for many companies. Proxmox offers an enterprise-class feature set (live migration, HA clustering, backup, etc.) at minimal cost.

What’s good: No per-core licensing fees. You pay for support only if you need it.

What’s to keep in mind: Backups. For years, Veeam didn’t support Proxmox. That has changed, and with the recent release of Veeam 13, the App-aware backups have finally became available for Proxmox users. That’s being saidm, the native “Proxmox Backup Server” (PBS) is still the most popular way to handle deduped, incremental backups out of the box and for free.

For a detailed comparison of features, performance, and costs, visit our blog: Proxmox vs Hyper-V: Features, Performance & Cost Comparison

Microsoft Hyper-V

Included with Windows Server Datacenter at no extra hypervisor cost, Hyper-V is a natural choice for Microsoft-centric shops. It integrates deeply with Active Directory and Azure hybrid cloud services. (Windows Server Standard also includes Hyper-V but is limited to two VMs per license. Datacenter edition lifts VM limits.) Customers heavily invested in the Microsoft stack can leverage Hyper-V with existing Windows licenses and tools.

What’s good: If you license your hosts for Windows Server Datacenter (to run unlimited Windows VMs), Hyper-V is included at no extra cost.

What’s to keep in mind: Storage Spaces Direct (S2D). While Hyper-V itself is rock solid, Microsoft’s native vSAN equivalent (S2D) can be fragile. It is known for issues with ReFS corruption and allows fewer hardware configurations than vSAN.

Full disclosure: We know this sounds biased coming from a competitor. And yes, S2D appreciators will argue that failures usually result from improper configuration. So don’t just take our word for it, check the forums and ask for real user feedback before implementation.

XCP-ng

A clone of the good old vCenter Thick Client. fully open-source Xen-based virtualization platform. When paired with Xen Orchestra (XO), it provides, subjectively, the most “VMware-like” experience of the bunch, bundling backup, orchestration, and monitoring into a single stack without subscription-based per-CPU licensing.

What’s good: If your team hates learning CLI, XCP-ng combined with XO offers a web UI that feels very similar to vCenter. It handles backups and live migration natively without the complexity of Proxmox’s separate Backup Server.

What’s to keep in mind: KVM (used by Proxmox) has largely won the industry battle for driver support and ecosystem momentum, while Xen is stable but stagnant. Also, be aware: while XCP-ng is free, the “turn-key” version of Xen Orchestra requires a license. To get the full feature set for free, you must build it from source yourself (or use a community script), which adds an extra hurdle for setup.

Conclusion

For two decades, buying VMware guaranteed stability. Broadcom’s attempt to enforce a 72-core minimum has inverted that logic. The platform is now a source of volatility.

Walking back the policy doesn’t change the intent. Broadcom is optimizing for the Fortune 500. If you run a 2/3-node cluster, you are no longer the target customer, you are “long-tail” revenue that they are willing to squeeze or lose.

What to do?:

1. Audit your renewal risk: Calculate your 2026 costs assuming near-zero discounts. If the number breaks your budget, move before the invoice arrives.
2. Treat licensing like hardware failure: You wouldn’t run a data center without storage redundancy. Stop running your virtualization stack without a licensing contingency plan.
3. Validate the “exit ramp”: Don’t just read about Proxmox or Hyper-V. Spin them up in a lab and test the specific “gotchas” we highlighted.

The era of “default” virtualization provider is over. Planning an exit strategy is now standard risk management. Fortunately, hypervisor-agnostic storage solutions by StarWind and DataCore allow you to decouple your data from the OS, supporting your freedom and whatever decision you make next.

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