Broadcom acknowledged that its approach to VMware’s product lineup has alienated small-to-medium-sized businesses since acquiring the virtualization company. The shift from perpetual licenses to subscription-based bundles, particularly the pricey VMware Cloud Foundation offering, has made the platform unaffordable for many SMBs. Sales representatives reportedly pushed VCF despite customer concerns about unnecessary features and high costs, with some claiming that lower-priced alternatives like vSphere Standard were unavailable.
Company executives attributed the strategy to new sales incentives that encouraged VCF promotion. Paul Turner, chief product officer of VCF, stated that Broadcom had “too big a focus on VCF” and acknowledged the issue has been corrected. The company plans to release an updated version of vSphere Standard in the coming months, with additional details expected to be announced in October at VMware’s Explore conference in Frankfurt. The last update to vSphere Standard occurred in 2022, despite a new VCF version arriving in 2025, as the company prioritized security improvements for VCF.
The credibility damage extends beyond customer relationships to channel partners. Dean Colpitts, CTO of Canadian managed services provider Members IT Group, which lost its reseller status after 19 years of partnership, stated the company will not conduct future VMware business. Similar sentiment appears in online forums, where users express skepticism about whether the new offering represents a genuine commitment.
Meanwhile, competitors including Nutanix, Proxmox, and Microsoft Hyper-V are actively recruiting disaffected VMware customers. Industry analysts emphasize that restoring trust requires more than product updates, including predictable pricing, licensing flexibility, and core features without additional upcharges. Broadcom’s software business has performed well financially, generating $8.75 billion in revenue in fiscal Q3 2026, though the strategic importance of SMBs to long-term goals remains unclear.
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