Broadcom’s acquisition of VMware shifted the company’s business model from perpetual licenses to subscription-based bundles, with a particular emphasis on VMware Cloud Foundation (VCF). This strategy has made virtualization services prohibitively expensive for many small-to-medium-sized businesses, who report being discouraged from purchasing lower-cost alternatives like vSphere Standard.
Paul Turner, VCF’s chief product officer, acknowledged that Broadcom’s sales incentive structure encouraged excessive promotion of VCF to customers regardless of their needs or budgets. He stated the company is correcting course and plans to release an updated vSphere Standard version in the coming months, with details expected to be shared in October at VMware’s Explore conference in Frankfurt. VMware has not updated vSphere Standard since 2022, despite releasing VCF 9 with updated capabilities in 2025. Turner attributed the focus shift to prioritizing security improvements in VCF during that period.
The pricing and sales strategy has damaged customer relationships and channel partnerships. Dean Colpitts, chief technology officer of Canadian reseller Members IT Group, stated the company has ceased VMware business entirely after being cut from the reseller program, citing a loss of trust in Broadcom. Industry observers and online communities echo similar sentiments, with many customers describing the situation as too little, too late.
Market analysts stress that pricing and feature updates alone will not resolve Broadcom’s challenges with SMBs. Trust has become the primary concern, with customers demanding predictable pricing, stable renewal terms, and genuine commitment to the segment. Competitors including Nutanix, Proxmox, and Microsoft Hyper-V are actively recruiting disaffected VMware users, particularly small-to-medium businesses.
While Broadcom’s overall software business has remained financially strong, generating $8.75 billion in fiscal Q3 2026 revenue, restoring confidence among SMBs will require sustained effort and transparent business practices to prevent further customer migration.
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