Broadcom Bought VMware and Left Small Businesses Behind: Why SMBs Are Moving to Proxmox

If your business runs VMware, you have probably seen the renewal quote by now. For a lot of small businesses, it was the kind of number that makes you read the email twice.

This isn't a one-off pricing glitch. It is the result of a deliberate strategy. Since Broadcom closed its roughly $69 billion acquisition of VMware in late 2023, the company has reshaped how VMware is sold, who it is sold to, and what it costs. Small and mid-sized businesses ended up on the wrong side of almost every change.

This post covers what Broadcom actually changed, why it hits small businesses hardest, and why a growing number of Charlotte-area companies are moving their virtual servers to Proxmox.

What Broadcom Changed After the Acquisition

The deal was a negotiated acquisition, not a hostile takeover in the legal sense. But what followed felt hostile to many customers. Broadcom's playbook is well known in the industry: concentrate on the largest enterprise accounts, raise the price of everything else, and cut whatever doesn't fit the model.

These are the changes that matter most to small businesses:

• Perpetual licenses ended. You can no longer buy VMware outright. Existing perpetual licenses still run, but support and subscription renewals for them were halted, so security patches and upgrades stop once your support contract lapses.
• Subscription-only licensing. Everything now renews on a term, and the price is set by Broadcom at each renewal.
• Products were collapsed into large bundles. Customers used to buy just the hypervisor. Now the options are mainly VMware vSphere Foundation and VMware Cloud Foundation, which bundle storage and networking components many small offices never use.
• Entry-level packages were reshaped or retired. Editions like vSphere Essentials Plus, built for small deployments, were heavily restructured.
• Per-core pricing with minimums. Licensing moved from per-socket to per-physical-core, with minimum core counts per CPU. A small server with a modest processor can be billed as if it were far larger.
• Late renewal penalties. Reports from customers and resellers describe surcharges of about 20 percent for renewing after a contract expires.

What the Price Increases Look Like

Broadcom has not published a single "increase percentage," and individual results vary a lot. What businesses and analysts have reported is a wide range, from roughly 3x to well over 10x on renewal for some customers, especially those who had been on cheaper entry-level editions.

The honest summary is this: if you were paying for a small VMware package before 2024, assume your next quote will look very different. Get it in writing before you assume anything.

That uncertainty is part of the problem. A hypervisor is infrastructure. You are supposed to be able to budget for it.

The Partner Program Fallout

Small businesses rarely buy VMware directly. They buy it through a local IT partner, and that channel was reorganized too.

• Broadcom cut the number of authorized VMware Cloud Service Providers sharply.
• White-label arrangements, where smaller providers resold VMware through larger distributors, were eliminated or heavily restricted.
• The partner ecosystem was consolidated into a much smaller group of top-tier partners.

For a small business, that means fewer local options for VMware support, fewer partners with a reason to care about a 15-person office, and less leverage when a renewal comes in high.

Why Small Businesses Feel This the Most

Enterprises have procurement teams, multi-year contracts, and negotiating leverage. A small business typically has one or two hosts, a few virtual machines, and an IT budget set a year in advance.

The pattern is consistent:

• Small clusters are the easiest to over-provision under core minimums.
• Smaller customers have the least pricing leverage at renewal.
• Fewer partners are left to help them negotiate.
• A single six-figure budget surprise can force a decision they weren't ready to make.

Broadcom never said "we don't want small customers." It simply built a pricing and partner model where they stopped making financial sense for Broadcom to serve.

What Is Proxmox, and Why Is It the Leading Alternative?

Proxmox Virtual Environment (Proxmox VE) is an open-source virtualization platform built on KVM and Linux containers. It has been around for well over a decade and has a large, active community, and it is used in production by organizations of all sizes.

What makes it appealing to small businesses:

• The software is free. Proxmox VE is licensed under the GNU AGPL v3. There are no per-core fees, no feature tiers, and no bundles.
• Enterprise features are included. Clustering, high availability, live migration, built-in backup, and software-defined storage are all part of the base product.
• Support is optional and affordable. Paid subscriptions don't unlock features. They give you access to the stable enterprise update repository and vendor support tickets, and are priced per physical CPU socket per year.
• No lock-in. Virtual machines run on standard KVM, and the platform uses open formats.
• There is a built-in VMware import tool. Proxmox includes an import wizard that can connect directly to an ESXi host and bring virtual machines across, including their configuration and disks.

What Proxmox Support Costs

Proxmox subscriptions are priced per CPU socket, per year. Published pricing at the time of writing:

• Community: about €120 per socket per year, enterprise repository only, forum help
• Basic: about €370 per socket per year, 3 support tickets per year
• Standard: about €550 per socket per year, 10 tickets per year with faster response
• Premium: about €1,100 per socket per year, unlimited tickets

A typical small business with two single-socket hosts can run a supported Proxmox environment for roughly $1,000 to $2,500 a year, depending on the tier. That is a different order of magnitude from many VMware renewals. Prices are in euros and change, so confirm current figures with Proxmox or a reseller.

Is Proxmox Right for Every Business?

No. Be wary of anyone who tells you it is. Proxmox is a strong fit in many situations and a poor fit in others.

Proxmox is a good fit when

• You run a handful of Windows or Linux virtual machines on one to a few hosts
• Your VMware renewal has jumped, or you have been told your edition is going away
• You want to stop paying per-core licensing on hardware you already own
• Your IT partner is comfortable supporting Linux-based infrastructure

Look at other options when

• You rely on third-party products that are certified only for VMware
• You are a Microsoft-centric shop and Hyper-V already fits your licensing
• Your server is due for retirement anyway and the cloud makes more sense. See our guide on retiring your last on-premise server.
• Nobody on your team or at your IT provider can support it

Hyper-V and Azure are both legitimate answers for some small businesses. The goal is to stop making a decision under pressure from a renewal deadline.

How a VMware to Proxmox Migration Works

A planned migration is far less dramatic than most people expect. The usual steps look like this:

1. Inventory every virtual machine. Record the operating system, CPU, memory, disks, network settings, and the application each one runs.
2. Check licensing and vendor support. Confirm that your software vendors support running on KVM.
3. Build the Proxmox host. Ideally use new or spare hardware so the old environment keeps running during the move.
4. Test with a non-critical VM first. Use the import wizard to move one low-risk machine and verify it boots and performs.
5. Prepare the guests. Remove VMware Tools, install VirtIO drivers, and clean up stale network settings.
6. Schedule cutover windows. Move production machines after hours, one at a time, with backups verified beforehand.
7. Validate and decommission. Confirm everything works, keep the old host available for a few weeks, then retire it.

Backups matter most during this process. Before you touch anything, confirm you have a recent, tested backup. For more on that, read our post on why businesses need immutable backups.

Mistakes to Avoid

• Waiting until the renewal deadline. A migration done in a panic is the one that goes wrong. Start early.
• Letting your VMware support lapse before you have a plan. Your hosts stop receiving security patches.
• Assuming it's just a copy job. Drivers, networking, and licensing all need attention.
• Skipping the support subscription. For a business environment, the cost of a paid tier is small compared with an outage.
• Not planning for monitoring and backup on the new platform. These need to be rebuilt, not assumed.

How eSmith IT Helps Charlotte Businesses Get Off VMware

eSmith IT has supported businesses in Charlotte, Huntersville, Mooresville, Cornelius, Concord, and Gastonia for more than 25 years. We don't push one platform. We look at what you run, what your renewal really costs, and what a move would involve, and then give you a straight comparison.

Our virtualization work includes:

• A VMware environment review covering hosts, virtual machines, and licensing exposure
• Cost comparison of renewing VMware, moving to Proxmox, Hyper-V, or the cloud
• Planned Proxmox migrations with tested backups and after-hours cutovers
• Ongoing monitoring, patching, and backup for the new environment
• Budget planning so the next infrastructure decision isn't a surprise

If you have a VMware renewal coming up, or you have already received a quote that doesn't make sense, contact eSmith IT for a free review. We'll tell you what your options are before the deadline, not after it.