Broadcom's VMware Strategy Faces Backlash as SMBs Abandon vSphere for Alternatives

For many small-to-medium-sized businesses (SMBs), VMware has become too expensive.

Broadcom’s acquisition of the virtualization firm brought the end of perpetual license sales and the arrival of pricey, stacked, subscription-based bundles that priced out many SMBs.

The most obvious is VMware Cloud Foundation (VCF), VMware’s flagship private cloud bundle that has been Broadcom’s primary focus since taking over VMware. Many SMBs find that VCF is unaffordable and stuffed with unnecessary offerings. However, numerous customers have reported online that VMware sales representatives have still pushed them toward VCF, with some claiming that sales reps have told them that the lower-priced edition of VMware’s virtualization platform, vSphere Standard, was no longer available.

Speaking with The Register this week, Paul Turner, VCF’s chief product officer, said Broadcom’s new sales incentives encouraged the sales team to push VCF.

“We corrected this,” Turner told the publication. He admitted that sometimes VMware had “too big a focus on VCF.”

vSphere Standard update

VMware will release an “updated version” of vSphere Standard “soon,” The Register reported. More information will likely come in October during VMware’s Explore conference in Frankfurt, Ram Velaga, president of Broadcom’s Infrastructure Software Group, told The Register.

VMware hasn’t updated vSphere Standard since 2022 despite an updated version of vSphere arriving with VCF 9 in 2025. This was because, Turner said, VMware was prioritizing improving VCF’s security.

Velaga said that VMware prioritized VCF in an effort to promote private clouds as a more affordable alternative to the public cloud, which are easier to manage. “People could get distracted” if VMware introduced a low-end virtualization product then, the executive said.

Broken trust

Dean Colpitts, CTO of Canadian managed services provider Members IT Group (MITG), which VMware cut from its reseller program after 19 years of partnership last year, told Ars that MITG is not doing any VMware business now and won’t in the future.

“Broadcom has burned all the bridges. While it may be easier to migrate to whatever this new [vSphere] Standard release is from vSphere 8, they have already shown both customers and [channel] partners they can’t be trusted,” he told Ars Technica.

You can find similar sentiments about trust in online discussions about VMware’s announcement.

“Too little, too late. We’ve moved on,” a Reddit user named bakonpie wrote about the upcoming update.

Broadcom’s stated interest in smaller sales comes as VMware rivals are openly vying for disgruntled VMware users, especially those that are SMBs.

“An updated vSphere Standard signals Broadcom heard the market, but three years of neglect, quote refusals, and VCF-only sales tactics have already pushed many SMBs toward Nutanix, Proxmox, and [Microsoft] Hyper-V,” Sumit Bhatia, co-author of the book Navigating VMware Turmoil in the Broadcom Era, told Ars. “Trust, not features, is the real deficit. Broadcom must prove sustained commitment—stable pricing, reliable renewals, and real investment—before SMBs treat vSphere Standard as safe again.”

A vSphere Standard update would need “predictable, published pricing with no surprise renewal spikes; a genuine capped-term or perpetual-style license option; core features, like [vSphere] vMotion, [vSphere High Availability], and backup integration without upsell gates; simplified per-socket licensing instead of per-core minimums built for hyperscale environments,” Bhatia said.

“VMware’s biggest challenge is convincing a burned market that Broadcom won’t repeat the bait-and-switch once switching costs make customers captive again,” he added

It’s unclear how important SMBs truly are to Broadcom’s overall goals. The conglomerate’s software business has thrived since its VMware takeover and made $8.75 billion in revenue (a 29 percent year-over-year increase) in fiscal Q3 2026.

Still, if Broadcom puts an effort into making vSphere Standard more appealing and, critically, accessible again, it could make some SMBs more comfortable sticking with VMware instead of spending time and money determining how to properly migrate.