June 23, 2025 LONDON — Broadcom executives are defending sharply higher costs under VMware’s new subscription model, saying most major customers have already adopted the comprehensive bundle.
Joe Baguley, Broadcom’s chief technology officer for Europe, Middle East and Africa, told The Register that pricing concerns often stem from customers not fully using the VMware Cloud Foundation bundle. He said cost complaints “don’t play out” when Broadcom works directly with clients, adding that “87 per cent of VMware’s top 10,000 customers have signed up for VMware Cloud Foundation.”
But several smaller and mid sized organizations have reported costs rising dramatically — in some cases by eight to 15 times — under the new pricing structure. One municipal IT manager reported an increase from approximately US$900 to US$32,000 annually for similar infrastructure levels, according to industry reports.
Broadcom argues the new integrated bundles replace multiple standalone tools and reflect significant R&D investments. Critics, however, say many customers are being forced to pay for features they don’t need or use.
The pricing debate comes amid broader concerns about rising enterprise computing costs, particularly in public cloud. An InfoWorld survey found that “more than 43 per cent of IT leaders found that moving applications and data from on‑premises to the cloud was more expensive than expected”
There have been reports from several high profile companies that have detailed huge savings by moving out of the cloud. CTO of 37signals, David Heinemeier Hansson claimed last year that moving back from the cloud would save the SaaS project management firm 37Signals over $7 million. This year he reported that the company would be also moving their storage out of the cloud for more savings.
As organizations reassess their IT spending, the challenge for many is distinguishing between the long-term value of bundled platforms and the risk of unnecessary costs tied to vendor-driven packaging.
