Altanora, September 2026
In September 2024, AT&T told a federal court that Broadcom had proposed a renewal increase of more than 1,050 percent for the VMware support contract keeping its network running. “We appear to be at an impasse on our VMware deal,” one AT&T executive wrote to Broadcom’s CEO. The case is still working its way through the courts.
That’s an extreme case, and it made headlines precisely because it’s extreme. But talk to almost any IT Director who’s been through a VMware renewal since Broadcom closed its acquisition, and “extreme” isn’t really the word for what they’re describing. It’s not a lawsuit-sized shock. It’s something steadier and more structural, and it’s the reason so many teams have started calling it the VMware tax.
Here’s what’s actually driving it, what the data says about how organizations are responding, and what to do before your own renewal notice lands.
It’s tempting to treat this as a simple price hike, but the mechanics matter, because they determine whether your specific environment gets hit hard or barely notices.
It’s easy to find a scary headline about VMware pricing. It’s harder to find a grounded, current picture of how organizations are actually experiencing it. The most complete recent data comes from a CloudBolt survey of 302 IT decision-makers at North American companies with 1,000+ employees, fielded in January 2026:
| What 302 IT decision-makers said (Jan. 2026) | |
|---|---|
| 88% | are concerned about further VMware price increases |
| 86% | are actively reducing their VMware footprint |
| 54% | are staying on VMware while shrinking their dependence elsewhere, not doing a full rip-and-replace |
| 5% | have actually seen the 100%+ cost increases that 73% feared back in 2024. The anxiety has outpaced the average outcome, though the tail risk is real |
Source: CloudBolt, “The Mass Exodus That Never Was,” February 2026.
The nuance in that last number matters. Costs are absolutely up for the large majority of organizations, and the mechanics above explain why , but a runaway, universal 100%+ price shock isn’t the median experience. What is common is the steady structural pressure: bundle costs that don’t map to actual usage, a core-count floor that penalizes older hardware, and a compounding uplift clause working in the background every renewal cycle. That’s arguably a harder problem to notice and budget for than one big scary number, because it doesn’t show up all at once.
It’s also no longer just a customer-vendor dispute. In 2026, a coalition of European cloud providers (CISPE) filed a formal antitrust complaint with the European Commission over Broadcom’s VMware partner-program changes, with reporting around the complaint citing price increases above 1,000% in some cases tied to bundling and minimum-commitment terms. Regulators are now looking at the same mechanics IT teams have been living with for two years.
VMware renewals used to be close to a rubber stamp: confirm the count, sign, move on. The packaging and pricing changes above have turned that into a real negotiation with real leverage on the table, for whoever shows up prepared.
One advisory firm’s analysis of roughly 35–50 Broadcom VMware transitions found that organizations who went in prepared (decomposing the bundle against what they actually deploy, checking their real core counts against the 16-core minimum before the quote arrived, and having a genuine priced alternative in hand) held their final increase to roughly 40–60% of the opening ask. Notably, that leverage showed up even for organizations that never intended to actually leave VMware: simply having a credible, priced walk-away option changed the conversation.
The organizations getting the worst outcomes aren’t the ones with the most complex environments. They’re the ones who treated the renewal notice as the start of the process instead of the deadline for finishing it.
Once you’ve done the homework above, most organizations land on one of three strategies. None of them is automatically “right.” It depends on your environment, your timeline, and how much re-architecture risk you’re willing to take on.
Whichever path fits, the organizations that come out ahead all do the same handful of things well before the renewal conversation starts:
If you want a starting number before you start the conversation, we built a short calculator that estimates the gap between a typical VMware/Broadcom renewal and a fully managed, hosted alternative from a few basics about your environment. No sales call is required to get the estimate.
Try the VMware Renewal Cost Calculator →
If your renewal is already on the calendar and you want a second set of eyes on it before you’re back at the negotiating table, we’re glad to help.