Average VMware Enterprise Discounts
VMware enterprise pricing has shifted under Broadcom. Enterprise buyers need to know what “normal” discounts look like.
Below we break down average VMware enterprise discounts by deal size so you can benchmark any quote.
For an overview of benchmarking pricing, read our guide, VMware Pricing Benchmark – Understanding the New Broadcom Discount Reality.
Why Deal Size Impacts Discount Levels
Historically, VMware offered bigger discounts for bigger deals. A customer spending $5 million a year could easily get 30–40%+ off, whereas someone spending $100,000 might only see 5–10%. Volume mattered—sales reps could justify deeper cuts on large orders.
Under Broadcom, this dynamic still exists but is far less generous. Broadcom favors high margins over high volume.
They will walk away from small deals rather than discount heavily.
If your annual spend is modest, expect little to no break on the list price. Only very large enterprise contracts (multi-million dollars) have enough leverage to pry meaningful discounts now – and even those are smaller than they used to be.
Pro Tip: If your planned purchase is just shy of a higher discount tier, consider bundling additional needs to bump it up. For example, moving a $900K order to $1M might unlock a noticeably better discount percentage.
Average Discount Ranges by Deal Size
What kind of discount can you expect at various spending levels?
The table below shows typical VMware deal size discount benchmarks – comparing historical VMware-era discounts to current Broadcom-era levels.
These ranges cover annual license + support spend:
| Annual VMware Spend (License + Support) | Historical Discount (VMware era) | Current Discount (Broadcom era) |
|---|---|---|
| < $250K (small deal) | ~5–15% off list | ~0–5% off list |
| $250K – $1M (mid-sized deal) | ~15–30% off list | ~5–15% off list |
| $1M – $5M (large deal) | ~30–45% off list | ~10–20% off list |
| > $5M (very large deal) | ~40–50% off list | ~20–30% off list |
Table: Average VMware enterprise discount levels by annual deal size (license + SnS), past vs. present.
In VMware’s prime, an Enterprise License Agreement often meant 20–40% off list, and the biggest customers sometimes saw half off. Today, those days are gone – many enterprises find that a 10–20% discount is the new normal ceiling (maybe 25–30% only for the very largest clients after a fight).
Bottom line: if your $2M quote shows just a 5% discount, you’re being low-balled.
And if you once enjoyed a 50% break, don’t expect anything close today. Broadcom is clawing back those generous deals. Use the table above as a reality check – if your discount is far below typical for your tier, demand better.
Pro Tip: Don’t be impressed by a “big” discount without context. Focus on the final price relative to what others pay – not just the percent off list.’
Use RFPs to gain leverage. Using RFPs and Third-Party Quotes to Gain VMware RFP Pricing Leverage.
Factors that Lift or Lower Your Discount Potential
Certain factors can swing your VMware enterprise licensing discount up or down:
Factors That Increase Discounts:
- Deal Size & Term: Bigger spend and multi-year commitments = bigger discounts.
- Competitive Pressure: Broadcom will bend if it thinks it might lose your business. Make it clear you’re evaluating alternatives (cloud, Hyper-V, Nutanix, third-party support). It’s one of the few ways to extract a better deal.
Factors That Decrease Discounts:
- Small or Piecemeal Deals: One-off or low-dollar purchases get minimal breaks. Broadcom doesn’t mind losing small customers, so expect to pay near list price if your spend is low.
- No Alternatives: If VMware knows you have no Plan B, they have no reason to do more than a token discount. No competition = no incentive for them to budge.
- Expired Legacy Deals: Coming off an old contract with a big discount? Broadcom will try to strip it away and push you toward full price. Don’t expect past terms to carry over without a fight.
Pro Tip: VMware’s first quote is usually a highball. Broadcom’s opening bid might be double or triple your last bill, hoping you won’t fight it. Never accept the first offer – it’s almost always a bluff.
Benchmarking Your VMware Quote – Quick Validation Checklist
Got a VMware quote in hand? Run it through this quick checklist to validate it against VMware renewal discount benchmarks and smart negotiation practices:
- Effective Discount: Calculate the percent off the list price in your quote. Does it align with the typical range for your deal size? If you’re only getting 5% off when others average 20% in your tier, you’re overpaying.
- Support & Future Increases: Are support fees around 25% of license cost (historical norm) or has Broadcom pushed them higher? Also check for any built-in price hikes in later years. A first-year discount means little if huge increases follow in later years.
- Unneeded Products or Capacity: See if the quote includes bundled components you don’t need. Broadcom loves bundle bloat. If there’s shelfware in the quote, get it removed or demand an extra discount to offset it.
- Multi-Year vs. Single-Year: If you’re committing to multiple years, ensure the pricing reflects that. A multi-year deal should have a better effective rate than a single-year order. If not, ask why – you should get a better break for a longer commitment.
- Compare to Last Deal: Look at what you paid under your last VMware contract (for a similar scope). How much higher is this new quote? If it’s dramatically more for the same footprint, that’s a red flag to challenge.
Use this checklist to flag overpricing or sneaky terms. If several boxes don’t check out, you have a clear case to go back and push for a better deal. An informed buyer signals that “we know what the fair market is” – making it harder for VMware to overcharge you.
Compare pricing how it was before Broadcom acquired VMWare, Broadcom Era Pricing vs Past VMware Pricing.
How to Raise Your Discount Game
Securing a decent VMware discount in today’s environment requires a proactive strategy.
Here’s how to up your game:
Start negotiations early and arm yourself with data. Engage VMware well ahead of renewal (6–12 months out) to avoid last-minute traps. In parallel, audit your usage and gather pricing benchmarks from industry sources. Knowing what a fair deal looks like upfront lets you counter Broadcom’s inflated quotes with facts.
Develop a credible Plan B. If VMware’s offer is too high, be ready to shift workloads or support elsewhere. Even if a full switch isn’t practical, show that you could migrate some systems to the cloud or another platform (or use third-party support). Broadcom becomes much more flexible when they see you have real alternatives.
Control the timeline and flip the pressure. If a rep claims “this price expires Friday,” assume it’s a bluff – real offers don’t vanish overnight. Instead, use their quarter-end deadline to your advantage: say you’ll sign by that date only if the deal meets your requirements. Otherwise, you’ll wait. This puts the urgency on them to improve the offer. If you still hit a wall, escalate to higher-ups – a CIO-to-CIO talk can break through “policy” limits.
Pro Tip: Never let VMware know your true budget or desperation level. If they sense you must close, you’ll never see their best offer. Keep them guessing – and making their best pitch to win your business.
5 Rules for Using Discount Benchmarks to Gain Leverage
Finally, some clear rules for wielding these benchmarks in your VMware negotiations:
- Use Current Benchmarks: VMware’s discount landscape changed after Broadcom’s takeover, so old benchmarks may mislead. Get fresh data from industry sources to ground your negotiation in today’s reality.
- Challenge Bluffing: If a rep insists “no one gets more than X%,” politely call their bluff.
- Guide, Don’t Threaten: Use benchmarks as a guide, not a weapon. For example, say you expect a discount in line with peers (e.g., ~25% off for a deal your size) instead of making ultimatums.
- Keep Data Close: Let VMware know you’ve done your homework (hint that you know typical discount levels for companies like yours), but don’t share details. Make them wonder how much you really know.
- Be Ready to Walk: If VMware won’t come near market pricing, invoke your Plan B. For example: “Others are getting ~20% off; if you’re stuck at 5%, we’ll explore alternatives.” A credible threat to leave – backed by data – is your ultimate leverage.
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