Using Competitor Alternatives as Leverage in VMware/Broadcom Renewals
Why Showing a Credible Plan B Matters
Broadcom’s takeover of VMware has led to steep price increases for many customers. Renewal costs have doubled or tripled in some cases.
Broadcom is essentially betting that you’re so locked in to VMware’s platform that you have no choice but to pay these inflated fees. If you appear fully dependent on VMware, then VMware/Broadcom holds all the cards – they can dictate terms, knowing you have nowhere else to go.
A credible “Plan B” changes this equation. The vendor’s strategy relies on the assumption that you won’t switch to another solution.
The moment you show that you could switch that you have a viable alternative lined up – the power dynamic flips. Suddenly, you’re not a captive customer anymore. VMware realizes it could actually lose your business, and that gives you leverage.
This isn’t just theory. Companies that enter negotiations with a real alternative in hand often see VMware become far more flexible.
Some have secured perks like capped renewal rates or big discounts once VMware understands a competitor is truly on the table. Having a believable Plan B turns a one-sided “take it or leave it” scenario into a two-way negotiation. VMware now has to earn your business instead of taking it for granted.
You also wouldn’t be the only customer considering an exit. Many VMware clients – from mid-size firms to large enterprises – are actively evaluating alternatives because of Broadcom’s price hikes.
Alternative vendors report a wave of former VMware customers migrating since Broadcom’s changes. VMware’s team knows these competitors are real. By showing that you’ve done your homework on other platforms, you pressure VMware/Broadcom to offer a more reasonable deal or risk pushing you to Plan B.
Also read our guide, VMware Pricing Increases Explained: How to Negotiate Caps.
How Competitor Alternatives Create Leverage
Showing VMware that you’re evaluating competitors sends a clear message: “We have options.” This puts pressure on the vendor in a few ways:
- Breaks the lock-in assumption: Vendors assume you won’t endure the hassle of switching. Proving you’re open to it shatters that belief and creates urgency for them to keep you happy.
- Invites a pricing contest: When VMware knows others are bidding for your business, it has to compete instead of handing you a take-it-or-leave-it renewal. Competition almost always leads to better pricing or terms.
- Shifts risk onto the vendor: If leaving is on the table, VMware now faces the real risk of losing your account. To avoid that loss, they’re more likely to concede on contentious terms or offer incentives to persuade you to stay.
Below is a snapshot of what some Plan B options can signal to VMware – and what preparation you need to make them credible leverage:
| Alternative Option | Leverage Impact | Preparation Needed |
|---|---|---|
| Nutanix HCI + AHV | Full VMware replacement | Proof-of-concept trial + comparative cost model |
| Microsoft Hyper‑V / Azure Stack | Uses existing Microsoft stack | Workload mapping + migration cost analysis |
| Open-Source / Cloud-Native Path | Escape proprietary lock-in | Internal strategy plan + budget for pilot and training |
No matter which alternative you consider, the key is making it real. Back up your Plan B with facts. If you can show VMware a well-researched cost comparison or a pilot success on the new platform, your stance stops being a bluff.
Many customers find that just presenting a solid Plan B makes VMware far more flexible. The vendor, suddenly aware it might lose you, often comes back with a better offer to keep you. In short, viable competition forces VMware to work to keep your business.
Caution – Only Use the Alternative Threat If Credible
Be careful: don’t bluff about switching if you’re not prepared to actually do it.
An empty threat can backfire. VMware’s negotiators have seen customers claim they’ll leave without any real plan. If they sense your “Plan B” is just posturing, they may call your bluff – and once that happens, your negotiating power evaporates.
Losing credibility makes it very hard to win concessions. So before you mention an alternative, make sure your house is in order.
Do the homework: run the numbers, talk to the potential new vendor, maybe even do a small pilot migration. That way, if VMware pushes back or asks questions, you have solid answers ready. You’ll come across as serious, not just playing games.
The bottom line: only invoke a competitor alternative if you’re truly willing and able to follow through. If you threaten to switch but would never actually do it, VMware will sense that and you’ll undermine your position.
On the other hand, if the vendor sees your threat is credible – that you have a real plan and approval to execute – they’re much more likely to respond with concessions to make switching unnecessary.
How to Prepare the Alternative-Threat Strategy
If you plan to use a competitor as leverage, you need to lay the groundwork first. Key steps include:
- Audit your VMware environment: Map out what you have – products, licenses, support contracts, current costs, and when each renewal hits. This gives you a clear baseline.
- Model the alternative’s costs: Calculate a rough total cost of ownership for moving to the alternative versus renewing VMware. Include everything (licenses, hardware, migration services, training) to gauge potential savings.
- Assess technical feasibility: Check whether your workloads could run on the alternative platform. Perhaps do a small pilot or consult the alternative’s engineers. Identify major hurdles (feature gaps, compatibility issues) and how you’d address them. Document these findings to show the option is viable.
- Set your “walk-away” terms: Define what VMware needs to offer for you to stay. For example, “We’ll renew if the price increase is under 15% and we get X included. If not, we move to Plan B.” Establish this threshold internally (with management buy-in) so everyone knows when to walk away and switch.
This preparation not only strengthens your hand with VMware – it also ensures your team is aligned. Everyone involved should understand the Plan B option, its costs and risks, and the conditions that would trigger using it.
That unity is important, because VMware might try to sow doubt or play stakeholders against each other. With everyone on board and the facts in hand, you can confidently address those concerns and stay on course.
Timing & Communication Tactics
How and when you communicate your Plan B can influence its effectiveness. Keep these tactics in mind:
- Start early: Begin renewal talks well before your VMware contract expires. Early engagement gives you time to evaluate alternatives and prevents Broadcom from using last-minute time pressure.
- Frame it as exploration, not threat: When you mention looking at other solutions, present it as due diligence. For example, say you’re exploring options “to ensure we get the best value going forward.” This sounds professional rather than confrontational.
- Keep VMware in the loop: Don’t go silent on VMware while you investigate Plan B. Provide periodic updates that you’re evaluating other options alongside the VMware renewal. For example, mention that you received a compelling quote from Competitor X and are weighing it against VMware’s proposal. This keeps pressure on them without ending the dialogue.
- Set a decision deadline: Let VMware know you intend to make a final decision by a certain date. Knowing you have a firm timeline to choose between staying or switching will motivate them to put their best offer forward before that deadline.
Read how to build a business case and gain leverage, Building a Business Case to Push Back on VMware Price Increases.
Five Expert Recommendations for Competitive Leverage
- Document your Plan B (and mention it): Write out your alternative plan – timeline, costs, key steps – and let VMware know it exists. You don’t have to share every detail, but saying “we’ve drawn up a migration plan for Platform X” shows your threat isn’t idle.
- Quantify the switch: Be ready to cite the time and money it would take to move. For example, “We figure roughly 9 months and $500K to shift to Platform Y.” Concrete numbers prove you’ve done the analysis. VMware will realize you’re not simply afraid of migration – you’ve actually calculated it.
- Use the competitor as a benchmark: In discussions, refer to the alternative’s offer. For instance, note that the competitor’s solution would run about 30% cheaper over three years. That sets a clear benchmark. You’re not asking VMware to beat it, but you expect them to narrow the gap.
- Keep negotiations parallel: Don’t cut off talks with VMware while pursuing the alternative. Continue engaging with VMware reps even as you solicit competitor quotes or run a pilot. This keeps VMware motivated and ensures you don’t burn bridges.
- Be prepared to walk: Only leverage an alternative if you are truly willing to walk away. Make sure you have approval and budget in hand to execute Plan B if needed. If VMware’s final offer doesn’t meet your requirements, be ready to say “no” and move on. Once a vendor sees you will leave if necessary, they’re far more likely to concede so you won’t have to.
By applying these recommendations, you put yourself in a powerful position to drive a better deal. The goal isn’t to abandon VMware – it’s to ensure that if you stay, it’s on your terms. Ideally, your Plan B leverage convinces VMware to offer a great renewal deal. If not, you’re ready to switch. Either way, you avoid being stuck with an unfair agreement.
Read about our Broadcom Audit Defense Service.
