VMware Licensing 101
Introduction – Why VMware Licensing Terms Matter
Understanding VMware’s licensing jargon is crucial now more than ever. Broadcom’s shift to subscription-based licensing has introduced new terminology and changed the meaning of familiar metrics.
Terms like “per core,” “socket,” and “instance” now directly drive how much you spend on VMware. Misunderstandings can lead to buying more licenses than you need or, worse, falling out of compliance and facing audit penalties.
Pro Tip: If you don’t know what a metric measures, you can’t control what it costs.
Read our comprehensive guide, VMware Licensing Changes Explained: 2025-2026 Update for Enterprises.
Core Licensing Terms (Compute Metrics)
Core
A physical CPU core. In VMware licensing, each core on a host must be licensed. Licenses come in 32-core packs – even a CPU with eight cores needs a full 32-core pack. More cores mean higher cost.
Socket
A physical processor (CPU) socket. VMware’s older licenses were sold per socket (per CPU) rather than per core. Socket-based licensing is now phased out under Broadcom, but you might still see it in legacy setups.
CPU Pack (32-Core Pack)
A bundle license covering 32 cores – the standard unit in VMware’s 2025 model. For example, a server with 48 total cores needs two 32-core packs (covering 64 cores).
This often means paying for unused capacity, since you must buy in fixed 32-core blocks.
Pro Tip: The 32-core minimum often forces you to over-license – factor that into cost models.
Memory and Virtual Resource Metrics
vRAM
The amount of virtual memory (RAM) allocated to VMs. VMware once used vRAM as a licensing metric in past editions (capping total VM memory per license), but it’s largely retired now. If you see vRAM mentioned in a legacy contract, clarify its relevance – today, vRAM isn’t a direct license trigger.
vCPU
A virtual processor assigned to a VM. VMware doesn’t charge per vCPU – adding more vCPUs to a VM doesn’t increase license needs. However, vCPU count affects performance and capacity planning. Think of vCPU as a design consideration, not a billing metric.
Instance
A single deployed virtual machine or software appliance. Some VMware products (especially newer SaaS or cloud services) use per-instance licensing. That means each separate deployment – each VM, appliance, or service instance – requires its own license. More instances deployed equals higher costs in those models.
Pro Tip: vRAM and vCPU aren’t license triggers today — but Broadcom could reintroduce resource-based metrics in future SaaS pricing.
User and Access Metrics
Named User
A license tied to a specific person. Common in VMware’s end-user computing products like Horizon (virtual desktops) or Workspace ONE. One user license covers one named individual, no matter how many devices they use. Be careful: if an employee leaves and you don’t reassign their license, it remains consumed by that inactive user.
Concurrent User
A license model that limits how many users can be active at the same time. For example, 50 concurrent licenses allow up to 50 people to use the system simultaneously (regardless of total users). This model was used in older Horizon VDI deployments. Broadcom’s current licensing rarely uses concurrent user metrics, but you might encounter them in legacy agreements.
Device License
A license tied to a specific device (one license per PC, thin client, or kiosk). It’s used when multiple people share one machine. Each device running the VMware software needs its own license, no matter who uses it.
Pro Tip: User-based licenses demand good housekeeping — an inactive employee’s account will still consume a paid license until you remove or reassign it.
Subscription and Term Metrics
Subscription
A time-limited right (usually 1–3 years) to use VMware software, including support and updates. VMware (under Broadcom) has eliminated perpetual licenses in favor of subscriptions. When your term ends, you must renew to stay compliant and keep support. This makes VMware licensing a recurring expense instead of a one-time purchase.
Term License
A license contract with a fixed duration (e.g., 36 months) – basically the same as a subscription. Watch for auto-renewal clauses: if you don’t cancel in time, the contract may renew for another full term, locking in costs.
Support Entitlement
The right to technical support and software updates is tied to your license. In a subscription, support is bundled only for the active term. If support lapses, you lose update access, and Broadcom may consider continued use of the software unlicensed.
Pro Tip: Letting support expire can trigger audit risk — Broadcom often considers software running without active support as unlicensed.
Read, Core vs Socket VMWare Licensing Changes (2024–2025).
Product and Suite Licensing
vSphere Foundation
VMware’s main server virtualization platform under Broadcom, replacing the old vSphere Enterprise Plus edition. It includes the core hypervisor and additional features (like Kubernetes integration). vSphere Foundation is licensed per core via subscription (using 32-core packs) and is the base for most enterprise deployments.
VMware Cloud Foundation (VCF)
An all-in-one data center bundle (vSphere + vSAN + NSX + more) offered as a single subscription. It’s licensed per core and typically sold in fixed tiers. With VCF, you license the entire suite even if you don’t use every component.
Aria Suite
A set of VMware management tools (formerly vRealize Suite) for operations, automation, and logs. Broadcom no longer sells Aria Suite on its own – its features are now included in larger bundles like VCF or vSphere Foundation. In short, you don’t license Aria separately anymore; it comes as part of broader subscriptions.
Pro Tip: Each VMware bundle hides multiple licensing layers — always confirm how each component is licensed to avoid surprises.
Compliance and Audit Metrics
Entitlement
Proof of your right to use VMware software. This is documented by your license keys, contracts, or VMware portal records, showing how many units (cores, users, etc.) you own. Auditors compare your entitlements (what you purchased) to your actual usage. Any shortfall means a compliance gap.
Deployment Count
The actual usage in your environment (how many cores, hosts, VMs, or users you’re running). Auditors measure this and compare it to your entitlements. If your usage exceeds what you purchased, you’re under-licensed and at risk of true-up penalties.
True-Up
Buying additional licenses after the fact to cover unlicensed use. If an audit finds you used more than you bought, you must “true up” – pay for the overuse, often at full list price. True-ups are unplanned costs, so staying compliant to avoid them is crucial.
True-Down
Reduce your licensed quantity to match lower usage. This would happen at renewal if your needs dropped. Broadcom doesn’t offer automatic true-downs, but you might negotiate to drop licenses you no longer need. A true-down, if you can get it, prevents paying for excess capacity in the next term.
Pro Tip: Compliance isn’t just about counting licenses — it’s about matching each usage metric to a valid entitlement. Always align what you’re using with what you’ve purchased.
Read more about VMware Suite Licensing Explained (vCloud Suite, Aria, and Beyond).
Example: One Metric Misunderstanding = One Expensive Audit
A company assumed its old per-socket vSphere licenses would cover new 48-core servers. After Broadcom’s changes, each license still only covered 32 cores of each CPU, leaving 16 cores unlicensed per processor. An audit flagged this shortfall and hit the firm with $1.2 million in true-up fees.
Lesson: Always verify whether your licensing is based on cores, CPUs, or sockets – and know the core limits for each. One misunderstanding can lead to a very costly surprise.
Related Terms to Know
vCenter Server
The central management tool for vSphere environments. vCenter lets you control multiple hosts and VMs from one console. In VMware’s subscription era, vCenter Server is typically included with bundles and not a separately charged item (unlike older days when it had its own license).
DR Host
A “disaster recovery” host kept on standby for emergencies. Even if it’s only powered on during a failure or test, if VMware is installed on it, it generally needs to be licensed. DR environments are often overlooked in licensing, but auditors will count them if VMware software is there.
Host
A physical server running the VMware ESXi hypervisor. Each host provides CPU and memory resources for virtual machines. You must license all of a host’s CPU cores for the VMware software installed on it.
Cluster
A group of hosts managed together in vCenter for load balancing and high availability (HA). A cluster isn’t licensed as a unit – you license each host (and its cores) in the cluster.
Virtual Machine (VM)
A software-defined computer (an OS instance) running on a VMware host. VMs use the host’s CPU, memory, and storage. VMware doesn’t charge per VM for vSphere, but each VM consumes resources on a host that must be licensed.
Summary – Why These Terms Define Your Costs
Every VMware licensing term sets a boundary for cost and compliance. In Broadcom’s subscription era, there’s no room for confusion — misreading a “core” vs. “socket” or overlooking a user count can quickly lead to surprise fees or audit trouble. Mastering these definitions gives you leverage: you can model costs accurately, avoid compliance traps, and negotiate renewals with confidence.
Pro Tip: In VMware’s world, the metric is the money — master the definitions, and you master the deal.
Read more about our Broadcom Audit Defense Service.
