VMware Pricing Benchmark – Understanding the New Broadcom Discount Reality

Since Broadcom’s acquisition of VMware, customers are struggling to determine what “fair pricing” even means. Long-time VMware users who were used to predictable discounts and published price lists now face a fog of uncertainty.

Broadcom’s new licensing model and opaque quotes make it hard to tell if you’re getting ripped off or getting a reasonable deal.

This is where pricing benchmarks come in – hard data on what others are paying can cut through the opacity and anchor your negotiations with facts.

Knowing the market norms lets you push back against one-sided renewal terms and answer the critical question: “What’s a good deal for VMware now?”

Pro Tip: The only way to know if you’re getting a good deal is to know what others are paying.

Why VMware Pricing Benchmarking Matters

Broadcom’s approach to VMware pricing has been anything but transparent.

Public price lists have vanished, and many customers are seeing sky-high renewal quotes with little explanation.

In this environment, benchmarking becomes your safety net. It reveals what discounts are normal in the market and flags when a quote is out of line.

In short, knowing how your deal compares to others arms you with leverage.

Checklist – Why Benchmarking Protects You:

• Prevents Overpaying Inflated Quotes: If you know the typical discount is 25% off and your quote shows 5%, you can immediately spot an overpriced deal.
• Highlights Negotiation Opportunities: Benchmarks show where others have successfully negotiated – for example, getting support fees reduced or multi-year discounts. These points indicate areas where you shouldn’t settle for “standard pricing.”
• Justifies Taking a Hard Line: Presenting data justifies delaying approval or escalating negotiations internally. You can confidently tell leadership why a quote isn’t acceptable using external facts, not just gut feel.
• Strengthens Your Case for Alternatives: If benchmarking reveals your vendor’s price is way above market, it strengthens the business case to consider other options (or at least pretend to). Vendors hate hearing that informed customers have Plan B’s.

In short, an informed customer is a difficult customer – and that’s exactly why Broadcom isn’t volunteering comparative information.

It’s no coincidence that transparency tends to disappear after big acquisitions; vendors prefer you in the dark. Benchmarking flips the light switch back on.

Historical Discount Patterns (Pre-Broadcom)

To understand where things are now, it helps to know what VMware pricing looked like before Broadcom’s takeover. Historically, VMware’s discounts off list price varied by product and customer size.

Large enterprises could negotiate steep cuts, while smaller customers had far less leverage. Here’s a snapshot of typical license discount ranges in the pre-Broadcom era:

Table: Typical VMware license discount ranges before Broadcom’s acquisition, based on enterprise size.

As the table shows, bigger customers historically pushed for bigger discounts. A large enterprise signing an ELA (Enterprise License Agreement) or large bundle deal might have received 40% or even 50% off the list price on vSphere and related products.

These hefty discounts weren’t handed out freely – they were earned through scale and savvy negotiation (often exchanging multi-year commitments or volume guarantees for a better rate).

Mid-market organizations typically landed in the 20–30% off range on major products if they negotiated diligently or pitted resellers against each other. Meanwhile, small enterprises with limited spend had minimal room to negotiate – 5–15% off was about as good as it got, and many paid close to full price.

Product mix also mattered. VMware was more generous in discounting its core and competitive products. For example, vSphere (the de facto virtualization platform) and vSAN (software-defined storage) often saw deeper cuts, especially when sold in bundles. These were areas where VMware faced competition (Microsoft Hyper-V, Nutanix, etc.) and where large volume deals were common.

In contrast, niche solutions like NSX (network virtualization) or the Aria/vRealize suite often saw lower discounts. Those products were highly specialized and less likely to be swapped out, so VMware had less incentive to slash prices on them. Often, they were bundled into bigger deals rather than discounted heavily à la carte.

It’s worth noting that channel partners played a role in historical discounts, too.

In the pre-Broadcom days, VMware’s network of resellers and OEM partners (like Dell or HPE) could offer additional margin reductions.

A partner might trim its own margin to win a customer’s business, effectively giving you a better price than VMware’s official rate. Seasoned procurement teams would solicit multiple quotes from different partners to squeeze out an extra few percentage points.

All of these tactics meant that the real price paid by enterprises was often well below VMware’s sticker price.

Pro Tip: The biggest discounts weren’t published — they were earned through scale and patience. In other words, those 40–50% off deals you hear about never come easy; they result from big commitments and tough negotiations, not a standard price list.

The Broadcom Effect – What’s Changing Now

Broadcom’s takeover of VMware has upended these familiar patterns.

The new Broadcom pricing model emphasizes standardization and margin protection above all. What does this mean for you as a customer?

In practice, it’s a shift toward smaller discounts and more rigid terms.

Here are the key changes unfolding:

• Deals Closer to List Price: Broadcom is notorious for minimal discounting. Many VMware customers are now getting renewal quotes at or near full list price – something almost unheard of for mid-size or large clients in the past. A discount that might have been 30% is now perhaps 10%. Broadcom’s sales philosophy is “high price, take it or leave it,” especially for modest deals. Generous cuts are largely reserved for only the biggest, multi-million dollar contracts (and even those aren’t as generous as before).
• Subscription Lock-In (No Perpetual Licenses): Broadcom immediately eliminated VMware’s perpetual licenses. All VMware licensing is subscription-only now. This locks customers into recurring costs and gives Broadcom a steady revenue stream. It also means you can’t buy once and hold a license indefinitely; you either pay as you go or lose the software. For Broadcom, this model reduces flexibility to skip support or delay upgrades – you’re always on the hook for the next renewal.
• SKU Simplification – Bundles Only: VMware’s product catalog has been slashed and simplified into a few big bundles. Broadcom combined what used to be separate components (vSphere, vSAN, NSX, Aria, etc.) into all-in-one suites like VMware Cloud Foundation (VCF) and vSphere+ Foundation. While simpler on paper, this forces customers to buy more than they might want. Need NSX? You might have to buy a whole Cloud Foundation package. The days of picking individual components à la carte are fading. This SKU consolidation is great for Broadcom’s sales efficiency and margin – not so great for customers who now have to pay for extras they’ll never use.
• Higher Support Costs & Rigid Renewals: It’s not just licenses – support pricing and terms have tightened too. Annual support (SnS) fees, which were ~22% of the license cost, are reportedly creeping up to 25–30% under Broadcom. On top of that, Broadcom is enforcing strict renewal policies: multi-year terms (typically 3-year) are becoming the norm, and penalties for lapses have appeared. For instance, if you miss your renewal date, Broadcom may hit you with a 20% “late renewal” fee on your subscription. They’re also threatening to cut off support entirely if a customer doesn’t renew on time or balks at moving to the new model. This hardline stance is worlds apart from VMware’s older, more accommodating approach.

So, what does a “good deal” even look like now? In Broadcom’s VMware era, discount bands have narrowed significantly.

Enterprises that once enjoyed 40% off may now consider 20–25% off a victory. Mid-market firms that used to see 20% might only get 10% now, if anything. Many small customers get zero discount and pay straight list.

A realistic benchmark in 2025 is that large enterprises might negotiate around 25–30% off in the best case (exceptionally, maybe one-time 40% on a huge commitment), and mid-size organizations are lucky to get 10–15%. Anything beyond that usually requires pulling major levers (like committing to an all-in Cloud Foundation deal or showing Broadcom you’re prepared to walk away). If your initial quote comes back with no discount, don’t be shocked – that is Broadcom’s opening gambit for many. It puts the onus on you to fight for any reduction.

Pro Tip: Expect fewer exceptions — Broadcom’s pricing machine doesn’t reward negotiation creativity. Unique discount arrangements, one-off concessions, or “let’s get creative” deal structures are far less likely now.

Broadcom has a playbook, and they stick to it. Unless you’re a Fortune 50 spending tens of millions, the quote you get will be by-the-book with minimal wiggle room. This means you have to bring exceptional leverage to break out of Broadcom’s preset pricing mold.

Discount Dynamics by Product and Size

Even under Broadcom’s one-size-fits-all pricing philosophy, not all products and customers are treated equally. There are still variations by product line and enterprise size, but they are just within a tighter range.

Understanding these nuances can help you focus your negotiation where it counts.

• Enterprise vs. Mid-Market: Large enterprises (think global banks, telecoms, etc.) still have the best shot at bending Broadcom’s rules. If you’re spending eight figures and willing to commit long-term, Broadcom might carve out a slightly better deal (e.g., throw in a custom bundle or an incremental discount). We’ve seen big accounts negotiate bespoke bundles – for example, including certain legacy VMware components not officially sold anymore – as part of a giant Enterprise License Agreement. Mid-market and smaller customers, however, are being funneled to standardized deals through a handful of authorized resellers. Broadcom drastically reduced the number of VMware partners, meaning mid-sized IT shops often get quotes that are essentially “pre-approved” rates with little variance. The flexibility to negotiate via multiple channels or play partners against each other has dwindled. In short, enterprise whales still have some sway; mid-market minnows are often told to take the set menu.
• Product-Specific Differences: Some VMware products remain harder to get discounts on. NSX (software-defined networking) and the Aria suite (formerly vRealize) have historically been tightly controlled on margin – and Broadcom continues that stance. These are specialized products that VMware (now Broadcom) knows customers can’t easily find direct substitutes for, so the pricing is more “take it or leave it.” Don’t be surprised if your NSX quote is at 0–10% off list, even if you’re a big shop – that was common even pre-acquisition. Conversely, vSphere and vSAN – as core infrastructure facing competition – were historically discounted more and still represent your best chance to push for a break. Broadcom may be willing to budge a bit more on vSphere/vSAN pricing if it means closing a larger deal (especially if you hint at considering a rival hypervisor or storage solution for those layers).
• VMware Cloud Foundation as the New Anchor: VMware Cloud Foundation (VCF) has become Broadcom’s flagship offering for enterprises, essentially bundling vSphere, vSAN, NSX, and more into one package. Broadcom is aggressively pushing customers toward VCF. In fact, they even publicly announced a 50% list price reduction on VCF’s per-core subscription to make it more enticing. But don’t be fooled by headline numbers: that “discounted” VCF price often comes alongside requiring you to buy the entire stack. Many organizations end up paying more overall because they’re forced to license components they previously didn’t need or had under cheaper legacy contracts. Broadcom’s strategy is clear – get customers onto the full Cloud Foundation bundle, lock them in, and standardize pricing there. The silver lining is that if you do agree to go all-in on VCF across your data center, Broadcom will likely show slightly more flexibility on price per core (because you’re meeting their strategic goal). Cloud Foundation deals are where we occasionally still see an enterprise eke out maybe a ~30% discount. Just go in eyes open: you’re getting that 30% off a much larger bundle list price, so your total spend may still rise.

In summary, know where you have leverage. If you’re a large enterprise buying the whole portfolio, use that scale to push for every percentage point. If you’re mid-sized with a narrower purchase, be aware that you might be offered a boilerplate deal; you’ll need to introduce competitive tension or other tactics to break out of that.

And always scrutinize which products are in your quote – if there are things you don’t need, you’re now likely paying for them regardless.

Still, it’s worth pointing out unused components as a negotiation chip (“We don’t even use product X, can we remove it or get credit for it?”). Broadcom may say no, but it signals you’re not an easy mark.

How to Benchmark Your Own Quote

Benchmarking isn’t just a theoretical exercise done after the fact – you should actively benchmark your VMware quote during negotiations. When that renewal or new proposal lands in your inbox, approach it like an auditor.

Here’s a checklist to validate the pricing and make sure it aligns with reality:

1. Obtain a Detailed SKU Breakdown: Don’t accept vague proposals. Insist on a line-by-line quote showing each SKU, the quantity, unit list price, and the discount applied. You need to see how much Broadcom is charging for licenses and support for each component. This transparency is crucial for benchmarking (and it sometimes flushes out hidden costs, like an overpriced support line item or an extra bundle you didn’t ask for).
2. Compare Discounts to Benchmarks: Once you have the line-item discounts, compare them against known historical averages or industry benchmarks. For example, if you see only a 5% discount on vSphere but you know enterprises historically got 30%+, that’s a red flag. Check each major product’s discount level versus what similar customers have achieved (articles like this one, peer feedback, or advisory firms can provide those ballparks). This will quickly show you which parts of your quote are out of line. It’s not just about one number – maybe your vSphere is 15% off (decent nowadays), but your vSAN is full price – that’s something to question.
3. Use Third-Party Quotes or RFPs: A powerful way to benchmark is creating real alternative quotes. Engage a third-party vendor or cloud provider in parallel to price out a migration scenario, or issue a formal RFP including VMware and at least one competitor. If you can show Broadcom a credible quote from, say, a hyper-converged infrastructure alternative or even the projected cost to move some workloads to AWS/Azure, you gain leverage. At the very least, get a quote from a certified VMware reseller (if you’re not already dealing direct) – even if Broadcom fixed the channel, another quote can sometimes reveal a slightly better price or different bundling. Use these external quotes as a yardstick and a bargaining chip: “Vendor Y will give us this much value for a similar cost – why is VMware coming in so high?”
4. Validate Escalation Clauses and Price Locks: Don’t just focus on the upfront price – benchmark the terms too. Look at what the quote or draft contract says about future price increases. Broadcom’s standard practice is to allow itself room to hike prices at renewal. Negotiate a cap on annual increases (e.g., no more than 5% a year) and compare that with what others have gotten. Historically, some vendors agreed to 0–3% caps in ELAs; see if Broadcom has budged for anyone on this. If your peers are locked in a cap and your offer has none, you have justification to demand one. The same goes for termination rights, transfer rights, and other clauses – get advice on what’s become typical in VMware contracts post-acquisition so you can spot if your terms are unusually one-sided.
5. Document Renewal Terms & Tie Discounts to Commitments: Be very clear on what happens when your term is up. Broadcom often ties any discount you do get to strict conditions – like a multi-year lock-in or a commitment to expand usage. Ensure you document any “special” discount in writing, along with its conditions. For example, if they say you’re getting 20% off for a 3-year deal, what happens at renewal in year 4? Is that pricing protecte,d or will it jump to list? Savvy customers benchmark not just the here-and-now price, but the whole lifecycle cost. If your quote lacks renewal protections that others insist on, push for them. Always ask: “What will our VMware environment cost in Year 4 and 5?” and compare that trajectory to industry averages. Broadcom loves front-loaded deals that balloon later – shine a light on that and plan accordingly.

By running through these steps, you transform a passive quote review into an active negotiation strategy. The idea is to catch any outliers – whether it’s an abnormally low discount, a sneaky term, or a price escalation – and challenge them with data.

Pro Tip: If your quote has a 10% discount, but the industry average was 35%, you’re subsidizing someone else’s deal. Vendors sometimes offer one customer a meager discount to offset another customer’s steep discount.

Don’t be the one paying list price so someone else can enjoy 50% off. Use benchmarks to ensure you’re not the outlier footing the bill for Broadcom’s margin targets.

Using Competitive Anchors for Leverage

When facing a tough VMware renewal, one of the strongest negotiation tactics is introducing competitive anchors – in plain terms, alternatives.

Broadcom’s worst fear is a customer saying, “We have other options.” Even if you have no immediate plan to rip out VMware, simply showing that you could will recalibrate the discussion.

Consider creating a credible Plan B in the eyes of the vendor:

• Cloud Migration Scenarios: Calculate what it would cost to move a portion of your workloads to a public cloud or a cloud-native platform. For example, if VMware’s price is outrageous, what is the 3-year cost to shift some VMs to AWS or Azure with native services? You might not actually do it for all workloads, but if you can demonstrate that some of your footprint could go to the cloud for less than Broadcom’s quote, that’s powerful leverage. It reminds VMware that virtualization is not the only game in town for every app.
• Alternate Hypervisors or Stacks: Evaluate other on-premises virtualization solutions – Microsoft Hyper-V, Nutanix AHV, Red Hat KVM, or even open-source platforms like Proxmox. Each has trade-offs, but many enterprises are now exploring a dual-vendor strategy to reduce dependence on VMware. You can even bring up old-school alternatives: “We might revert a portion of our environment to physical servers or a simpler hypervisor for non-critical workloads.” The key is to put a price tag on these alternatives and plan around them. For instance, get a quote from Nutanix or have your team estimate the cost of migrating 20% of workloads to Hyper-V. If Broadcom thinks you’re seriously considering a switch, their “take it or leave it” stance can soften.
• Partial Rollback of VMware Usage: You don’t have to threaten a full replacement to make a point. Perhaps you tell VMware, “We’re containerizing our new applications on Kubernetes, which means our VMware growth will slow.” Or, “We’re planning to decommission older workloads instead of renewing those VMware licenses.” This signals that continuing with VMware is a choice that you’re weighing, not an automatic necessity. Even a modest reduction in scope – like migrating a disaster recovery site off VMware or using a cloud DR service – can create savings you can dangle in front of Broadcom during talks.

Using competitive benchmarks isn’t just bluffing; it’s prudent due diligence.

And it has a psychological effect: the moment VMware senses true competition, they often re-evaluate their offer.

We’ve seen situations where a previously rigid “no discount” quote suddenly came back 15% lower after the customer mentioned they’re piloting an alternative solution. The vendor’s calculus changes from “How much can we get out of them?” to “What will it take to keep them?”

Make sure to document these alternatives and be ready to share some details (without giving away your whole strategy). For example, “Our analysis shows we could save 30% over three years by shifting X% of workloads to Y platform.” You don’t even need that analysis to be perfect – you just need it to be plausible.

Finally, be aware that Broadcom’s sales team will try to poke holes or FUD (fear, uncertainty, doubt) in any alternative you bring up. That’s fine; your goal isn’t to win a debate, it’s to make them sweat a little. Even the hint that you might migrate or diversify is often enough to reset their internal discount logic in your favor.

How Procurement Can Reclaim Control

With Broadcom calling the shots on pricing, it’s easy for procurement teams to feel on the back foot. But you can still reclaim control of the process with a proactive strategy.

Here are some techniques to level the playing field:

• Cross-Check Every SKU and Term: Don’t take any part of the quote at face value. Ensure every item on the proposal is actually something you need, and verify the math. For instance, confirm that support fees are correctly calculated (Broadcom might default to a higher support tier). Look out for bundled items that you didn’t explicitly request. By doing a fine-tooth comb review, you can catch unjustified costs and push back before it’s too late. This attention to detail also signals to the vendor that you’re not a pushover – you’re watching every dollar.
• Bring in Benchmarking Advisors: If you have access to procurement consultants or industry analyst data, use it. Ask them, “Does this VMware offer align with what similar companies are seeing?” Third-party advisors often have aggregate data that can validate (or invalidate) Broadcom’s quote. Even if you don’t hire outside help, tap into peer networks – sometimes a quick call with a fellow CIO or sourcing manager at another firm can yield invaluable intel. The point is, arm yourself with external perspectives so you’re not negotiating in a vacuum.
• Align Negotiations with Vendor Timing: Timing can be your ally. Broadcom, like any vendor, has sales targets and financial reporting periods. The end of the quarter or the fiscal year can be moments when sales reps are under pressure to close deals. If you have the flexibility, plan your negotiation cycle such that final approvals (or the option to sign) land in one of those crunch times. You might find that a previously rigid offer suddenly becomes a bit more flexible when the rep needs your deal to hit their number. That said, Broadcom is less deal-quarter driven than classic VMware was, but pressure points still exist – use them to your advantage by not rushing to sign until it benefits you.
• Demand Total Cost Transparency: Broadcom’s quotes can be confusing – intentionally or not. Insist that they present the total 3-year or 5-year cost of the deal, not just a low-looking monthly or per-core price. Break down the costs in a meaningful way: for example, cost per host per year, or cost per environment. This helps you compare with alternatives and justify decisions internally. If the salesperson only talks about “per core pricing,” redirect them to discuss the big picture cost. When you force transparency, you take control of the narrative. It also prevents nasty surprises (like Year 4 price jumps) because you’ve laid it all out during negotiations.

By taking these steps, procurement shifts from reactive to proactive. Instead of feeling you have to accept Broadcom’s new rules, you reintroduce competition, timing, and data into the equation.

Essentially, you’re managing the negotiation process just as tightly as you manage any other major supplier contract – which is exactly how it should be.

Related articles

• How to Benchmark Your VMware Renewal Quote
• Industry Benchmark – VMware Pricing in Finance vs Healthcare
• Using RFPs and Third-Party Quotes to Gain VMware RFP Pricing Leverage
• Average VMware Enterprise Discounts – What You Should Expect by Deal Size
• Broadcom Era Pricing vs Past VMware Pricing

5 Rules for Negotiating VMware Pricing Under Broadcom

Negotiating with Broadcom for VMware licenses isn’t business-as-usual. It’s a tougher game, but not an impossible one.

Here are five ironclad rules to guide your strategy and mindset:

1. Never accept “standard pricing” — it doesn’t exist. If a sales rep tells you, “This is the standard price and nobody gets more than 5% off,” treat it as a starting point, not the final word. There is always a better deal hiding behind the word “standard.” Under Broadcom, they want everyone to think discounts are off the table – your job is to prove otherwise. Everything is negotiable if you have the right leverage. Remember, the first offer is often the worst offer you’ll see.
2. Always validate discounts against historical peers. Context is king. Don’t evaluate your deal in isolation. Ask yourself: What did we pay last time? What have others paid? If similar organizations historically got 30% off and you’re being offered 10%, you know you deserve better. Bring those comparisons into the conversation (without divulging confidential info). Broadcom may claim “times have changed,” but showing that you know the legacy benchmarks will pressure them to justify why your deal should be so much worse.
3. Bundle smartly: fewer SKUs, higher leverage. One of the best ways to improve your discount is to consolidate your purchases. Vendors reward bigger deals, so consider grouping your VMware needs into one negotiation instead of a piecemeal approach. For example, if you need vSphere, vSAN, and NSX, negotiate them together – a single $5 million deal gets more attention (and discount) than three separate $1–2 million deals. Also, aim for cleaner bundles by eliminating minor add-on SKUs that fragment the deal. A slim number of line items with a big total spend can give you more leverage to push for a higher overall discount. Just be careful not to buy things you truly don’t need; bundle what’s logical and essential to you, not what’s convenient for the vendor.
4. Use competition and timing to force exceptions. Broadcom’s default stance is rigid, but even they will bend if they believe they might lose your business. Leverage the competitive anchors we discussed: make it known that you’re exploring other options (cloud, other hypervisors, etc.). And strategically time your negotiation around their deadlines. These factors can “force an exception” to Broadcom’s tough rules. For instance, a rep who swore no one gets more than 10% off might suddenly find approval for 20% off if you’ve demonstrated that you could cut your VMware investment and if the quarter’s sales target is on the line. The key is to create a scenario where giving you a better deal is in Broadcom’s interest (to beat a competitor or to hit a quota).
5. Treat renewals like new deals — not automatic extensions. Perhaps the biggest mistake customers make is treating a renewal as a rubber-stamp event. Under Broadcom, that complacency will cost you dearly. Approach every renewal as if it’s a new vendor selection. This means re-evaluating needs, considering alternatives, and negotiating terms from scratch. Let Broadcom know you’re willing to walk if the renewal isn’t acceptable – just as you would with a new supplier. By resetting the expectation that “we’ll only renew if it makes business sense,” you compel them to earn your business again. A renewal should never be just an administrative update; it’s a chance to renegotiate price and terms. Use it.

By following these rules, you shift the power dynamics of the negotiation. You become the driver of the conversation, not a passenger on Broadcom’s ride. It’s about being informed, assertive, and strategic every step of the way.

Pro Tip: Benchmarking turns pricing from mystery into math — and math beats margin. When you back your negotiation with hard numbers and comparisons, you take the emotional and vague aspects out of it.

Suddenly, it’s not about Broadcom’s “policy” or sales spin; it’s about dollars, percentages, and facts. That’s how you challenge a giant on pricing – with data and a cool head.

In the end, the goal is to pay a fair price for the value you get, and the best tool to achieve that in this new VMware landscape is a solid benchmark in one hand and a firm handshake in the other. Good luck!

Read about our VMware Audit Defense Service.

Do you want to know more about our VMware Advisory Services?

Please enable JavaScript in your browser to complete this form.

Name *

First

Last

Email *

Company

Message *

Submit