Transition from Perpetual to Subscription – A Step-by-Step Plan for Broadcom Customers
Broadcom’s move to subscription licensing for VMware isn’t optional in the long run.
The choice is whether you migrate on your own terms or get pushed later under pressure. A smart customer uses this forced shift as a chance to gain leverage instead of simply accepting vendor terms.
Mini-scenario: A global manufacturer planned its VMware license migration nine months before renewal. They negotiated credit for their existing perpetual licenses and saved 18% on Year 1 subscription costs. Early planning turned a mandate into a cost win.
Pro Tip: You can’t stop Broadcom’s shift, but you can turn it into leverage.
Read our comprehensive guide, Termination of VMware Perpetual Licenses: What Enterprises Can Do.
Step 1 – Assess What You Already Own
Start by thoroughly inventorying your current VMware perpetual licenses. List every product, edition, and version you own, along with quantities and the status of support contracts.
This complete entitlement picture is your baseline for comparing value when Broadcom presents subscription offers. If you know what you have and use, you can make data-driven decisions instead of guesses.
Checklist:
- Gather all proofs of purchase and entitlement for your perpetual licenses.
- Identify which licenses are actively used (and which might be shelfware).
- Note the software versions and support contract end dates for each.
Pro Tip: If you can’t measure it, you can’t negotiate it. Knowing your assets is step one in any negotiation.
Step 2 – Establish the Financial Baseline
Translate your inventory into a financial baseline. In other words, figure out what all those perpetual licenses are worth in today’s terms. Calculate how much you originally spent on them (and on annual support).
Then estimate what equivalent capabilities would cost under Broadcom’s subscription model. This comparison reveals the gap between your sunk costs and future costs. It also defines your negotiation zone for any conversion deal.
Do not blindly accept Broadcom’s “upgrade offer” without these numbers—otherwise, you will not know if the deal is fair or a rip-off.
For many companies, this exercise is eye-opening. Sometimes, the money invested in perpetual licenses could cover multiple years of subscription fees. Understanding that helps you push for credit or discounts.
You’ll know, for example, if Broadcom’s proposed subscription pricing effectively makes you pay twice for the same software. Armed with data, you can counter with evidence and avoid leaving money on the table.
Checklist:
- Calculate the original purchase value of your perpetual licenses (plus maintenance paid to date).
- Compare that total with the projected subscription cost for the same scope (over a similar time frame, e.g., 3 years).
- Define what return on investment (ROI) you need on the new subscription – how much credit or discount makes it worthwhile.
Pro Tip: Your perpetual purchase history is your discount weapon. Use it to justify better subscription pricing.
Step 3 – Talk to Broadcom Early
Don’t wait until your support is about to lapse or an ELA ends—start the conversation with Broadcom (or your VMware reseller/partner) months in advance.
Early engagement puts you in control and signals you expect a thoughtful migration plan, not a last-minute scramble. It also incentivizes Broadcom to offer conversion perks rather than risk you stalling or exploring alternatives.
When you open talks, ask direct questions about the transition. Make Broadcom clarify what they’ll do for you if you switch. For example:
- Will they credit your existing perpetual licenses toward the new subscription? (Get specifics on any “trade-in” programs or upgrade incentives.)
- Are there migration bundles or promotions to lower the cost? (For instance, discounted suites if you convert multiple products at once.)
- Can the new subscription term be co-terminus to align with your fiscal year or other contracts? (This helps with budgeting and keeping renewals in sync.)
Raising these points early gives Broadcom time to craft a tailored offer. You also demonstrate that you’re an informed customer expecting a fair deal.
Pro Tip: The earlier you engage, the better the conversion incentives. Vendors are more generous when they see you planning (and when they have time before a deadline).
Read about Maximizing Value from Existing VMware Perpetual Licenses.
Step 4 – Pilot the Subscription Model First
Before committing your whole environment, run a pilot on a limited scope. Pick a non-critical workload or a subset of systems (for example, a small cluster or a specific department’s infrastructure) and move that to the subscription model (such as VMware vSphere+ or another Broadcom subscription offering). This trial run lets you experience the new licensing in real conditions without risking a major outage or budget shock.
Consider how subscription licensing works during the pilot: Are there new features or management tools? How is the usage metered and billed monthly or annually? How responsive is support under the new model? Use this period to catch any surprises on a small scale.
Mini-scenario: A retail chain piloted vSphere+ on 25% of its servers before a full rollout. This test validated the technology and revealed actual subscription costs in practice. Armed with real usage and billing data, they confidently expanded enterprise-wide – and had evidence to negotiate better discounts.
Checklist:
- Select a pilot group of systems (low-risk, not mission-critical) to convert to subscription licensing.
- Track the usage, performance, and costs during the pilot period. Note how expenses compare to your expectations.
- Document lessons learned (technical issues, support quality, cost variances) before scaling up the deployment.
Pro Tip: Pilot first, scale later. It’s how you negotiate from data, not theory. Real results from a pilot strengthen your position when you talk pricing and terms.
Step 5 – Build Your Budget for Recurring Costs
Switching to subscription means shifting your spending from one-time capital expenditure (CapEx) to ongoing operational expenditure (OpEx).
It might look cheaper upfront, but you must budget beyond the first year. Take a multi-year view (at least 3–5 years out) of the subscription’s cost so there are no nasty surprises.
Remember that subscription fees can increase at renewal. Many enterprise software vendors (Broadcom included) apply annual uplift percentages or higher rates after the initial term. Plan for potential 7–10% increases in subscription costs per year, or negotiate caps on those if you can (we’ll cover that in Step 6).
Also factor in growth: if you expect your environment to expand (more VMs, more hosts, new projects), your subscription spend will rise accordingly since it’s often metered per core or per usage.
The goal is to incorporate the subscription into your IT financial planning, like any recurring service.
By forecasting now, you can seek internal approval for future budgets and ensure the subscription model remains sustainable in the long run—not just a Year 1 bargain that balloons later.
Checklist:
- Project your annual subscription costs for 3–5 years, assuming current usage and anticipated growth.
- Include expected support or subscription uplifts (e.g., 7–10% annual increase) in your model, unless you have price protections.
- Model future workload growth or new deployments, and add those to the cost projections to prepare you for expansion fees.
Pro Tip: Subscription models often look cheaper until Year 4 hits. Always budget long-term to understand the true total cost of ownership (TCO).
Step 6 – Negotiate the Conversion Deal
Now comes the big moment: negotiating your deal to convert from perpetual to subscription. This is where all your prep work pays off.
You know what you own (Step 1), what it’s worth (Step 2), and you have real-life data from your pilot (Step 4) plus a clear budget (Step 5). Use all of it as leverage in the negotiation.
Approach Broadcom with confidence, backed by numbers and insights, and don’t be afraid to ask for what you need.
Key items to negotiate in your conversion deal:
- Conversion credits or “trade-in” value for your existing licenses. You’ve invested in perpetual licenses; ask Broadcom to recognize that by discounting the subscription price or providing credits.
- Pricing caps on renewals or multi-year price protection. Lock in a reasonable renewal rate (or at least a maximum uplift percentage) for future terms, so you aren’t hit with huge hikes after year one.
- Multi-year commitments or stability clauses. If you’re willing to sign up for multiple years, get Broadcom to guarantee consistent pricing or added perks yearly. Your longer commitment should equal a stronger commitment to value from them.
- Co-term and flexibility. If you are phasing the migration, ensure that any additional licenses you add later will get the same negotiated discount and co-term with the same renewal date.
Come to the table with a clear ask: you want a fair deal, acknowledging your past investment and future loyalty. If the initial offer isn’t good enough, be prepared to push back or explore alternatives (even if just as a bluff).
Mini-scenario: A financial services firm negotiated a five-year fixed subscription rate for VMware. In exchange, they agreed to migrate 50% of their environment in the first year. By showing commitment, they locked in a predictable cost and avoided the typical year-2 price jump. This kind of creative give-and-take can yield a win-win: Broadcom secures a long-term customer, and you secure budget stability.
Pro Tip: Migration leverage fades fast — negotiate before the mandate arrives. Your bargaining power drops once you’re forced into a subscription because support has expired. Strike a deal while you still have options.
Step 7 – Phase Critical Systems Last
Plan a phased transition instead of a big bang. Not everything should switch to subscription on Day 1, especially not your most critical systems.
Start with lower-risk, lower-tier workloads and make sure the new licensing works smoothly there. This approach protects your operations and maintains some leverage until you’re confident in the new model.
Phasing also means you can align each wave with internal schedules (for example, migrate one data center this quarter, another next quarter) and manage the impact on your IT team.
By getting to your mission-critical applications and servers, you’ll have worked out kinks in earlier phases and validated performance, compatibility, and cost.
Also, try negotiating your contract so that the same pricing and terms you negotiated upfront cover each added license phase. You don’t want a situation where early phases are discounted but later additions cost more.
Always have a rollback or contingency plan for each phase if something goes wrong (technical issues, budget constraints), you should know how to pause or revert to your perpetual licenses for a bit longer. This safety net ensures zero downtime and no pressure to push forward blindly.
Checklist:
- Prioritize the migration order from low-criticality systems to high-criticality systems. Treat it as a sequenced project with stages.
- Align contract terms so all phases share the same pricing and end dates. Ensure that adding more licenses later doesn’t reopen pricing negotiations.
- Define rollback options for each phase (e.g., keeping perpetual licenses active in parallel for a time, or maintaining support on critical systems until final cutover).
Pro Tip: Move smart, not fast. Phasing your transition protects uptime and preserves some leverage until the very end.
5 Rules for a Smart Subscription Transition
- Know your perpetual baseline before any discussion. (Inventory is power — never negotiate in the dark.)
- Engage early to seek conversion credits. (The best deals go to those who prepare, not procrastinate.)
- Pilot the model before full rollout. (Test it, learn from it, then scale with confidence.)
- Budget beyond Year 3 for true cost. (Plan for the long haul so you’re not caught off guard by cumulative costs.)
- Migrate in phases, not in panic. (A phased approach keeps you in control and your systems safe.)
Following these steps and rules, you can turn the transition from perpetual licenses to Broadcom’s subscription model into a strategic win.
Instead of feeling forced or rushed, you’ll confidently negotiate, protect your budget, and migrate on your timeline with minimal risk. The key is preparation and leverage – with those on your side, you can embrace the new licensing model without overpaying or sacrificing continuity.
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