Will VMWare’s licensing changes push devirtualization of data centers?

The landscape of data center infrastructure is shifting dramatically, influenced by recent licensing changes from Broadcom that are driving up costs and prompting enterprises to reevaluate their virtualization strategies. A new trend — devirtualization, a process of migrating workloads from virtual to physical environments — is taking shape as a response to these changes, according to Gartner’s 2024 Hype Cycle for Data Center Infrastructure Technologies report.

“On-premises virtualized large complex workloads with more marginal consolidation benefits are being considered to rehost on physical servers or devirtualize,” Gartner said in the report. “Clients are seeing increased costs with on-premises virtualization with Broadcom’s acquisition of VMware. Costs are not the only factor alongside service levels, based on resilience, availability and portability of the workloads.”

What’s driving this trend?

According to Gartner, Broadcom’s new licensing models, which transition from enterprise license agreements to more complex consumption models, can force businesses to pay 2-3 times more. This substantial cost hike is particularly challenging for large workloads that do not benefit from the density increases and cost savings associated with consolidating smaller workloads.