For non-profits and charities, managing IT costs is a top priority, especially given the reality of stretched IT budgets. With Broadcom’s acquisition of VMware, major changes to VMware licensing for non-profits and pricing are creating uncertainty, especially for organisations that relied on previous discounts and predictable pricing models. Some non-profits have experienced price hikes ranging from 175% to as high as 1200%, depending on their previous agreements and discounts.
As 2025 progresses, these challenges are ongoing and evolving. This blog explores how these changes impact non-profits and provides practical strategies to help you take control of your IT spend.
The challenges of VMware licensing for non-profits
1. The shift to subscription-based licensing
VMware has moved from perpetual licenses to a subscription-only model, creating financial unpredictability. While the change aims to simplify licensing, many organisations are still grappling with substantial cost increases related to VMware licensing for non-profits.
2. Uncertainty over non-profit VMware licensing discounts
Previously, VMware provided generous non-profit discounts. However, with Broadcom now in charge, it’s unclear whether these discounts will have been significantly reduced or removed entirely.
3. Increased licensing complexity
Broadcom has streamlined VMware’s product offerings, reducing the number of available product SKU’s[i]. While this may simplify purchasing on paper, many organisations are now forced to buy bundled packages that include unnecessary features, leading to higher costs. This shift remains a challenge in 2025, as many non-profits continue to find themselves paying for unwanted services.
4. Changes to VMware support services
Broadcom’s ownership raises concerns over potentially higher support costs and changes in service quality.
5. The risk of vendor lock-in
Many non-profits feel locked into VMware due to high transition costs and complex migration processes. However, with the pricing changes of VMware licensing for non-profits, staying put might be just as costly in 2025. The transition to alternative platforms is still a viable option, but it requires careful planning.
Possible Solutions
Strategic planning & cost management
- Consider long term planning for subscription models and factor in price escalation in your annual IT budget forecasts.
- Align your usage to the Broadcom bundles wherever possible, so you don’t end up paying for products you neither want nor need.
- Maintain an IT asset management (ITAM) strategy – Keep track of your VMware licences to avoid over-licensing and under-licensing.
- Negotiate with VMware for flexible terms that align with your budget, including scalable pricing or renewal flexibility.
Exploring alternatives & migration strategy
- Explore alternatives virtualisation platforms such as Microsoft Hyper-V, Proxmox, or KVM. Assess their feasibility based on your organisation’s needs and budget.
- Consider cloud-based solutions such as Microsoft Azure, AWS, and Google Cloud for scalability and cost savings.
- If planning on migrating, transition gradually to reduce risk and ensure a smooth migration.
Support services & internal development
- Reassess your support needs to determine whether your current level of support is necessary or if a more cost-effective solution would be sufficient.
- Explore third-party support for legacy VMware perpetual licenses. If you’re still using perpetual licenses, independent support providers may offer cost-effective alternatives without forcing a subscription shift.
- Invest in internal training to reduce reliance on external support and maintain operational efficiency.
What this means for you
By understanding the challenges and taking proactive steps, your organisation can:
- Avoid unnecessary expenses by aligning your IT strategy with the new VMware licensing model.
- Explore alternative platforms to reduce costs and increase flexibility.
- Ensure long-term financial stability by implementing an effective IT asset management strategy.
- Strengthen internal capabilities to reduce dependency on costly external support.
Taking a strategic approach now will help your organisation adapt to these changes with confidence, ensuring both cost efficiency and operational resilience.
Taking control of your IT spend
Broadcom’s acquisition of VMware presents significant financial and operational challenges for non-profits. However, with careful planning and strategic decision-making, you can minimise costs, improve efficiency and future proof your IT estate.
Key Takeaways
- Audit your VMware usage regularly to make sure you only pay for what you need.
- Negotiate with VMware to explore potential cost-saving agreements.
- Consider alternative solutions such as open-source or cloud-based platforms for better value.
- Monitor licensing and support costs by implementing a strong IT Asset Management (ITAM) strategy.
At bedigital, we help organisations, including non-profits, to optimise IT spending and make informed technology decisions. Whether you’re navigating VMware’s changes or explore cost effective alternatives, our experts can guide you.
Book a call now to navigate the complexities of VMware’s changes with expert guidance and find the best approach for your organisation.
[i] SKU – Stock Keeping Unit
