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VMware acknowledges pricing strategy alienated SMBs; pledges vSphere Standard update

Confirmed1 source · Sep 4, 2026

Broadcom's shift to expensive subscription bundles after acquiring VMware has driven away small-to-medium businesses, prompting the company to address sales practices and revive a cheaper product tier.

VMware acknowledges pricing strategy alienated SMBs; pledges vSphere Standard update
Image via Ars Technica

What happened

Following Broadcom's acquisition, VMware replaced perpetual licenses with costly subscription bundles, particularly VMware Cloud Foundation (VCF), pricing out many SMBs. Sales representatives reportedly told customers that the lower-priced vSphere Standard was unavailable, though VMware's VCF chief product officer Paul Turner confirmed to The Register that Broadcom's sales incentives encouraged pushing VCF and acknowledged the company had "too big a focus on VCF." Turner stated these practices were corrected. VMware will release an updated version of vSphere Standard "soon," with details expected at the October Explore conference in Frankfurt. The company has not updated vSphere Standard since 2022, despite releasing an updated vSphere with VCF 9 in 2025; executives cited prioritization of VCF's security and concern that a low-cost product would distract from positioning VCF as an affordable private cloud alternative. At least one long-term reseller, Members IT Group, was cut from the partner program after 19 years and said it will not do VMware business in the future.

Context

The pricing changes and sales practices have eroded customer trust and disrupted business relationships. VMware's strategy reflects a broader shift from serving smaller deployments to focusing on enterprise-scale private cloud infrastructure, which Broadcom views as more defensible against public cloud competition. The departure of established resellers and SMB customer defections represent the tangible cost of the transition. By reviving vSphere Standard, VMware is attempting to recapture market share it lost, though the long gap in updates and the admission that sales teams were misled about its availability suggest the damage to customer confidence may require time to repair.