Is VMware really becoming the new mainframe?

In the wake of Broadcom’s acquisition of VMware, many CIOs have considered whether to drop VMware from their IT portfolios. But because the popular virtualization platform can be too expensive and pervasive to replace even if they may want to, they may find themselves with a mainframe-type of dilemma.

The comparison of VMware to mainframes started as a bit of a joke for Gartner vice president analyst Michael Warrilow but the analogy holds up, to a point, he says. After Broadcom acquired VMware in late 2023, many customers complained about huge price increases, but most can’t seem to end the relationship.

VMware is “reliable, mission-critical, hard to get off,” Warrilow says. “Everybody says VMware works as advertised, but they have a problem with how Broadcom has changed the way you purchase and use VMware.”

Concerns about price hikes surfaced when Broadcom moved VMware away from perpetual licensing terms and onto a subscription model that bundles multiple products together.

Migrating while paying subscription fees

Over the past year, a majority of Gartner clients in contact with Warrilow have asked about ways to migrate away from VMware products, he says. A recent report from Gartner, however, estimates a large-scale migration could take up to four years and cost more than $6 million, with users all the while paying subscription fees to Broadcom.

Even with the huge price increases, many CIOs will find it difficult to see the value proposition for migration, Warrilow says.

“It’s the switching cost versus the opportunity cost of tying up all your people for several years to do nothing more than swap something out,” he adds. “What I say to CIOs is, ‘If you do this perfectly, the best you can hope for is no one will notice what you’ve done.’”

Other than eventual cost savings, migrating away from VMware doesn’t bring a lot of value to the business or the mission, Warrilow adds.

“CIOs can start to unwind their dependence on VMware,” he says. “But they need to know it may not have any material reduction in their spend with Broadcom over multiple renewals. They’re going to have to get completely off Broadcom.”

Still, Warrilow recommends that CIOs running VMware consider alternatives over the long term. They should also look for exit strategies for other market-dominant IT products they use, given that Broadcom has seen early success with VMware, he says.

“The cautionary tale for CIOs is that this is just the beginning,” he says. “Every tech investment firm is going to be saying, ‘I want what Broadcom has with their share price.’ They’re a year ahead of the financial target for VMware, and every investment firm is going to be looking for the next VMware.”

Broadcom’s stock price has risen from $125.71 at market close on Feb. 7, 2024, to $232 at close on Feb. 5, 2025.

Large suite of tools

VMware is hard to replace in part because the vendor has created a broad suite of virtualization-related tools that few competitors can match, Warrilow says. VMware’s virtualization suite before the Broadcom acquisition included not only the vSphere cloud-based server virtualization platform, but also administration tools and several other options, including software-defined storage, disaster recovery, and network security.

Many of those tools are now bundled together in the new vSphere product line.

VMware now has several competitors in the virtualization space, with more than 30 server virtualization vendors listed in a recent Gartner market guide. But in many cases, CIOs may need to piecemeal several vendors’ products together to get the same functionality, Warrilow says.

A Broadcom executive agrees with Warrilow’s analysis that the integration of several virtualization-related tools gives VMware an edge.

Most customers don’t want separate compute, storage, and networking platforms, even though these products sat in separate divisions under the old VMware, says Prashanth Shenoy, vice president of marketing for the VMware Cloud Foundation Division at Broadcom. “There was nobody to sit on top and stitch all these products together into a platform,” he adds.

The new bundle of products was an intentional decision by Broadcom to simplify the product line for customers, he says. And while some customers experienced “sticker shock” with the introduction of subscription pricing, VMware had warned customers for years that it planned to move to the industry-standard pricing model, he adds.

Broadcom’s positive balance sheet shows customers accepting and adjusting to the new pricing model, Shenoy says. Broadcom’s infrastructure software revenue grew 41% to $5.8 billion in Q4 of 2024.

The VMware sales team is actively working with customers to find the best pricing options, Shenoy adds. “We completely realize that our customers do have choices,” he says. “We have actively been asking customers to look at other alternatives and do a fair apples-to-apples comparison of the technology differentiators, as well as the total cost of ownership. In pretty much every case, we have come out on top.”

Platform stickiness

Shenoy didn’t comment on the Gartner report on the cost of migration, but Warrilow’s comparison of VMware to mainframes isn’t necessarily a bad thing, Shenoy adds.

“The comparison works a bit, maybe from a stickiness perspective, because customers have built their applications and workload using virtualization technology on VMware,” he says. “When they have to do a mass refactoring of applications, it’s very, very hard.”

But the analogy has its limitations because many users think of mainframes as a legacy technology, while VMware’s cloud-based products address future challenges, he adds.

“The cloud is the future for running your AI workload,” Shenoy says. “Customers have trusted us for the last 20 to 25 years to run their business-critical applications, and the interesting part right now is we are seeing a lot of growth of these AI workloads and container workloads running on VMware.”

The comparison to mainframes doesn’t extend beyond the stickiness of both technologies, adds A.J. Thompson, chief commercial officer at data-focused managed services provider Northdoor. However, he understands Gartner’s point about the expense and time needed to migrate.

“There is absolutely no doubt that, for any major enterprise, the thought of rebuilding, configuring, testing, and then going live is a three- or four-year undertaking,” he says. “The capital cost of the new VMWare licensing is but a small part of the overall project. Enterprise organizations simply do not have the time or the personnel to move in the short term.”

Some Northdoor customers have complained about price increases that have doubled in some cases, he says, but few are doing anything about it.

“This has been met with anger and annoyance, but we have only seen a handful decide that they will take the short-term pain, sign up for a multi-year renewal, then start to plan their migration away from VMware technology,” Thompson adds.

In the end, VMware isn’t a good comparison to mainframes because it’s possible to find other options, even if the migration can be expensive, adds Ferris Ellis, CEO at software solutions provider Urban Dynamics. Large VMware customers seeing huge price increases may be able to justify the time and complexity of a migration, he says.

“Mainframes have much stronger lock-in for the software running on them,” he says. “They force a deep-rooted dependency on their proprietary hardware and platform for the workloads they run. The workloads on any VM platform, VMware or otherwise, have little concept of which platform they’re on — that’s part of the value of a VM platform.”