Broadcom’s acquisition of VMware is driving a wave of enterprise migrations, with Gartner estimating that 35 percent of VMware workloads would migrate elsewhere by 2028. According to industry data, companies including Allstate, T-Mobile, and UK grocery chain Tesco are migrating off of VMware as software licensing costs rise significantly under Broadcom’s ownership.
The Impact of Broadcom’s Licensing Changes on Enterprise Budgets
For many large organizations, migrating off VMware infrastructure has shifted from a theoretical IT exercise to an active budgetary priority. According to Scott Mann, StorMagic’s SVP of global sales, enterprises historically accepted high licensing costs as the status quo for remote and edge locations. However, post-acquisition pricing structures have forced infrastructure teams to reevaluate their vendor dependencies.
Broadcom has consistently defended its strategy, maintaining that updates to VMware’s licensing model are in line with the rest of the industry. Company executives have pointed to the financial success of the acquisition as evidence that the structural transition supports long-term business goals.
Overcoming Operational Hurdles in Large-Scale Migrations
Executing a complete or partial exit from VMware presents distinct technical hurdles, particularly for businesses operating continuous 24/7/365 environments. Retailers and distributed enterprises often face tight constraints regarding physical space, power, on-site technical staff, and budget.
To mitigate business disruption during massive retail transitions, organizations rely on heavy automation and specialized import utilities. For example, migrating complex store operations requires precise API integration and automated virtual machine conversion tools to ensure minimal downtime while development, planning, and deployment happen simultaneously.
Vendor Landscape Shifts Beyond Traditional SMB Markets
Infrastructure vendors traditionally focused on small- to medium-size businesses (SMBs) are increasingly positioning their products to capture enterprise clients looking to escape rising software costs. Companies like StorMagic are targeting large, highly distributed enterprises with hundreds or thousands of retail, grocery, or branch locations that share the same infrastructure limitations as traditional SMB datacenters.
While industry analysts project a steady multi-year migration trend through 2028, many enterprise customers remain in early planning stages due to the sheer complexity of replicating VMware’s ecosystem compatibility and management capabilities elsewhere.
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