Technology giant Broadcom has announced major licensing model changes for its Azure VMware Solution (AVS) customers, which will come into almost immediate effect.
The hyperscaler policy shift demands that customers now purchase a BYOL (bring your own license) portable subscription from Broadcom, for VMware Cloud Foundation (VCF).
But while industry reports state that this is a licensing update only – with no changes to how AVS works – the move has created seismic ripples.
Supermarket chain Tesco, for example, is said to be suing Broadcom over an alleged breach of contract. News reports state that Tesco’s perpetual licenses were supposed to include support and upgrades until 2026, with the option to extend for a further four years. However, Broadcom’s prioritisation of its subscription-based models has caused unrest, with the alleged “excessive” pricing strategy set to cost Tesco significantly more, and disruption feared for approximately 40,000 server workloads.
But of course, Tesco is only one of thousands upon thousands of organistions impacted.
As CloudWize’s CEO Edward Humphrey explains: “In simple terms, any enterprises who have moved from an on-premise solution to AVS could face multi-million pound price hikes if they don’t have an AVS Reserved Instance.”
From 15 October 2025, enterprises will need to provide a VCF subscription from Broadcom, for any new AVS node purchase. For any organisation that has purchased a Reserved Instance before 15 October 2025, it is possible to keep using AVS without any licensing or product changes, until the end of their agreement.
How can CloudWize help?
Broadcom’s subscription-based modelling priority has been widely acknowledged since the firm’s acquisition of VMware back in 2023. But the scale and impact of the cost implications could have unmanageable consequences for CIOs and CTOs globally.
If you are affected by the changes, CloudWize can help you accelerate the migration from AVS to an Azure native environment, to regain control of your costs. We have developed a standardised migration approach – iterated of hundreds of projects – to avoid the challenges commonly encountered and overcome the bottlenecks which typically hinder internal adoption.
What to do next...
If you want to hear more, our experienced cloud strategist Lee Thatcher has opened his calendar for appointments to discuss your cloud infrastructure and the options you have. Book your initial 30-minute consultation directly via Calendly.
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