How Broadcom's VMware Changes Are Reshaping Used Hardware Prices

Since Broadcom completed its acquisition of VMware in late 2023, the virtualization landscape has undergone its most significant disruption in two decades. The shift from perpetual licensing to subscription-only models, the elimination of point products in favor of bundled suites, and aggressive price increases have sent shockwaves through IT departments of every size.

These licensing changes are having measurable effects on the used hardware market. Here's what we're seeing in the data.

The Licensing Shift

Under Broadcom's ownership, VMware's licensing model changed fundamentally:

• Perpetual licenses eliminated — all customers must move to subscription
• Point products discontinued — vSphere, vSAN, and NSX are now only available as part of VMware Cloud Foundation (VCF) or VMware vSphere Foundation (VVF)
• Per-CPU licensing replaced with per-core — a change that dramatically increases costs for servers with high core counts
• Minimum core counts — 16-core minimums per CPU, regardless of actual core count

For many organizations, particularly those running older VMware versions on perpetual licenses, the renewal cost has increased 2-10x.

Impact on Server Hardware Demand

Rising Demand for Alternative Platforms

Organizations migrating away from VMware are driving new patterns in used hardware purchasing:

Proxmox VE adoption has accelerated dramatically. As an open-source hypervisor with no per-core licensing, Proxmox runs on any standard x86 server. This is increasing demand for well-priced used servers from organizations that previously wouldn't have considered the secondary market — they were locked into OEM refresh cycles tied to VMware ELA renewals.

Microsoft Hyper-V / Azure Stack HCI is capturing enterprise migrators who want commercial support. Microsoft's licensing model (per-physical-core but bundled with Windows Server Datacenter) is predictable and often cheaper than the new VMware pricing.

Nutanix AHV is growing among mid-market organizations. Nutanix's hypervisor is included with their software — no additional virtualization licensing cost.

Dell PowerEdge R640View current valuations

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The "Right-Sizing" Effect

VMware's per-core pricing has triggered a wave of infrastructure right-sizing. Organizations are:

1. Reducing core counts — choosing fewer, higher-frequency cores over many lower-clock cores
2. Consolidating workloads — fewer servers, higher utilization, to minimize license costs
3. Splitting workloads — moving non-critical VMs to free hypervisors, keeping VMware only for workloads that require it

This right-sizing is creating an unusual pattern in the used market: increased supply of high core-count servers being decommissioned, combined with increased demand for moderate core-count systems.

Price Effects We're Tracking

Servers with Lower Core Counts: Price Increase

Servers with dual 8-10 core Xeon processors (like the E5-2640 v4 or Xeon Silver 4210) have seen 5-12% price increases over the past six months. These are the sweet spot for organizations that still need VMware but want to minimize per-core licensing costs.

Servers with High Core Counts: Price Softening

Conversely, servers with dual 24-32 core processors (like the Xeon Gold 6248R or Platinum 8260) have seen slight price softening as organizations replace them with lower core-count alternatives for VMware workloads.

HPE ProLiant DL360 Gen9View current valuations

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Networking Equipment: Stable with NSX Impact

VMware NSX licensing changes have pushed some organizations toward traditional networking hardware. We've seen modest increased demand for physical switches and routers as organizations unwind NSX deployments, but the effect is small compared to the server market impact.

What This Means for Sellers

If you're selling used equipment, consider these implications:

Time your sales strategically. Organizations on VMware ELA renewal cycles (typically annual) make purchasing decisions 60-90 days before renewal. Q4 and Q1 are historically active periods, and the VMware pricing pressure is amplifying this pattern.

Highlight core counts in listings. With per-core licensing top of mind, buyers are paying more attention to core counts than ever. A server with dual 10-core processors may actually sell for more than a comparable system with dual 20-core processors, depending on the buyer's VMware licensing situation.

Consider the Proxmox buyer. A growing segment of buyers doesn't care about VMware compatibility or vSAN readiness. They want good hardware at good prices for open-source virtualization. These buyers are less brand-loyal and more price-sensitive.

Lenovo ThinkSystem SR650 V2View current valuations

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What This Means for Buyers

If staying on VMware: Focus on servers with moderate core counts (8-16 cores per socket). The licensing savings over the server's lifetime will dwarf the hardware cost difference.

If migrating to Proxmox/Hyper-V: You have more flexibility on hardware selection. High core-count servers that VMware users are offloading represent excellent value for non-VMware hypervisors.

If running mixed environments: Consider a split strategy — VMware for workloads that genuinely need it (specific vendor integrations, existing automation), and Proxmox/Hyper-V for everything else.

Looking Ahead

Broadcom has signaled that VMware pricing will continue to increase. Each price bump will push more organizations toward alternatives and generate another wave of hardware refresh activity on the secondary market.

For the used hardware market, this is a structural tailwind. More organizations buying used equipment (to offset increased software costs) means higher demand and healthier pricing across most server categories.

We'll continue tracking these trends in our monthly market reports.