Broadcom's VMware announced vSphere Express, a per-core subscription product priced at $9,600 annually for systems with up to 128 cores, signaling a reversal of the company's post-acquisition strategy that consolidated customers into high-margin enterprise bundles.
The product launch amounts to a tacit admission that VMware's aggressive bundling strategy backfired. After Broadcom acquired VMware in 2023, the company consolidated sales incentives around its flagship VMware Cloud Foundation offering and pushed sales teams to discontinue vSphere Standard, the traditional entry-level product. VMware sales representatives began directing SMB customers toward VCF, a private cloud bundle laden with capabilities many smaller organizations didn't need.
Prashanth Shenoy, VP of product marketing for VCF, described vSphere Express as the product for "lower-end customers who didn't really want the VVF but wanted the core virtualization capability." Paul Turner, VCF's chief product officer, previously acknowledged that Broadcom's sales commission structure created "too big a focus on VCF."
vSphere Express includes core virtualization features—vMotion for live VM migration and high availability for automated failover—but runs as discrete instances without central management. Unlike vSphere Standard, which languished without updates for years, vSphere Express will receive regular updates alongside VCF and VMware vSphere Foundation.
TD Synnex lists vSphere Express at $9,600 annually for up to 128 cores, with no per-core discount for smaller deployments. This pricing structure still carries friction for minimal use cases but undercuts VCF and VVF significantly.
The reversal underscores a persistent tension in enterprise software: aggressive upsell strategies can drive customer defection faster than they drive margin expansion. VMware's move suggests Broadcom recognizes that loss of SMB wallet share may exceed the incremental revenue gained from bundling.
