Broadcom's VMware introduced vSphere Express today, a virtualization offering priced at $9,600 annually for deployments up to 128 cores. The move is a direct acknowledgment that the company's post-acquisition focus on large enterprise clients and expensive bundles has cost it the SMB market.
VMware's licensing strategy since Broadcom acquired it in 2023 consolidated products into fewer SKUs—chiefly VMware Cloud Foundation and VMware vSphere Foundation—effectively eliminating the entry-level vSphere Standard. Sales representatives began steering SMBs toward VCF, a private cloud bundle loaded with features most smaller shops didn't need or want. Channel partners shrunk. Customer acquisition in the segment flatlined.
vSphere Express is the company's response. It runs on a per-core subscription model with no volume discount—the $9,600 floor applies whether a customer deploys 50 cores or 128. The offering includes vMotion for live virtual machine migration and high availability for automated failover, but lacks centralized management capabilities. It also gets regular updates, unlike the aging vSphere Standard.
"We started listening to a lot of our lower-end customers who didn't really want VVF but wanted the core virtualization capability," Prashanth Shenoy, VP of product marketing for VCF, said in a statement.
The repricing signals anxiety inside Broadcom about VMware's revenue quality. The enterprise-only strategy was financially successful in the near term—VCF generated strong bookings—but at the cost of abandoning a segment where VMware once had entrenched relationships. Competitors including Nutanix and Proxmox have filled the gap with aggressive SMB pricing.
Paul Turner, VCF's chief product officer, had previewed the vSphere Express concept in September, calling the prior sales incentive structure "too big a focus on VCF." The pricing now makes clear how much margin Broadcom is willing to surrender to recapture that customer base.
