Proxmox vs. VMware: what virtualization costs SMEs in 2026
Broadcom has moved VMware to subscriptions, prices have multiplied, and support for vSphere 8 ends in October 2027. Many SMEs are doing the maths seriously for the first time. Here it is: what VMware costs in 2026, what Proxmox costs, and when switching pays off. Every figure with a source, as of July 2026.
Published on July 12, 2026 · Daniel Gläser
Why this is on the table in 2026
Since the Broadcom takeover in late 2023, VMware has been turned upside down: perpetual licenses abolished, products consolidated into large bundles, prices raised drastically. Gartner cites typical increases of 300 to 400 percent. The European cloud association CISPE reported renewal increases of 800 to 1,500 percent to the EU Commission, and AT&T put the increase it was quoted at 1,050 percent in court filings.
For small and medium businesses there is also a hard date: general support for vSphere 8 ends on 11 October 2027. vSphere 8 is the last version that was still available as a perpetual license. Anyone running vSphere Standard today has to decide by then: move to a subscription, keep running without support, or switch platforms.
Running without support is not a quiet option
Since May 2025 Broadcom has been sending blanket cease-and-desist letters to companies that keep operating perpetual licenses without an active support contract, accusing them of having applied patches after support ended. The letters also threaten audits.
The VMware licensing model in 2026
Since 11 December 2023 Broadcom no longer sells VMware perpetual licenses. There are only subscriptions, billed per physical CPU core, with a minimum of 16 cores per CPU. If your processor has only 8 or 12 cores, you still pay for 16. All physical cores of all CPUs in a host must be licensed.
- VMware vSphere Foundation (VVF): the smaller bundle. Broadcom publishes no official price list; licensing advisors quote market rates of 150 to 190 USD per core per year for 2026. In December 2025 Broadcom even withdrew VVF from parts of the EMEA region, forcing affected customers onto the larger VCF or onto alternatives.
- VMware Cloud Foundation (VCF): the large bundle with a list price of 350 USD per core per year.
- vSphere Standard and Enterprise Plus are still sold, but frozen at version 8 Update 3. vSphere 9 features are available exclusively in the VVF 9 and VCF 9 bundles.
| When | Change |
|---|---|
| December 2023 | End of perpetual licenses: VMware subscription-only, billed per CPU core |
| 2024 | Product portfolio consolidated into the VVF and VCF bundles, VCF list price 350 USD per core per year |
| October 2024 | VVF price increase of 11 percent, in return more vSAN capacity |
| March/April 2025 | Minimum order was to rise from 16 to 72 cores, withdrawn within roughly two weeks after massive criticism |
| May 2025 | Cease-and-desist letters to perpetual customers without support contracts |
| 2025 | vSphere 9 ships only in VVF 9 and VCF 9, vSphere Standard and Enterprise Plus remain capped at version 8U3 |
| December 2025 | VVF discontinued in parts of the EMEA region |
| 11 October 2027 | General support for vSphere 8 ends (technical guidance until October 2029) |
The 20 percent late fee
According to distributor information, renewing a VMware subscription late costs a 20 percent surcharge on the first-year price. Sitting out the renewal as a negotiation tactic is expensive.
Want to go deeper? The article on the VMware licensing changes under Broadcom explains the chronology, core licensing and the three options of renewing, shrinking or switching in detail.
What Proxmox VE costs
Proxmox VE is a virtualization platform by Vienna-based Proxmox Server Solutions, built on Debian and licensed as open source under the AGPLv3. The current version is 9.2, released in May 2026. The decisive difference from the VMware model: there is no feature paywall. HA clustering, live migration, ZFS, Ceph, software-defined networking and backup integration are included in every variant, even entirely without a subscription.
With Proxmox you do not pay for features but for stability and support: a subscription unlocks the conservatively tested enterprise repository and, depending on the tier, includes support tickets with guaranteed response times.
| Tier | Price | Included |
|---|---|---|
| Community | 120 EUR | Enterprise repository, community support |
| Basic | 370 EUR | Enterprise repository, 3 support tickets per year |
| Standard | 550 EUR | Enterprise repository, 10 tickets per year, 4-hour response time |
| Premium | 1,100 EUR | Enterprise repository, unlimited tickets, 2-hour response time |
For backups there is the Proxmox Backup Server with deduplication, incremental backups and verification, also open source. Subscriptions cost between 560 EUR (Community) and 4,480 EUR (Premium) net per backup server per year, with unlimited backup storage and unlimited clients included.
Worked example: 3 hosts with 48 cores over 5 years
Take a typical SME setup: three hosts with one CPU and 16 cores each, 48 cores in total, over five years. That matches the VMware licensing minimum per CPU exactly and is a realistic size for environments with 20 to 100 employees.
| Platform | Per year | Over 5 years |
|---|---|---|
| VMware Cloud Foundation, list price 350 USD per core | 16,800 USD | 84,000 USD |
| VMware vSphere Foundation, market rates 150 to 190 USD per core | 7,200 to 9,120 USD | 36,000 to 45,600 USD |
| Proxmox VE Standard (3 sockets) plus Backup Server Community | 2,210 EUR | 11,050 EUR |
| Proxmox VE Community (3 sockets), without a separate backup server | 360 EUR | 1,800 EUR |
Compared with the VCF list price, the example SME pays roughly one seventh to one eighth with Proxmox Standard plus Backup Server. Even against the cheaper VVF, a factor of roughly three to four remains. Importantly, the Proxmox figure already includes the backup product; with VMware, backup software comes on top.
Hidden costs on both sides
License fees are only part of the truth. If you switch, budget for these items:
- Migration: the move costs working time for export, import, drivers and testing per VM. Since version 8.2 Proxmox ships an import wizard for ESXi (tested with ESXi 6.5 to 8.0), including live import where the VM already runs on Proxmox while its disks migrate in the background. Windows VMs need VirtIO drivers, and vSAN as a source datastore is not supported directly.
- Backup: Veeam Backup & Replication fully supports Proxmox since version 13 (September 2025), including application-aware backups for Windows VMs (SQL Server, Oracle, PostgreSQL). For version 13.1 replication jobs are announced, initially local only, with instant recovery as an experimental feature (as of July 2026). Alternatively the Proxmox Backup Server takes over.
- Skills and support: VMware knowledge is widely available on the market, Proxmox knowledge is growing. Without in-house Linux skills, a service provider with Proxmox experience replaces vendor support. That belongs in the calculation honestly, but typically costs a fraction of the VMware difference.
- Processes: monitoring, documentation and runbooks have to be adapted to the new platform once.
You would not be alone in switching: in a survey of 450 VMware customers across 14 countries, half plan to reduce their VMware usage by 2028. Gartner forecasts that by 2028 around 35 percent of today's VMware workloads will run on other platforms. Big names such as the British supermarket chain Tesco are working on their exit in 2026 as well.
How the move works concretely, from inventory via the import wizard to the typical pitfalls, is shown step by step in the VMware to Proxmox migration guide.
When VMware remains the right choice
As clear as the cost calculation is, the other side deserves an honest look. Gartner warns that some leavers end up with more complex and less capable infrastructure, because there is no one-to-one replacement for the full VCF package. You should stay on VMware if any of these apply:
- You use features Proxmox does not offer in the same way, such as vSAN in stretched clusters, sophisticated DRS or NSX network virtualization.
- Your business applications are certified for VMware only, or their vendor supports no other platform.
- Your team and processes are deeply tuned to vSphere and license costs barely register in the overall budget.
- You are in the middle of a hardware lifecycle where a platform change would currently be the biggest operational risk.
In those cases the better strategy is usually to negotiate early and hard at renewal, align the licensed core count precisely with actual sizing, and prepare a possible switch for the next hardware cycle.
My assessment for SMEs
For the typical SME environment with two to five hosts, standard workloads such as Windows and Linux VMs, file, application and database servers, and no vSAN or NSX dependencies, Proxmox VE in 2026 is a mature alternative that is economically hard to beat. The cost difference is not a rounding error but a factor of seven to eight against the VCF list price, and it recurs every single year.
This is exactly the decision I support as a provider of IT infrastructure services: from the initial assessment through a test migration to ongoing operations with monitoring and updates, as described in the article on RMM and managed IT. A structured timeline matters: October 2027 sounds far away, but assessment, testing and migration windows per host need lead time. Anyone starting in 2027 negotiates and migrates under pressure.
- Take stock: record VMs, dependencies, storage, the backup chain and license renewal dates.
- Clarify the renewal date: request the renewal quote early and avoid risking the 20 percent late fee at all.
- Set up a test cluster: move one non-critical VM with the import wizard, rehearse backup and restore.
- Plan the migration: realistic maintenance windows per VM instead of everything in one weekend.
Sources
- Broadcom: Ende der VMware-Kauflizenzen (VMware Blog, Januar 2024)
- Broadcom Knowledge Base 313548: Kern-Zählung und 16-Kern-Minimum
- VMware vSphere with VCF 9.1 FAQ: Standard und Enterprise Plus auf Version 8U3 begrenzt
- heise: VMware nimmt 72-Kern-Mindestbestellung zurück (April 2025)
- The Next Platform: VCF-Listenpreis 350 USD pro Kern und Jahr (Juni 2024)
- The Register: VVF-Preiserhöhung um 11 Prozent (Oktober 2024)
- The Register: VVF in Teilen der EMEA-Region eingestellt (Dezember 2025)
- The Register: CISPE meldet Preiserhöhungen von 800 bis 1.500 Prozent (Mai 2025)
- The Register: Gartner warnt vor Komplexität nach dem VMware-Ausstieg (Mai 2026)
- The Register: Hälfte der VMware-Kunden will Nutzung bis 2028 reduzieren (März 2026)
- Network World: Unterlassungsschreiben an Perpetual-Kunden (Mai 2025)
- Westcon (Distributor): 20 Prozent Aufschlag bei verspäteter Verlängerung
- Computer Weekly: Support-Ende von vSphere 8 im Oktober 2027
- Proxmox VE: offizielle Subscription-Preise
- Proxmox Backup Server: offizielle Subscription-Preise
- Proxmox VE Roadmap: Version 9.2 (Mai 2026)
- heise: Proxmox VE 8.2 mit Import-Assistent für ESXi-VMs (April 2024)
- Veeam Help Center: Proxmox-VE-Unterstützung in Veeam Backup & Replication
This article is carefully researched guidance, not legal or tax advice. For binding information, please consult your tax advisor or lawyer.
Frequently asked questions
What does Proxmox VE cost per year?+
The software itself is free open source (AGPLv3). Subscriptions for the stable enterprise repository and support cost, net per CPU socket per year: 120 EUR (Community), 370 EUR (Basic), 550 EUR (Standard) or 1,100 EUR (Premium), as of July 2026. A three-host cluster on the Standard subscription comes to 1,650 EUR per year.
Is running Proxmox without a subscription allowed in a company?+
Yes. The AGPLv3 license permits productive use without a subscription and all features are included. You then use the no-subscription repository, which is tested less conservatively, and have no vendor support. For production environments at least the Community tier with the enterprise repository is advisable.
How many cores do I have to license with VMware at minimum?+
16 cores per physical CPU, even if the CPU has fewer cores. All physical cores of all CPUs in a host must be licensed. The increase of the minimum order to 72 cores announced in 2025 was withdrawn within roughly two weeks after broad criticism.
What happens if I do not renew my VMware subscription?+
The software keeps running technically, but support and updates end. For late renewals Broadcom charges a 20 percent surcharge on the first-year price. Perpetual-license customers without a support contract have been receiving blanket cease-and-desist letters since May 2025, accusing them of applying patches after support ended. A hypervisor without security updates is not a sustainable state.
Does Veeam work with Proxmox?+
Yes. Basic support has existed via the Proxmox plug-in since Veeam 12.2 (August 2024), and full support including application-aware backups for Windows VMs since version 13 (September 2025). For version 13.1, replication jobs (initially local only) and experimental instant recovery are announced, as of July 2026. Alternatively there is the Proxmox Backup Server as the integrated option.
When is switching to Proxmox not worth it?+
If you actually use VCF-specific features such as vSAN stretched clusters or NSX, if your business applications are certified for VMware only, or if a platform change in the middle of a hardware lifecycle carries more risk than savings. In that case, negotiate hard and prepare the switch for the next cycle instead.
Out of the license trap, into predictable operations
I review your VMware environment, run the numbers for both paths in your specific case and support the migration to Proxmox where it pays off: test cluster, move, backup and ongoing operations afterwards. From Chemnitz for SMEs in Saxony and across Germany.
Daniel Gläser
Owner of Gläser IT-Solutions, Chemnitz
I build software and run IT infrastructure for small and medium businesses, from the first analysis to day-to-day operations. Everything here comes from real projects and is backed by sources.
