Cloud, Servers May 03, 2024

In the shifting landscape of IT infrastructure, small and micro businesses find themselves at a crossroads. The recent price hikes in VMware’s licensing, following its acquisition by Broadcom, have sent shockwaves through the industry, leaving many to question the viability of their current virtualization platforms. For a small shop with just a few ESXi hosts, like the one discussed in a recent Spiceworks community thread, the sudden jump to a $30k annual cost from a modest $5k is not just alarming; it’s unsustainable.

The response to these changes has been a mixture of disbelief and a scramble for alternatives. This situation underscores the need for more scalable, cost-effective solutions that do not compromise on performance or reliability. Enter Proxmox Virtual Environment (VE) and Netrouting Cloud Compute, two powerful options for those looking to transition away from VMware without breaking the bank.

For larger organizations like London Grid for Learning (LGfL), the impact of VMware’s pricing changes is profound. According to Michael Eva, LGfL’s programme manager, VMware provided new pricing only six weeks before the April 2024 license renewal date. LGfL, with a perpetual license, now faces a 268% increase in renewal costs for a new three-year contract. Even opting for an annual maintenance agreement would result in a 125% increase. Eva criticized these hikes as a “blatant misuse of VMware’s market position,” expressing concern that discontinuing the subscription-based model could disrupt tens of thousands of classrooms in England. If LGfL doesn’t renew its maintenance agreement, its VMware platform would no longer receive security patches, jeopardizing the virtual environment critical for secure internet access in schools. As a non-profit, LGfL cannot pass on the additional fees to cash-strapped schools, making the situation even more challenging.  Source: ComputerWeekly

The Financial Imperative for Change

To understand the financial implications of staying with VMware versus transitioning to Netrouting Cloud Compute’s implementation of Proxmox VE, consider the following comparative cost analysis:

Comparative Cost Analysis Table

Here’s a comparative table that leverages the information from the discussed VMware pricing issues and positions Proxmox VE and Netrouting as viable alternatives for optimizing cloud infrastructure:

Comparative Cost Analysis Table

Here’s a comparative table that leverages the information from the discussed VMware pricing issues and positions Proxmox VE and Netrouting as viable alternatives for optimizing cloud infrastructure:


Feature VMware under Broadcom Proxmox VE + Netrouting Comments
Licensing Cost Up to 10x increases, with stories of costs rising to $650K+ for a 3500 core minimum Proxmox VE offers free open-source use with optional paid support. Available for automated installation on Netrouting Bare Metal Servers. Netrouting Cloud Compute Services provide high-availability cloud resources powered by Proxmox VE on a license-free subscription model for public and private clouds. The drastic cost increase under Broadcom makes VMware financially untenable for many, highlighting Proxmox VE’s value proposition
Flexibility Restrictive licensing model, focusing on large customers High flexibility with no core minimums, allowing for tailored setups based on specific needs Proxmox VE and Netrouting offer scalable solutions that adapt to business size and demand, unlike VMware’s one-size-fits-all approach
Support for Small MSPs Shifted focus away from smaller MSPs, offering little to no flexibility in licensing Proxmox VE, being community-driven, along with Netrouting’s customer-centric support, offers a viable path for small MSPs The community and customer support available with Proxmox VE and Netrouting stand in stark contrast to VMware’s focus under Broadcom
Cloud and Infrastructure Services High dependency on VMware’s ecosystem, which can be costly for cloud services Netrouting offers scalable cloud compute resources or bare metal servers, complemented by Proxmox VE’s virtualization management Netrouting alongside Proxmox VE provides a cohesive, cost-effective solution for managing and scaling cloud infrastructure
Migration Path Costly and complex migration for existing VMware customers due to licensing changes Proxmox VE supports various migration tools and methods for VMware, facilitating a smoother transition For businesses looking to migrate from VMware, Proxmox VE presents a less burdensome option, potentially saving on migration costs and reducing downtime
Community and Learning Limitations on learning opportunities due to cost barriers and restricted access Proxmox VE offers extensive community resources, forums, and documentation, fostering a learning environment The open-source nature of Proxmox VE encourages learning and experimentation, which is crucial for innovation and skill development in IT

Why Transition?

The case for transitioning away from VMware is compelling, especially for small to medium-sized enterprises (SMEs) that operate on tighter budgets. The primary motivator is cost: with VMware’s pricing model becoming increasingly prohibitive, businesses are forced to explore more financially viable alternatives that offer similar or better functionality. Proxmox VE emerges as a strong contender, offering a robust, open-source virtualization management solution that is both feature-rich and wallet-friendly.

Equally important is the choice of cloud infrastructure. Netrouting Cloud Compute provides a flexible, scalable cloud solution that perfectly complements Proxmox VE, allowing businesses to optimize their cloud compute resources efficiently and cost-effectively.

Transitioning to Proxmox VE and Netrouting Cloud Compute

Assessing the Current Infrastructure

The first step in transitioning away from VMware involves a thorough assessment of the current infrastructure. This includes evaluating the number of VMs, storage requirements, network configurations, and any special functionalities or services running on the VMware platform. Understanding these elements is crucial for planning a seamless migration to Proxmox VE.

Planning the Migration

With a clear understanding of the existing setup, the next phase is detailed migration planning. This involves:

  • Selecting Suitable Hardware: For businesses using Netrouting’s bare metal servers, this step includes choosing servers that meet the specific requirements of the Proxmox VE and the anticipated load.
  • Configuring Proxmox VE: Configuring Proxmox involves setting up the necessary storage, networking, and VM configurations. Proxmox VE’s intuitive web-based interface simplifies this process, making it accessible even to those new to the platform.
  • Migrating VMs: Proxmox VE supports a variety of methods for migrating VMs from VMware, including direct 
  • migration tools and manual processes. This stage requires careful planning to minimize downtime. Additionally, our team offers free migration support for VMware ESXi versions 6.5 to 8.0 for anyone switching their computing infrastructure to Netrouting Cloud Compute or Netrouting Bare Metal.

Leveraging Netrouting Cloud Compute

Netrouting Cloud Compute offers a scalable, pay-as-you-go model for cloud resources, making it an ideal match for SMEs looking to optimize their cloud spending. Integrating Netrouting Cloud Compute with Proxmox VE allows businesses to achieve a highly customizable and scalable cloud environment, with benefits including:

  • Enhanced Performance: With dedicated resources from Netrouting’s bare metal servers, businesses can expect high performance and reliability.
  • Cost Efficiency: Netrouting’s transparent pricing model ensures that businesses only pay for the resources they use, allowing for better budget management.
  • Flexibility and Scalability: Easily scale resources up or down based on demand, without the need for complex licensing agreements.

Realizing the Benefits

The transition from VMware to Proxmox VE, supported by Netrouting Cloud Compute, is not just a cost-saving measure; it’s a strategic move towards greater flexibility, scalability, and control over one’s infrastructure. Businesses stand to gain from the open-source nature of Proxmox VE, which eliminates licensing costs and offers a community-supported environment for troubleshooting and development.

Moreover, Netrouting’s Cloud Compute service ensures that businesses can dynamically adjust their cloud resources to meet fluctuating demands, offering a truly optimized cloud computing experience.


The changing dynamics of the virtualization and cloud computing market, exemplified by VMware’s cost increases, necessitate a strategic reassessment of IT infrastructure. For small and micro businesses, the transition to Proxmox VE and Netrouting Cloud Compute presents a viable, cost-effective solution that ensures operational efficiency, scalability, and, most importantly, significant cost savings.

As the IT landscape continues to evolve, flexibility and adaptability become paramount. By embracing open-source solutions and optimized cloud services, businesses can navigate these changes confidently, ensuring their IT infrastructure remains robust, responsive, and aligned with their financial objectives.


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