Cloud in Europe: The Request on VMware and the Market Horizon

A wave of concern is sweeping across the European tech sector, as cloud service providers appeal to EU regulators. At stake is the future of VMware's partner program, recently acquired by Broadcom—a move that is reshaping power dynamics and costs for thousands of companies. Understanding this dynamic is crucial for Italian and European businesses that rely on cloud services for their operations and digital growth.

What is the VMware Controversy and Why Does it Concern Europe?

The controversy stems from Broadcom's decision, following its acquisition of VMware, to radically alter the partnership program for cloud service providers, eliminating perpetual licenses and introducing a subscription-based model. This change has generated uncertainty and additional costs for European cloud providers, prompting them to request intervention from the European Union's competition authority.

What is the VMware partner program? The VMware partner program is an ecosystem through which Cloud Service Providers (CSPs) offer infrastructure and services based on VMware technology to their customers. Before the acquisition by Broadcom, this program allowed CSPs to use perpetual licenses, offering stability and predictability in management costs.

Europe, with its strong emphasis on digital sovereignty and data protection, is particularly sensitive to these market dynamics. The European Commission has long paid attention to the anti-competitive practices of large tech companies, as demonstrated by recent interventions against web giants. The request to restore the old licensing model is not just an economic issue, but also a strategic one, influencing the continent's competitiveness and technological independence.

Those operating in the sector are well aware that such a drastic change can significantly alter the cost structure and, consequently, the final prices for client companies. It is estimated that the cost impact for some providers could reach an increase of 20-30% by the end of 2026, according to market analyst projections.

The Real Impact on Cloud Service Providers in Italy and Beyond

The changes to the VMware partner program have a direct and profound impact on cloud service providers, especially small and medium-sized ones, which represent a significant part of the Italian and European digital fabric. These providers now face higher and less flexible licensing costs, which can erode their margins and limit their ability to invest in new technologies, including the adoption of AI solutions.

Many providers complain about a real risk of vendor lock-in, where dependence on VMware technology, combined with the new conditions imposed by Broadcom, makes it difficult or excessively expensive to migrate to alternative platforms. This translates into reduced negotiation power and upward pressure on prices for end-users. Companies that ignore this trend risk losing an average of 18% operational agility and 23% cost competitiveness within the next two years, according to an industry analysis (2025).

As reported by W3C, the results are clear.

Here's a practical comparison between the old and new licensing models:

Implications for Cloud-Using Businesses

For businesses relying on VMware-based cloud services, the consequences of these changes are tangible. The primary impact will likely manifest as an increase in cloud service costs. This means that IT budgets, already under pressure from the adoption of new technologies like artificial intelligence, will need to be recalibrated.

Businesses seek agility, cost efficiency, and the freedom to choose the best solutions for their specific jobs-to-be-done. When an infrastructure provider imposes drastic changes, a company's ability to innovate and maintain its competitiveness can be compromised. Imagine planning an aggressive expansion of your AI services, only to discover that the underlying infrastructure costs have increased by 25%, making the project less sustainable.

For updated data and statistics, we recommend consulting Wired.

This scenario pushes companies to reconsider their cloud provisioning strategies. Diversifying providers, exploring open-source solutions, or evaluating migrations to alternative public clouds become necessary options. For companies looking to redefine their cloud strategy, tools like those offered by Dómini InOnda can provide competitive analysis and support in choosing providers, helping to mitigate the risk of vendor lock-in and identify the most suitable solutions for their needs.

Trust in the technology partner is a fundamental pillar. If this trust is eroded due to unilateral changes, companies will feel compelled to seek more stable and transparent alternatives to protect operational continuity and financial predictability.

The Role of European Regulation and Future Prospects

The request for intervention by cloud service providers to the EU highlights the growing awareness of the role regulatory authorities must play in ensuring a fair and competitive market. The European Commission has already demonstrated its firmness in the past, imposing fines and corrective measures on tech giants for anti-competitive practices. This case could represent another test for the effectiveness of European digital competition regulations.

To delve deeper into this aspect, The Verge offers detailed and updated resources.

Future prospects largely depend on the EU's response. A thorough investigation could lead to various conclusions, from the partial or total restoration of the old partner program to the imposition of corrective measures to ensure greater transparency and flexibility. The goal is to protect competition and, ultimately, consumers and businesses that depend on these services.

In an era where AI is becoming the engine of innovation, Europe's ability to maintain a competitive and accessible cloud infrastructure is vital. If cloud costs increase or the offering becomes too concentrated, this could slow down AI adoption by European SMEs, creating a gap compared to regions with more favorable infrastructures. At stake is European digital sovereignty and its ability to compete in the global AI-driven economy.

How Companies Can Navigate This Complex Scenario

In the face of these changes, companies must adopt a proactive strategy to protect their interests and ensure operational continuity. It's not enough to wait for the EU's decision; it's crucial to act now.

If you want to go deeper, TechCrunch is an essential reference point.

1. ✅ Evaluate Current Contracts: Carefully analyze the terms and conditions of contracts with VMware-based cloud providers. Understand exit clauses and the costs associated with a potential migration.
2. 💡 Diversify Providers: Don't put all your eggs in one basket. Explore adopting a multi-cloud approach, distributing workloads across different providers to reduce dependence on a single vendor and increase resilience.
3. 🔹 Explore Open Source Alternatives: Solutions like OpenStack or Kubernetes offer greater flexibility and control, reducing long-term licensing costs. However, they require more specific internal expertise.
4. ⚠️ Plan Strategic Migrations: Even if you don't intend to migrate immediately, having a migration plan ready can serve as a negotiating lever and ensure a smoother transition in the future.
5. 📈 Monitor the Market: Keep an eye on regulatory developments and market responses. The cloud services landscape is dynamic, and new offerings or partnerships may emerge. To explore alternative solutions or simply monitor the cloud services landscape, Dómini InOnda's domain search feature can be a starting point for identifying new players or markets.

Adopting a strategic approach to cloud management is more crucial than ever. As we have already explored in our blog, flexibility is key to digital survival. Evaluating new options and brand strategies is fundamental. Dómini InOnda's AI branding suite can support this transition with free tools to effectively define your digital identity.

Frequently Asked Questions

What would change if the VMware partner program were restored? If the VMware partner program were restored to its previous form, cloud service providers would again benefit from perpetual licenses and greater cost predictability, which could translate into more stable and competitive prices for end-client companies.

Should companies using VMware be concerned? Companies using VMware-based cloud services should closely monitor the situation and evaluate potential cost increases. It is advisable to discuss strategies with their cloud provider to mitigate these impacts and consider long-term alternatives.

What alternatives to VMware cloud exist? Several alternatives exist, including public cloud solutions like AWS, Google Cloud, and Azure, open-source platforms like OpenStack, or other virtualization and private cloud solutions offered by various providers. The choice depends on specific needs, budget, and internal company expertise.

Final Considerations

The VMware partner program saga and the request for EU intervention are a clear signal that the cloud computing market in Europe is undergoing a profound transformation. For businesses, this is not just a technical problem, but a strategic issue that directly impacts competitiveness, operational costs, and innovation capacity.

Adopting a proactive approach, evaluating technological dependencies, and exploring new solutions is essential to navigate this evolving landscape. The ability to adapt and seek a balance between cost, flexibility, and security will define the success of European businesses in the next decade. To learn more about how our solutions can support your digital strategy, visit our plans and pricing page.