When Broadcom acquired VMware in late 2023, the licensing model changed fundamentally. What was once per-socket pricing became per-core. Perpetual licenses became subscriptions. For a 42-server environment running 1,680 cores across two datacenters, that means vSphere licensing of €153,000 per year.
The environment we migrated ran almost entirely Linux workloads—mostly RHEL. No Windows licensing to untangle, and the ops team already knew their way around a terminal. That makes Proxmox a realistic alternative.
But cost wasn't the only factor. The environment used distributed vSwitch across both datacenters for centralized network management. Network changes happened multiple times per month—new VLANs, MTU adjustments, bond configurations. Without distributed vSwitch, every change would mean touching 42 servers manually.
This article documents how we replaced both vSphere and distributed vSwitch with Proxmox and Ansible. The migration took 12 weeks, with VM moves happening on weekends only. First-year savings covered the migration cost.
The Numbers
42 servers, dual-socket, 20 cores per CPU. That's 1,680 cores Broadcom wants to charge for.
| Item | Specification |
|---|---|
| Servers | 42 physical hosts |
| CPU Configuration | Dual-socket, 20 cores per CPU |
| Total Cores | 1,680 cores |
| Total Sockets | 84 sockets |
| Regions | 2 (European datacenters) |
VMware
Distributed vSwitch needs Enterprise Plus or vSphere Foundation. Per-core pricing:
| Pricing Tier | Per Core/Year | Annual Total (1,680 cores) |
|---|---|---|
| List Price (vSphere Foundation) | ~€125 | €210,000 |
| List Price (Enterprise Plus) | ~€140 | €235,200 |
| Typical Negotiated Rate | ~€91 | €153,000 |
This customer negotiated hard and got ~€91/core. Still €153,000/year.
Proxmox
| Subscription Tier | Per Socket/Year | Annual Total (84 sockets) |
|---|---|---|
| Community | €115 | €9,660 |
| Basic | €355 | €29,820 |
| Standard | €530 | €44,520 |
Community subscription gives you the enterprise repo. €9,660/year for 84 sockets.
Management and Maintenance
We handle ongoing management and maintenance for the cluster. Patching alone is 42 nodes, four times a year. Add network changes, config updates, capacity planning. Works out to about €28,560/year. The effort is similar whether you're running VMware or Proxmox—patching, monitoring, troubleshooting doesn't change much between hypervisors.
First Year Including Migration
We're not going to pretend migrations are free. 12 weeks of work came to €58,800. Here's year one:
| Cost Component | VMware (Year 1) | Proxmox (Year 1) |
|---|---|---|
| Licensing | €153,000 | €9,660 |
| Management & Monitoring | €28,560 | €28,560 |
| Migration Project (12 weeks) | — | €58,800 |
| Year 1 Total | €181,560 | €97,020 |
| Year 1 Savings | €84,540 (47%) | |
Even with the full migration cost, they saved €84,540 in year one. Year two onward, that jumps to €143,340/year since there's no migration to pay for.
The Distributed vSwitch Problem
This customer relied on distributed vSwitch. Network changes happened multiple times per month—new VLANs, MTU tweaks, bond configurations. Change it once in vCenter, it propagates to all 42 hosts. That's the whole point.
Without it? Standard vSwitch means logging into each server and editing the network config manually. 42 times. Every time something changes. Nobody wants that job.
But distributed vSwitch needs Enterprise Plus. Under Broadcom's new pricing, that feature alone costs six figures per year for this environment.
Ansible Instead
Proxmox is just Linux. Network config lives in /etc/network/interfaces. No built-in distributed switch.
We built Ansible roles for this. Network config defined once in YAML, version-controlled in git, rolled out to all nodes:
# Roll out network config to DC1
ansible-playbook site.yml --tags network --limit dc1
Same result as distributed vSwitch—change once, apply everywhere—but now every change is in git. We can see who changed what, when, and roll back if needed.
How We Did It
12 weeks total. VM moves happened on weekends only—no weekday production impact.
Timing worked out well. The customer had a partial hardware refresh planned anyway. We built the new Proxmox clusters on fresh hardware, then migrated VMs and decommissioned VMware nodes one by one. No need to run double infrastructure.
They had NetApp storage, which made things easier. We created new NFS shares for Proxmox alongside the existing VMware datastores. Same storage, different hypervisor.
Weeks 1-4: New hardware, new Proxmox clusters, Ansible roles, NFS shares.
Weeks 5-10: VM migrations on weekends. DEV first, then STAGING, then PROD. Each environment validated before touching the next.
Weeks 11-12: Decommission VMware, retire old hardware.
Results
| Metric | VMware | Proxmox |
|---|---|---|
| Year 1 (incl. migration) | €181,560 | €97,020 |
| Year 2+ | €181,560 | €38,220 |
| 5-Year Total | €907,800 | €249,900 |
| 5-Year Savings | €657,900 (72%) | |
Includes licensing and our management fee. Proxmox Year 1 includes the €58,800 migration.
Paid for itself in year one. Network changes still happen multiple times per month—now through Ansible instead of distributed vSwitch.
We now offer this as a Managed Proxmox Platform—fully managed clusters on dedicated hardware, starting at €249/month.