MI Solutions
Insights/Audits and compliance
Audits and compliance

Virtualization and Licensing: Avoiding Costly Surprises

Why virtualization multiplies software licensing requirements, how VMware's core-based minimums work after Broadcom, and how to keep server licensing under control.

By the MI Solutions SAM team10 min read2 exhibits

Virtualization lets you run many workloads on fewer servers and move them freely between hosts. Licensing does not always follow. Some publishers license the physical hardware a workload could run on, not just the virtual machine it runs in today. And virtualization platforms themselves are licensed per core, with minimums that can make small hosts surprisingly expensive.

Two layers of licensing

Virtualized server estates carry two separate licensing questions, and both can surprise you:

01The platform

The hypervisor and management software, licensed per physical core with minimums. See VMware after Broadcom.

02The workloads

Operating systems, databases and middleware running in the VMs, each with its own rules about virtual environments.

Why virtualization multiplies the count

When a publisher counts the physical cores of every host a workload could run on, a single small virtual machine in a large cluster can require licensing the entire cluster. Database and middleware publishers are where this matters most. See Oracle license audits and IBM sub-capacity licensing.

Exhibit 1
Where a workload can run decides how many cores you licensePhysical cores in scope for one 4-vCPU database VM under different rules, illustrative 8-hostcluster with 32 cores per host0 cores100 cores200 cores300 coresLicensed per virtual core4 coresLicensed per host it runs on32 coresLicensed per host in a 2-hostaffinity group64 coresLicensed per host in the wholecluster256 coresIllustrative. Which rule applies depends on the publisher, the product, the virtualization technology and yourcontract.

VMware licensing after Broadcom

VMware's products are now sold as subscriptions licensed per physical core. Every CPU must be licensed for at least 16 cores, even if it has fewer, and from April 10, 2025, each order must cover at least 72 cores.

Exhibit 2
Minimums can make small VMware estates expensiveCores licensed for one host with two 8-core CPUs0 cores20 cores40 cores60 cores80 cores16 coresPhysical cores32 coresWith 16-core-per-CPU minimum72 coresMinimum per order (from April2025)Source: Techzine and heise reporting on Broadcom's VMware licensing changes, April 2025.

See VMware licensing after Broadcom for more detail.

How to control virtualization licensing

  1. Know each publisher's rules

    For virtual environments, before deploying anything licensed by core or processor.

  2. Isolate licensed workloads

    On dedicated hosts or clusters where rules require host-level licensing, and document the isolation.

  3. Right-size hosts

    To the core counts that licensing minimums make efficient.

  4. Track VM mobility

    Automatic migration and disaster-recovery failover can extend licensing scope.

  5. Review before expanding

    Adding a host to a cluster can add licensing requirements for every workload in it.

Before adding a host or cluster

How MI One helps

Frequently asked questions

Do all publishers license the whole host?

No. Rules differ widely. Some license per virtual machine; others per physical host or cluster.

Can moving to the cloud remove these issues?

It changes them. Cloud deployments have their own licensing rules, especially for bring-your-own-license scenarios.

Who should approve cluster changes from a licensing view?

The SAM function should be a reviewer in the infrastructure change process for any cluster running core-licensed software.


Sources

See where your software budget goes

Bring your five largest vendors to a 30-minute call. Our SAM experts will show you where the savings usually hide, and how fast MI One can surface them.