Proxmox vs. VMware: what virtualization costs SMEs in 2026

Why this is on the table in 2026

Since the Broadcom takeover in late 2023, VMware has been turned upside down: perpetual licences abolished, products consolidated into large bundles, prices raised drastically. In May 2026 Gartner analyst Paul Delory put the typical rise in licensing bills at 300 to 400 percent. Members of the European cloud association CISPE reported 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 available as a perpetual licence, and the standalone editions vSphere Standard and Enterprise Plus are capped at version 8 as well. Anyone running vSphere Standard 8 today, perpetual or subscription, has to decide by then: move to a larger VMware bundle, bet on the newly announced vSphere Standard release whose terms are still open, keep running without support, or switch platforms.

The VMware licensing model in 2026

Since 11 December 2023 Broadcom no longer sells VMware perpetual licences. 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. Broadcom publishes no price list; the prices below come from a German software reseller’s price list.

• VMware vSphere Foundation (VVF): the smaller bundle for classic virtualization, with 0.25 TiB of vSAN capacity per core. Reseller list price in September 2026: 192.75 EUR net per core per year. Availability is limited: since December 2025, according to Broadcom, VVF is no longer offered in some EMEA countries, and trade press reports that it now goes almost exclusively to customers who also buy VCF.
• VMware Cloud Foundation (VCF): the large bundle including NSX, automation and 1 TiB of vSAN capacity per core. Reseller list price in September 2026: 362.24 EUR net per core per year. VMware itself cited a list price of 350 USD in 2024.
• vSphere Standard and Enterprise Plus remain on the product list but are capped at version 8 Update 3; the same reseller lists vSphere Standard at 51.25 EUR net per core per year. vSphere 9 features are available exclusively in VVF and VCF. In early September 2026 Broadcom announced a new vSphere Standard release; price, licensing model and feature set are still open.

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 on 21 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 enterprise repository, which Proxmox recommends for production use, and from the Basic tier upwards includes support tickets with committed response times.

For backups there is the Proxmox Backup Server with deduplication, incremental backups and verification, also open source. Subscriptions cost, net per backup server per year, 560 EUR (Community, not intended for production), 1,120 EUR (Basic), 2,240 EUR (Standard) or 4,480 EUR (Premium), each with unlimited backup storage and unlimited clients.

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. To keep every figure comparable in euros, I use the reseller list prices from above for VMware.

Compared with VCF, the example SME pays roughly one sixth with Proxmox Standard plus Backup Server Basic. Against VVF a factor of just over three remains, provided VVF is offered at all. Importantly, the Proxmox figure already includes the backup product; with VMware, backup software comes on top. vSphere Standard costs about as much per year as Proxmox, but its support ends with version 8 in October 2027; whether and on what terms the announced new Standard release arrives is open.

Hidden costs on both sides

Licence 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 (April 2024) Proxmox ships an import wizard for ESXi, tested by Proxmox with ESXi 6.5 to 8.0, including live import, where the VM already runs on Proxmox while its disks are pulled across in the background. Windows VMs need VirtIO drivers, and VMs on vSAN cannot be imported directly.
• Backup: Veeam Backup & Replication has supported Proxmox VE via a plug-in since version 12.2 (August 2024) and, since version 13 (September 2025), with application-consistent backups of Windows and Linux VMs, for example running SQL Server, Oracle or PostgreSQL. Version 13.1 (July 2026) adds replication between Proxmox hosts and instant recovery, the latter with experimental support for now. Licensing is per protected VM via the Veeam Universal License. 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 complements vendor support. That belongs in the calculation, 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 by the analyst firm Virtified of 450 VMware customers across 14 countries, half plan to reduce their VMware usage by 2028. Gartner expects around 35 percent of today’s VMware workloads to run on other platforms by 2028. Big names are working on their exit in 2026 too: according to court filings, the British supermarket chain Tesco does not expect to be off VMware before the end of 2027.

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, mature 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 licence 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 and economically very attractive alternative. The cost difference is not a rounding error but, in the example, a factor of about six against VCF, 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 is little more than a year away, and assessment, testing and migration windows per host need lead time. Anyone starting in summer 2027 negotiates and migrates under pressure.

• Take stock: record VMs, dependencies, storage, the backup chain and licence renewal dates.
• Clarify the renewal date: request the renewal quote early so that a late-renewal surcharge never becomes an issue.
• 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.