Evaluating the Cost Efficiency of Proxmox as an Alternative Virtualization Platform
In recent years, VMware’s acquisition by Broadcom has led to major changes in its product licensing strategy.
The company has transitioned entirely from perpetual licenses to a subscription-based model, now billed per CPU core.
For enterprises still running older versions such as vSphere 5.x–6.x, these changes have significant implications for both budgeting and long-term IT planning.
As legacy VMware environments reach end-of-support status, upgrading is unavoidable — yet the new pricing structure dramatically raises the cost.
This article analyzes the financial and operational impact of two options: upgrading VMware versus migrating to Proxmox VE, an open-source virtualization platform.
1. Current Environment Overview
| Item | Quantity |
|---|---|
| Physical servers | 25 units |
| CPU sockets per server | 2 |
| Cores per CPU | 10 cores |
| Total sockets | 50 |
| Total physical cores | 500 |
2. VMware’s New Licensing Model
Starting in 2024, VMware (now Broadcom) introduced the vSphere Foundation (VVF) subscription plan:
- Licenses are charged per CPU core.
- Each CPU is counted as at least 16 cores, even if it has fewer physical cores.
- A minimum of 72 cores per order is required through distribution channels.
- vCenter, Aria Operations, and Tanzu are bundled into the Foundation suite, further increasing cost.
VMware vSphere Foundation — Taiwan Pricing (2025)
| License Type | Unit | Annual Fee (NT$) | 3-Year Term (NT$) |
|---|---|---|---|
| vSphere Foundation | Per Core | 9,500 / year | 22,500 / 3 years |
| Minimum Billable Cores | 25 servers × 2 CPUs × 16 cores = 800 cores | ||
| Total Cost (Base License) | ≈ NT$7,600,000 / year | ≈ NT$18,000,000 / 3 years |
If vSAN or Aria Operations is enabled, additional add-on licenses are required, typically adding another 15–30% to the total cost.
3. Proxmox VE + PBS — Local Pricing Estimate (Taiwan)
Proxmox VE (Virtual Environment) and Proxmox Backup Server (PBS) are fully open-source.
Licensing fees are optional and mainly provide access to the Enterprise Repository and official support.
All core features remain available even without a subscription.
Proxmox Taiwan Pricing (Government Procurement Contract Reference)
| License Type | Unit | Annual Fee (NT$) |
|---|---|---|
| Proxmox VE Standard | Per CPU Socket | 21,800 |
| Proxmox Backup Server Standard | Per Server | 88,817 |
Estimated Cost
| Item | Quantity | Unit Price | Annual Cost (NT$) | 3-Year Total (NT$) |
|---|---|---|---|---|
| Proxmox VE (Virtualization Platform) | 50 sockets | 21,800 | 1,090,000 | 3,270,000 |
| Proxmox Backup Server | 1 | 88,817 | 88,817 | 266,451 |
| Combined (PVE + PBS) | — | — | ≈ 1,178,817 / year | ≈ 3,536,451 / 3 years |
4. Total Cost of Ownership (3-Year Comparison)
| Platform | Licensing Model | Annual Cost | 3-Year Total | Savings |
|---|---|---|---|---|
| VMware vSphere Foundation | Per-core Subscription | ≈ NT$6,000,000 | NT$18,000,000 | — |
| Proxmox VE + PBS | Per-socket Subscription | ≈ NT$1,178,817 | NT$3,536,451 | ≈ 80% Lower |
The three-year TCO for Proxmox is about 20% of VMware’s.
As core counts increase in future hardware generations, the gap will widen even further.
5. Feature and Operational Comparison
| Aspect | VMware vSphere Foundation | Proxmox VE + PBS |
|---|---|---|
| Licensing | Per core (min. 16 cores per CPU) | Per socket (fixed) |
| Cost growth | Scales linearly with core count | Scales with socket count only |
| Virtualization technology | vSphere / ESXi | KVM + QEMU + LXC |
| Management | vCenter + Aria Operations | Web GUI + REST API + CLI |
| Backup | Requires add-on (Veeam, etc.) | Built-in incremental & deduplicated backups (PBS) |
| Clustering / HA | Mature & enterprise-grade | Native HA (requires design tuning) |
| Software-defined storage | vSAN (licensed add-on) | Ceph (open-source integrated) |
| Openness | Proprietary ecosystem | Fully open-source, customizable |
| Support ecosystem | Large enterprise vendor network | Strong open-source community & vendor partners |
| Maintenance effort | Easy to manage, high licensing cost | Requires learning curve, high autonomy |
6. Recommended Adoption Strategy
Phase 1: Proof of Concept (PoC)
- Deploy 2–3 non-critical servers with Proxmox VE.
- Build a basic cluster and test VM import, snapshots, backup, and restore.
- Evaluate performance, stability, and admin training needs.
Phase 2: Hybrid Deployment
- Gradually migrate secondary workloads to Proxmox.
- Retain mission-critical systems on VMware during transition.
- Unify monitoring and backup across both platforms.
Phase 3: Full Transition & Optimization
- As hardware refresh cycles occur, retire VMware nodes.
- Integrate Ceph or existing NAS/SAN for enterprise-grade SDS.
- Develop internal maintenance SOPs to strengthen in-house expertise.
7. Conclusion: Open Source Means More Than Cost Savings
Migrating from VMware to Proxmox is not just about cutting costs —
it’s about regaining control and flexibility over your virtualization infrastructure.
Proxmox significantly reduces licensing and maintenance expenses
while empowering IT teams with deeper visibility and customization options.
In the new Broadcom subscription era, open-source virtualization represents
not merely a cheaper alternative but a strategic safeguard for sustainable enterprise IT operations.
📘 References
✍️ Author’s Note
This article is based on real enterprise infrastructure data and 2025 Taiwan-region pricing benchmarks.
Organizations considering a VMware upgrade or migration should first conduct a small-scale PoC deployment of Proxmox,
evaluate operational readiness, and then plan for a gradual, low-risk transition to open-source virtualization.