VMware in IT: Why Virtualization Still Matters for Hosting Resellers

Last updated: October 6, 2026

VMware has been a dominant force in server virtualization for over two decades, and the conversation around it has not changed much: it works, it is expensive, and it is everywhere. The recent Broadcom acquisition has added a new variable, but the underlying technology remains foundational to most hosting and cloud infrastructure, including the private cloud products that resellers and small hosting businesses often build on.

This piece walks through what VMware actually does, why it still matters in 2024, and what resellers should understand about it even if they never deploy it directly.

What happened

• VMware is a virtualization platform that allows multiple virtual machines to run on a single physical server.
• Each VM has its own virtual CPU, memory, disk, and network interface.
• The technology is mature, well-documented, and used by most large cloud and hosting providers.
• The Broadcom acquisition has introduced licensing uncertainty that is pushing some customers to evaluate alternatives.

What VMware does, simply

A hypervisor is a piece of software that sits between the physical hardware and the operating systems running on top of it. VMware's hypervisor (ESXi) does exactly this, allowing a single physical server to run many independent virtual machines, each with its own operating system, applications, and configurations. The VMs are unaware of each other and behave, from the perspective of the software running inside them, exactly like physical machines.

The practical effect is that physical hardware becomes a pool of resources. A server can be carved up into many smaller VMs, each sized appropriately for its workload, and resized as needs change. For a hosting provider, that flexibility is the foundation of the entire product.

Why it still matters in 2024

The question worth asking is why VMware has stayed dominant for so long despite the rise of containers, public cloud, and open-source hypervisors like KVM and Xen. The honest answer is that VMware's management tooling, particularly vCenter, is genuinely better than what comes with most alternatives. VSphere, vMotion (live migration of running VMs between hosts), and the snapshot and replication features are mature, well-documented, and used by most enterprise IT teams.

For a small hosting provider or a reseller building infrastructure, the question is rarely "should we use VMware" and more often "should we use a VMware-based managed product." Most small operators do not have the operational maturity to run VMware themselves. They consume it as a service from a provider that does.

The Broadcom variable

Broadcom completed its acquisition of VMware in late 2023, and the changes to VMware's licensing model since have been significant. End-of-sale announcements for perpetual licenses, bundling changes, and pricing increases have pushed a meaningful number of customers to evaluate alternatives. KVM, Hyper-V, and Proxmox are the most common destinations, with Nutanix also picking up share in mid-market deployments.

For resellers, the practical implication is that the long-term stability of VMware-based products is more uncertain than it was a year ago. The technology is not going anywhere, and most customers will stay on it for the foreseeable future, but the cost of staying is rising. If you are advising clients on multi-year infrastructure commitments, that is a real variable to track.

Our analysis

The interesting thing about VMware is that it is a technology most resellers never touch directly but inherit indirectly through every provider they partner with. The VPS you resell likely runs on VMware, KVM, or Hyper-V. The cloud product you recommend probably runs on one of those three. The private cloud product you might package for a compliance-heavy client almost certainly runs on VMware.

Understanding what VMware is, what it does well, and what its failure modes are is part of being a competent reseller. You do not need to deploy it. You need to know what your providers are selling and what they are not telling you.

The other interesting thing is how the conversation has shifted. Five years ago, "cloud" meant public cloud and "virtualization" meant VMware. Today, the lines have blurred. Public cloud providers run on custom hypervisors. Private cloud products wrap VMware or KVM. Containers run on virtual machines that run on hypervisors. The vocabulary is converging, even if the products are not.

A practical example

Say a client in healthcare asks you about hosting a small application that handles patient intake forms. The data is PHI under HIPAA, the client needs a BAA with the hosting provider, and the workload is too small to justify a full AWS deployment. A managed VMware private cloud with a HIPAA-compliant provider is a reasonable answer. The client gets a single-tenant environment, full auditability, and a provider who signs the BAA. The cost is higher than a shared VPS, but the fit is right for the compliance requirement. Knowing that VMware is the underlying technology, and what that means for isolation and auditability, is what lets you make the recommendation confidently.

What to watch next

• The migration of customers off VMware as Broadcom's licensing changes take effect.
• The maturation of KVM and Proxmox as alternatives for small and mid-sized deployments.
• The continued development of hyperconverged products (Nutanix, VMware vSAN) that combine compute, storage, and networking into a single management layer.
• The slow standardization of bare-metal cloud as an alternative to virtualized infrastructure for high-I/O workloads.

Bottom line

VMware is foundational infrastructure that most resellers never deploy directly but inherit through every provider they work with. Understanding what it does, what it costs, and what is changing under Broadcom is part of being a competent infrastructure advisor. The technology is not going anywhere, but the licensing and pricing landscape around it is shifting, and that shift will produce both opportunities and risks for resellers in the near future.

Key takeaways

• VMware is a dominant virtualization platform and runs most private cloud and many public cloud products.
• The Broadcom acquisition has introduced licensing uncertainty that is pushing some customers to evaluate alternatives.
• Resellers rarely deploy VMware directly but inherit it through the providers they partner with.
• Knowing what your providers are running underneath is part of being a competent infrastructure advisor.