The 2026 Licensing Trifecta: How Broadcom, Microsoft, and Oracle Are Collaborating to Drain Your Budget

Key Takeaways

• The “Volume” Handshake is Gone: Microsoft is killing volume discounts (Level A-D) in Nov 2025. Consequently, being big doesn’t save you money anymore; it just makes you a larger target.
• The “Janitor Tax”: Oracle’s new model charges you for every employee in your directory. In other words, you pay even if they have never written a line of code.
• The End of “Sweating Assets”: Broadcom has killed the perpetual license. Therefore, you can no longer run that old cluster for another year to save cash; if you stop paying, the lights go out.
• The Clock is Ticking: You have until roughly Q3 2025 to audit, lock in contracts, or migrate. After that point, the trap snaps shut.

Having designed enterprise infrastructure for over 15 years, I remember when an Enterprise Agreement (EA) felt like a genuine partnership. You committed to spending millions, and, in return, the vendor gave you a break. It was a handshake deal: “You scale up, we lower the unit cost.”

However, those days are dead.

I was recently reviewing a portfolio for a client—a solid, mid-sized enterprise—and realized we are walking into a buzzsaw. It’s not just one vendor tightening the screws; rather, it is a synchronized squeeze. Microsoft, Oracle, and Broadcom have effectively formed a “trifecta” of cost increases that hits every layer of the stack: the OS, the Hypervisor, and the Runtime.

For those of us in the trenches, this isn’t merely a procurement headache. On the contrary, it is an architectural crisis. If we don’t design around this now, we’re going to be the ones explaining to the CFO why the OpEx budget just blew a 300% gasket.

The Threat Landscape: Why 2026 is Different

1. Microsoft: The “Big Business” Penalty (Nov 2025)

Starting November 1, 2025, Microsoft is eliminating the pricing tiers (Level A-D) for Enterprise Agreements within the EU/EFTA, with global ripples likely to follow.

The Architect’s Reality:

I used to build ROI models assuming that once we hit 15,000 seats (Level D), we’d get that sweet discount. Unfortunately, that math is now broken. Microsoft is standardizing the price. Effectively, the more you buy, the more you pay. There is no bulk discount at the buffet anymore.

2. Oracle: The “Janitor Tax”

Furthermore, Oracle’s shift to the “Java SE Universal Subscription” is, frankly, terrifying. They no longer care how many processors you run; instead, they care how many employees you have.

What This Means for You:

I saw a quote recently where a company with only 50 developers was asked to pay for 10,000 employees—including warehouse staff and truck drivers. Why? Because “technical capability” is irrelevant to the license terms. If you are on the payroll, you are a billable unit.

3. Broadcom: The Subscription Strong-Arm

We all saw this coming with the VMware acquisition, yet the reality is harsh. Perpetual licenses are gone. Support for perpetual is gone.

The Hard Truth:

In the old days, if the budget was tight, we’d just “sweat the assets”—run vSphere 7 for an extra two years without upgrading. Now, we can’t do that. You are renting your hypervisor. Ultimately, if you stop paying the rent, you get evicted.

Decision Framework: The Architect’s Defense Strategy

We can’t just complain on Reddit. Rather, we have to architect our way out of this. Here is the playbook I’m using right now.

Strategy A: The “Audit & Purge” (For Oracle)

The Scenario: You have a sprawling legacy estate and no idea who is running Java.

My Advice:

1. Treat it like malware: Use Flexera or Snow (or a simple PowerShell script if you’re scrappy) to hunt down every java.exe.
2. The “Red Hat” Pivot: For instance, switching 90% of your backend services to Red Hat OpenJDK or Amazon Corretto is painless. It’s usually a drop-in replacement.
3. Quarantine: If you must run Oracle Java, put those workloads in a dedicated, air-gapped environment. Subsequently, you need to prove to the auditors that the rest of the company literally cannot touch it.

Strategy B: The “Time Machine” (For Microsoft)

The Scenario: You are deep in the Azure/O365 ecosystem and can’t leave.

My Advice:

1. Beat the Clock: Check your EA renewal date. If it’s in 2026, call your rep today.
2. Early Renewal: Negotiate an early renewal before November 1, 2025. Specifically, lock in a 3-year term under the current discount structure. This buys you a three-year runway to figure out your next move while your competitors are paying the markup.

Strategy C: The “Repatriation & Right-Sizing” (For Broadcom)

The Scenario: Your VMware renewal quote just landed, and it looks like a ransom note. My Advice:

1. Stop Guessing Core Counts: Broadcom’s pricing is strictly per-core. Before you negotiate, you need exact numbers.
   • Use Tool: Run our VMware VVF/VCF Core Calculator to see exactly what your new license burden looks like.
2. The Nutanix/Flow Option: If you are migrating off ESXi/NSX-T to Nutanix AHV, you can’t just “lift and shift” firewall rules. The logic changes.
   • Use Tool: Use our NSX-T to Flow Translator to map your security policies.
   • Read Guide: Check our Field Guide to Migrating NSX-T to Nutanix for the step-by-step logic.
3. Validate the Hardware: If you are moving to new hardware to escape the “Broadcom Tax,” ensure you aren’t over-provisioning.
   • Use Tool: Launch the V2N Mapper & Sizer to right-size your new footprint.

Visual Engineering: The “Do Nothing” Tax

I always tell my SEs: “Don’t bring me problems, bring me data.” Therefore, here is the data you need to show your leadership.

Mandatory Cost Analysis: The Price of Inaction

Let’s look at a hypothetical manufacturing company: “Widget Corp.” They have 5,000 employees (mostly factory workers) and 200 servers. Here is how the math breaks down:

• Microsoft Impact: Losing their Level C discount hits them for an extra $150,000/year.
• Oracle Impact: Instead of paying for the 20 servers running Java, they pay for 5,000 employees. As a result, their bill goes from $40k/year to $900,000/year.
• VMware Impact: Their perpetual support was $80k/year. In contrast, the new subscription is $250,000/year.

Total Cost of Doing Nothing: An extra $1.1 Million per year. That is innovation budget. That is headcount. That is your bonus. Gone.

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