As more organizations move away from VMware following Broadcom's changes to its pricing policy, VMware Korea's workforce has nearly halved over the past three years. With steep price increases driving demand for alternative virtualization platforms, Broadcom's strategy toward the Korean market also appears to be shifting.
According to data from Korea's National Pension Service, VMware Korea's headcount fell below 100 for the first time in January. As of May, the company employed 92 people, representing a decline of about 45% compared with November 2023, when Broadcom completed its acquisition of VMware.
Industry observers attribute the workforce reduction to Broadcom's post-acquisition pricing strategy. After the acquisition, Broadcom eliminated perpetual software licenses and transitioned entirely to a subscription-based model. The shift significantly increased costs for many customers, with some reportedly facing price hikes of up to tenfold. As existing contracts come up for renewal or expiration this year, the trend of customers moving away from VMware is expected to accelerate.
Industry analysts believe Broadcom has shifted its strategy in Korea from expanding market share to prioritizing profitability.
“Broadcom appears to believe that even if it loses some customers following the pricing changes, the impact on revenue will be limited,” one industry source said. “The company is increasingly focusing on a smaller group of strategic accounts rather than pursuing broad customer expansion, and the reduction in its Korean workforce reflects that approach.”
Meanwhile, VMware's weakening market position has created new opportunities for both domestic and global vendors to expand their presence in the virtualization market. Namutech is preparing to launch NamuVirt, an integrated management solution based on the KVM virtualization environment, while Okestro is strengthening its push into both the public and private sectors with its server virtualization platform, Contrabass. Global vendors are also stepping up their efforts. Red Hat is promoting application modernization through Red Hat OpenShift Virtualization, while SUSE is expanding customer choice with its open-source infrastructure offerings.
Another industry official said, “In the past, most inquiries were simply about virtualization solutions. Recently, however, we're seeing a sharp increase in organizations asking whether they can realistically migrate away from VMware. Combined with growing demand for infrastructure modernization following VMware's pricing changes, the virtualization market has regained momentum after years of stagnation.”
