Microsoft and Broadcom licensing moves inflate IT budgets

Enterprise software licensing has moved from a routine renewal item to a visible budget pressure. Microsoft is charging PC makers more for Windows on new devices, Broadcom is shifting VMware customers to subscriptions while EU regulators examine the changes, and software vendors are moving AI features toward usage-based billing.

Broadcom completed its $61 billion acquisition of VMware in 2023 and began moving customers from perpetual licenses to subscriptions while consolidating its partner program. European cloud providers said these changes raised their costs and reduced flexibility.

Microsoft ended free support for Windows 10 on October 14, 2025, leaving many organizations still migrating to Windows 11 and sustaining PC demand. Counterpoint Research data cited by the Economic Daily News put worldwide PC shipments in the second quarter of 2026 at about 65 million, a 4% year-over-year drop and the first decline since early 2025.

In July 2026 Microsoft raised the OEM license fees it charges PC makers by an average of 7% to 10%, according to Taiwan's United Daily News. Framework highlighted the increase on July 22, and a July 31 Digitimes report said Windows pricing was up roughly double digits on average. PC brands expect finished PC prices to rise another 5% in the third quarter after earlier increases in memory, SSDs and CPUs, according to OC3D's account of the United Daily News figures. A PC brand executive told the newspaper that Microsoft increases OEM fees every year, but the July 2026 rise is larger than previous single-digit moves.

Harvard Business Review reported in mid-August that enterprise software vendors had been absorbing GPU, inference and token costs to encourage AI adoption, and that companies are now moving toward usage-based charges.

LicenseFortress announced on August 27 that it had expanded its software asset management services to include Adobe. The company said organizations may hold inactive Adobe licenses, buy duplicate products across teams and lack visibility before renewals; its service already covers Oracle, Microsoft, IBM, SAP and Broadcom's VMware.

An IMD analysis explains that one-way pricing rules push opening prices upward: when raising prices later is hard, the rational starting price drifts higher. The authors apply that logic to software licensing. EU officials have begun contacting European cloud providers about Broadcom's VMware licensing overhaul. The preliminary inquiry is examining migration obstacles and partner certification requirements, and a March 31 partner-program deadline could strip some providers of the right to sell VMware subscriptions. Broadcom has not publicly commented.

For IT buyers, the most immediate exposure is in PC refresh pricing. Windows license fees scale by CPU tier, so a higher-spec i7 workstation carries a larger increase than an i3 or i5 build. Spiceworks advises comparing current quotes with last year's comparable purchases and right-sizing CPUs where workloads allow.

The EU process could take years if it becomes formal, and no conclusion has been reached. With memory costs still elevated, licensing changes remain a central variable in enterprise technology budgets.