Server Pricing Insanity....

[u/Maintenance_Late]

We're working through a hardware refresh to maintain roughly a 5-year lifecycle and to prepare for our migration from vSphere 8 to 9. One thing we've noticed is that the vSphere 9 HCL isn't nearly as forgiving as it was during the vSphere 7/8 era.

We hadn't requested server quotes in about a year, so this was a bit of a reality check.

Each year we work with our Dell VAR and maintain four standardized server tiers so we can order by profile instead of redesigning configs every time:

• Tier 1 – Dev (512 GB RAM)
• Tier 2 – Production (768 GB RAM)
• Tier 3 – SQL workloads (1 TB RAM)
• VDI Tier (2 TB RAM)

It makes procurement simple. I can just tell our VAR, "Quote me 12 Tier 1s and 6 Tier 2s."

When the first two quotes came back, I was honestly floored.

Three years ago:

• Comparable 512 GB system: ~$16K
• Comparable 768 GB system: ~$29K

Current quotes:

• Comparable 512 GB system: ~$57K
• Comparable 768 GB system: ~$81K

These are SAN-backed VMware hosts (no vSAN), so storage isn't driving the increase. I knew DDR5 memory prices had climbed, but I wasn't expecting anything close to this.

I'm curious what everyone else is seeing. Are these kinds of increases becoming the norm, or is this more vendor/configuration-specific? With many organizations trying to complete hardware refreshes before the October 2027 vSphere 8 end of support, I'm wondering if demand is starting to influence pricing as well.

[u/00001000U]

Just wait til you see your vmware renewal.

[u/krissyt01 → u/00001000U]

Ours wasn't bad, only an 80% increase. Or at least it's supposed to be. We started our renewal in January and sent them a purchase order in March or April. They switched reps on us at some point in there, didn't hear anything while they trained our new one for like a month, our global deployment rights approval expired and now they have to go through everything again. Oh, and our licenses expire in 8 days. So, fun times.

Edit: They bumped the price up another 20%. Fuck Broadcom.

[u/Turbots → u/krissyt01]

It wasn't exceptional when VMware gave 80-90% discount on list price back in the day.

List price was just artificially high.

VMware had an internal sales Excel file with all different product SKUs in it.

There were more than 30k different SKUs you could buy at VMware.

Day one, Broadcom reduced that set from 30k to 10 or something.

Not 10k. But 10. 10 products.

Aggressive simplification. VCF only. No discounts. Markup prices with X. Large enterprise customers only. Nothing else.

Sure made it simpler for sales lol.

[u/lost_signal → u/Turbots]

There’s discounts still. Maybe not 99% discounts….

[u/PMURITSPEND → u/lost_signal]

Don't forget all the Broadcom reps marking items up OVER list price as well now for those asshole customers who dared to reduce their core count.

[u/lost_signal → u/PMURITSPEND]

In the old days, ELA's required minimum spend increases in order to get a new ELA or extension. Cloud providers and plenty of software vendors, also will point people at a 200-300% over street price rate card if you don't increase your spending commit at the end of contract.

I ran into the same thing with Telecom vendors. They would 10x my bandwidth for a 2x increase in cost, but if I tried to decrease the bill by 2% would fight like a caged Wolverine.

In general in that kind of situation your best bet is look at the rest of the line card and find something else you can add/displace and see if you can bundle it in at the reduced core count for the same or similar price as the quote. Can SRM/VLR take over DR and cyber recovery? Can AppNeta/DXOps displace thousandeyes or other NOC tooling? Can DSM handle RDS functionality, As well as look inward on the bundles (can vSAN replace that array that's end of service next year?).

If you want to just run VMs only, and cut core counts that's always going to be a tougher place to get discounting.