When Tesco—one of the UK's largest retailers—sues a software vendor for £100 million over licensing changes, mid-market IT leaders should pay attention. The supermarket giant claims Broadcom's VMware licensing overhaul could disrupt its ability to put food on shelves. They're not alone—AT&T, Siemens, and others are fighting similar battles.
But VMware's subscription changes aren't all IT leaders are worried about.
Three massive licensing model changes are converging in 2026—including Oracle Java's per-employee pricing, and Microsoft's EA elimination. Organizations that haven't prepared are facing budget shocks ranging from 150% to over 1,000% increases, plus heightened audit risk during transitions.
The Perfect Storm: When All Your Vendors Change at Once
Here's what makes 2026 different: it's not just one vendor shifting terms. Multiple enterprise software giants are simultaneously restructuring how they sell to mid-market organizations, and these changes hit when IT teams are already stretched thin.
VMware Under Broadcom: From Flexible to Forced
Since Broadcom acquired VMware, customers have reported price increases ranging from 150% to over 1,500%, with some organizations facing subscription costs that are ten times higher than their previous perpetual licenses. The core issue: Broadcom ended support for perpetual licenses, forcing customers onto expensive bundled subscriptions they may not need.
The financial impact is staggering. Organizations must now commit to mandatory three-year subscriptions, with a 20% penalty for late renewals. For mid-market teams already managing tight budgets, this creates an impossible choice: pay dramatically more for software you already own, or migrate to alternatives—a process that typically takes 6-18 months.
What's changing:
- Support discontinued for perpetual licenses
- Forced migration to bundled subscription packages
- Pricing increases averaging 3-5x previous costs
- Three-year minimum commitments required
Oracle Java: The Employee Headcount Trap
Gartner predicts that by 2026, one in five organizations using Java will be audited by Oracle, leading to unbudgeted noncompliance fees. The reason? Oracle's shift to per-employee pricing means every person in your organization—whether they use Java or not—requires a license.
A mid-sized organization with 500 employees now faces roughly $90,000 annually in Java licensing costs. Under the previous model, that same company might have paid just a fraction of that for the actual users who needed it. Oracle defines "employees" broadly: full-time, part-time, temporary staff, contractors, and consultants all count toward your license requirement.
The compliance burden is significant. Software audit rates surged in 2024, and Oracle's Java enforcement is intensifying. Organizations that undercount employee totals face audit exposure and retroactive fees.
What's changing:
- Per-employee pricing regardless of actual Java usage
- All staff—including contractors—require licenses
- Audit enforcement ramping up through 2026
- Java 21's free update period ends in 2026, forcing migration decisions
Microsoft EA: Saying Goodbye to Volume Discounts
Starting November 1, 2025, Microsoft is eliminating volume-based discounts for Online Services under Enterprise Agreements, forcing all customers to Level A pricing—the public list price. For organizations that previously received 6-12% discounts based on user count, this means immediate cost increases at renewal.
The bigger strategic shift: Microsoft is actively directing organizations with fewer than 2,400 users away from EA agreements toward Cloud Solution Provider (CSP) models. This isn't just pricing—it's a fundamental change in how Microsoft wants to do business with mid-market companies.
The hidden compliance risk: EA and CSP have different licensing rules for identical software. Product mapping errors and compliance gaps during transitions are common, creating audit exposure precisely when IT teams are managing multiple vendor changes simultaneously.
Microsoft's EA transition creates specific risks that require careful planning, especially around compliance and cost modeling.
What's changing:
- Volume discounts eliminated for all Online Services
- Mid-market organizations pushed toward CSP or MCA-E
- Different compliance requirements between models
- Any new services added after November 1 priced at higher rates
Why This Matters: The Convergence Problem
When one vendor changes terms, IT teams can adapt. But when VMware, Oracle, and Microsoft all restructure simultaneously? That's when mid-market organizations face a budget crisis.
The math is brutal: If your organization uses all three vendors and each increases costs by 200-500%, you're looking at IT spend that suddenly consumes significantly more of your operating budget. For a 750-employee company, this could mean an additional $500K-$1.5M annually across these three vendors alone.
The bandwidth problem is worse: Your IT team can't negotiate with three major vendors, plan migrations, and ensure compliance all at once—especially while keeping the business running. Common ITAM mistakes get magnified during major transitions like this.
What Smart IT Leaders Are Doing Now
Organizations that weather vendor licensing changes best share a common approach: they know exactly what they have before vendors come calling.
Complete ITAM visibility is the foundation. You can't negotiate VMware costs if you don't know your actual usage. You can't challenge Oracle's employee count if you lack accurate deployment data. You can't model Microsoft's EA-to-CSP transition without understanding your current licensing position.
The reality check: most IT leaders waste 25-30% of their cloud and SaaS budgets because they lack visibility. That waste compounds during vendor transitions when every license matters for compliance and cost control.
The strategic response framework:
- Document your complete software inventory before renewal discussions start
- Identify audit exposure across all major vendors, not just the one currently negotiating
- Model alternative scenarios including cloud-first approaches and vendor alternatives
- Create budget reserves specifically for licensing changes and potential audit costs
- Establish ongoing visibility to catch compliance gaps before they become expensive problems
This is where modern IT Asset Management becomes critical. Organizations with complete visibility across software, SaaS, and cloud can respond strategically rather than reactively when vendors announce changes.
The Missing Piece: Unified IT Visibility
Here's what's different about successful organizations: they don't discover licensing problems during vendor audits or renewal negotiations. They already know their exposure because they have complete, real-time visibility across their entire IT environment.
Block 64 solves the convergence problem by providing unified visibility that traditional ITAM tools miss:
- Software inventory that catches unlicensed Oracle Java deployments before audits
- SaaS visibility that identifies Microsoft license optimization opportunities
- Cloud tracking that helps model VMware migration alternatives
- Entitlement management that ensures compliance during licensing model transitions
The difference? While other tools require months of deployment and enterprise-level complexity, Block 64 delivers first insights in 15 minutes. When three major vendors are simultaneously changing their licensing models, speed matters.
Organizations using Block 64 aren't scrambling during vendor negotiations because they already have the data they need: accurate license counts, usage metrics, and compliance documentation that stands up to audit scrutiny.
Take Control Before Vendors Force Your Hand
The 2026 licensing changes are already happening. Organizations that act now have negotiating leverage.
Ready to see what you're really running? Start your free Block 64 trial and get complete visibility across your software, SaaS, and cloud environment starting in 15 minutes or less. Because when every major vendor is changing their rules, knowing exactly what you have isn't optional—it's your competitive advantage.
Block 64 provides mid-market IT leaders with unified visibility across software, SaaS, cloud, and entitlements—eliminating blind spots that create audit exposure and budget waste. Learn how organizations are using complete IT visibility to navigate major vendor licensing changes with confidence. Visit Block64.com to learn more.