What’s Happening with VMware Licensing?
For nearly two decades, VMware has powered enterprise virtualization — helping organizations run multiple virtual machines efficiently across servers and data centers.
But since Broadcom’s acquisition of VMware, customers are seeing licensing costs rise sharply and product bundles change. Some renewals now cost two to three times more than before, creating uncertainty around pricing, support, and long-term strategy.
As these shifts take hold, IT leaders are asking a familiar question: Is VMware still the right fit — or is it time to re-evaluate their virtualization platform altogether?
Why VMware Alternatives Are Gaining Attention
Virtualization remains the backbone of modern IT. It drives scalability, disaster recovery, and workload mobility across Windows Server, Linux, and containerized ecosystems like Kubernetes.
What’s changing is how — and where — enterprises run those virtual environments. Rising licensing fees, vendor lock-in, and limited deployment flexibility are forcing organizations to rethink long-standing VMware dependencies in favor of cloud-connected, cost-effective virtualization solutions.
Across industries, IT leaders are evaluating several VMware alternatives such as:
- Microsoft Azure VMware Solution (AVS): the preferred path for many enterprises seeking to migrate existing VMware workloads “as is” while gaining the scalability, security, and automation of Azure’s cloud platform.
- Microsoft Hyper-V: ideal for organizations integrating with existing Windows Server infrastructure.
- Nutanix AHV: strong for hyperconverged (HCI) scalability and node-based expansion.
- Proxmox VE and KVM: open-source options offering customization and licensing flexibility for cost-conscious teams.
- Red Hat Virtualization (RHV): suited for Linux-centric and automated enterprise environments.
Each of these platforms offers value, but Azure stands apart for its ability to deliver the familiarity of VMware ESXi, vCenter, and vSphere — combined with the agility, data protection, and innovation of the cloud. It gives organizations a clear path to modernization, reducing complexity, unlocking AI, and enhancing ease of use while building an enterprise-grade foundation for digital transformation.
What’s Driving the Shift Away from VMware
Three major forces are reshaping the virtualization market in 2025 — and together, they’re accelerating a move toward cloud-based platforms like Microsoft Azure:
- Escalating licensing costs. Broadcom’s new VMware licensing model is pushing IT budgets to their limits, prompting organizations to seek more predictable, cost-effective options.
- Evolving workloads. Modern applications demand automation, high availability, and faster replication across clouds — capabilities that are built into Azure’s enterprise-level virtualization platform.
- Hybrid and multi-cloud strategies. Many organizations now prioritize interoperability between on-premises, private, and public clouds. Azure’s open ecosystem and seamless VMware compatibility make it the preferred foundation for hybrid IT and multi-cloud deployments.
For many enterprises, Azure has become the logical next step. It offers the scalability of the cloud, the familiarity of VMware, and the innovation of Microsoft’s AI and automation ecosystem — all while reducing vendor lock-in, downtime, and long-term operating costs.
Why Azure VMware Solution Stands Out
For enterprises that still depend on VMware’s ecosystem — vCenter, vSphere, ESXi — Microsoft’s Azure VMware Solution (AVS) provides a balanced path forward.
AVS provides one of the best VMware alternatives because it lets organizations lift and shift VMware workloads “as is” to Azure, maintaining full hypervisor compatibility while eliminating on-prem hardware costs.
Once workloads move to AVS, organizations gain:
- Scalability and high availability across Azure regions.
- Automation and load balancing through Azure management and REST API integration.
- Seamless integration with Microsoft 365, Power Platform, and Dynamics 365.
- Reduced downtime through live migration, replication, and built-in data protection.
It’s the same VMware functionality — backed by Azure’s cloud performance, security, and global scale.
Microsoft Funding and Incentives
As a Microsoft Solutions Partner with Azure VMware Solution (AVS) expertise, UDT helps customers take advantage of Microsoft-funded programs that reduce migration costs and simplify the transition from on-premises VMware environments to Azure.
Through UDT’s partnership with Microsoft, eligible organizations can access:
- 20% discount on new one-, three-, or five-year Reserved Instances purchased before December 31, 2025, with price protection and predictable costs locked in for up to five years.
- License portability for existing infrastructure in Windows Server and SQL Server workloads with Software Assurance — allowing customers to move to Azure VMware Solution without additional licensing costs, plus receive free Extended Security Updates for older versions.
- Migration assistance through the Azure Migrate and Modernize program, providing technical guidance, resources, and funding to streamline planning and execution.
- Azure credits of up to $240,000 for qualifying new AVS Reserved Instances — credits that can also be applied toward other Azure services to modernize additional workloads.
These funding and incentive programs are available to UDT customers through our Microsoft partner channel, ensuring that migrations are both cost-effective and strategically aligned with long-term modernization goals.
The Hidden Costs of Standing Still
Choosing to stay on VMware without evaluating alternatives can create hidden expenses and operational bottlenecks:
- Hardware refresh cycles and power costs in data centers.
- Maintenance downtime during patching and upgrades.
- Limited scalability for modern virtual desktops (VDI) and enterprise workloads.
- Complex licensing structures that increase long-term costs.
By migrating to AVS or another modern virtualization platform, organizations can streamline operations, strengthen disaster recovery, and enhance resilience — without disrupting users or applications.
How UDT Helps You Modernize Without Disruption
As a Microsoft Solutions Partner with deep virtualization expertise, UDT helps clients evaluate and execute the right modernization strategy.
Our team delivers:
- Virtualization assessments to compare VMware alternatives and identify funding eligibility.
- Migration planning and execution that minimizes downtime and protects critical data.
- Architecture design for hybrid, hyperconverged (HCI), and cloud environments.
- Ongoing optimization to improve automation, scalability, and ease of use.
Because UDT participates in Microsoft’s AVS and Azure Migrate programs, our clients often gain access to exclusive funding, technical expertise, and streamlining tools that accelerate migration and reduce risk.
Preparing for the Next Era of Virtualization
The future of virtual environments is hybrid, AI-enabled, and cloud-connected. Whether you choose Azure VMware Solution, Microsoft Hyper-V, Nutanix AHV, or Proxmox VE, the goal is the same — simplify operations, enhance data protection, and eliminate vendor lock-in.
With the right plan, organizations can reduce licensing costs, improve high-performance computing, and build a resilient, enterprise-grade virtualization ecosystem that scales across clouds, nodes, and operating systems.
If your organization is evaluating VMware alternatives or planning a move to the cloud, now is the time to take a closer look at what Azure and UDT can do for you.
Whether you’re ready to migrate or still exploring your options, UDT can guide you every step of the way, helping you navigate today’s changing virtualization landscape with clarity and confidence.
