Virtualization is far from dead, but the way enterprises run it is changing fast. A looming 2027 support deadline is turning a slow-burn licensing dispute into an urgent platform decision.
Virtualization is alive and well, despite major marketplace upheaval, according to Ron Westfall, vice president of infrastructure and networking at HyperFRAME Research. But, he said, many organizations’ environments will look dramatically different a few years from now.
Gartner expects that by 2029, 55% of enterprises will migrate 100% of workloads from VMware to alternative infrastructure delivery solutions. Some of that movement has already occurred in the nearly three years since Broadcom acquired VMware, during which it phased out perpetual licenses and transitioned customers into different product bundles. Westfall sees organizations that once took virtualization for granted now face a deadline that demands a decision.
Meanwhile, a June report from HyperFRAME Research found that 57% of organizations plan to increase their virtualization budgets over the next one to two years.
In a Q&A with The Forecast, Westfall explained why he expects a looming deadline for vSphere 8 to motivate organizations to seek alternatives, if not leave VMware altogether. The vSphere 8 end-of-general-support deadline in 2027 ends patches and security updates for VMware's vSphere 8, leaving customers to move to Broadcom's VCF 9 or VFF 9 bundles or migrate to alternative hybrid infrastructure platforms.
Westfall sees these changes transforming virtualization from a “commoditized background utility” into a strategic lever that leaders must use to manage financial risk. He said more IT organizations now recognize that dependency on a single hypervisor leaves their multi-year budgets vulnerable to sudden price swings.
Some of that movement has already occurred in the nearly three years since Broadcom acquired VMware, during which it phased out perpetual licenses and moved customers into new product bundles. But it hasn't happened for many yet. A June report from HyperFRAME Research found that 57% of organizations plan to increase their virtualization budgets over the next one to two years.
Taken together, these changes are transforming virtualization from a "commoditized background utility" into a strategic lever that leaders must use to manage financial risk, Westfall wrote. Where enterprise executives once took their virtualization environments for granted, they now recognize that dependency on a single hypervisor leaves their multi-year IT budgets vulnerable to sudden price swings.
"Instead of eliminating legacy hypervisors altogether, enterprises are strategically redirecting capital toward the Nutanix Cloud Platform solution, which can co-locate traditional virtual machines alongside containers and production AI workloads," Westfall said. "Consequently, this shift transforms a forced software migration into a catalyst for infrastructure modernization that restores multi-year budget predictability and hybrid cloud portability."
Is the 2027 Deadline Different From Past VMware Changes?
This cutoff threatens core security and patch availability, not just pricing.
Many organizations have already scrambled to find alternatives amid higher-than-expected VMware renewal costs over the past several years. Westfall sees the current moment as different.
"Unlike Broadcom's initial post-acquisition shifts, which primarily caused financial friction through modified pricing models and mandatory subscription bundling, the end-of-general-support deadline introduces a severe operational countdown that threatens core baseline security and patch availability," he said.
"While past portfolio restructuring forced IT leaders into difficult short-term contract renegotiations, this technical cutoff alters an organization's multi-year risk profile by creating a hard wall for remaining perpetual licenses."
The impending deadline will elevate many organizations' virtualization predicaments from a standard licensing dispute into an urgent platform choice, Westfall said. Migrating dense vSphere footprints requires extensive lead time for architecture revalidation and workload testing, meaning leaders must decide soon if they want to be ready to make a permanent move by fall 2027.
"This hard lifecycle boundary transforms what was previously a series of reactive, cost-mitigation decisions into a proactive catalyst for deciding whether to commit long-term to Broadcom's bundled ecosystem, or execute a structured shift toward alternative hybrid infrastructure platforms," Westfall said.
How Does the Deadline Accelerate Hybrid AI?
Rather than simply replacing one hypervisor with another, Westfall said, enterprises can move toward platforms that support traditional VMs alongside containers and production AI workloads, improving portability and long-term infrastructure flexibility.
This path aligns with the findings of the June HyperFRAME Research report, which noted that enterprises already run the same share of workloads on containers and serverless infrastructure (40% total between the two) as they do on traditional VMs. Some 93% of organizations already use containers or Kubernetes in production to some extent.
AI is a major driver of the shift. According to the 2026 Enterprise Cloud Index report from Nutanix, 85% of IT executives say AI is accelerating their organization's adoption of containers in a meaningful way, and 87% expect the level of application containerization within their organization to increase over the next three years.
The vSphere 8 end-of-support deadline is forcing organizations to decide not only how to proceed with their virtualization infrastructure but also how to lay the foundation for their future AI efforts, Westfall said.
"By forcing a re-architecting of core data centers," he said, "the October 2027 deadline is unexpectedly accelerating hybrid AI deployment timelines."
What Role Do Channel Partners Play in the Migration?
Displaced resellers and multicloud partners are guiding customers through risk assessments and multi-vendor builds. Westfall said they help clients decide whether moving to a new software plaftorm makes sense and how to build systems they need now and in the future.
According to the June HyperFRAME Research report, only 12% of organizations exclusively use internal teams for infrastructure management, without any assistance from external service providers. More importantly, Westfall sees channel partners as adept at building out multi-vendor solutions that leverage existing infrastructure, control costs and meet customers' current and future needs.
"Channel partners have become the critical, unbiased intermediaries guiding IT decision makers through risk evaluations," Westfall said.
"Rather than choosing isolated software tools, organizations rely on this channel ecosystem to deploy validated, joint-vendor architectures, such as Nutanix integrated with Everpure or Cisco FlashStack solutions, which preserve existing hardware investments while establishing a modern operational plane."
The partner ecosystem has changed dramatically in the past several years, Westfall noted, with VMware eliminating thousands of resellers and ending white-label partner programs in favor of a small, elite tier of authorized integrators and service providers. He expects many of those displaced partners to work alongside dissatisfied customers over the next 14 months to build out their new environments.
"The broader channel ecosystem is being relied on more than ever before as enterprise buyers turn to displaced resellers, value-added distributors, and multicloud partners to navigate skyrocketing licensing costs, assess migration risks, and re-architect their stacks around alternatives such as Nutanix, Red Hat, or AWS [solutions]," Westfall said.
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Calvin Hennick is a contributing writer. His work appears in BizTech, Engineering Inc., The Boston Globe Magazine and elsewhere. He is also the author of Once More to the Rodeo: A Memoir. Find him on LinkedIn.
Ken Kaplan contributed to this article. He is Editor in Chief for The Forecast by Nutanix. Find him on X @kenekaplan and LinkedIn.
© 2026 Nutanix, Inc. All rights reserved. Nutanix, Inc. is not affiliated with VMware by Broadcom or Broadcom. For additional information and important legal disclaimers, please go here. Nutanix has not independently verified third-party data or commissioned research mentioned in this article.
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