Broadcom paid $61 billion for VMware in late 2023 and quickly reshaped the company’s financial models, swapping perpetual licenses for subscription bundles, and cutting back its channel partners from its programs to focus on its biggest customers. For many, these changes were a wake-up call that’s still rippling through IT departments across industries. Now a looming 2027 deadline, the scramble to stand up agentic AI and the shift to hybrid cloud are pushing VMware customers to decide whether to double down or move to a different infrastructure software for the next decade of enterprise computing.
A CloudBolt Software study found 86% of North American enterprises surveyed were actively working to reduce their VMware footprints. According to Gartner, by 2029, 55% of enterprises will migrate 100% of workloads from VMware to alternative infrastructure delivery solutions. Tesco, a UK supermarket chain, even filed a $134 million lawsuit over the perpetual license takeaway and began removing its 40,000 servers from the VMware platform.
Still, as of earlier this year, only 4% had fully gone elsewhere. The costs, complexity, and uncertainty of migration convinced many to stay put. But staying put may no longer be an option for many IT teams. Looming VMware changes and broader market pressures are pushing many of those same IT leaders to confront something bigger: what their infrastructure needs to look like for a world built around AI and hybrid cloud?
“Most people think Broadcom is costing them more,” said Nutanix President and CEO Rajiv Ramaswami.
“They raise prices by forcing customers to buy bundles they may not fully need. It has created a lack of trust. CIOs and IT teams want someone they can trust for the next 5 to 10 years. They want to work with people who take care of them and continue to innovate.”
A Hard Deadline
Broadcom set an October 2027 deadline to end support for vSphere 8, which means customers using that technology won’t receive patches or updates. Customers are encouraged to move to the VCF 9 or VFF 9 bundles of software. Depending on IT team's longer-term plans, such as supporting AI and container-based workloads across hybrid clouds, these changes may be more like complex migrations than simple upgrades.
This is happening amidst growing pressure to have agentic AI capabilities that can run across hybrid systems. Sourcing hardware continues to be challenging during a supply crunch. All of this is compounding, forcing teams to widen their aperture to understand their best options for the future. IT teams are considering whether VMware remains the right foundation for the next decade of enterprise computing, explained Steve McDowel, principal analyst at NAND Research, in an interview with The Forecast.
“As people deploy new applications, VMware is not your first choice,” McDowell said.
“There’s more awareness that VMware is not necessarily the long-term answer for new workloads.”
They recognize moving to VCF 9 isn’t a trivial lift. McDowell said organizations running thousands of workloads on VMware face a significant architectural overhaul.
Hock Tan, Broadcom's CEO, argues it’s worth it because VCF 9 delivers what private clouds have long promised but rarely achieved: a unified stack that brings compute, storage, networking, and security together under a single management layer. Broadcom's own research found that more than 90% of IT practitioners trust private cloud for security and compliance, and 70% plan to repatriate workloads from public cloud back to private infrastructure. Tan has said more than 90% of VMware's top 10,000 customers have signed up for VCF.
But VCF 9 is built specifically for private cloud at a moment when most enterprises expect to operate across multiple environments. Kearney's study found 70% of IT leaders expect their future architectures to combine on-premises, public, and private clouds.
An AI Complication
The rapid rise of AI adds more urgency and challenges. Companies have moved past pilot programs and are pushing for production systems that can act on data across the business, including agentic workflows that need GPU-dense compute and platforms capable of running virtual machines and containers side by side. Meanwhile, TrendForce says AI demand for high-bandwidth memory and DDR5 has sparked a “memory super-cycle,” with capacity shortages driving up hardware costs across the industry. That’s squeezing budgets that CIOs need to fund major migrations.
CIOs being pulled in too many directions at once, said McDowell.
“CIOs are overwhelmed,” he said. “They’re pressured by their peers across the business to rapidly embrace AI.”
McDowell isn’t convinced that VCF 9 addresses what IT teams really need to move into the AI era.
“VCF 9 closes some of the competitive gaps that VMware was suffering from, especially in integrating with AI workloads,” McDowell said.
“It doesn’t close all the gaps, and it certainly doesn’t resolve Broadcom’s bigger licensing issues. But it does give some VMware customers a little breathing room, further kicking the can down the road on adopting an alternative solution.”
The Way Forward
IT leaders are responding in different ways. Some will adapt to VCF 9's requirements in order to stay with VMware, avoiding disruptions that come from moving to a different infrastructure software.
The decision shouldn't be driven by cost or frustration alone, according to the Kearney report.
“CIOs should approach this as a strategic review rather than a pure cost exercise,” the firm wrote. “This means identifying workloads ready for containerization or modernization, building a multiyear diversification road map, and strengthening negotiating leverage through credible alternative options.”
Who’s Already Moving
Some are further along than others on reimagining their futures. Dartmouth College in New Hampshire, for example, began migrating to Nutanix in 2022 – well before the Broadcom acquisition – to build a more flexible infrastructure capable of running virtual machines and containers side by side.
And Western Union recently said it will shift up to 1,200 applications from VMware to Nutanix as part of a “period of reinvention” to become more customer-focused.
Dissatisfaction with Broadcom's pricing and licensing models isn't going away, but neither is VMware, said McDowell. He believes the platform still offers enough value to remain a core part of most infrastructure approaches, even as IT leaders rearchitect their environments for the future.
“VMware, to me, is a legacy workload management system that’s sitting in the infrastructure,” he said.
“It’s going to be there probably for as long as you and I are in the business, because IT guys figure, if it ain’t broke, don’t fix it.”
Related:
The Strategic Value of Operational Efficiency
Navigating the True Cost and Capability Gap: Nutanix vs. VMware Explained
Cloud Vendor Shakeup Puts Focus on IT Resilience
Slew of Changes Drive VMware Customers to Consider Alternatives
IT Analysts Discuss the Search for VMware Alternatives After Broadcom Acquisition
Nutanix CEO Paves Way for Those Leaving Broadcom VMware
Focus Shifts to Migration in Wake of Broadcom’s VMware Acquisition
Editor’s note: Read the Research note by HyperFRAME Research titled Driving Enterprise Transformation Beyond the VMware Migration Deadline, which states, “The Nutanix Cloud Platform is a strategic alternative for enterprises navigating VMware's impending support deadlines and licensing shifts by offering a unified, predictable operating model that consolidates traditional virtualization, containerized applications, and AI workloads across hybrid environments.”
David Rand is a business and technology reporter whose work has appeared in major publications around the world. He specializes in spotting and digging into what’s coming next–and helping executives in organizations of all sizes know what to do about it.
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