For over two decades, VMware has remained a leading provider in the infrastructure virtualisation space. Its flagship products, including VMware ESX/ESXi and vSphere, have been widely adopted by organisations across the globe. Together, VMware and Microsoft maintain a dominant position in the global infrastructure virtualisation market, with VMware leading the way. Many of the world’s largest enterprises rely on VMware to support their critical business systems and workloads.
Acquisition by Broadcom and key changes
In 2023, VMware was acquired by Broadcom, resulting in significant changes to VMware’s product offerings, licensing, and operational model. The main changes include:
- Licensing model update: VMware has transitioned from a perpetual licensing model to a subscription-based pricing structure. The sale of perpetual licences, as well as associated support and subscription renewals, has been discontinued.
- Product portfolio rationalisation: VMware has streamlined its Cloud Infrastructure suite to just two core SKUs. Previously available standalone offerings have been phased out and are no longer sold separately. The current offerings include:
- VMware Cloud Foundation (VCF): A scalable and flexible private cloud IaaS platform, which includes vSphere, vSAN, NSX, and Aria.
- VMware vSphere Foundation (VVF): A simplified enterprise-grade platform for managing workloads, incorporating vSphere, vSAN, and Aria.
Both VCF and VVF can be enhanced with additional services to expand their functionality. VVF is targeted at mid-sized and smaller organisations, while VCF is intended for large enterprises seeking to run business-critical and next-generation cloud-native applications in a hybrid cloud environment.
Strategic options for VMware customers
Following Broadcom’s acquisition and the subsequent changes, many organisations are reassessing their VMware strategy. The main options being considered include:
- Retain: This approach involves adopting VMware’s subscription-based pricing. It is suitable for organisations where technical complexity or commercial constraints make migration to an alternative impractical.
- Replatform/Migrate: Organisations may choose to migrate to managed VMware services offered by major cloud providers such as Azure VMware Solution (AVS), VMware Cloud on AWS (VMC), or Google Cloud VMware Engine (GCVE). This option reduces operational overhead and avoids the need to modify the application layer, simplifying the overall transition to the cloud.
- Replace: Some organisations may opt to replace VMware with platforms such as Microsoft Hyper-V, Nutanix, or OpenStack. This route requires detailed planning and execution, as workloads must be migrated to a new environment, often with complex dependencies.
- Rearchitect: This strategy involves redesigning applications hosted on VMware to run on cloud-native platforms. These may include Kubernetes-based container-as-a-service (CaaS) offerings such as Azure Kubernetes Service (AKS), Amazon Elastic Kubernetes Service (EKS), or Amazon Elastic Container Service (ECS), as well as serverless solutions like Azure Functions, AWS Lambda, and Google Cloud Run. This approach suits organisations committed to long-term cloud-native adoption and modernisation.
Cloud-based virtualisation services, such as Azure, AWS EC2, and Google Compute Engine, remain viable options for modernising infrastructure.
Key takeaways
The transformation of VMware workloads is becoming an urgent priority for many organisations, driven by rising costs, licensing changes, and the operational impact of Broadcom’s acquisition. Two primary migration strategies are currently gaining traction:
- Migrating to VMware solutions on cloud platforms: Transitioning to cloud-hosted VMware environments—such as AVS, VMC, or GCVE—enables organisations to leverage cloud scalability while maintaining their existing VMware-based application environments, thus minimising disruption.
- Rearchitecting VMware applications using cloud-native technologies: This option requires redesigning applications using containers or serverless services. Although this approach is more complex, it positions organisations for long-term agility and alignment with modern cloud architecture.
Grant Thornton Bharat’s role in your VMware transformation
We support organisations throughout their entire VMware transformation journey. This includes conducting environment assessments, developing migration strategies, and executing transitions to cloud platforms such as AVS, VMC, and GCVE. Post-migration, we provide ongoing support and operations management to ensure long-term stability. Our goal is to help organisations achieve efficient, sustainable transitions that align with their broader IT strategies.
Tanya Khatri, Senior Executive, Grant Thornton Bharat, has also contributed to this article.
