The fallout from Broadcom’s acquisition of VMware continues to reshape the enterprise IT landscape, but not in the immediate, wholesale migration many predicted. Instead of a “mass exodus,” a more measured and strategic retreat is underway, with research from CloudBolt Software revealing that 86 percent of companies are actively reducing their VMware footprint.
The initial expectation, fueled by concerns over rapidly escalating costs, was a swift departure from the virtualization giant. However, the reality has been more nuanced. While a complete abandonment of VMware hasn’t materialized, organizations are systematically unwinding their dependence on the platform, workload by workload. This shift is driven not just by price, but also by operational complexity and increasing scrutiny from executive leadership.
A Slow, Strategic Decoupling
CloudBolt’s study, surveying 302 IT decision-makers at North American enterprises with over 1,000 employees, found that only 5 percent of respondents have experienced a doubling of VMware costs. Despite this, a significant 88 percent remain concerned about future price increases, prompting a proactive approach to diversification. The process isn’t quick; the research indicates that organizations are facing an 18-24 month timeline to fully address process dependencies.
The migration process itself is unfolding in stages. Currently, 36 percent of organizations have migrated between 1 and 24 percent of their VMware environment. A further 32 percent have moved 25 to 49 percent, with 10 percent exceeding 50 percent and a small fraction (2 percent) having migrated 75 percent or more. Interestingly, 5 percent haven’t initiated any migration efforts.
Where are these workloads going? Public cloud infrastructure-as-a-service (IaaS) is the primary destination, attracting 72 percent of migrated workloads. Microsoft’s Hyper-V/Azure stack is also a popular choice, benefiting from 43 percent of migrating organizations.
Broadcom’s Strategy and the Impact on Customers
Broadcom’s acquisition of VMware and subsequent changes to licensing and product offerings are central to this shift. The company has prioritized streamlining operations and maximizing returns on its $61 billion investment. A key change was the elimination of perpetual licenses, forcing all users to adopt a subscription-based model. VMware’s extensive product portfolio has been consolidated into a smaller number of core bundles, primarily VMware Cloud Foundation (VCF).
This “all-or-nothing” approach presents a challenge for many customers, who may find themselves paying for functionality they don’t need. The consolidation, coupled with new licensing rules, has demonstrably increased costs for some organizations, particularly smaller and medium-sized businesses (SMBs).
Challenges in Migration
While the desire to reduce reliance on VMware is strong, the migration process isn’t without its hurdles. CloudBolt’s research highlights two primary challenges: multi-platform complexity (cited by 52 percent of respondents) and skills gaps (33 percent). As organizations diversify their infrastructure, they inherit the operational burden of managing multiple platforms, each with its own unique governance and operational models.
“As organizations diversify away from VMware, they inherit the operational burden of managing multiple platforms with different operational and governance models,” the report states.
A Calculated Approach for Broadcom
Interestingly, CloudBolt’s analysis suggests that Broadcom isn’t necessarily aiming to retain every VMware customer. The company’s strategy appears to be focused on maximizing value from those who remain on the platform while allowing the market to gradually diversify. According to the report, Broadcom has “done the math” and is prepared for customer churn, having built a business model that can withstand it.
Mark Zembal, CloudBolt’s chief marketing officer, summarized the current situation: “The fear has cooled, but the pressure hasn’t—and most teams are now making practical moves to build leverage and optionality—even if for some that includes the realization that a portion of their estate never moves off VMware.”
This suggests a future where VMware remains a significant player in the virtualization market, but one where its dominance is significantly diminished, and customers have greater leverage in negotiating terms and exploring alternative solutions. The “great unwind” isn’t a sudden collapse, but a slow, deliberate reshaping of the enterprise IT landscape.
