Key takeaways
- Following the Broadcom acquisition, perpetual licenses were discontinued. VMware is now licensed via a subscription model based on cores, sometimes with minimum requirements of 72 cores.
- As a result, many companies are currently seeking a VMware alternative for commercial rather than technical reasons.
- Microsoft offers three potential paths: Hyper-V (integrated directly into Windows Server), Azure Local (on-premises hardware with cloud management via Azure Arc), and a full migration to the Azure cloud.
- Hyper-V is particularly well-suited for small to medium-sized environments that are already based on Microsoft.
- Azure Local is the right fit when data must remain on-premises, but cloud-based management is desired.
- Five-step migration: inventory assessment, defining target architecture, pilot migration, phased rollout, and license cleanup.
- A realistic timeline for a migration is often several months; a pilot phase significantly reduces the risk of unexpected operational downtime.
The virtualization market has been in flux since Broadcom’s acquisition of VMware. Classic perpetual licenses have been abolished, and licensing is now handled via a subscription model per core, with a minimum of 16 cores per CPU. Although a 2025 announcement regarding a minimum purchase of 72 cores per order was withdrawn following massive criticism, the new licensing still means noticeably higher costs and a changed contract structure for many companies. Consequently, many IT managers are now specifically looking for a VMware alternative. As Baggenstos we focus intensively on Microsoft-based virtualization solutions, this article will show you why Microsoft, with Hyper-V and Azure Local, is a logical replacement and how to successfully execute a migration in practice.
Why companies are now looking for a VMware alternative
The trigger for the current willingness to switch is usually commercial rather than technical. With the shift to subscription licenses and bundling into larger packages, many companies are paying for features they do not even need, while total costs often rise significantly. Added to this is growing strategic uncertainty: those heavily dependent on a single vendor want to reduce this dependency in light of the changed contract terms. For many companies, VMware licensing has thus become the catalyst for fundamentally rethinking their own virtualization strategy.
These are the primary options for a VMware alternative
Several categories of alternatives have established themselves in the market: Microsoft-based solutions like Hyper-V and Azure Local, open-source platforms like Proxmox VE, specialized hyperconverged infrastructure providers like Nutanix AHV, and cloud-native platforms like Red Hat OpenShift Virtualization. Which option makes sense depends heavily on the existing technology stack, the team's current expertise, and the desired target architecture. This article deliberately focuses on Microsoft-based options, as they integrate particularly seamlessly into existing Windows Server and Azure environments without requiring companies to build entirely new operational expertise.
Microsoft Hyper-V as a direct VMware alternative
Hyper-V is integrated directly into Windows Server as a role, meaning it is already available to many companies without the need for a separate license. Management is handled via Windows Admin Center or Failover Cluster Manager—tools that IT teams with Windows Server experience are usually already familiar with. For companies with small to medium-sized virtualization environments that rely heavily on the Microsoft stack, Hyper-V is therefore a pragmatic and cost-effective VMware alternative.
Azure Local as a modern VMware alternative with cloud connectivity
For those seeking modern, cloud-based management in addition to pure virtualization, Azure Local offers a more comprehensive option. Azure Local also uses Microsoft Hyper-V as its hypervisor; it is built directly on this technology rather than being a standalone alternative. Azure Local continues to run workloads locally in your own data center, but manages them via the same Azure interface as cloud resources, controlled through Azure Arc. We explain how this architecture works in detail and which use cases it is suitable for in our article Azure Local: Modernizing on-premises with cloud technology. When adopting Azure Local we support you from the initial analysis through to ongoing operations.
Migration to the Azure Cloud as an alternative
Not every company wants to operate its own hardware in the long term. For workloads that are fundamentally suited to the public cloud, a full migration to Azure is a viable option. With tools like Azure Migrate, existing VMware VMs can be assessed and gradually transitioned to the Azure cloud without the need to rebuild applications from scratch. You can find more about our service portfolio for cloud migrations at Microsoft Azure as well as in our cloud infrastructure solutions.
Which Microsoft option fits which scenario
The following overview maps the three options to general use cases:
The benefits of switching to Microsoft
- Leverage existing investments: Companies already using Windows Server or Azure can build on their existing expertise instead of learning an entirely new platform.
- Centralized and hybrid management: Azure Arc and Windows Admin Center enable centralized management and monitoring of local, hybrid, and cloud-based Windows Server resources.
- Utilize existing license benefits: Depending on your contract, existing Windows Server licenses, Software Assurance, and Azure Hybrid Benefit can be incorporated into the target architecture.
- Reduced vendor lock-in: Companies already relying on Microsoft technologies can more effectively consolidate virtualization, server operations, and hybrid management within an established ecosystem.
- Phased migration: Suitable workloads can be prioritized and moved to the new platform in stages, rather than migrating the entire environment at once.
How to successfully migrate from VMware to Microsoft in practice
A migration should be approached in a structured manner rather than rushed:
- Inventory assessment: Analysis of VMware workloads, dependencies, resource requirements, network and storage configurations, backup processes, integrations, and license agreements.
- Define target architecture: Evaluation of whether Hyper-V, Azure Local, Azure, or a hybrid architecture is the right target platform.
- Pilot migration: Execution using representative, non-business-critical workloads.
- Phased rollout: Migration in defined phases, including validation and a fallback plan.
- Stabilization and optimization: Review of operations, data backup, and disaster recovery processes, as well as decommissioning of no longer required VMware licenses.
The duration of a migration depends less on the size of the company than on the number and complexity of the workloads, their dependencies, and the requirements for testing, availability, and compliance. A structured migration in controlled waves reduces the risk of unplanned operational downtime.
The role Baggenstos plays in your VMware migration
As a Microsoft Solutions Partner, we support companies from the initial inventory assessment and the selection of the appropriate target architecture through to the migration and ongoing operation of the new virtualization environment. In doing so, we consider local platforms such as Hyper-V and Azure Local as well as a move to Azure or a hybrid architecture. Which solution is best suited depends on existing workloads, technical and operational requirements, and long-term IT strategy. You can find insights into projects we have already implemented in our case studies.
Conclusion
The changes to VMware licensing following the Broadcom acquisition have prompted many companies to review their virtualization strategy. With Hyper-V, Azure Local, Azure, and hybrid architectures, Microsoft offers various options for different requirements. Which target platform is suitable depends, among other things, on which workloads must be operated locally, which are suitable for the cloud, and how strongly existing Microsoft technologies are to be integrated.
Would you like to know which Microsoft-based target architecture fits your existing VMware environment? Get contact in touch with us; we would be happy to advise you on developing your individual migration strategy.
Frequently Asked Questions
Why are so many companies currently switching from VMware to Microsoft?
The primary driver is usually the change in licensing following the Broadcom acquisition, which introduced subscription models based on core counts and, in some cases, high minimum requirements. Microsoft-based solutions are particularly well-suited for companies that already utilize Windows Server or Microsoft 365.
Is Hyper-V a full-fledged alternative to VMware?
For many small to medium-sized virtualization environments, yes. Hyper-V covers standard virtualization requirements and can be managed using familiar Microsoft tools. For highly complex enterprise needs, it is also worth taking a look at Azure Local.
How much can you save by switching from VMware?
This depends heavily on your current license size and the chosen Microsoft model. Since the new minimum core requirements disproportionately affect small and medium-sized environments, it is often worth conducting a specific cost comparison for these companies.
How does a VMware migration work?
A structured migration involves taking stock of existing assets, defining the target architecture, conducting a pilot migration with non-critical workloads, executing a phased rollout of production systems, and performing a final license cleanup and optimization.
Can I easily migrate existing VMware VMs to Hyper-V or Azure Local?
Existing virtual machines can generally be converted and migrated, though the effort involved depends on the configuration, operating system, and any VMware-specific features in use. An initial assessment will identify where adjustments are required.
What exactly has changed with VMware licensing under Broadcom?
Perpetual licenses have been discontinued; licensing is now based on a subscription model per core, with a minimum of 16 cores per CPU. A minimum purchase requirement of 72 cores per order, which had been announced for 2025, was withdrawn following significant backlash. Nevertheless, for many companies, this new licensing model represents a fundamentally different cost structure than before.
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