Published October 19, 2026
Server virtualization software lets one physical server run many virtual machines. A hypervisor pools the server's processing, memory and storage and allocates them among those machines, and each virtual machine contains its own operating system. This edition covers the platforms organizations run in their own data centers.
Where the market stands
Broadcom completed its acquisition of VMware on November 22, 2023.
On December 11, 2023, VMware announced the move from perpetual licenses to subscriptions. Standalone products reached end of availability. The portfolio became two subscription offers: VMware Cloud Foundation (VCF) and VMware vSphere Foundation (VVF).
Broadcom supports existing support contracts until they end. Renewals are on the new subscription portfolio.
What a VMware subscription includes
Both offers are licensed per core, with a minimum of 16 cores per processor. Every core on a licensed server counts, including cores disabled in the BIOS.
VCF includes vSphere, vSAN, NSX, VCF Operations and VCF Automation. It carries 1 TiB of vSAN capacity per licensed core. VVF includes vSphere and carries 0.25 TiB of vSAN capacity per licensed core.
Version 9 and later adds a compliance condition. Customers must send Broadcom a regular, verified report of their installed base. If the report is late or altered, management features can be degraded or blocked, and support, including updates, can be suspended.
General support for vSphere 7 ended on October 2, 2025. Broadcom says vSphere 8 is supported until October 2027.
If you run vSAN and NSX, price VCF against the cost of replacing them. If you run neither, compare VVF and the alternatives on the hypervisor alone.
Four ways forward
The choices fall into four paths. Each path has more than one product.
- Stay with VMware. VCF or VVF on the terms above. An estate still on vSphere 7 needs an upgrade as well as a renewal to stay in general support.
- Move to hyperconverged infrastructure. Nutanix, Microsoft Azure Local and Scale Computing combine the hypervisor and storage in one platform. Nutanix also supports external arrays: Dell PowerFlex since April 2025 and Everpure (formerly Pure Storage) FlashArray since December 2025. Nutanix says Dell PowerStore support is in early access and NetApp AFF and FAS support is planned. Azure Local supports external SAN storage at a higher price tier.
- Adopt an open-source hypervisor. Proxmox VE is licensed under the GNU AGPLv3. Oracle says Oracle Virtualization, which includes Oracle Linux Virtualization Manager, built on the oVirt project, has no license cost. Vates says XCP-ng has no license fees. Each vendor sells paid support.
- Run virtual machines on Kubernetes. Red Hat OpenShift Virtualization runs virtual machines alongside containers on one platform. Red Hat also sells OpenShift Virtualization Engine, an edition for virtual machines only.
Veeam Backup & Replication 13 protects Nutanix AHV, Proxmox VE, Scale Computing HyperCore, XCP-ng, oVirt KVM, Azure Local and Red Hat OpenShift Virtualization, as well as VMware vSphere and Microsoft Hyper-V.
What each path costs and requires
- Nutanix. Nutanix Cloud Infrastructure is licensed per physical CPU core, on terms of 1 to 5 years. The license must cover every core in the cluster. Licenses move across hardware platforms. The licensing page lists no prices.
- Azure Local. Billed through Azure per physical core, with no minimum. The standard tier covers hyperconverged deployments of up to 16 nodes. Microsoft's retail price list sets the standard host fee at $0.33 per core per day, about $10 per core per month. Deployments with external SAN storage or multiple racks use a higher tier at $0.667 per core per day. The first 60 days are free. A system must connect to Azure at least once every 30 days for billing.
- Windows Server guests on Azure Local. A Windows Server subscription costs $23.30 per physical core per month and covers unlimited guests. Customers with Windows Server Datacenter and active Software Assurance can instead use Azure Hybrid Benefit, which waives both the host fee and the Windows Server subscription on the standard tier only.
- Proxmox VE. Subscriptions are priced per CPU socket per year, in four tiers: Community, which is for non-production use, Basic, Standard and Premium. Proxmox publishes the prices in euros. Each major version is supported while its Debian base has security support, about 3 years. Proxmox VE 9 shipped in August 2025. Proxmox VE 8 reached end of life in August 2026.
- Oracle Linux Virtualization Manager. Support comes with an Oracle Linux Premier Plus subscription. It covers the KVM host and as many Oracle Linux guests as the customer runs on it. Oracle Linux support runs for ten years from the release of each major version.
- XCP-ng. Vates sells support per host per year in its Pro and Enterprise tiers, and as a flat annual fee for up to 3 hosts in its Essential and Essential+ tiers.
- OpenShift Virtualization Engine. Subscribed per bare-metal node, whatever the number of sockets or cores. Each subscription covers unlimited virtual machines on that host. It cannot run application containers. Red Hat Enterprise Linux guests need a separate subscription.
Migration tools the vendors provide
- Nutanix Move migrates workloads from vSphere, Hyper-V and AWS to Nutanix. Since April 2026, Nutanix also offers zero-copy, in-place conversion from VMware vSphere Virtual Volumes to AHV disks.
- Azure Migrate moves VMware virtual machines to Azure Local without installing agents on them. The disks stay on premises. Only metadata and replication state are stored in Azure. It needs VMware's Virtual Disk Development Kit (VDDK) 8.0.0 to 8.0.2, which Azure Migrate does not provide.
- SC//Migrate, launched by Scale Computing in August 2024, moves workloads from VMware to Scale Computing.
- The Proxmox VE import wizard imports virtual machines from ESXi. Proxmox tested it with ESXi 6.5 to 8.0. It cannot import disks on vSAN, which must move to another datastore first.
- Xen Orchestra V2V migrates VMware virtual machines to XCP-ng. The source keeps running during the first copy, and only blocks changed since then move at cutover.
- Red Hat's Migration Toolkit for Virtualization moves virtual machines to OpenShift Virtualization from VMware vSphere, Red Hat Virtualization, OpenStack and OVA files created by vSphere.
The cost of leaving
Plan for more than converting virtual machines. Backup, recovery, monitoring, automation and runbooks all change with the platform.
Run the move in phases. Assess the estate and choose a destination. Pilot conversions on representative workloads. Migrate in waves while VMware stays licensed as a fallback. Then decommission and right-size. Set the length of each phase from what the pilot shows.
Build a three-year comparison. Count subscriptions, conversion, re-tooling of backup, recovery and monitoring, retraining, hardware and operating staff. Subtract the VMware renewal avoided and any storage-array savings. If the migration will run past October 2027, the fallback needs a vSphere version that is still in support.
Questions to settle first
Settle these before choosing a path.
- Which workloads depend on NSX, vSAN or VMware automation, and what replaces each one?
- Which of today's virtual machines will be containers or in public cloud before the hardware is depreciated?
- Does the backup product you run today support the destination, and at which version?
- What does the pilot have to prove before a cutover date is set?
Vendor perspectives
Vendor perspectives in State of Play are not paid opinions and do not influence inclusion in Buyer Guides.
What changed in the last 12 months
The virtualization market is evolving around three major trends. First, organizations are increasingly seeking open-source alternatives that reduce vendor lock-in and geopolitical dependencies. Independent, European-developed solutions like Vates VMS offer greater control over critical infrastructure. Second, AI adoption is accelerating datacenter investments, increasing demand for flexible, cost-efficient infrastructure platforms. Third, rising hardware costs are encouraging organizations to extend server lifecycles. Vates VMS supports a broad range of standard x86 hardware, allowing businesses to modernize their virtualization stack without necessarily replacing existing servers. For CIOs, the priority is shifting beyond licensing costs toward technological independence, hardware flexibility, and predictable long-term economics.
Who it is the right choice for
Vates VMS is designed for organizations seeking a reliable, enterprise-supported, open-source virtualization platform with predictable costs and greater infrastructure independence. It is particularly well suited for mid-sized and large enterprises, public institutions, educational organizations, healthcare organizations and cloud or managed service providers. Whether migrating from VMware, diversifying their infrastructure, or extending existing hardware lifecycles, organizations benefit from an integrated virtualization stack combining centralized management, backup, disaster recovery, automation, Kubernetes support and professional support, including 24/7 coverage for mission-critical environments.
Who would be better served by a different approach
Organizations heavily dependent on VMware-specific technologies, such as NSX or proprietary automation frameworks, may benefit from maintaining those environments until migration becomes justified. Similarly, highly specialized AI training workloads requiring maximum GPU performance and direct hardware access may be better suited to bare-metal infrastructure. We believe infrastructure diversity is a strength. Vates VMS does not need to replace every existing platform to deliver value. The goal is to choose the right technology for each workload.
What buyers underestimate
The biggest challenge is rarely deploying the hypervisor itself, but adapting the broader operational ecosystem. Virtualization environments are deeply integrated with storage, networking, backup, and automation systems. Buyers often underestimate the effort required to adapt these dependencies and validate workload compatibility. The human factor is equally important. IT teams must become familiar with new technologies, workflows, and operational practices. At Vates, we recommend phased migrations, starting with a representative proof of concept. Beyond technical migration tools like Xen Orchestra's V2V, training, certification, and professional services such as Technical Account Management (TAM) and consulting help organizations build internal expertise, accelerate adoption, and ensure long-term operational success.
How it is priced, and what makes the cost grow
Vates VMS uses a per-host subscription model, independent of CPU cores or VM count. Our open-source platform is available for free, with commercial subscriptions starting at $2,000/year for up to three hosts. Pro starts at $1,000/host/year, while Enterprise starts at $1,800/host/year with 24/7 support. Costs typically increase when customers add physical hosts, upgrade their support level, or purchase additional professional services. Hardware upgrades and higher VM density do not increase licensing costs.
What ships in the next 12 months
Over the next 12 months, we're focusing on major innovations: - VMK (Vates Management Kubernetes): integrated Kubernetes cluster management. - Microsegmentation: advanced network isolation and security controls. - TWINSTOR: high availability for two-node infrastructures, without requiring a third host or dedicated shared storage. - Xen Orchestra 6: expanded self-service, access control, and infrastructure management capabilities. Backed by our recent €30 million funding round, these developments aim to make open-source virtualization more versatile, secure, and accessible to organizations of all sizes.
Also invited: Microsoft Hyper-V / Azure Local, Nutanix, Oracle Linux Virtualization Manager (KVM), Red Hat OpenShift Virtualization, Scale Computing Platform (SC//HyperCore).
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