More VMware customers jumping ship as contracts wind down...
Paul Crocetti·2026-06-26·via WhatIs
Enterprises have explored new virtualization options for years. With VMware contracts ending, now's the time for many to make the change, as some vendors offer migration incentives.
The great VMware migration might finally be happening.
After Broadcom's blockbuster acquisition of VMware for $61 billion closed in November 2023, customers faced increased costs, product and licensing changes, and decreased support. However, migrating off a platform that a company has invested in for years is easier said than done, especially when the user is under contract. Now that a lot of those contracts are winding down, customers are actively seeking alternatives, many with an eye on decreasing costs.
Following the Broadcom acquisition, 72 percent of organizations reported a cost increase in their hypervisor platform because of changes in their provider's licensing model, according to research last year by Omdia, a division of Informa TechTarget.
VMware competitors are looking to capitalize on the opportunity, with some offering migration incentives. HPE is hoping to convince more customers to migrate through its platform migration program, where eligible customers can receive up to one free year of licensing.
Other vendors such as Nutanix and StorMagic, as well as open source projects including OpenStack and Proxmox, have emerged as VMware alternatives. Nutanix, for example, is also offering a migration incentive in which eligible customers receive one year of licensing free.
A Broadcom representative did not respond to a request for comment on this story.
A multiyear migration process
Several organizations at HPE Discover last week said they are planning to migrate off VMware or have already started.
Danfoss, a global industrial manufacturing company based in Denmark, is in the middle of a large-scale VMware migration. The company is transitioning its workloads to HPE Morpheus Software – VM Essentials (VME). Cost was just one reason.
"It's much more to the architectural thinking of our infrastructure, where we talk about a digital backbone across the company," said Sune Tornbo Baastrup, senior vice president and CIO at Danfoss. "Within that backbone, we want to have accessibility to workloads and data at any time and any location where we need it the most efficiently."
The VMware migration covers Danfoss' general-purpose VM landscape of about 1,100 servers. The target platform supports more than 2,500 VMs across Danfoss' data center nodes in Denmark, according to Jeppe Agerbak Christensen, senior director and head of IT infrastructure. The phased approach to the VMware migration started in spring 2025 and is expected to wrap up by the end of 2027.
"Overall, this migration is a key step in simplifying and standardizing our infrastructure while preparing for future workloads and scaling needs," Christensen wrote in an email to TechTarget. "… Our virtualization landscape had grown increasingly complex over time with many environments, limited transparency and difficulty managing consistently across sites. At the same time, costs were increasing, making the current setup less sustainable."
A large part of Danfoss' infrastructure already runs on HPE. VME plus HPE GreenLake provides versatility and preparation for AI workloads, Baastrup told TechTarget at HPE Discover.
How VME stacks up
Baastrup said he likes the vision that HPE has laid out for VME. HPE detailed new Morpheus Software capabilities at Discover, including a combination of self-service provisioning with integrated observability and operations for hybrid cloud.
The new HPE Morpheus Orchestration Copilot automates and orchestrates workload provisioning. Customers can also migrate workloads from VMware to HPE's VMs with continuous data protection through HPE Zerto Software.
HPE has a lot of the parts and pieces, said Rob Strechay, an analyst at TheCube Research and Smuget Consulting.
"The Morpheus KVM stack and container stack is not as advanced as VMware, so I think they'll lose points on things like security and other pieces, but they'll make up for it on licensing costs," Strechay said.
The real test will be how clean those migrations are at scale and whether the savings hold up once customers are in production.
Mike LeoneAnalyst, Moor Insights & Strategy
Customers say a migration sounds good on paper, but it often creates a cost "double bubble," HPE CTO Fidelma Russo said during a Discover keynote.
"You have to pay for the old platform because you're running all your applications while you're investing and migrating to the new platform," Russo said.
The platform migration program is a smart, practical way to lower the barrier to switching, said Mike Leone, an analyst at Moor Insights & Strategy.
"The real test will be how clean those migrations are at scale and whether the savings hold up once customers are in production," Leone wrote in an email to TechTarget.
'How were we going to get out of that?'
Matt Messick, CIO of the Dallas Cowboys, said his organization was in a bind last year at this time regarding VMware costs.
"The most important thing was the Broadcom situation -- how were we going to get out of that?" Messick said at an HPE Discover breakout session. That's when he found VME.
Dallas Cowboys CIO Matt Messick speaks at an HPE Discover breakout session.
The shift freed up additional funds and eventually led him to try HPE Private Cloud AI.
"It all worked out absolutely perfect," Messick said.
A VMware migration is a potential future project for the city of New Orleans, said Ross Bourgeois, director of the city's public safety support services and its Real-Time Crime Center.
"Once we're outside of our contracted period, we're going to explore all the options that are on the market," Bourgeois told TechTarget at Discover. "I suspect that there'll be a significant price increase."
Paul Crocetti is editorial director of Informa TechTarget's Infrastructure sites, which include SearchStorage, SearchDataCenter and SearchITOperations. Since starting at then-TechTarget in 2015, he has also served as editor on the SearchStorage, SearchDataBackup and SearchDisasterRecovery sites. You can reach him at [email protected] and on LinkedIn.
