VMware to cloud migration moved from a slow-burn pattern to an urgent one in 2024 and stays that way through 2026. Broadcom's acquisition of VMware in November 2023 was followed by significant licensing changes that pushed many customers to evaluate exit options. The migration patterns split between staying on VMware-based managed cloud offerings (VMware Cloud on AWS, Azure VMware Solution, Google Cloud VMware Engine) and refactoring to native cloud compute. The cost shapes are different. This page is the 2026 cost reference for both paths.
Broadcom completed the acquisition of VMware in November 2023 and announced significant changes to the VMware portfolio in early 2024. The headline changes: the perpetual licence model was retired in favour of subscription-only; the SKU portfolio was consolidated from over 8,000 SKUs to four primary bundles (VMware Cloud Foundation, vSphere Foundation, vSphere Standard, vSphere Enterprise Plus on legacy terms); the partner programme was restructured ending the partnership for many smaller resellers; and pricing for most customers increased 50 to 400 percent at renewal.
The pricing increases produced an immediate response across the customer base. Reports from Gartner, Forrester, and customer surveys throughout 2024 indicated that 40 to 60 percent of VMware customers were actively evaluating migration paths. The dominant patterns: stay on VMware via managed cloud offerings (VMC, AVS, GCVE), refactor to native cloud, or migrate to alternative hypervisors (Nutanix AHV, Red Hat OpenShift Virtualization, Proxmox for smaller deployments). The cost-driven migration is the largest workload migration pattern of 2025 to 2027.
Each major hyperscaler offers a managed VMware-based service. The three services are structurally similar: dedicated bare-metal hosts running VMware Cloud Foundation, with the hyperscaler providing the underlying infrastructure and Broadcom (or in some cases the hyperscaler) providing the VCF stack.
VMware managed cloud services, May 2026
| Service | Operated by | Host SKU | Approx $/host/month | Notes |
|---|---|---|---|---|
| VMware Cloud on AWS (VMC) | Broadcom on AWS | i4i.metal | $10,000 to $14,000 | Existing service; repositioning as VCF on AWS |
| Azure VMware Solution (AVS) | Microsoft on Azure | AV36 | $7,500 to $10,500 | Microsoft-operated; broader Azure integration |
| Google Cloud VMware Engine (GCVE) | Google on GCP | ve2-standard-72 | $6,500 to $9,500 | Google-operated; strongest data integration |
| IBM Cloud for VMware | IBM on IBM Cloud | Various | $8,000 to $12,000 | Smaller scale; specific compliance scenarios |
| Equinix Metal VCF | Customer on Equinix | Various | $7,000 to $11,000 | Customer-operated VCF on bare-metal colocation |
Moving from on-premise vSphere to a managed VMware cloud service is structurally simple. The destination uses the same vSphere hypervisor, the same vCenter, the same VM format, the same network virtualisation (NSX), and the same storage virtualisation (vSAN). The migration mechanic is HCX (Hybrid Cloud Extension), a Broadcom tool that handles bulk vMotion, layer-2 network stretch, and live migration between source and destination.
A typical 200-VM migration to VMC, AVS, or GCVE takes 3 to 9 months and costs $400K to $1.5M including HCX licensing, migration partner labour, network re-architecture, and cutover. The per-VM migration cost is typically $2,000 to $7,500, materially lower than native cloud rehost because the VMs themselves require no refactoring. The trade-off is the ongoing run cost: the managed VMware cloud destination typically runs 1.5 to 2.5 times the cost of equivalent native cloud capacity.
Refactoring from VMware to native cloud (EC2, Azure VMs, Compute Engine) is structurally harder. Each VM must be converted to a cloud-native instance, with the host operating system, application configuration, and network attachment all reconfigured for the destination cloud model. The migration tooling: AWS Application Migration Service (MGN), Azure Migrate, Google Migrate to Virtual Machines, or third-party tools like Carbonite Migrate or Zerto.
A typical 200-VM migration to native cloud takes 9 to 18 months and costs $800K to $2.5M. The per-VM migration cost is typically $4,000 to $12,500, higher than VMware-to-VMware migration. The ongoing run cost however is materially lower: native cloud capacity with reserved instance discounts typically lands at 40 to 60 percent of equivalent VMware managed cloud capacity. The break-even between the two paths on a 3-year horizon depends on the VM count, the destination cloud, and the willingness to commit to reserved capacity.
The path choice on 3-year TCO
For customers staying on VMware (whether on-premise or via managed cloud offerings), the Broadcom licence cost is the dominant variable in the long-term cost case. Broadcom's current licensing model (as of May 2026) bundles VMware capability into four primary SKUs: VMware Cloud Foundation (the full stack including vSAN, NSX, Aria), vSphere Foundation (vSphere plus core management), vSphere Standard, and vSphere Enterprise Plus on legacy terms (for existing customers). Pricing is per-core, with subscription-only billing.
Typical licensing costs at 2026 rates: VMware Cloud Foundation at approximately $350 per core per year (1-year subscription) or $300 with 3-year commitment. vSphere Foundation at approximately $135 per core per year. The new pricing represents a 50 to 400 percent increase versus pre-acquisition pricing for most customers. For a 200-VM estate at typical 2-4 cores per VM, the VCF licence cost lands at roughly $280K to $560K per year, a significant ongoing cost that did not exist on perpetual licences.
A representative cost build for a 200-VM VMware migration with two paths shown for comparison: Path A migrates 200 VMs to Azure VMware Solution; Path B refactors the same 200 VMs to native Azure Virtual Machines. Both paths assume a 12-month programme.
Worked VMware migration cost build, Path A: 200 VMs to Azure VMware Solution, 12 months
| Cost line | Low estimate | Typical estimate | High estimate |
|---|---|---|---|
| Assessment and AVS sizing | $30,000 | $60,000 | $120,000 |
| HCX deployment and configuration | $25,000 | $50,000 | $110,000 |
| AVS host provisioning (4 hosts for 200 VMs) | $15,000 | $30,000 | $60,000 |
| Migration labour (vMotion-based) | $80,000 | $180,000 | $380,000 |
| Network re-architecture (ExpressRoute, NSX) | $45,000 | $110,000 | $280,000 |
| AVS host cost during migration (4 months parallel) | $120,000 | $170,000 | $240,000 |
| On-premise parallel running cost (4 months) | $80,000 | $160,000 | $320,000 |
| Cutover and testing | $25,000 | $60,000 | $140,000 |
| Source VMware decommission | $15,000 | $30,000 | $70,000 |
| Contingency at 15 percent | $65,000 | $130,000 | $260,000 |
| Net total estimate (Path A) | $500,000 | $980,000 | $1,980,000 |
Worked VMware migration cost build, Path B: 200 VMs refactored to native Azure VMs, 12 months
| Cost line | Low estimate | Typical estimate | High estimate |
|---|---|---|---|
| Assessment and instance sizing | $35,000 | $70,000 | $150,000 |
| Azure Migrate appliance deployment | $15,000 | $30,000 | $60,000 |
| Migration labour (per-VM refactoring) | $200,000 | $450,000 | $1,000,000 |
| Network re-architecture (VNet, NSG, firewall) | $60,000 | $140,000 | $320,000 |
| Per-VM application validation | $80,000 | $200,000 | $520,000 |
| Azure VM cost during migration (5 months parallel) | $45,000 | $90,000 | $170,000 |
| On-premise parallel running cost (5 months) | $100,000 | $200,000 | $400,000 |
| Cutover and testing | $40,000 | $95,000 | $220,000 |
| Source VMware decommission | $15,000 | $30,000 | $70,000 |
| Contingency at 15 percent | $90,000 | $200,000 | $430,000 |
| Net total estimate (Path B) | $680,000 | $1,505,000 | $3,340,000 |
Path A (AVS) typically costs $500K less than Path B (native Azure VMs) on the one-time migration. The ongoing run cost shifts the long-term comparison dramatically: AVS at $250K to $400K per month for 4 hosts versus native Azure VMs at $80K to $150K per month for equivalent capacity. On a 3-year horizon Path B typically saves $5M to $9M compared with Path A despite the higher one-time cost. The path choice depends on the customer's willingness to invest in the higher one-time refactoring effort.
VMware to cloud migration is the dominant workload migration pattern of 2025 to 2027, driven by the Broadcom licence cost increases rather than by any technology limitation. The path choice between managed VMware cloud and native cloud is the most consequential decision in the programme and is rarely reversible at sensible cost. Teams that succeed at VMware migration treat the path choice as a 3-year TCO decision, not a 12-month migration decision, and choose deliberately based on the customer's tolerance for refactoring risk versus run-cost certainty.
A. VMware-to-cloud migration cost has shifted materially since Broadcom acquired VMware in late 2023. For customers staying on VMware-based managed offerings (VMC on AWS, Azure VMware Solution, GCVE), per-host pricing typically runs $8K to $14K per month for production-tier i4i.metal or equivalent. For customers refactoring away from VMware to native cloud (EC2, Azure VMs, Compute Engine), the lift-and-shift cost is typically $3K to $8K per VM with substantially lower run-rate. A 200-VM migration typically costs $400K to $2M depending on the destination choice.
A. Broadcom's acquisition of VMware in November 2023 was followed by significant licensing changes. Broadcom retired the perpetual licence model, consolidated SKUs from over 8,000 to 4 bundles, ended the partner programme for many smaller resellers, and increased prices for most customers by 50 to 400 percent. Many customers facing 2024 to 2026 renewal cycles are evaluating exit options as a direct response. The cost-driven flight from VMware is the dominant migration pattern in 2026.
A. Yes, but with caveats. VMware Cloud on AWS (VMC) is still operated by Broadcom on AWS infrastructure. The service is being repositioned as VMware Cloud Foundation (VCF) on AWS in 2026 alongside other VCF-on-hyperscaler offerings. Per-host pricing has increased meaningfully post-acquisition; customers should validate current pricing direct from Broadcom or AWS rather than relying on pre-2024 pricing references.
A. VMware Cloud on AWS runs on dedicated bare-metal i4i.metal or i3en.metal hosts at typical $8K to $14K per host per month all-in. A single host hosts roughly 30 to 60 typical workloads depending on size. Native EC2 for the same workloads using a mixed instance mix typically lands at $4K to $9K per equivalent capacity, plus reserved instance savings of 30 to 50 percent on commitment. The trade-off is rebuild cost: native EC2 requires VM-to-instance refactoring; VMC accepts VMs as-is via vMotion.
A. Azure VMware Solution (AVS) follows a similar pricing model to VMC: dedicated AV36, AV36P, AV52, or AV64 host SKUs billed per hour. Typical production-tier AV36 hosts run roughly $6K to $11K per month each. AVS pricing is on the public Azure pricing page. Like VMC, AVS pricing has been adjusted post-Broadcom acquisition; current rates should be validated directly with Microsoft.
A. VMware-to-VMware (on-premise vSphere to VMC, AVS, or GCVE) migrations are typically the fastest cloud migration path: 3 to 9 months for a 200-VM estate. The migration is largely a vMotion exercise plus network and identity rework. VMware-to-native-cloud (vSphere to EC2 / Azure VMs / Compute Engine) takes longer because of the per-VM refactoring: typically 9 to 18 months for the same scope. The choice between paths is dominated by the customer's stance on Broadcom relationship continuity.
On-prem to AWS ->
MAP, EC2, Snowball
On-prem to Azure ->
Hybrid Benefit, FastTrack
On-prem to GCP ->
Sustained-use, BigQuery
Data centre exit ->
Multi-workload programme
AWS MGN cost ->
Native cloud rehost tooling
Azure Migrate cost ->
Native Azure migration tooling
Lift-and-shift per server ->
Per-VM cost band
10 hidden costs ->
Detailed playbook
Updated 2 May 2026