What Are You Really Paying To Stay With VMware?
IT Economics might seem boring. Most want to focus on the exciting and hopefully career building stuff like AI, robots, cybersecurity, quantum and so on. I’ve talked to a lot of people who since the golden arrival of IT as a Utility/Cloud/Service have believed capacity, performance and financial optimization are unrewarding as championed initiatives or for career development. And it seems many who think that way, often those entrenched in larger enterprises, are still mainly entrenched with VMware. But understanding the economics of IT, especially for an inevitable VMware exit, is how the most competitive IT shops end up returning the most business value.
Doing what you’ve always done seems easiest. No one ever really needs the risk of changing out from something that’s always worked. But if you want to get somewhere better, strolling down an easy path carved out of sheer inertia is never going to drive you to a better future. The key to transitioning is knowing when the value of change/opportunity zooms past the relative safety of a legacy position. And especially knowing how fast that seemingly safe place is slowly eroding underneath.
We’ve all heard stories about Broadcomm’s VMware licensing extortion which they can’t help but make more onerous as their legacy market leadership continues to fade. This is a classic tech story about large vendors milking huge cash cows. It’s not really Broadcomm’s fault in the sense that this is what always happens with big acquisitions where core IP is at first well entrenched (why they got bought) but “unlimited” growth opportunities have hit a wall (why they sold off). When investors see a plateau, even if there is yet enterprise growth opportunity and significant long tail revenue yet to be mined, they of course want to jump ship to shinier things (like AI!) that are gleaming with hockey stick growth opportunity.
So the VMware writing is on the wall. Although VMware server virtualization will likely never truly die, it is meandering down a similar legacy path to that of mainframes. Fundamentally, IT follows an evolutionary process based on competitively leveraging emerging newness, always shifting our target optimal architecture towards “better” adapted technologies for the current environment.
Evolutionary theory may be a bit removed from our day-to-day IT, but sound economic analysis observes and models in what directions our ecosystem is changing. We can smartly apply economic insight to predict where we should be going now with our IT priorities and investment. And if we are really prescient with our models, we can successfully strategize where we should be going next.
Economics of the VMware Exit
What are some of the IT economics driving VMware exits? If you are still sitting on a pile of VMware licenses, there are several trends you should be paying attention to here in 2026. I recently recorded a Small World Big Data interview with George Crump at Verge.io. Many of you know George was an IT storage analyst (and still keeps up Storage Switzerland). Now at Verge.IO, George knows more about the details of hyperconverged (ultraconverged!?) infrastructure than I ever will. (the full discussion is soon to be published, register here to be notified https://www.truthinit.com/index.php/channel/1880/the-new-economics-of-vmware-exit/)!
In our conversation we talked about some significant VMware exit economic factors you should be taking into account here in 2026 (in addition to the increasing VMware licensing):
- New host hardware is no longer available when you want it. Memory, Flash, GPU, etc are all facing longer and longer delivery times, rule of thumb now six to eight months depending on how well you know Michael Dell. But now you can productively reuse your current platforms especially when transitioning to a far more efficient virtualization O/S layer (imagine only 3% virtualization overhead vice 15% or more from legacy hypervisor plus storage plus cache plus…). Capacity, performance, reliability etc can all improve while operating costs (opex, like power, cooling, management) come way down. For example, if you convert an 8-node VxRail cluster into a 3-node Verge cluster, you can actually end up with more of everything IT that we care about. Smart infrastructure reuse is a huge win-win.
- Great storage is still a core challenge of (hyper) converged solutions like VMware. We talked about this almost as an aside, but actually implementing a highly performant data deduplication with a reliant global namespace means your total flash storage footprint goes much farther! And that’s in addition to VM performance, resiliency, efficiency and operating gains from better storage service.
- Data protection, e.g. Backup and Restore, can be fully consistent when transitioning. Especially with a solution like Verge if you already have Veeam. Often getting backup right is where VMware exit initiatives can stall out. If your backup doesn’t have to be transitioned at all, moving off VMware becomes almost a no-brainer (and done in hours).
There is always some risk with any large IT transition project, especially one involving storage, but we think now there is far more IT risk (and business $ loss) in staying with VMware simply out of inertia. With the right re-platforming target, both transition effort and risk in this case can be minimized to the point where end users won’t even notice the changeover (except maybe in good ways).
The Example Set by Verge.IO
Verge.IO is, of course, a VMware alternative target of high interest. They are not trying to do it all, but Verge should be high on your shortlist for due diligence along with Nutanix, Scale and ProxMox for those seeking independence (or Oracle, MS Hyper-V and Citrix XCP if you still think first of big vendors). See this blog by George Crump for some more details on the above economics and how Verge.IO specifically can help. https://www.verge.io/blog/vmwareexit/now-is-the-worst-time-to-buy-vmware-servers/
Exit Ramp Approaching!
Want some good advice? Start moving off VMware sooner. At least get some of your portfolio moving onto alternatives to start understanding the effort, the benefits, the opportunity, and the cost savings.
Just economically, the bottomline is that are a lot of gains to be had with a well planned VMware exit. We’ve introduced some increasingly significant economic motives above but there are more factors to consider when you dig deeper. Exiting VMware should not be thought of as a a retreat or a treading water kind of thing – you can greatly improve your cost structure, recognize large infrastructure returns, improve IT performance and VM service delivery, and more!