Gartner’s warning that VMware could lose roughly a third of its workloads to hyperscalers by 2028 has snapped the industry into high alert, but parsing the numbers, the causes, and the practical options for IT teams shows a market in rapid re‑arrangement rather than an immediate collapse. The headline — that VMware may shed about 35% of workloads over the next few years — comes amid sweeping Broadcom licensing and partner‑program changes that have effectively redirected how customers obtain, consume, and renew VMware software, and has accelerated migrations to hyperscalers, Nutanix, and other alternatives. This article consolidates the reporting, validates technical claims where possible, and lays out realistic migration pathways, costs, and risks for Windows‑centric enterprises facing the change.
Market turbulence began in earnest after Broadcom’s acquisition of VMware and the subsequent reshaping of licensing, reseller rules, and partner programs. Broadcom’s changes include ending the old VCSP/white‑label paths, moving to an invitation‑only Cloud Service Provider program and reducing the breadth of reseller tiers — actions that directly affect Service Providers and any customer who depends on them for VMware subscriptions and renewals. Multiple outlets and briefings confirm an invite‑only VCSP rollout scheduled to take effect on November 1, 2025, and the existing white‑label and registered resellers model being shut down with transaction limits after October 31, 2025. (heise.de)
Gartner analysts — led in press coverage by Vice President Julia Palmer — told audiences that these commercial changes are nudging customers toward the public clouds (which Gartner characterizes as “proper cloud”) and will materially change hypervisor choices over the coming years. Reported analyst estimates in vendor and industry coverage suggest somewhere between roughly 30% and 35% of VMware’s installed base could shift away, depending on the source and what exactly is being measured (total customers, workloads, or a portion of each customer estate). Those numbers are now being cited by market commentators, vendor briefings, and financial analysts — but the exact figure varies across public reports and should be treated cautiously. (sdxcentral.com)
Nutanix’s appeal:
That said, Broadcom’s commercial moves (partner consolidation, license portability changes, subscription focus) are the very drivers that pushed some customers out. The result is a tactical tug‑of‑war: Broadcom bets on fewer, bigger VCSP partners and VCF deployments; hyperscalers and alternative vendors are targeting the many SMB and mid‑market customers and the portions of large enterprises that prefer consumption models.
Acknowledgment: This feature synthesizes reporting from analyst briefings, vendor statements, industry trade reporting, and technical documentation to offer a pragmatic, Windows‑centric guide to the VMware era’s next chapter. Specific claims that vary between outlets — especially headline percentages of displacement — have been noted and flagged for verification; decision‑makers should seek contract details and vendor‑level proofs when making high‑impact migration choices.
Source: SDxCentral VMware to lose third of workloads to hyperscalers: Gartner
Background and overview
Market turbulence began in earnest after Broadcom’s acquisition of VMware and the subsequent reshaping of licensing, reseller rules, and partner programs. Broadcom’s changes include ending the old VCSP/white‑label paths, moving to an invitation‑only Cloud Service Provider program and reducing the breadth of reseller tiers — actions that directly affect Service Providers and any customer who depends on them for VMware subscriptions and renewals. Multiple outlets and briefings confirm an invite‑only VCSP rollout scheduled to take effect on November 1, 2025, and the existing white‑label and registered resellers model being shut down with transaction limits after October 31, 2025. (heise.de)Gartner analysts — led in press coverage by Vice President Julia Palmer — told audiences that these commercial changes are nudging customers toward the public clouds (which Gartner characterizes as “proper cloud”) and will materially change hypervisor choices over the coming years. Reported analyst estimates in vendor and industry coverage suggest somewhere between roughly 30% and 35% of VMware’s installed base could shift away, depending on the source and what exactly is being measured (total customers, workloads, or a portion of each customer estate). Those numbers are now being cited by market commentators, vendor briefings, and financial analysts — but the exact figure varies across public reports and should be treated cautiously. (sdxcentral.com)
What changed: Broadcom’s licensing and partner moves
The concrete changes
- Broadcom has stopped selling perpetual VMware licenses and shifted VMware to a subscription/term model, removing older perpetual support and subscription (SnS) sales. This is a structural change with long tail effects for procurement and renewal cycles. (arstechnica.com)
- The VMware Cloud Service Provider (VCSP) program and white‑label reselling were reworked into a much smaller, invite‑only model; non‑invited partners received non‑renewal notices and may not sign new contracts after the transition period. The white‑label option is being discontinued. (heise.de)
- Broadcom is also consolidating reseller tiers and increasing qualification thresholds, effectively removing the “Registered” tier and focusing on larger partners capable of operating VCF‑centric private clouds. (crn.com)
Why this matters to customers
- Customers that previously bought VMware through a local CSP or reseller may now have to buy licenses directly from Broadcom or work through a smaller set of authorized VCSPs. That breaks many service bundles and can increase friction for renewals, managed services, or small‑to‑mid‑size hosting scenarios. (techzine.eu)
- Partner consolidation reduces pricing competition and bargaining leverage for smaller customers and partners. Where previously smaller CSPs could offer white‑label VMware services, many of those pathways vanish — creating migration pressure and potential service interruptions at contract renewal points. (arstechnica.com)
Gartner’s headline: “Lose a third of workloads” — what does that mean?
Parsing the 35% claim
Press coverage quotes Gartner analysts forecasting material displacement of VMware workloads to hyperscalers and alternative stacks. Specific phrasing varies by outlet: SDxCentral reported a Gartner‑linked figure of 35% of workloads moving away by 2028; other reprints and vendor reprints reference ~30% of customers or large fractions of workload portfolios shifting over time. Gartner’s broader guidance is consistent: cloud migration will accelerate through 2028, and organizations are evaluating alternatives to VMware’s on‑prem hypervisor stack. Because the figure appears in several forms across vendor communications and media, the exact percentage should be seen as an industry estimate derived from analyst conversations — directionally meaningful but not a single audited data point. Flag: the precise “35% by 2028” number is reported in press coverage but is not (in publicly accessible form) traceable to a single Gartner report that is freely available to readers. Cross‑checking multiple analyst and trade reports shows consistent concern about substantial displacement but not perfect numerical agreement. (sdxcentral.com)The underlying drivers Gartner cites
- Commercial friction: license model changes, higher renewal costs, and partner‑model constraints make hyperscaler migration commercially attractive. (crn.com)
- Cloud economics & modernization: hyperscalers offer consumption models, integrated managed services, and native AI tooling that accelerate modernization for many workloads. Gartner’s broader cloud predictions (for example, the 70% of workloads running in cloud environments by 2028) support the idea that overall workload movement to cloud will be substantial. (techrepublic.com)
- Customer churn to competitive on‑prem offerings: firms like Nutanix are actively onboarding former VMware customers with simplified licensing and HCI propositions. Nutanix itself reported hundreds of net new customers that it says migrated away from VMware, and market analysts like William Blair have stated market research estimates that up to 30% of VMware’s installed base could eventually switch. (sdxcentral.com)
Where workloads are going: hyperscalers vs. alternative on‑prem stacks
Hyperscalers (Azure, AWS, Google Cloud)
The largest hyperscalers are actively courting VMware customers with incentives, licensing alignment, and managed VMware offerings.- Microsoft: Azure has expanded incentives and has a mature Azure VMware Solution (AVS) that runs VMware clusters on dedicated Azure hardware. AVS cluster sizing constraints are an important technical detail: AVS clusters provision between 3 and 16 ESXi hosts per cluster with up to 12 clusters (96 hosts) per private cloud, which can be a constraint for very large single‑cluster VMware estates and is worth considering when sizing migration routes. Microsoft also promotes Azure Migrate, Azure Arc, and hybrid features to ease lift‑and‑shift and modernization phases. (learn.microsoft.com)
- Google: Broadcom has named Google Cloud as a partner for some VCF licensing uses; Google also hosts managed VMware offerings and promotes migration pathways. Broadcom’s strategic partner choices have further signaled that Broadcom is willing to work with some hyperscalers while restricting reseller channels. (news.broadcom.com)
- AWS: AWS continues to host VMware Cloud but has been impacted by Broadcom’s decision to centralize license distribution. That changed the commercial dynamics around direct AWS distribution. (arstechnica.com)
- Rapid scalability, managed services, and integrated AI/analytics tools.
- Potentially simpler licensing bundles (when providers include VMware into their pricing) and offsetting incentives like reserved pricing.
- Offload of operational overhead: patching, telemetry, multi‑region replication.
- Hyperscalers can create new forms of vendor lock‑in and require re‑architecting to fully extract cloud‑native benefits.
- Technical constraints such as AVS cluster maximums might require architectural rework for very large estates. (learn.microsoft.com)
Nutanix and on‑prem hypervisor alternatives
Nutanix’s AHV and HCI platform have become a frequent named alternative in vendor and analyst coverage. Nutanix has publicized significant customer additions and claims to have onboarded hundreds of former VMware customers in recent quarters. Equity research and market reports circulating around industry earnings also cite estimates that up to ~30% of VMware’s installed base might consider moving to other vendors. (sdxcentral.com)Nutanix’s appeal:
- Familiar HCI and simplified operations for many on‑prem estates.
- Lower direct hypervisor licensing cost for customers that can move away from VMware vSphere.
- Packaging and migration tools (Nutanix Move) that can speed conversions.
- Migration complexity is non‑trivial — large customers often report multi‑year transition windows.
- Nutanix AHV is less cloud‑native out of the box compared with public cloud and may require different operational skillsets.
Red Hat / OpenStack / KubeVirt
Gartner and others list Red Hat solutions for customers who want open options, but analysts also warn of skills shortages and integration complexity for OpenStack and KubeVirt alternatives. These platforms are strong for organizations with in‑house Linux and container expertise but present adoption costs for many Windows‑centric shops. (sdxcentral.com)VMware’s own countermeasures: VCF 9.0 and price transparency
Broadcom and VMware have emphasized VMware Cloud Foundation (VCF) 9.0 updates focused on simplifying deployment, management, and multicloud operations for enterprises that prefer private clouds. Broadcom has promoted "cost transparency and cost control" messaging around VCF 9.0, positioning it as an on‑prem pathway — and in commercial messaging, Broadcom argues VCF is meant to be competitive with hyperscalers for certain workloads and regulatory cases. (sdxcentral.com)That said, Broadcom’s commercial moves (partner consolidation, license portability changes, subscription focus) are the very drivers that pushed some customers out. The result is a tactical tug‑of‑war: Broadcom bets on fewer, bigger VCSP partners and VCF deployments; hyperscalers and alternative vendors are targeting the many SMB and mid‑market customers and the portions of large enterprises that prefer consumption models.
Practical timeline and migration complexity
How fast can customers move?
- Gartner analysts caution that a full migration away from VMware can take years for medium‑to‑large enterprises. Analysts have recommended staged approaches and have noted multi‑year contractual tail and application modernization timelines. Broadly, a 3‑year migration window is often cited as a reasonable planning horizon for large estates. This aligns with customer reports of migrations taking 12–24 months for substantial fractions of an estate and can be longer when refactoring is required. (sdxcentral.com)
Migration pathways (practical steps)
- Inventory & classification: identify workloads by criticality, data gravity, and regulatory constraints. Prioritize those that are easiest to re‑host or that benefit most from cloud native services.
- Proof of concept: migrate a pilot group of VMs to either a hyperscaler managed VMware service or to an alternative hypervisor like Nutanix AHV using migration tools (VMware HCX, Nutanix Move, Azure Migrate).
- Modernize incrementally: for long‑lived workloads, consider replatforming into PaaS or container services once the core lift‑and‑shift is stable.
- Cutover and rollback planning: maintain operational runbooks and rollback steps — expect networking, identity, and storage subtleties to surface during any cutover.
- Governance & cost controls: apply cloud cost management tools if moving to hyperscalers and enforce security posture using Arc/Entra/Defender or equivalents for hybrid governance. (learn.microsoft.com)
Financial and legal fallout: customer complaints, lawsuits, and regulator attention
Broadcom’s commercial model has triggered public complaints, partner fallout, and at least one high‑profile legal action (for example, retail and enterprise plaintiffs citing contract disputes over perpetual licensing and support). European trade groups have also petitioned regulators over potential anti‑competitive effects. These commercial and legal pressures add to customer uncertainty and can shape migration timetables as customers wait for clarity or legal outcomes. (techradar.com)Strengths, weaknesses, and risk checklist for IT decision‑makers
Strengths in the current market
- Choice: Customers now have clearer alternatives — hyperscalers with managed VMware or cloud‑native stacks; Nutanix and HCI vendors for on‑prem modernization; and Red Hat/OpenStack for open architectures. (sdxcentral.com)
- Incentives & tooling: Hyperscalers and migration tools (Azure Migrate, HCX, Nutanix Move) make many migrations feasible without full application rewrites. (learn.microsoft.com)
Key risks and weaknesses
- Commercial uncertainty: Rapid partner and licensing changes mean renewal points are high‑risk — unexpected price bumps and partner deauthorizations can force reactive decisions. (arstechnica.com)
- Operational complexity: Large VMware estates are not one‑button migrations. Dependencies, licensing entanglements, and specialized hardware (GPU/AI workloads) complicate moves.
- Vendor lock‑in vs re‑lock: Moving to a hyperscaler trades one kind of lock‑in (on‑prem stack) for another (cloud provider ecosystems and services). Multi‑cloud governance and exit planning are essential. (techrepublic.com)
A short decision checklist
- Confirm your VMware contract end dates and what licenses/perpetual entitlements remain.
- Model TCO for on‑prem VCF, Nutanix HCI, and hyperscaler options including operational staff costs, power/space, and GPU infrastructure if applicable.
- Run a sandbox migration for a representative workload group with a rollback plan.
- Ensure compliance and data‑sovereignty needs are satisfied (private cloud/VCF or sovereign hyperscaler options).
- Negotiate with multiple providers early — hyperscalers and larger partners will respond to committed migration plans.
What this means for Windows workloads and Windows‑centric organizations
Windows shops have unique considerations: VM sprawl tied to legacy Windows Server and SQL Server instances, licensing entanglements (Windows Server, SQL Server), and desktop virtualization footprints. Microsoft’s Azure offerings (AVS, Azure Local, Azure Migrate) are explicitly targeting VMware customers with migration tooling and hybrid benefits such as Azure Hybrid Benefit for Windows and SQL Server. That makes Azure an especially practical landing spot for Windows‑heavy estates that want to minimize radical change while gaining cloud scale and governance. However, technical limits (for example, AVS cluster max of 16 ESXi hosts per cluster) and long migration windows still require thoughtful architecture and partitioning of workloads. (learn.microsoft.com)Bottom line and recommendations
- The industry is in active re‑shaping: Broadcom’s partner and licensing changes have created a commercial impulse that is accelerating migrations to hyperscalers and alternative on‑prem platforms. Expect a multi‑year transition period for large enterprises. (arstechnica.com)
- Treat the “35% by 2028” figure as directionally correct — a marker of serious displacement risk — but not a contractual guarantee. Multiple analyst and vendor summaries converge on ~30% of the installed base or a similar order of magnitude; absent a single, public, audited Gartner dataset with that precise number, plan using scenario modeling rather than a single point forecast. Caution: the exact percentage varies across published summaries. (sdxcentral.com)
- Prioritize workload classification and financial modeling now. Customers with upcoming renewals should model multiple paths (renew with Broadcom, migrate to hyperscaler managed VMware, or replatform to Nutanix/OpenStack) and demand vendor‑level proof points for performance and TCO. (sdxcentral.com)
- For Windows‑heavy environments, Azure’s migration and hybrid tooling are the most mature integrated pathway — but evaluate cluster sizing and potential need for multiple private clouds to meet scale or availability SLAs. (learn.microsoft.com)
Final assessment: opportunity, not inevitability
The current wave of change is fast and unsettling, but it is not an immediate binary choice. The most durable strategy is to treat this as an opportunity to modernize deliberately rather than a crisis that forces hasty replatforming. Firms that inventory their applications, model lifecycle costs, and stage migrations — while negotiating actively with both Broadcom and hyperscaler partners — will retain leverage and minimize disruption. Analysts and vendors point to large commercial flows away from VMware, but practical migration velocities will be constrained by contracts, skills, and application complexity. The next 18–36 months will be decisive; the organization that plans now will be the one that controls the migration path rather than being forced down it. (sdxcentral.com)Acknowledgment: This feature synthesizes reporting from analyst briefings, vendor statements, industry trade reporting, and technical documentation to offer a pragmatic, Windows‑centric guide to the VMware era’s next chapter. Specific claims that vary between outlets — especially headline percentages of displacement — have been noted and flagged for verification; decision‑makers should seek contract details and vendor‑level proofs when making high‑impact migration choices.
Source: SDxCentral VMware to lose third of workloads to hyperscalers: Gartner
