Why Businesses Are Moving Away from VMware: Proxmox, Hyper-V and the Changing Virtualisation Landscape
There is no getting around it: the virtualisation market has changed dramatically since Broadcom acquired VMware (insert your personal views here).
For many organisations, VMware was the obvious choice for virtualisation. It was mature, reliable, feature-rich and incredibly well engineered. At Blue Sky Systems, we have worked with VMware for many years and have seen first-hand why it became such an important part of the IT infrastructure of businesses around the world.
That is why this is a difficult article for us to write.
We still believe VMware is a fantastic product.
However, the licensing, commercial and contractual changes introduced since the Broadcom acquisition have fundamentally changed the conversation. For a growing number of businesses, the question is no longer simply "Is VMware technically the right platform?"
It is:
"Does VMware still make commercial sense for our business?"
For many organisations, the answer is increasingly no.
The VMware landscape has changed
Broadcom's changes to VMware have included a shift from perpetual licensing to subscription-based offerings, significant changes to the VMware product portfolio, and the consolidation of products into larger bundles, terminating many low-value offerings. VMware announced the end of perpetual licensing and the transition to subscription offerings in 2024.
VMware's current licensing model is also based around physical CPU cores, with a minimum of 16 cores per physical CPU socket for vSphere licensing. This changed the price dynamics overnight when this rule was introduced.
For some organisations, these changes may be perfectly acceptable. For others, particularly businesses and Education with smaller environments or infrastructure that previously relied on straightforward perpetual licensing, the economics can look very different.
And this is where we are hearing increasing concern from customers.
It isn't necessarily one single price increase that is causing businesses to reconsider VMware. It is the combination of constantly changing licensing models, product bundles, subscription commitments, renewal uncertainty and changing commercial terms.
The goalposts have moved and keep moving.
And for businesses trying to plan IT expenditure several years into the future, predictability matters.
Businesses really are reconsidering VMware
It would be easy to describe this as a sudden "VMware exodus", but the reality is more nuanced.
Organisations are not necessarily ripping VMware out overnight. Many are taking a much more cautious approach: reducing their VMware footprint, moving selected workloads elsewhere and evaluating alternatives before their next renewal.
A January 2026 survey of 302 enterprise IT decision-makers found that 86% were actively reducing their VMware footprint, while 85% remained concerned about future VMware price increases. The same research found that migration is often a gradual, workload-by-workload process because VMware can be deeply embedded into an organisation's infrastructure and operational processes.
That is an important distinction.
Moving away from VMware is not simply a case of installing another hypervisor and clicking "migrate".
You have servers to assess, storage to consider, backups to validate, networking to redesign, applications to test, and business owners to involve.
A VMware migration needs a plan.
So, what are the alternatives to VMware?
There is no universal replacement for VMware.
The right answer depends on your existing hardware, workloads, applications, storage, backup platform, Microsoft licensing position, technical skills and long-term IT strategy.
Two platforms that are increasingly being considered are Proxmox VE and Microsoft Hyper-V (outside of very large deployments).
Proxmox VE
Proxmox VE has become a particularly interesting VMware alternative for organisations looking for an open-source virtualisation platform.
Proxmox VE is based on KVM/QEMU and provides features including clustering, high availability, live migration, software-defined storage, backups and a web-based management interface. The software is available under the GNU AGPLv3 licence, with commercial subscriptions providing enterprise repositories and support.
Importantly for VMware customers, Proxmox also provides an integrated ESXi Import Wizard that lets you import VMware virtual machines into Proxmox VE.
That does not mean every VMware environment can simply be converted to Proxmox without engineering work. It does, however, provide a credible migration path for many businesses.
For organisations particularly concerned about vendor dependency and long-term licensing flexibility, Proxmox is certainly worth evaluating.
Microsoft Hyper-V
For organisations already heavily invested in Microsoft technologies, Hyper-V can also be an extremely compelling VMware alternative.
Hyper-V is Microsoft's enterprise virtualisation technology built into Windows Server. It supports capabilities such as high availability, live migration and disaster recovery, making it suitable for enterprise virtualisation environments.
The economics can also be attractive where an organisation already has appropriate Windows Server licensing. Windows Server Datacenter, for example, provides unlimited Windows Server virtual machine rights under Microsoft's licensing model.
That does not make Hyper-V automatically cheaper than VMware. Windows Server licensing, application licensing, backup, storage, management and support all need to be included in a proper comparison. Also, the lack of direct support contracts and the complexity of Active Directory add additional requirements to consider.
The important point is that the comparison should be based on total cost of ownership, not simply the price of the hypervisor.
Proxmox vs VMware and Hyper-V vs VMware: what should you choose?
This is where independent technical advice becomes valuable.
There is a temptation to simply look for the cheapest VMware replacement.
We don't think that is the right approach.
A successful virtualisation strategy needs to consider:
- Existing server hardware and CPU architecture
- Storage and SAN/NAS infrastructure
- Backup and disaster recovery
- Network architecture
- Windows and Linux workloads
- Application compatibility
- High availability requirements
- Business continuity requirements
- Monitoring and management
- Existing Microsoft licensing
- Internal IT skills
- Future growth
- Security and compliance requirements
- Migration downtime
- Long-term support requirements
- Total cost of ownership
For some businesses, Proxmox will be the right answer.
For others, Hyper-V may make considerably more sense.
For some, staying with VMware may still be the right decision.
The key is to make that decision based on your business requirements, not because a renewal deadline is forcing it.
Why VMware migration planning matters
One of the biggest mistakes we see organisations make is leaving the decision until their VMware renewal is only weeks away.
By then, there may not be enough time to properly evaluate alternatives, test workloads, and design the replacement environment.
A VMware migration can take considerably longer than expected, particularly when an organisation has years of technical dependencies built around its existing platform.
That is why we recommend starting the conversation early.
A sensible VMware migration strategy might look something like this:
1. Assess
First, understand exactly what you have.
Which hosts are running which workloads? What storage is being used? Which VMs are business-critical? How are they backed up? Which applications have dependencies on particular configurations?
2. Design
Once we understand the environment, we can compare potential platforms and design the target environment.
This is where we can look at Proxmox vs VMware, Hyper-V vs VMware, or other options where appropriate.
3. Test
Before moving production workloads, test the proposed platform.
Migration isn't just about getting a VM to boot. It is about proving that applications, networking, backups, monitoring and recovery processes work as expected.
4. Migrate in stages
Rather than attempting a "big bang" migration, you can move workloads in controlled stages.
This gives your team an opportunity to learn the new platform, identify issues early and minimise business risk.
5. Validate and decommission
Once workloads have migrated successfully, you can progressively retire the old VMware infrastructure.
This is also an opportunity to review backup, disaster recovery, monitoring and documentation rather than simply recreating the old environment on a new platform.
Why Blue Sky Systems can help
At Blue Sky Systems, we understand why businesses are asking these questions.
We also understand why many IT teams are reluctant to make the change.
VMware has been an excellent platform for many years. It is mature, capable and proven. We have used it ourselves and recommended it to customers because it was often the right technical and commercial choice.
The difficult part is that we no longer believe we can make that recommendation in the same way.
The current VMware/Broadcom commercial model has introduced too much uncertainty for some of our customers, particularly where licensing costs and changing terms significantly impact IT budgets.
That is why Blue Sky Systems can no longer routinely recommend VMware as our default virtualisation platform.
This isn't because VMware suddenly became a bad product.
Quite the opposite.
It is because a great product still needs to make commercial sense for the customer buying it.
Our engineers can help you understand your options without pushing you into a particular platform. We can review your existing VMware environment, discuss your requirements, compare potential alternatives and develop a migration strategy that works around your business.
If Proxmox is right for you, we'll tell you.
If Hyper-V is the better option, we'll tell you.
And if VMware remains the right choice for your particular environment, we'll tell you that too.
Thinking about moving away from VMware?
You don't need to decide overnight.
The best time to start planning a VMware migration is before your next renewal becomes a deadline.
Whether you are considering Proxmox, Hyper-V or another virtualisation strategy, our engineers can help you understand the technical, operational and financial implications of moving away from VMware.
Talk to Blue Sky Systems about your VMware environment, and let's work out the right next step for your business.