As if navigating multi-cloud environments wasn’t already complex, Microsoft and Broadcom have just introduced a major shift that could reshape how VMware customers leverage Azure VMware Solution (AVS). If AVS is part of your infrastructure roadmap, this licensing update demands immediate attention.
What’s Changing with Azure VMware Solution Licensing?
On September 2, 2025, Microsoft announced that AVS will no longer sell nodes bundled with VMware Cloud Foundation (VCF) licenses after October 15, 2025. From that point forward, customers must bring their own (BYO) portable VCF subscription from Broadcom or an authorized partner.
This change introduces new procurement hurdles, cost modeling challenges, and strategic decisions for IT leaders managing hybrid or multi-cloud environments. While existing Reserved Instances (RIs) purchased before the deadline will be honored, pay-as-you-go nodes can continue operating under license-included pricing only until October 31, 2026. That gives organizations just over 12 months of operational runway—and only six weeks to lock in current pricing.
Three Strategic Questions AVS Customers Should Be Asking
1. How are you approaching the short transition window?
With the October 15 deadline fast approaching, now is the time to assess your AVS usage and expansion plans. If you’re planning to renew or scale AVS workloads, this is your final opportunity to secure license-included pricing.
Consider accelerating Reserved Instance purchases, auditing current AVS workloads for exposure, and consulting your cloud partner to model the cost and licensing implications. Acting now could save significant time and budget later.
2. Does BYO VCF make AVS adoption easier or harder?
The answer depends on your licensing maturity and operational readiness. Commercially, BYO licensing introduces complexity in procurement, budgeting, and renewals—especially if your Broadcom relationship is new or unestablished. Operationally, it shifts responsibility for license compliance, tracking, and portability back to your team, adding overhead that was previously abstracted by Microsoft.
However, there’s a strategic upside. If you already own portable VCF licenses or want to decouple licensing from infrastructure scaling, this change could offer more flexibility in how you manage cloud resources.
3. Does this accelerate or delay your exit from VMware?
For some organizations, this may be the final nudge toward native Azure IaaS or PaaS. If you were already planning to migrate off VMware, the added cost and complexity of BYO VCF could accelerate that shift. On the other hand, if your environment is still deeply tied to VMware dependencies, this transition may delay your exit while you renegotiate licensing or rebuild your roadmap.
Recommendations from The IT Strategists
To navigate these Azure VMware Solution licensing changes effectively, we recommend taking a proactive approach:
Start by reviewing your AVS usage and future plans. If you expect to continue using AVS past 2025, assess how BYO VCF impacts your total cost of ownership. Engage Broadcom early—procurement processes take time, and waiting until Q4 could leave you scrambling.
This is also a prime opportunity to explore native Azure alternatives. Consider whether some workloads can be refactored onto IaaS, AKS, or PaaS. And if you’re unsure how to model the financial impact of staying, moving, or refactoring, partner with a FinOps specialist (like us) to build a clear, data-backed strategy.
What’s Your Next Move?
Are you locking in Reserved Instances before the deadline? Shifting off VMware altogether? Or waiting to see what Broadcom does next?
Let us know—publicly or privately. We’re advising several clients on this transition and can share lessons learned, cost models, and strategic options tailored to your environment. Schedule your initial call with The IT Strategists.