Microsoft retires license-included Azure VMware Solution

Microsoft has announced the phase-out of its license-included Azure VMware Solution (AVS), one of the last remaining ways to purchase VMware products without committing to Broadcom’s full Cloud Foundation (VCF) suite. The change reflects Broadcom’s strategic shift toward bundling VMware offerings exclusively within VCF, leaving customers with limited alternatives for standalone virtualization deployments in cloud environments.

What changed

Microsoft will stop selling the license-included version of AVS on October 31, 2026. Existing customers must transition to a bring-your-own-license (BYOL) model using Broadcom’s VCF by August 30, 2027, or risk service disruption. The company has advised users to begin assessing their environments immediately to avoid last-minute migrations.

The license-included AVS previously allowed organizations to deploy VMware’s vSphere, vSAN, and NSX without separately acquiring VCF licenses. However, Broadcom’s licensing policy now mandates VCF for all cloud-based VMware services, including those offered by hyperscalers. Microsoft’s decision follows similar moves by other cloud providers, which have already adopted BYOL requirements for VMware workloads.

Why the shift matters

Broadcom’s licensing strategy has increasingly targeted enterprise-scale customers, sidelining smaller organizations and edge deployments. The company has openly stated its preference for selling VCF as a complete package, citing higher revenue and adoption rates among its target market. For customers using AVS or other non-VCF VMware services, this shift creates two immediate challenges:

1. Cost and complexity: Acquiring VCF licenses adds upfront expenses and may require architectural changes to align with the suite’s hybrid cloud model. Smaller customers, in particular, may find the bundled approach less flexible or cost-effective than standalone virtualization.
2. Migration pressure: Organizations that do not already use VCF must either purchase licenses or explore alternatives to AVS before the August 2027 deadline. Microsoft’s guidance emphasizes the need for early planning, as migrations can be time-consuming and disruptive.

The change also underscores Broadcom’s broader consolidation of VMware’s product portfolio. Since the acquisition, the company has discontinued several smaller cloud providers’ VMware services, forcing customers to migrate to larger hyperscalers or alternative platforms. While Broadcom has framed these moves as a focus on high-value customers, they have left many users with fewer options for running VMware workloads outside of VCF.

What to watch

Customers currently using license-included AVS have two primary paths forward:

• Adopt VCF: Purchase licenses from Broadcom and transition to the BYOL version of AVS. This option maintains VMware compatibility but may involve higher costs and operational adjustments.
• Migrate away from VMware: Explore alternative virtualization platforms or cloud-native solutions. Microsoft’s advice to “assess modernization opportunities” suggests it may be positioning Azure-native services as a replacement for some workloads.

For professionals managing VMware environments, the timeline is tight. With the October 2026 sales cutoff and August 2027 service deadline, organizations should begin evaluating their options now to avoid rushed decisions or unexpected downtime. The shift also raises broader questions about Broadcom’s long-term strategy for VMware, particularly whether further licensing restrictions or product consolidations are on the horizon.