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Public vs private cloud

Beyond lift and shift: rethinking VMware in the public cloud era

Broadcom's VMware changes have forced a question many organisations had put off: is on-premises virtualisation still the right platform? Why a rationalised move to the public cloud, built on a zero-trust landing zone and managed for you, beats a straight copy.

The Next Device31 October 20265 min read

For more than a decade, VMware was the safe choice for running servers on-premises. Licences were paid, the platform was familiar, and the hardware refresh was the only decision that came up every few years.

That calm has gone. Since Broadcom acquired VMware, licensing has moved to subscription bundles and many customers have seen their renewal costs rise sharply. Renewal time has become a decision point: renew for another term, or use the moment to rethink where your workloads should live.

86%

of enterprises surveyed are actively reducing their VMware footprint

Source: CloudBolt research, January 2026

59%

have seen VMware prices rise by more than 25%

Source: CloudBolt research, January 2026

72%

of the workloads they're migrating are heading to public cloud infrastructure

Source: CloudBolt research, January 2026

The survey covered 302 IT decision-makers at North American organisations with 1,000 or more employees. Australian organisations of every size are having the same conversation at renewal time.

The renewal is the wrong question

It's tempting to treat this as a licensing problem: negotiate the renewal, or find the cheapest place to run the same virtual machines. But the virtual machines are not the point. The applications and data on them are, along with the people who use them and the risk they carry.

Moving to the public cloud is an opportunity to ask, for every workload: does this still need to exist, and if so, what's the best way to run it now?

A lift and shift moves your problems to someone else's data centre. A rationalised migration leaves them behind.

Why lift and shift alone falls short

Copying every virtual machine to the cloud exactly as it is can be fast, but it carries over everything that wasn't working: oversized servers, unpatched operating systems, flat networks and applications nobody uses any more. In the cloud, oversized means overpaying every month. Microsoft's own guidance notes that rehosting does not resolve existing performance, reliability or architectural issues.

A better approach: rationalise, then migrate

From VMware to a modern cloud platform

  1. Step 1

    Assess

    Inventory every VM, dependency, licence and cost. Measure real utilisation, not provisioned size.

  2. Step 2

    Rationalise

    Decide per workload: retire, replace with SaaS, rehost, refactor or rebuild.

  3. Step 3

    Build the landing zone

    Identity, networking, security and governance in place before the first workload arrives.

  4. Step 4

    Migrate in waves

    Low-risk workloads first, with tested rollback and cut-overs out of hours.

  5. Step 5

    Modernise

    Move to managed databases, app services and right-sized compute where it pays.

  6. Step 6

    Manage & optimise

    Monitoring, patching, backup and cost reviews through managed services.

A migration is a programme of decisions, not a copy job. Each workload gets the treatment that suits it.

Assess the estate

We inventory every virtual machine, its dependencies, licences, utilisation and cost. Real utilisation, not provisioned size, is what drives the cloud design. Most estates have servers sized for peaks that never came.

Rationalise workload by workload

Each workload gets one decision. Some are retired. Some are replaced with a SaaS product that does the job better, such as file servers moving to SharePoint. Some are rehosted quickly. The ones that matter most are refactored or rebuilt to take advantage of managed databases, app services and automatic scaling.

Cloud rationalisation: one decision per workload

Retire

Little or no business value left

Turn it off and stop paying for it

Replace

A SaaS product does the job

e.g. file servers to SharePoint, on-prem apps to their cloud editions

Rehost

Needs to move fast, works as is

Lift to Azure VMs, right-sized from real usage

Refactor

Small changes unlock big savings

Managed databases, app services, containers

Rearchitect / rebuild

Core to the business, holding you back

Redesigned for scale, resilience and cost

Retain

Not ready to move yet

Stays put, connected to the cloud, revisited later

Based on the rationalisation approach in Microsoft's Cloud Adoption Framework. Most estates end up with a mix, not a single answer.

Build a landing zone before the first workload moves

A landing zone is the foundation: identity, networking, security policies, governance and cost management, set up once and applied to everything that follows. Done properly, it means your cloud is secure by default rather than secured after the fact.

Connect users and branch offices with zero trust

Traditional networks trusted anything inside the perimeter. In the cloud there is no perimeter to hide behind. A zero-trust model verifies every request by identity and device health, segments workloads so a problem in one can't spread, and gives staff and branch offices secure access to what they need, and nothing else.

A landing zone built on zero trust

Staff anywhere

Branch offices

Managed devices

Zero-trust access layer

Identity & MFA
Conditional Access
Device compliance
Private, encrypted connectivity

Production workloads

Data & backups

Shared services

Monitored, patched, backed up and cost-managed 24/7 through managed services Policies and governance applied to every subscription
Users and branch offices reach applications through identity-based access, not a flat network. Every request is verified; workloads are separated; everything is monitored.

Keep it running well

Migration is the beginning. Ongoing managed services monitor performance and security, patch and back up workloads, and review costs every month, so the savings you planned are the savings you keep. Right-sizing and reserved capacity can then cut steady-state costs further.

What changes for the business

  • Cost that follows usage: pay for what you use, with reservations and savings plans for the steady base, and no hardware refresh cycle.
  • Resilience by design: backups, disaster recovery and multi-zone options that would be expensive to build on-premises.
  • Security that's consistent: one identity platform, one policy set and one monitoring view across offices, people and workloads.
  • Speed: new environments in hours, not procurement cycles.
  • A platform ready for AI: data and applications in a modern cloud are far easier to connect to AI services safely.
Small business

A 30-person firm with three ageing VMware hosts

Instead of renewing licences and replacing hosts, the file server moves to SharePoint, line-of-business apps move to their cloud editions, and the one remaining server runs in Azure. The server room is switched off.

Medium business

A 300-person organisation with 60 VMs across two sites

An assessment finds a fifth of the VMs can be retired. The rest move in waves into a landing zone with zero-trust access for both offices, and disaster recovery is included rather than a separate project.

Large business

A 3,000-seat enterprise facing a multi-year VMware renewal

Workloads are rationalised by business unit, with critical systems refactored onto managed services and others rehosted to hit the renewal deadline. Ongoing management keeps the environment patched, monitored and cost-reviewed every month.

When staying put makes sense

The public cloud is not the answer for every workload. Some systems have latency, data sovereignty or licensing constraints that keep them on-premises for now. A good rationalisation identifies those honestly, keeps them connected to the cloud, and revisits them as the constraints change.

The bottom line

The VMware renewal has turned an infrastructure decision into a business one. Organisations that use it to rationalise, modernise and secure their estate end up with a platform that costs less to run, is safer by design and is ready for what comes next. Those that only move the virtual machines end up paying cloud prices for yesterday's problems.

Sources

Thinking about life after VMware?

Get an assessment that rationalises your estate workload by workload, with the cost and risk of each path.