Microsoft's VMware Rapid Migration Plan: Not as shiny as it looks

Mary Jo Foley is the Editor in Chief at Directions on Microsoft. Before joining Directions, Mary Jo has worked as... more

In late 2023, VMware’s new owner Broadcom announced the phase-out of perpetual licenses in favor of subscriptions, leaving many of its customers unhappy. But it wasn’t until May 1, with its announcement of the “VMware Rapid Migration Plan,” that Microsoft attempted to capitalize on VMware customer angst.

Microsoft’s new migration plan centers around its Azure VMware Solution. Azure VMware Solution is a service for new or existing VMware virtual machines (VMs), including those running Microsoft software, within Microsoft’s Azure cloud.

Microsoft’s VMware Rapid Migration Plan includes the following “carrots”:

A 20% discount on Azure VMware Solution when customers purchase a new one-year Reserved Instance before Dec. 31, 2024.
A one-time award of Azure credits of up to $120,000 when buying a new Reserved Instance (for one or three years) for running Azure VMware Solution or other Azure services.
The option of a five-year Reserved Instance for Azure VMware Solution (two years longer than the usual, top-of-the-line three-year Reserved Instance), which is only available for purchase until December 31, 2024, on top of the standard 25-30% discount applied to one-year Reserved Instance purchases. (Note: This is a new date. Microsoft quietly updated its original blog post, which stated the cut-off date was June 30, 2024.) Update (Dec. 16) Microsoft updated the end-date for this again with no public notice. The new date is June 30, 2025.
The ability to run cloud-hosted Windows Server and SQL Server in Azure VMware Solution without any additional licensing costs (requires the purchase of Software Assurance).
Free Extended Security Updates for Windows Server and SQL Server for older versions that face end of life.

While Microsoft’s offer makes these incentives look unique, few are. And even the ones that are new may not be as shiny as they first appear, as Directions on Microsoft analyst Wes Miller noted.

The hosted Windows Server/SQL Server carrot is the existing Azure Hybrid Benefit, which already is included in Microsoft’s Azure VMware Solution. Extended Security Updates (ESUs) for no additional cost is something Microsoft offers all customers of Windows Server and SQL Server as long as they are running these products on Azure.

The five-year Reserved Instance may entice some customers who are interested in locking down a good price, but what happens after those five years are up, Miller wondered aloud. The other quantifiable benefit in the new VMware Migration Plan is the $120,000 in credits, which gives organizations six months of Azure services for free.

In short, “this migration plan isn’t nearly the windfall it’s being promoted to be,” Miller said.

Broadcom, which purchased VMware last year, announced in Dec. 2023 that once customers’ VMware licenses for their perpetual contracts end, they will no longer be able to stay with that model. Broadcom said it would provide customers with upgrade pricing incentives if they move to their new subscription plans. Microsoft and Broadcom are partners.