Azure VMware Solution customers using VMware Cloud Foundation licences bundled with pay-as-you-go deployments have until October 31, 2026, to move to a bring-your-own-licence model. After that date, Microsoft says those deployments will no longer comply with Broadcom’s licensing requirements unless customers provide their own VCF subscription.

Microsoft stopped selling new Azure VMware Solution nodes with included VCF subscriptions after October 15, 2025. New nodes now require customers to purchase a portable VMware Cloud Foundation subscription directly from Broadcom and use it with Azure VMware Solution.

Customers with active reserved instances purchased for VCF-included hosts are under different terms. Microsoft says those deployments can continue using the bundled VCF subscription until the reserved-instance term ends, after which customers must provide their own VCF subscription. Additional usage beyond the capacity covered by an existing VCF-included reservation also requires BYOL.

VCF licensing moves to BYOL

Under the BYOL model, organisations separately purchase the VCF software subscription from Broadcom and Azure VMware Solution infrastructure from Microsoft. Microsoft says the AVS VCF BYOL option is priced lower than AVS with the VCF subscription bundled, although that comparison does not include the price of the VCF subscription purchased separately from Broadcom.

IDC reported in 2024 that some VMware customers had seen higher costs at purchase or renewal following Broadcom’s licensing changes. The research firm cited subscription bundles, per-core licensing, and the inclusion of previously separate VMware products in broader packages.

The licensing change does not alter how Azure VMware Solution itself operates. Microsoft continues to provide the service as a managed VCF private cloud and remains responsible for the Azure infrastructure, management of VMware host-level software, patching, and upgrades.

Customers moving to portable VCF can register their Broadcom subscriptions with Azure VMware Solution through the Azure portal. Microsoft also supports mixed-licensing environments, where existing hosts remain covered by licence-included commitments while new capacity uses customer-owned VCF subscriptions.

Portable licensing also allows eligible VCF subscriptions to move between an organisation’s own data centre and Azure VMware Solution. Microsoft and Broadcom introduced the portability model so customers can retain the rights to the software subscription when moving it between supported environments.

Broadcom said in 2025 that VCF licences could only be ported to public cloud services on its Certified Cloud Services list at the time, including active hyperscaler and VMware Cloud Service Provider partners. Broadcom said non-renewing partners would no longer be certified for VCF licence portability.

The BYOL model also requires customers to manage the number of VCF cores assigned to their Azure VMware Solution environments. Microsoft says the total number of registered cores must remain within the entitlement purchased from Broadcom, although customers can divide the same VCF key across multiple private clouds.

Microsoft says an Azure VMware Solution private cloud that exceeds its Broadcom core entitlement can become noncompliant and be at risk of service suspension.

Migration options beyond AVS

Microsoft also points customers considering a move from AVS to Azure-native infrastructure or platform services towards its migration resources. These resources can be used to assess VMware workloads and plan a move to another Azure environment.

Azure Migrate can assess VMware environments for migration either to Azure VMware Solution or directly to Azure virtual machines. AVS assessments can estimate workload readiness, the number of required AVS nodes, projected resource utilisation, and monthly infrastructure costs, while Azure VM assessments evaluate the same VMware estate for deployment on Azure VMs.

Beyond assessment, Microsoft supports the migration of virtual machines from an existing Azure VMware Solution environment to Azure. Its Azure Migrate documentation says VMware VMs running both on-premises and in AVS can be migrated to Azure.

Microsoft’s VMware migration guidance also includes dependency analysis between servers before workloads are grouped for migration. The assessment can identify connections between workloads that need to be considered before individual systems are moved.

Broadcom’s hyperscaler licensing policy also applies outside Microsoft Azure. Google Cloud introduced a corresponding change to Google Cloud VMware Engine, requiring customers buying new commitments after October 15, 2025, to obtain VCF licences directly from Broadcom and purchase the BYOL version of VMware Engine separately from Google.

The licensing change also affected Google Cloud’s VMware Engine capacity controls. From November 1, 2025, VMware Engine nodes required portable VCF licences, and Google restricted on-demand usage to existing levels by adjusting regional project quotas. Customers with eligible existing commitments that needed additional capacity could submit a quota increase request.

The hyperscaler licensing changes follow a wider restructuring of VMware under Broadcom. Broadcom ended sales of perpetual VMware licences, moved the portfolio to subscription licensing, and introduced subscription portability for supported hybrid-cloud environments.

Broadcom also moved the VMware portfolio towards per-core subscription pricing and reduced a catalogue of more than 160 products to a smaller set of offerings focused on VMware Cloud Foundation and VMware vSphere Foundation. The company reorganised the business around a single VMware Cloud Foundation division covering product development, go-to-market operations, and professional services.

(Photo by Rubaitul Azad)

See also: Microsoft expands Azure AI with Databricks and Mistral

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