Broadcom VMware Licensing Changes: What Azure VMware Solution Customers Need to Know |

Introduction

The cloud landscape is shifting rapidly, and nowhere is this more evident than in the recent changes to VMware licensing under Broadcom. If you’re running workloads on Azure VMware Solution (AVS), it’s crucial to understand how these changes will impact your licensing, procurement, and operational strategy from November 1, 2025.

What’s Changing?

Broadcom is moving all hyperscaler platforms, including Azure VMware Solution, to a “bring your own” portable subscription model for VMware Cloud Foundation (VCF):

Customers must purchase portable VCF subscriptions directly from Broadcom or its authorised channel partners.
Microsoft will no longer bundle VCF licenses with AVS node purchases after October 15, 2025.
Existing AVS Reserved Instances (RIs) purchased on or before October 15, 2025, will remain valid until the end of their term.
PayGo nodes with license included can continue to operate until October 31, 2026, after which a BYOL model is mandatory.
No product changes to AVS. Microsoft continues to manage infrastructure, patching, and upgrades.

Why Is This Happening?

Broadcom’s strategy is to simplify and streamline the VMware portfolio, focusing on subscription-based licensing and license portability. This shift is designed to give customers more flexibility to move workloads between on-premises and cloud environments, but it also introduces new procurement and compliance requirements.

What Does This Mean for Azure VMware Solution Customers?

No Product Changes: AVS remains a fully managed VCF private cloud service. Microsoft continues to handle infrastructure, patching, and upgrades.
Licensing Complexity: Customers must manage their own VCF licenses, which can add administrative overhead, especially for large or hybrid environments.
Strategic Planning Required: Organisations should inventory their current AVS nodes, evaluate RI terms, and plan future purchases to avoid running out of valid licenses.

Key Dates & Actions

October 15, 2025: Last day to purchase AVS nodes with bundled VCF licenses.
November 1, 2025: All new AVS node purchases require BYOL VCF subscriptions.
October 31, 2026: End of support for PayGo nodes with bundled licenses.

How to Purchase VCF Subscriptions

VCF subscriptions must be purchased directly from Broadcom or authorised channel partners. If you don’t have a Broadcom contract, leverage their partner ecosystem for procurement support.
Register your portable VCF license with Microsoft to use it with AVS. Ensure your license covers all physical cores in your AVS hosts.

Reserved Instances: Lock in Value

If you have existing Reserved Instances, you’re protected until your RI term ends. Consider extending your RI term before October 15, 2025, to lock in current pricing and licensing models. After this date, all new purchases require BYOL.

Optimisation Matters

With licensing now tied to per-core usage, optimising your AVS infrastructure is more critical than ever. For example, overprovisioned or inefficent storage can drive oversised solution footprint, in turn inflating licensing costs. Third party vendors like NetApp offer solutions for AVS that can help drive efficiency, reduce footprint and overall costs.

Migration Tips

Assess Your Current Environment: Inventory all AVS nodes and determine which use bundled licenses, PayGo, or Reserved Instances.
Evaluate Reserved Instances: Take advantage of existing RI terms and plan future purchases carefully. Extend RI terms before October 15, 2025, if possible.
Plan for License Portability: Ensure you have a Broadcom contract or channel partner relationship to purchase VCF licenses.
Optimise Infrastructure: Review storage and compute allocations to minimise licensing costs. Consider consolidating workloads or leveraging storage solutions like NetApp Files or Pure Cloud Block Store.
Test Compatibility: Before deploying new nodes, verify your VCF subscription covers all required cores and add-ons (e.g. vDefend Firewall).
Leverage Azure Migrate: Use Azure Migrate and related tools to benchmark TCO and streamline migration to AVS or Azure Native services.
Engage Stakeholders: Communicate changes to IT, procurement, and finance teams to ensure compliance and budget planning.
Monitor Updates: Stay informed via Microsoft Tech Community and Broadcom announcements for any further changes or guidance.

Frequently Asked Questions (FAQ)

Q: What is the Broadcom licensing change for AVS?
A: Starting November 1, 2025, customers must bring their own portable VCF subscription purchased from Broadcom to use AVS. Microsoft will no longer bundle VCF licenses with AVS node purchases.

Q: Will my existing AVS Reserved Instances be affected?
A: No, Reserved Instances purchased on or before October 15, 2025, will remain valid until the end of their term.

Q: How do I purchase a VCF subscription for AVS?
A: VCF subscriptions must be purchased directly from Broadcom or authorised channel partners. Register your license with Microsoft to use it with AVS.

Q: What happens to PayGo nodes?
A: PayGo nodes with license included can continue to operate until October 31, 2026. After that, BYOL is required.

Q: Are there any product changes to AVS?
A: No, these updates are licensing only. AVS remains a fully managed VCF private cloud service.

Q: What add-ons do I need for AVS?
A: If you use features like vDefend Firewall, you must purchase the add-on from Broadcom and register it with Microsoft.

Q: How do I optimise my AVS environment for licensing?
A: Review your infrastructure for overprovisioned storage and compute. Optimise workloads and consider storage solutions to reduce your licensing footprint.

Broadcom VMware Licensing Changes: What Azure VMware Solution Customers Need to Know