Hypervisors in 2026: Where the Market Stands Three Years After Broadcom’s VMware Acquisition

It has been nearly three years since Broadcom acquired VMware, and the hypervisor landscape continues to shift in ways few predicted. What once seemed like a stable, VMware dominated market has transformed into a period of reevaluation, cost scrutiny, and accelerated exploration of alternatives. 

At Burwood, we’ve been closely tracking the trends across hundreds of customer conversations, migration planning sessions, and licensing reviews. To help organizations navigate this rapidly evolving space, our team developed a multivendor comparison framework—focused on features, licensing, cost structures, and longterm viability. 

Below are the major developments we’re seeing across the hypervisor ecosystem today. 

VMware: Consolidation, Cost Increases, and Growing Customer Frustration 

Since the acquisition, Broadcom has significantly narrowed VMware’s product portfolio—consolidating everything into the VCF (VMware Cloud Foundation) and VVF bundles. While the stated goal is simplification, customers are experiencing substantial cost increases and stricter contract terms as a result. 

A few of the most notable impacts include:  

• Reduced product flexibility due to bundle only licensing 

• Higher pricing across almost all scenarios 

• Longer contract commitments becoming the norm 

• Cloud provider licensing changes, shifting responsibility to the customer 

• Cease and Desist letters sent to customers running unsupported deployments

For organizations using perpetual licenses, the rules have become stricter. You may legally continue using VMware, but you cannot apply any patches or upgrades released after the support contract expires. 

Subscription customers face even steeper consequences when a license lapses: 

• vCenter disconnects from all hosts 

• Backup operations fail 

• Existing VMs stay on, but cannot be powered back on if shut down 

• New VMs cannot be powered on 

• HA/DRS/vMotion cease to function 

• The environment becomes read only 

Unsurprisingly, these changes are driving customers to reconsider their long term dependency on VMware. 

HyperV: A Strong Resurgence Driven by Cost and Ownership 

HyperV is experiencing a clear resurgence. The most significant driver: organizations often already own it. 

Most enterprises license Windows Server Datacenter, which includes unlimited virtualization rights on HyperV hosts. This means: 

• Zero additional hypervisor licensing cost 

• Seamless alignment with existing Microsoft ecosystems 

• Enterprisegrade functionality without subscription volatility 

Because HyperV runs on the same general hardware as VMware, customers can often reuse existing servers—making it one of the most cost efficient migration paths. 

Nutanix: Strong Momentum for Hyperconverged + Hypervisor Transitions 

Nutanix adoption continues to climb, especially for organizations modernizing both their hardware and hypervisor. 

Key advantages include: 

• Rapid deployment 

• Highly scalable HCI architecture 

• Enterprise ready management and automation 

• A price protection guarantee—a meaningful differentiator in today’s climate 

Nutanix’s ecosystem has also expanded recently with Pure Storage now supported as external storage, and more integrations expected soon. For many organizations, Nutanix offers a compelling middle ground between traditional virtualization and cloudlike simplicity.

Cloud Adoption: A Noticeable Uptick as Organizations Reassess On Prem Investments 

Alongside growing hypervisor exploration, Burwood is also seeing a marked increase in cloud adoption conversations—particularly as organizations reevaluate the longterm sustainability of their virtualization strategies. 

Several trends are driving this shift: 

1. Cost Predictability and Avoidance of Hypervisor Lock In 

Customers facing rising VMware costs or anticipating further vendor consolidation are increasingly looking at cloud services where pricing models—while still complex—tend to offer more transparency and fewer licensing surprises. 

2. Migration Windows Created by Hypervisor Transitions 

As organizations assess whether to move from VMware to HyperV, Nutanix, or other platforms, many are asking a different question: 
“Should we move some—or all—of these workloads to the cloud instead?” 

Modernization windows create natural opportunities to rightsize environments and evaluate cloudnative services. 

3. Disaster Recovery and Backup Modernization 

DR and backup workloads are often the first to move. Many organizations see cloud DR as: 

• More cost-effective 

• Easier to manage 

• Less dependent on traditional hypervisors 

This often becomes the first step toward broader cloud adoption. 

4. Application Modernization Pressures 

As legacy applications evolve or are replaced, more organizations are considering transitions to: 

• PaaS offerings 

• Container platforms 

• SaaS replacements 

All of which reduce on-prem virtualization demands over time. 

The net result: cloud isn’t replacing hypervisors outright, but it is becoming a much more central part of longterm hybrid IT strategies. For some clients, the question is no longer “Which hypervisor should we move to next?” but rather “How much virtualization do we still need?” 

Other Hypervisors: Growing Curiosity, Limited Production Adoption 

Alternatives such as Proxmox, Scale Computing, and Verge.io are generating attention—largely due to cost advantages and opensource appeal. However, we have not yet seen largescale enterprise migrations toward these platforms in our client work. 

Still, with the market shifting, this category remains one to watch. 

Where the Market Is Headed 

The hypervisor landscape is undergoing its most significant transformation in more than a decade. Based on what we’re seeing: 

• HyperV will continue gaining momentum 

• Nutanix will benefit from organizations modernizing infrastructure 

• Cloud adoption will rise as customers use virtualization changes as an inflection point 

• Alternative hypervisors will grow in awareness, even if enterprise adoption remains gradual 

• VMware customers will increasingly evaluate exit strategies as pricing and licensing shift 

For many organizations, 2026 is the year to reassess virtualization and cloud roadmaps holistically—not just hypervisors in isolation. 

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