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Gartner: Over Half of Enterprise VMware Users Likely to Explore Rivals by 2029 Amid Broadcom Fallout

Analyst firm says customer sentiment remains negative but names VMware a leader in two key markets

By LineZotpaper
Published
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Analyst firm Gartner predicts that by 2029, 55 percent of enterprises will begin proofs of concept for alternative hybrid cloud platforms to replace their VMware-based deployments, up from 25 percent in 2026, according to its newly released Magic Quadrant for Distributed Hybrid Infrastructure. The forecast comes as Broadcom-owned VMware continues to face customer backlash over pricing, contract flexibility, and support delays, yet still ranks as a leader in both virtualisation and hybrid cloud markets.

Gartner's 'Strategic Planning Assumption' appears in the Distributed Hybrid Infrastructure (DHI) Magic Quadrant, which evaluates hybrid cloud platforms. The 2029 date is notable because it falls six years after Broadcom's acquisition of VMware, matching the expiry timeline for three-year subscription renewals that many customers signed in the months before the deal closed.

Among the four vendors rated as leaders in the DHI quadrant — VMware, AWS, Nutanix, and Microsoft — VMware received the harshest criticism from Gartner clients. The report cites 'an increased level of negative sentiment from Gartner customers, particularly regarding communication, commercial business practices and delays in support, compared to other market leaders.'

A separate Magic Quadrant for Server Virtualization Platforms — Gartner's first such report in a decade — strikes a similar tone. While VMware is again named a leader, with praise for its technology and AI integration, the firm notes that 'Gartner clients have reported that the transition to per-core subscriptions has resulted in significant cost increases' and 'minimal flexibility during negotiations, which has forced many heads of I&O to actively evaluate migration alternatives.'

Gartner is equally frank about VMware's would-be challengers. On the DHI quadrant, it warns that Nutanix's 'licensing and pricing models can be complex and less competitive than other market leaders,' and that AWS's on-prem Local Zones carry price premiums of 15 to 35 percent. The server virtualisation report adds that Nutanix's 'licensing can be complex and pricing frequently exceeds expectations,' while Microsoft users must navigate 'multiple disjointed management consoles.'

HPE earned 'Challenger' status in the server virtualisation quadrant, though Gartner says its products lack important features. Proxmox, frequently mentioned as a low-end VMware alternative, scored a Niche position.

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Analysis

Why This Matters

  • The prediction signals that Broadcom's aggressive pricing and licensing changes may trigger the largest enterprise infrastructure migration wave in years, affecting IT budgets, vendor relationships, and operational risk.
  • For organisations still on legacy VMware subscriptions, 2029 represents a natural decision point: stay with Broadcom or invest in a risky, multi-year migration to a rival platform.
  • The timeline gives both incumbents and challengers a multi-year window to improve offerings, potentially reshaping the hybrid cloud and virtualisation markets.

Background

VMware was the dominant player in server virtualisation for over two decades, with enterprises deeply reliant on its stack. Broadcom completed its $69 billion acquisition of VMware in November 2023. Since then, Broadcom has terminated perpetual licenses, shifted to per-core subscription models, and bundled products into larger packages — moves that have dramatically increased costs for many customers. The industry has seen a surge of interest in alternatives such as Nutanix, Microsoft Azure Stack HCI, and open-source platforms like Proxmox, but migration projects are complex and typically span several years.

Key Perspectives

Enterprises (current VMware customers): Face significant cost increases and inflexible negotiation terms, but also recognise that migration is risky and time-consuming. Many are likely to extend subscriptions for one more cycle (through 2029) before seriously evaluating alternatives. Broadcom/VMware: Maintains technology leadership and a strong product roadmap, including AI-native infrastructure integration. The company recently refreshed its low-end vSphere Standard product, likely aiming to retain smaller customers considering a jump to cheaper platforms. Challengers (Nutanix, Microsoft, HPE, Proxmox): Stand to benefit from customer dissatisfaction but face their own hurdles — Nutanix gets criticised for pricing complexity, Microsoft for fragmented management, and HPE for missing features. The market remains wide open with no clear 'second VMware' emerging yet.

What to Watch

  • Renewal cycles: Look for VMware's quarterly subscription renewal rates — a sharp drop would signal accelerating defection.
  • Challenger improvements: How quickly Nutanix, Microsoft, and HPE address their identified weaknesses in management simplicity and pricing transparency.
  • AI workloads: VMware's AI-native infrastructure push could become a retention lever if customers see value in running AI on the same platform as their virtualised apps.

Sources

Zotpaper

Written by software from the reporting listed above, scored by an automated standards desk, and published without a person reading it first. If something here is wrong, tell the editor and it will be put right.

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