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Modernizing Virtualization and Hypervisor Strategy

With recent changes in the virtualization marketplace, organizations are looking for solutions that meet their needs.

IN THIS ARTICLE

Virtualization remains a core component of modern IT environments, but evolving technologies and recent changes to the virtualization marketplace are prompting many organizations to re-evaluate their strategies. Some teams are doubling down on their existing platforms, while others are exploring alternative solutions, optimization methods or hybrid models. At the same time, organizations are seeking to get more value from their virtualization environments through application modernization, containerization and platform engineering. Often, these initiatives complement or enhance virtualization environments rather than replacing virtualization entirely.

Virtualization success requires more than top-tier infrastructure. Many organizations find that they need a trusted partner such as CDW to help them assess their existing infrastructure, architect new environments and manage the migration from one platform to another.

CDW can help you take the next step with your virtualized environment.

Virtualization remains a core component of modern IT environments, but evolving technologies and recent changes to the virtualization marketplace are prompting many organizations to re-evaluate their strategies. Some teams are doubling down on their existing platforms, while others are exploring alternative solutions, optimization methods or hybrid models. At the same time, organizations are seeking to get more value from their virtualization environments through application modernization, containerization and platform engineering. Often, these initiatives complement or enhance virtualization environments rather than replacing virtualization entirely.

Virtualization success requires more than top-tier infrastructure. Many organizations find that they need a trusted partner such as CDW to help them assess their existing infrastructure, architect new environments and manage the migration from one platform to another.

CDW can help you take the next step
with your virtualized environment.

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The Virtualization Landscape

In recent decades, server virtualization has been the default model for data centers, with vendor VMware powering the bulk of enterprise workloads. The model has enhanced hardware utilization, simplified disaster recovery and improved performance. As a result, virtualization has become nearly as foundational and essential to data center operations as electricity, and many organizations have not recently had a compelling reason to re-evaluate their virtualization environments.

But Broadcom’s acquisition of VMware in 2023 changed the virtualization landscape dramatically. Most significantly, Broadcom restructured VMware’s portfolio, shifting to a subscription-only sales model and making some of its core offerings available only through bundled packages. The company also increased the length of contracts and discontinued channel sales for some offerings. In one July 2024 poll, 95% of IT decision-makers said that recent changes to the virtualization landscape would be disruptive to their IT strategy. 

VMware continues to offer a robust, feature-rich, enterprise-grade virtualization platform with advanced capabilities for managing virtualized environments at scale. One new offering, VMware Cloud Foundation (VCF), provides a full-stack private cloud platform. Another, the unified cyber recovery and disaster recovery solution VMware Live Recovery, aims to deliver greater integration and resilience for VMware environments. Still, the changes are causing some business and IT leaders to reconsider their virtualization environments for the first time in years.

Regardless of industry developments, it is a best practice for organizations to periodically assess their IT ecosystems to ensure that their cornerstone technologies are still serving their needs. With recent changes to the virtualization landscape — and with the technology touching nearly every workload across many organizations — the current moment presents a natural opportunity to pause, evaluate virtualization strategies and determine whether current platforms continue to align with long-term goals.

At a minimum, organizations should conduct a license review to help teams better understand their dependencies on VMware; this can help clarify whether migration is even practical, at least in the short term. A capacity analysis can help teams better understand their current needs and whether alternative approaches such as containerization or a different virtualization platform would be able to meet those needs effectively.

If IT and business leaders think a change might be in order, they should carefully evaluate alternatives, possibly including virtualization platforms such as Nutanix, Microsoft Azure Local, Microsoft Server with Azure ARC, and Red Hat OpenStack or Red Hat OpenShift Virtualization. Each of these platforms offers different cost structures and features, and leaders must carefully weigh how various trade-offs would affect their long-term agility and costs.

Some organizations that go through this process may find a better fit for their environments. Others will find ways to optimize their existing VMware investments. In either instance, leaders will come away with a virtualization strategy that both meets their current needs and aligns with their future plans.

CDW can help your organization find a
virtualization strategy that sets it up for success.

The Virtualization Landscape

In recent decades, server virtualization has been the default model for data centers, with vendor VMware powering the bulk of enterprise workloads. The model has enhanced hardware utilization, simplified disaster recovery and improved performance. As a result, virtualization has become nearly as foundational and essential to data center operations as electricity, and many organizations have not recently had a compelling reason to re-evaluate their virtualization environments.

But Broadcom’s acquisition of VMware in 2023 changed the virtualization landscape dramatically. Most significantly, Broadcom restructured VMware’s portfolio, shifting to a subscription-only sales model and making some of its core offerings available only through bundled packages. The company also increased the length of contracts and discontinued channel sales for some offerings. In one July 2024 poll, 95% of IT decision-makers said that recent changes to the virtualization landscape would be disruptive to their IT strategy. 

VMware continues to offer a robust, feature-rich, enterprise-grade virtualization platform with advanced capabilities for managing virtualized environments at scale. One new offering, VMware Cloud Foundation (VCF), provides a full-stack private cloud platform. Another, the unified cyber recovery and disaster recovery solution VMware Live Recovery, aims to deliver greater integration and resilience for VMware environments. Still, the changes are causing some business and IT leaders to reconsider their virtualization environments for the first time in years.

Regardless of industry developments, it is a best practice for organizations to periodically assess their IT ecosystems to ensure that their cornerstone technologies are still serving their needs. With recent changes to the virtualization landscape — and with the technology touching nearly every workload across many organizations — the current moment presents a natural opportunity to pause, evaluate virtualization strategies and determine whether current platforms continue to align with long-term goals.

At a minimum, organizations should conduct a license review to help teams better understand their dependencies on VMware; this can help clarify whether migration is even practical, at least in the short term. A capacity analysis can help teams better understand their current needs and whether alternative approaches such as containerization or a different virtualization platform would be able to meet those needs effectively.

If IT and business leaders think a change might be in order, they should carefully evaluate alternatives, possibly including virtualization platforms such as Nutanix, Microsoft Azure Local, Microsoft Server with Azure ARC, and Red Hat OpenStack or Red Hat OpenShift Virtualization. Each of these platforms offers different cost structures and features, and leaders must carefully weigh how various trade-offs would affect their long-term agility and costs.

Some organizations that go through this process may find a better fit for their environments. Others will find ways to optimize their existing VMware investments. In either instance, leaders will come away with a virtualization strategy that both meets their current needs and aligns with their future plans.

CDW can help your organization find a
virtualization strategy that sets it up for success.

Speed and Efficiency With DevOps

$281,000

The total potential savings over three years from a 35-server upgrade using virtualization, including indirect cost savings such as lower energy bills

Source: energystar.gov, “Virtualize Servers,” June 17, 2025

74%

The percentage of enterprises that use cloud services, driving the growth of the virtualization software market

Source: The Business Research Company, “Virtualization Software Global Market Report 2025,” January 2025

$100B

The projected value of the global market for virtualization software in 2025

Source: The Business Research Company, “Virtualization Software Global Market Report 2025,” January 2025

Virtualization, by the Numbers

$281,000

The total potential savings over three years from a 35-server upgrade using virtualization, including indirect cost savings such as lower energy bills

Source: energystar.gov, “Virtualize Servers,” June 17, 2025

74%

The percentage of enterprises that use cloud services, driving the growth of the virtualization software market

Source: The Business Research Company, “Virtualization Software Global Market Report 2025,” January 2025

$100B

The projected value of the global market for virtualization software in 2025

Source: The Business Research Company, “Virtualization Software Global Market Report 2025,” January 2025

cdw

Four Virtualization Path Options

There’s no one best way forward for organizations seeking to optimize their virtualization environments. But broadly, teams will land on one of the following four approaches. The right path will depend on an organization’s business goals, existing investments, IT team skills and timeline.

STAY THE COURSE: For organizations with longstanding VMware investments, staying the course with the vendor may be the most practical and cost-effective option, especially in the short term. Many teams are already trained on VMware, with mission-critical processes such as disaster recovery and compliance monitoring closely linked to their VMware stack. Further, familiar and proven tools such as vSphere and vMotion continue to deliver the reliability and performance demanded of enterprise IT infrastructure.

Newer tools such as VCF and Live Recovery provide additional value, and VMware Aria Suite is a much more powerful management platform than the vCenter dashboard that IT teams have been using for years. For some organizations, renewing an existing VMware agreement may be more economical than migrating, especially when factoring in retraining, replatforming and the risk of potential downtime.

MIGRATE TO A NEW PLATFORM: For organizations looking for greater flexibility or lower costs, migrating to a new hypervisor platform may be the right move. Options such as Microsoft Azure Local, Nutanix AHV and Red Hat OpenStack all offer strong performance and robust feature sets, with licensing models that some organizations may find more economical.

While the prospect of switching virtualization platforms is often daunting, the transition can be relatively straightforward with the right combination of planning, partners and tools. Many organizations take a phased migration approach, starting with development and test environments to reduce risk and build momentum before moving onto their production environments. Sometimes, teams run both platforms side by side during the transition to minimize the chances of disruption.

TAKE A HYBRID APPROACH: By adopting a multihypervisor or hybrid cloud strategy, organizations can continue using their VMware infrastructure for some portion of their workloads while running the rest on other infrastructure or in public cloud environments. This approach is a good fit for organizations that want to keep their mission-critical applications running in the familiar environment of VMware but also want to take advantage of the cost efficiency and flexibility offered by other options for less critical workloads.

For organizations taking a hybrid approach, Azure Local may make sense to support Microsoft tools and licensing bundles, while Nutanix AHV is attractive to teams seeking the simplified management capabilities of hyperconverged infrastructure.

MODERNIZE AND OPTIMIZE: There may be opportunities for organizations to revamp their IT environments to better take advantage of VMware’s new licensing structure. Many organizations have allowed their data center hardware to sprawl over time, simply purchasing new physical hosts whenever a new need arises. With VMware’s licensing costs now tied to physical CPU cores, this sort of hardware scale-out can quickly drive up costs.

By investing in modern, high-end hardware solutions, organizations may be able to optimize their VMware utilization and bring down their bills. Also, VMware’s bundled offerings may help teams make more economical use of some of their other IT investments. For instance, teams can use the vRealize Log Insight tool included with VCF to filter logs before sending them to external monitoring tools, helping to reduce costs for solutions that bill based on data volume.

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Business Continuity and Disaster Recovery

Downtime due to causes such as cyberattacks and natural disasters represent a major threat to business operations, with a single hour of downtime costing at least $300,000 for 90% of organizations. Modern virtualization software can provide organizations an opportunity to enhance their business continuity and disaster recovery capabilities. 

CYBER RESILIENCE: Virtualization enables IT teams to isolate systems through measures such as network segmentation and virtual backups. This helps organizations recover quickly from disruptions and get back to business.

GROUND-TO-CLOUD DATA REPLICATION: Virtualized systems allow IT teams move data efficiently between on-premises environments and the cloud. The replication of virtual machines VMs in the cloud provides organizations with a flexible way to restore operations that have been disrupted.

AUTOMATION IN TESTING: Dependencies on external systems or services can hamper software testing by affecting the availability and accessibility of dependent systems. However, virtualization minimizes these dependencies, enabling efficient and thorough testing.

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Andrew Young

Andrew Young

Hybrid Infrastructure Strategy Lead

Andrew Young is an experienced Hybrid Infrastructure Strategy Lead with a strong blend of technical expertise and business acumen. He is dedicated to driving organizational growth and innovation through the development and execution of strategic initiatives and skilled in mapping out comprehensive hybrid infrastructure strategies encompassing networking, storage, compute, and cloud solutions.
Roger  Haney

Roger Haney

Chief Architect for Software-Defined Infrastructure, CDW

Roger Haney currently serves as CDW’s chief architect for software-defined infrastructure, leading technical efforts around the “4th Cloud” and covering all on-premises, colocated and hybrid cloud architectures for CDW. He currently focuses on architecture modernization, container-first strategies, hybrid cloud platform engineering operations design and Operator Framework automated operations. He