Azure VMware Solution customers who are currently using VMware Cloud Foundation licenses bundled with pay-as-you-go deployments have until October 31, 2026, to transition to a bring-your-own-license (BYOL) model. After this deadline, Microsoft states that these deployments will not be compliant with Broadcom’s licensing requirements unless customers have their own VCF subscription.
As of October 15, 2025, Microsoft ceased the sale of new Azure VMware Solution nodes that include VCF subscriptions. Moving forward, customers must purchase a portable VMware Cloud Foundation subscription directly from Broadcom and use it in conjunction with Azure VMware Solution.
Customers with active reserved instances for VCF-included hosts are subject to different terms. They can continue using the bundled VCF subscription until the reserved-instance term expires, at which point they must supply their own VCF subscription. If additional usage exceeds the capacity covered by an existing VCF-included reservation, BYOL is required.
Under the BYOL model, organizations must separately acquire the VCF software subscription from Broadcom and the Azure VMware Solution infrastructure from Microsoft. Microsoft notes that the AVS VCF BYOL option is priced lower than AVS with the bundled VCF subscription, although the cost of the VCF subscription purchased separately from Broadcom is not included in this comparison.
The licensing change does not impact how Azure VMware Solution operates. Microsoft remains responsible for providing the service as a managed VCF private cloud, handling Azure infrastructure, VMware host-level software management, patching, and upgrades.
Customers transitioning to portable VCF can register their Broadcom subscriptions with Azure VMware Solution via the Azure portal. Microsoft also supports mixed-licensing environments, where existing hosts are covered by license-included commitments while new capacity utilizes customer-owned VCF subscriptions.
Portable licensing allows eligible VCF subscriptions to move between an organization’s data center and Azure VMware Solution. This portability model was introduced by Microsoft and Broadcom to enable customers to retain software subscription rights when shifting between supported environments.
In 2025, Broadcom announced that VCF licenses could only be ported to public cloud services listed on its Certified Cloud Services roster, including active hyperscalers and VMware Cloud Service Provider partners. Non-renewing partners would no longer be certified for VCF license portability.
The BYOL model also necessitates that customers manage the number of VCF cores allocated to their Azure VMware Solution environments. Microsoft specifies that the total registered cores must not exceed the entitlement purchased from Broadcom, although customers can distribute the same VCF key across multiple private clouds.
Microsoft warns that an Azure VMware Solution private cloud exceeding its Broadcom core entitlement may become noncompliant and risk service suspension.
For customers exploring migration options beyond AVS, Microsoft offers resources to facilitate the move to Azure-native infrastructure or platform services. These resources assist in assessing VMware workloads and planning their migration to another Azure environment.
Azure Migrate can evaluate VMware environments for migration to Azure VMware Solution or directly to Azure virtual machines. AVS assessments estimate workload readiness, required AVS nodes, resource utilization, and monthly infrastructure costs, while Azure VM assessments evaluate the same VMware estate for deployment on Azure VMs.
Microsoft also supports the migration of virtual machines from an existing Azure VMware Solution environment to Azure. Azure Migrate documentation outlines the process for migrating VMware VMs running on-premises or in AVS to Azure.
The licensing changes introduced by Broadcom also extend to other cloud providers. Google Cloud, for instance, implemented similar adjustments to Google Cloud VMware Engine, mandating that customers acquire VCF licenses directly from Broadcom and purchase the BYOL version of VMware Engine separately from Google for new commitments made after October 15, 2025.
To maintain compatibility with the licensing changes, Google Cloud enforced capacity controls for VMware Engine nodes starting November 1, 2025. Portable VCF licenses were required for VMware Engine nodes, and on-demand usage was restricted to existing levels by adjusting regional project quotas. Customers needing additional capacity for eligible existing commitments could request a quota increase.
These hyperscaler licensing changes align with Broadcom’s broader restructuring of VMware, which involved shifting from perpetual licenses to subscription licensing, introducing subscription portability for supported hybrid-cloud environments, transitioning to per-core subscription pricing, and streamlining the product portfolio to focus on VMware Cloud Foundation and VMware vSphere Foundation.
The collaboration between Microsoft, Broadcom, and other cloud providers aims to provide customers with more flexibility and control over their software subscriptions and cloud environments as the industry continues to evolve.
(Photo by Rubaitul Azad)
See also: Microsoft expands Azure AI with Databricks and Mistral
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