Microsoft ends license-included Azure VMware Solution, and Broadcom’s VCF becomes the only door in
On August 20, 2026, Microsoft announced the retirement of the license-included Azure VMware Solution: sales stop after October 31, 2026, and a mandatory move to a VCF BYOL model before August 30, 2027. For customers, this is the last exit without going through Broadcom’s VMware Cloud Foundation bundle.
August 20, 2026. Microsoft announces the end of the license-included version of Azure VMware Solution (AVS). October 31, 2026. Sales of that offer stop. August 30, 2027. Customers must have moved to a BYOL model built on VMware Cloud Foundation (VCF), or face service disruption.
For a cloud leader, the news fits in one sentence: the last doorway into VMware without going through Broadcom’s big bundle is closing, and both the bill and the architecture need to be revisited before 2027.
What AVS was, and what Broadcom did to it
Azure VMware Solution is Microsoft’s long-standing offer for anyone who wants managed VMware inside Azure: vCenter, vSAN, vSphere, and NSX, licenses included, operated by Microsoft. It was the alternative for organizations that wanted to stay on VMware without jumping to VCF — the single bundle Broadcom has built its entire strategy around since the acquisition.
The nuance that matters: AVS does not include the SDDC Manager, the centralized management tool Broadcom uses to package its wares into a hybrid cloud in VCF. AVS was therefore, structurally, a path outside VCF — and that is exactly what Broadcom no longer wants to leave open.
Since the acquisition, Broadcom has made VCF the only commercial axis: no more standalone entry-level virtualization product, and — a decision announced late 2025 — hyperscale partners are no longer allowed to sell VMware licenses. In practice, Microsoft, Google Cloud, and the others must now require customers to bring their own VCF licenses. The shift of AVS to BYOL is the direct application of that rule at Microsoft.
The timeline, in plain terms
Microsoft’s announcement breaks into two deadlines that must not be confused. The first, October 31, 2026, ends sales of the license-included version. The second, August 30, 2027, ends operations: existing environments will no longer work if they have not migrated to AVS VCF BYOL.
Microsoft’s guidance is explicit and unusually blunt: “allow plenty of time to purchase VCF licenses from Broadcom and complete the transition,” and “start assessing current AVS environments immediately.” The phrase “avoid service disruption on August 31, 2027” says what the announcement softens: this is a firm deadline, not a recommendation.
For affected customers, the work does not start on switchover day. It starts with an inventory: which environments still run on AVS, what workload they host, and how long a migration really takes. A managed VMware estate does not move in a quarter, especially when the destination imposes a license-model change on top of an infrastructure change.
The real cost is VCF, not Azure
The financial pivot is not the cloud: it is the license. Broadcom demands VCF as the only ticket in, and VCF is billed per core, with minimums that change the equation for mid-sized estates. A cluster of a few hosts running on a simple vSphere license now has to fund a full suite, billed on a 16-core-per-socket minimum, on subscription.
The consequence is a calculation every AVS customer must make calmly before 2027: stay on VMware via VCF BYOL, or leave VMware for an alternative. This is not the first time this estate has been pushed to choose — Broadcom has already forced two waves of discontinuation among smaller cloud providers, and Allstate walked away from Broadcom while alleging a retaliatory license audit on the way out. The AVS shift extends the same pressure to hyperscaler customers.
The question is not theoretical. For a typical enterprise workload on AVS, staying means negotiating a VCF license, mapping it onto the Azure estate, then running the BYOL transition. Leaving means re-architecting: Azure VMware Solution has no one-to-one native equivalent, and a move to native Azure VMs, AKS, or KVM virtualization means rethinking the operations layer, not just moving virtual machines.
What to do before the deadline
The operational response runs in three steps, in order, and the first starts now.
Inventory. List the AVS environments, their workloads, their network dependencies, and their maintenance windows. Without this inventory, no option can be costed seriously.
Price both branches. On one side, the cost of VCF BYOL — a Broadcom license, negotiated at volume — plus the cost of the technical transition. On the other, the cost of an exit migration, to native Azure VMs or an alternative platform. The costing must include downtime, not just the license.
Decide, then plan backward. August 30, 2027 is the arrival point; the decision itself must come well before October 31, 2026, since license-included sales stop there and any new need will already have to go through VCF. A late decision shrinks the options to one: migrating in a hurry.
Verdict
If you still run Azure VMware Solution, the strategic decision is made now, not in 2027. October 31, 2026 freezes the license model; August 30, 2027 freezes the infrastructure. Stay on VMware only if you are ready to fund VCF at the scale of your estate — otherwise, start an exit to native VMs or a KVM alternative while there is still time to do it cleanly.
If you are evaluating VMware for a new project, the question already has its answer: do not enter an ecosystem whose only door is a per-core bundle. The signal Microsoft sends by closing the license-included option is unambiguous — Broadcom has definitively made VCF the only path into VMware, and that path has a price.
The rule to remember: the end of license-included AVS is not another price hike, it is the closure of an architectural alternative. Broadcom’s VCF becomes the only door in, and every customer must now choose between paying for that door or building the exit.