VMware Shift: A Hybrid Cloud Alternative
- Updated: June 30, 2025
- Read Time: 4 mins
It’s been a little more than a year since VMware announced major licensing changes. Those changes are still sending shockwaves throughout IT departments even today. The new model forced many organizations to reconsider the future of their on-prem infrastructure—facing steep price hikes and fewer options.
If you’re still weighing your next move, this is your sign to take a serious look at a solution purpose-built for SMBs and SLED organizations: Lenovo hardware paired with Azure Local.
More than just a workaround, this is a reliable, cost-effective alternative to VMware that supports your hybrid cloud computing strategy, without the overhead.
Why Many Are Leaving VMware Behind
Broadcom’s licensing overhaul of VMware has made things more difficult for smaller IT environments. Unless your organization fits what we like to call VMware’s “sweet spot” (using VCF licensing with vSAN and NSX), you’ve likely felt the pain:
- Higher subscription-based pricing
- Loss of perpetual licensing models
- Limited flexibility for smaller deployments
That’s especially challenging for schools, nonprofits, and small businesses exploring hybrid cloud.
If your current setup no longer fits your needs—or your budget—it’s time to explore a different way forward.
A New Path: Lenovo + Azure Local
This solution blends the cost-efficiency of edge computing with the flexibility of cloud, offering a modern virtualization stack built for agility and growth.
What Is Edge Computing?
Edge computing involves processing data closer to where it is generated rather than relying on a centralized data center. This approach reduces latency and can be more efficient for certain workloads.
For small organizations, edge computing offers a balance between traditional on-prem solutions and complete cloud migration, providing localized processing power with cloud integration benefits.
How This VMware Alternative Works
This solution takes Lenovo hardware—typically a single, two-rack unit that fits both servers and storage units, taking up very little physical space and requiring very little power—configures that hardware with Azure Local (formerly known as Stack HCI), and eliminates the need for third-party storage and significant switching investments.
Key Benefits
- Cost Savings: By minimizing the need for additional hardware—particularly 25 gig switches (typically, you would want two switches for resiliency, approximately $40,000)—thanks to direct server-to-server connections, organizations will save significant money. And that’s even before you get into licensing prices. With Azure Local, you can run your most demanding workloads and what would be the most expensive virtual machines (VMs) on-premises, significantly reducing your cloud budget.
- VMware Replacement: For customers left in the lurch by VMware’s recent changes, this solution provides an enterprise-grade path forward without the enterprise-grade sticker price.
You can ensure that your organization can maintain a hypervisor and on-prem infrastructure without breaking the bank. - Azure Integration: This solution integrates tightly with Azure, allowing for simplified management through the Azure portal. This makes moving workloads between on-prem and cloud environments easy, offering flexibility and operational efficiency. Critical services can be migrated with just a few clicks.
Why It’s a Strong VMware Alternative
If you’re exploring alternatives to VMware, this solution checks all the boxes:
- Enterprise Capabilities, Minus the Enterprise Price
No third-party storage. No 25G switching. No massive licensing fees. Just an affordable, compact setup that delivers real value. - Seamless Azure Integration
Already using Microsoft 365 or Entra? Azure Local plugs right into your Microsoft environment and lets you manage workloads directly from the Azure portal—on-prem and in the cloud. - Built for Hybrid Cloud
This is hybrid cloud computing for small business done right. Start small, scale easily, and align with your long-term cloud goals. - Supports Microsoft’s Cost-Saving Models
Schools and nonprofits can take advantage of steep Microsoft discounts. And if you already have Windows Server Datacenter with Software Assurance, you avoid Azure Local’s per-core fees entirely.
Is Azure Local Right for You?
Azure Local is best for organizations that:
- Already use or plan to use Azure in the next 1–2 years
- Need localized compute power for latency, compliance, or cost reasons
- Want a flexible, scalable alternative to VMware
- Are building a long-term hybrid cloud strategy
It may not be the best fit if you don’t plan to move to the cloud at all or if your workloads require extremely high performance (I/O-intensive systems).
Helping You Find the Right VMware Alternative
At HBS, we don’t believe in one-size-fits-all solutions. This is one great alternative to VMware—but not the only one.
We’ll help you determine whether Lenovo + Azure Local is right for your business, or if another option (like Nutanix or Microsoft Hyper-V) makes more sense based on your:
- Feature needs
- Budget
- Management expectations
- Cloud plans
- Security and compliance goals
Whether you’re just starting to explore cloud solutions or you’re already deep in hybrid operations, we’re here to help.
Related Content
VMware Changes: Understanding New VMware Licensing and Products
Explore the changes to VMware licensing and product offerings, including the shift to subscription models and streamlined portfolio.
Take the Guesswork Out of Azure Migration with an Assessment
Migrating to Azure but unsure of the first steps? An Azure Migration Assessment provides the clarity you need on costs, performance insights, risks, and more.
Navigating the New VMware: Training Hyperconverged Infrastructure (Azure Stack HCI & Nutanix)
RECORDING AVAILABLE – Deepen your knowledge with our training on Hyperconverged Infrastructure technologies, Azure Stack HCI and Nutanix.
