Three AV64 hosts in Azure VMware Solution need 192 cores of VMware Cloud Foundation. At the $399.90 per core per year that reseller Wiresoft advertises for VCF (one of several catalogue prices Vates tracked in August 2026), that is roughly $76,800 a year. Until this Saturday, many Azure VMware Solution customers never saw that number, because it was buried inside the hourly host rate Microsoft charged them.
On October 31, 2026, that ends for pay-as-you-go customers. Microsoft’s portable VCF licensing reference, revised on October 28, states it plainly: “License-included pay-as-you-go deployments must transition to portable VCF to remain compliant.” After that, the VMware license is a separate contract with Broadcom, and the Azure bill covers only infrastructure and the managed service.
This is a FinOps problem more than a technical one. The migration itself is a portal form that, per Microsoft, runs “without downtime or workload interruption.” What changes is who you pay, how you forecast, and which renewal date can take a private cloud out of compliance. Here are the questions finance and IT should answer together, in the order they tend to come up.
Who is actually affected on October 31?
Three groups, on three different clocks.
Pay-as-you-go hosts with the license included. These are hosts deployed before October 15, 2025 and billed hourly with VCF bundled. They are the ones on the Saturday deadline. Every deployment since November 1, 2025 has already been on bring-your-own-license (BYOL), because Microsoft stopped including VCF in new node purchases on that date.
Hosts covered by a license-included reserved instance. These get more time. Microsoft’s reference gives them until August 30, 2027 to “exchange their reservations for VCF BYOL reservations or transition those workloads off Azure VMware Solution.” There is a catch in the fine print: if a reservation expires before August 30, 2027, its license-included benefit ends on the expiry date, not the later one. A one-year reservation bought in early 2026 lapses well before the headline deadline.
Anyone running the vDefend Firewall. The number of firewall cores covered by the bundle was frozen on October 15, 2025. Usage above that number already requires a separate Broadcom add-on license.
If your organization runs VMware on Google Cloud VMware Engine instead, none of this is news: Google made the same switch on November 1, 2025. There is no hyperscaler left where VMware licensing stays bundled for new capacity.
Is BYOL cheaper, as Microsoft says?
The infrastructure line is. The total bill depends entirely on what you pay Broadcom.
Microsoft says the BYOL host SKU “is priced lower than AVS with the VCF subscription bundled,” but as CloudTech News pointed out in August, that comparison excludes the price of the VCF subscription bought separately. Microsoft is comparing a host with a license to a host without one. Of course the second number is smaller.
The number that decides your total is the Broadcom per-core price, and Broadcom does not publish a list. The advertised catalogue prices Vates found in August ranged from €362.24 (Software-Express, Germany) to $399.90 (Wiresoft) per core per year for VCF, and Vates noted the only advertised multi-year VCF prices it found were “effectively linear,” meaning no visible discount for committing to three or four years. Negotiated enterprise prices will differ, but those figures are a reasonable ceiling for a first budget pass.
Run it at scale and the stakes become clear:
| Deployment | Cores to license | VCF at $399.90/core/year |
|---|---|---|
| 3 × AV64 | 192 | about $76,800 |
| 6 × AV52 | 312 | about $124,800 |
| 16 × AV36P | 576 | about $230,300 |
Core counts come from Microsoft’s per-host table (AV36 and AV36P: 36, AV48: 48, AV52: 52, AV64: 64). Your actual quote may be lower. The point is that this line now has its own owner, its own contract and its own renewal, and it needs its own row in the forecast.
How many cores do we have to buy?
Every physical core on every BYOL host. The arithmetic is simple multiplication, but three details trip people up.
First, the registered core count must “exactly match the deployed BYOL cores” on each private cloud, according to Microsoft’s configuration guide. You can split one Broadcom key across several private clouds, but the total registered cannot exceed what you bought. Scaling out a cluster without updating the registration makes the private cloud noncompliant.
Second, mixed licensing is allowed. A private cloud can keep three license-included AV36P hosts under an active reservation and add four BYOL hosts, in which case you register 144 cores (4 × 36), not 252. That makes it possible to stagger the transition, but it also means two billing models inside one cluster.
Third, the firewall is counted separately. NSX Distributed Firewall needs add-on cores equal to every host core in the private cloud: 10 AV36P hosts need 360. The Gateway Firewall formula is edges × vCPUs per edge × 3. Check that math yourself: Microsoft’s own worked example for two large edges with eight vCPUs each lists 64 cores, while its formula produces 48. When the vendor’s documentation disagrees with itself, the reconciliation is your job, not theirs.
What happens if we miss the deadline?
Workloads do not stop on November 1. The exposure is quieter and arguably worse.
Microsoft’s reference says a private cloud that runs more cores than Broadcom licensed “becomes noncompliant and is at risk of suspension.” It also says something procurement teams should read twice: “Microsoft reports BYOL registrations and associated customer data to Broadcom monthly to meet partner compliance requirements.” Your hyperscaler is now a reporting channel for your license position. Any gap between deployed and licensed cores is visible to the vendor that sets your price, every month.
That changes the negotiation. A customer who arrives at a Broadcom renewal already out of compliance has no leverage. A customer who registers on time, at the right core count, negotiates from a clean position.
What do we do about our existing reservations?
Exchange them, but sequence it carefully. Microsoft’s process is to exchange the license-included reservation for the equivalent VCF BYOL reservation in the Azure portal, then register the Broadcom license details on the private cloud “within 60 minutes of the exchange.” That 60-minute window means the Broadcom key, site ID, serial number and expiration date need to be in hand before anyone clicks Exchange. In most organizations those details sit in a procurement system the cloud team cannot see.
Map every reservation’s actual end date before planning around August 30, 2027. The reservations that expire first lose their bundled license first.
There is also a mismatch to model. An Azure reservation runs one or three years from its purchase date. A Broadcom subscription runs from its own start date. Microsoft is explicit that “an expired VCF subscription makes BYOL hosts noncompliant” even when the Azure reservation is still active. Two contracts, two terms, and the shorter one controls compliance. If your team has already been working through Azure’s new reservation exchange restrictions, this is the same lesson in a different wrapper: commitments only save money when someone tracks every date attached to them.
Should we use this as the moment to leave VMware?
Plenty of organizations are asking. A Unisphere Research survey of 269 VMware users, commissioned by third-party support provider Rimini Street, found 90% said higher licensing costs were pushing them to consider alternatives and 48% had no plans to move assets to VCF, The Register reported on October 7. Rimini sells VMware support, so treat the headline with that in mind. The same report cites a more neutral forecast: Gartner predicts 55% of enterprises will begin proofs of concept for VMware alternatives by 2029, up from 25% in 2026.
The honest answer for most teams is that October 31 is too close for an exit to be the plan. Azure VMware Solution exists precisely because rewriting or replatforming hundreds of VMs takes quarters, not weeks. Register on time, buy the Broadcom term that matches your realistic exit horizon, and run the replatforming analysis on its own schedule. Microsoft’s Azure Migrate can assess the same estate for native Azure VMs, which gives you a second cost line to compare against VCF plus AVS infrastructure. The decision framework for what stays and what moves applies here as well; the difference is that the license cost is now visible enough to put in the model.
What you should not do is sign a long Broadcom term by default. If the assessment says half the estate leaves within two years, a three-year subscription for every core is the most expensive way to find that out.
Who owns this line item now?
Somebody has to, and it is usually not obvious who. Before, VMware licensing was an invisible slice of an Azure meter, so it lived wherever the Azure bill lived. Now it is a software subscription with a different vendor, a different renewal date and compliance consequences that land on a cloud environment.
In IT operations, the renewal that causes the outage is rarely the big strategic contract that everyone watches. It is the second contract attached to it, owned by a different team, tracked in a different system, ending on a different date. This change manufactures exactly that situation for every Azure VMware Solution customer.
A workable split:
- Procurement or vendor management owns the Broadcom contract, the core entitlement and the renewal date, and treats it like any other enterprise license agreement, including the notice window.
- The cloud or platform team owns the registered core count in the portal and updates it with every host change.
- FinOps owns the reconciliation: deployed cores in Azure against entitled cores from Broadcom, monthly, ideally before Microsoft’s monthly report to Broadcom does it for you.
- Finance moves the cost out of the cloud consumption forecast and into the software subscription budget, and stops comparing this year’s AVS bill to last year’s without adjusting for the license that left it.
That last point will matter at budget review. A team that moved to BYOL will show a falling Azure VMware Solution bill and a new Broadcom invoice. Anyone reading only the Azure cost reports will conclude cloud costs went down. They did not. They moved.