What is happening with VMware and Cloud Service Providers?
Broadcom’s acquisition of VMware has brought major changes to its partner ecosystem.
Since October 2025, Broadcom has formally ended VMware’s Cloud Service Provider (VCSP) program and replaced it with a highly selective, invitation-only model centered on VMware Cloud Foundation (VCF).
What does this mean for Cloud Service Providers?
For many regional Cloud Service Providers (CSPs) and Managed Service Providers (MSPs), particularly across Germany, Switzerland, and the wider DACH region, this means they can no longer renew agreements or onboard new VMware customers. Many are now evaluating how to continue serving customers while maintaining profitability and compliance.
What are the biggest consequences of the VMware CSP changes?
The impact varies depending on whether a provider remains in VMware’s ecosystem or not.
Some providers are being forced to find an alternative
Many regional providers were not invited into Broadcom’s new partner model. As existing agreements expire, these providers must either migrate customers to a different platform, establish a new virtualization strategy, or risk losing their ability to offer VMware-based services altogether.
Providers that remain face higher costs
For providers that continue offering VMware services, the transition to VMware Cloud Foundation often requires adopting a broader and more expensive subscription model.
Instead of licensing only the components they need, providers may be required to purchase a larger bundled platform, significantly increasing costs and pressure on margins.
Is replacing VMware with another hypervisor the best long-term solution?
Not necessarily.
Replacing one proprietary hypervisor with another does not solve the underlying problem: vendor lock-in.
Licensing models change. Vendors get acquired. Pricing increases. The risk remains the same.
Instead of moving from one proprietary platform to another, many providers are using this moment to rethink their infrastructure strategy around open standards and open-source technologies.
Additionally, there are sovereignty concerns. European organizations want to keep critical workloads under local control and reduce dependence on foreign-owned platforms. For Cloud Service Providers, sovereignty is increasingly becoming a competitive differentiator.
What is the alternative to VMware?
The answer is open source.
The VMware changes have highlighted the risks of building a business around a single proprietary platform.
One increasingly popular approach combines Kubernetes with KubeVirt.
KubeVirt allows organizations to run traditional virtual machines alongside containerized applications within Kubernetes. This creates a unified platform for both legacy and cloud-native workloads.
Why isn’t KubeVirt alone enough?
KubeVirt solves virtualization, but enterprise platforms require much more than a hypervisor.
Organizations still need lifecycle management, automation, multi-tenancy, self-service capabilities, upgrades, security controls, and operational tooling to run production environments at scale.
This is where Kubermatic comes in.
We help Cloud Service Providers build and operate open, sovereign alternatives to VMware.
Using Kubermatic Kubernetes Platform, Kubermatic Virtualization, and KubeVirt, we enable providers to run virtual machines and Kubernetes workloads on a single platform, without the licensing constraints and vendor lock-in of traditional virtualization stacks.
Has this approach been proven in production?
Yes.
Swisscom, Switzerland’s leading ICT provider, adopted this approach while building a next-generation cloud platform for highly regulated customers.
Rather than extending its legacy virtualization environment, Swisscom chose to build a new platform based on Kubermatic Kubernetes Platform, Kubermatic Virtualization, and KubeVirt.
The resulting architecture has been recognized by the Cloud Native Computing Foundation (CNCF) as an example of large-scale cloud-native infrastructure modernization.
How did Swisscom build a sovereign cloud platform with Kubermatic?
Swisscom’s goal was to build a modern platform that could support both existing virtual machine workloads and cloud-native applications while maintaining full control over its infrastructure and data.
Together with Kubermatic, Swisscom built an open-source platform based on Kubermatic Kubernetes Platform (KKP) and KubeVirt, creating a single operating model for both VMs and Kubernetes.
Most importantly, the platform remains fully operated by Swisscom, in Switzerland, under Swiss jurisdiction.
What were the results?
Swisscom successfully launched its Kubernetes platform as the company’s internal container platform.
The new platform provides self-service provisioning, automated scaling, faster updates, improved resilience, and reduced dependence on proprietary vendors.
For Swisscom and its customers, the result is a modern cloud platform with full control over infrastructure and data.
How long did the migration take?
Swisscom achieved adoption quickly.
Within the first nine months of operation, more than 60% of targeted workloads had already been migrated to the new platform.
What are the biggest concerns when migrating away from VMware?
For most organizations, the biggest challenge is not choosing an alternative. It is managing the migration risk.
The good news is that most VMware workloads can be migrated successfully. The key is understanding which workloads can move as-is, which should be modernized, and which require additional planning.
Will my virtual machines still work?
In most cases, yes.
KubeVirt allows organizations to run traditional virtual machines without changing the applications running inside those VMs.
This enables organizations to preserve existing investments while modernizing the underlying infrastructure.
Do all workloads need to be migrated as virtual machines?
No.
Many organizations discover that some workloads are better suited for containers.
A VMware migration project is often an opportunity to identify which applications should remain virtual machines and which can be modernized into cloud-native services.
Most successful migrations use a combination of both approaches.
How can organizations reduce migration risk?
At Kubermatic, we implement a phased migration approach:
- Uncover - Create a complete inventory of VMware workloads and dependencies.
- Analyze - Identify compatibility requirements, networking considerations, and modernization opportunities.
- Pilot - Migrate a small set of workloads to validate performance and operational processes.
- Plan and Scale - Execute a phased rollout based on lessons learned from the pilot.
This approach minimizes disruption, preserves rollback options, and reduces risk throughout the migration process.
Why is this a defining moment for European cloud infrastructure?
The end of the VMware CSP ecosystem represents more than a licensing change.
It is forcing providers to rethink sovereignty, vendor dependence, and long-term platform strategy.
Swisscom’s experience shows that there is an alternative: a sovereign, open-source platform that supports both virtual machines and cloud-native applications without creating a new dependency on proprietary technology.
How can organizations get started with a VMware alternative?
Start with an assessment.
Identify which workloads need to remain virtual machines, which can be modernized into containers, and which business, compliance, or sovereignty requirements must be met.
From there, run a small pilot before committing to a large-scale migration. This helps validate performance, operational processes, and migration paths while minimizing risk.
At Kubermatic, we help Cloud Service Providers assess their VMware footprint, build a migration strategy, and implement sovereign cloud platforms based on Kubermatic Kubernetes Platform, Kubermatic Virtualization, and KubeVirt.
About Kubermatic
Kubermatic is a Germany-based open-source company helping Cloud Service Providers and enterprises build sovereign cloud platforms.
Built on Kubernetes and KubeVirt, our solutions enable organizations to run virtual machines and cloud-native workloads on a unified platform while avoiding vendor lock-in.
Trusted by leading providers such as Swisscom and recognized as a top European contributor to the CNCF ecosystem, Kubermatic helps organizations modernize their infrastructure while maintaining full control over their data, operations, and future technology choices.
