After Broadcom acquired VMware in November 2023, several licensing changes began to strain public sector IT budgets:

• Perpetual licenses eliminated: Products like vSphere Enterprise Plus and vSphere Standard are no longer sold as perpetual. All new purchases and renewals must be subscription-based via VMware Cloud Foundation (VCF) or vSphere Foundation (VVF). When a subscription expires and isn’t renewed, the software stops functioning.
• Forced bundles instead of point solutions: The portfolio has been consolidated into a few bundles (VCF, VVF, plus add-ons). Agencies that previously bought only what they needed now have to pay for full bundles, often funding capabilities they don’t use.
• Minimum core purchase tripled: The minimum subscription size jumped from 16 cores to 72 cores. For smaller environments, this is a major cost increase. For example, a rural county running a 16-core server now must license 72 cores—a 350% increase in the minimum purchase threshold.
• Three-year upfront payment for many SKUs: For non-VCF licenses, Broadcom now requires a three-year upfront commitment. This clashes with annual public sector budgeting and often requires special approvals.
• 20% late-renewal penalty: If a subscription isn’t renewed by its anniversary date, a 20% penalty is added based on the first-year subscription price. With procurement cycles that can take 60–90 days, many agencies face this as an almost built-in cost risk.
• Reported price increases: Partners and customers have reported up to 70% year-over-year subscription price increases, driven by bundle mandates, higher minimum cores, and the shift from perpetual to subscription.

For public sector organizations with fixed, legislatively approved budgets, these changes can force tradeoffs: delaying cybersecurity projects, slowing citizen service modernization, or postponing AI initiatives just to cover higher VMware costs. The removal of perpetual licenses also removes the option to “ride out” a tight budget year on existing entitlements, making cost planning more difficult and less predictable.

Exiting VMware and moving to AWS allows public sector organizations to rethink their infrastructure strategy while addressing budget, compliance, and modernization goals.

Key reasons and benefits include:

• Cost savings and predictability: Organizations that migrated from on-premises to AWS have seen up to 66% infrastructure cost savings on average. Optimization and Licensing Assessments (OLA) typically identify 40–60% compute cost reduction and 45–77% license reduction for Windows and SQL Server workloads through right-sizing and flexible licensing options.
• Elimination of VMware licensing dependency: By moving to AWS-native services or EC2-based workloads, agencies can phase out VMware licensing entirely and avoid bundle mandates, minimum core thresholds, and late-renewal penalties.
• Compliance-ready cloud: AWS GovCloud (US) and commercial regions are FedRAMP-authorized at Moderate and High impact levels. AWS supports CJIS, HIPAA (via BAA), IRS-1075, and GovRAMP alignment for state and local workloads. This helps agencies maintain or strengthen compliance across mandates such as HIPAA, CJIS, and FedRAMP.
• Funded assessments and migration support: AWS backs a complimentary Well-Architected Migration Assessment (WMA) and Optimization and Licensing Assessment (OLA) at no cost to qualifying organizations. Additional programs—MAP, VMP, AMA, and AWS-funded ISV tools—provide partner cash incentives, service credits, and tooling funding (up to $200K for assessment tools and up to $2M per customer for migration tooling).
• Multiple migration pathways: AWS offers four validated paths—Amazon EVS, EC2 rehost with Application Migration Service, AWS native services, and Enhanced Integration with AWS Transform—so agencies can choose the mix of “lift-and-shift” and modernization that fits their risk, timeline, and budget.
• AI-ready infrastructure: Once on AWS, organizations can tap into more than 200 cloud-native services, including Amazon SageMaker for machine learning and Amazon Bedrock for generative AI. This helps build the AI-ready data foundation needed for emerging mission requirements.
• Operational efficiency: Customers on AWS have reported 60% time savings through task automation and 43% lower time to market for new features, allowing IT teams to focus more on mission outcomes and less on infrastructure maintenance.

In short, moving to AWS helps public sector organizations reshape their infrastructure strategy: reducing exposure to VMware licensing changes, aligning with compliance requirements, and positioning for AI and digital service initiatives.

The AWS migration roadmap is designed to fit public sector realities—fixed budgets, long procurement cycles, and strict compliance—while providing a structured path away from VMware.

1. Assess (Weeks 1–6)

• Start with a complimentary AWS-backed Well-Architected Migration Assessment (WMA) and Optimization and Licensing Assessment (OLA), funded by AWS at no cost to qualifying organizations.
• Deliverables typically include:
  • Full inventory of VMware workloads (VM counts, utilization, dependencies).
  • Cost comparison of staying on VMware vs. migrating to AWS across all four pathways.
  • License-efficiency matrix (BYOL vs. license-included recommendations).
  • Readiness scorecard aligned to the AWS Well-Architected Framework.
  • Compliance gap analysis (which AWS regions/services meet your regulatory needs).
  • Target architecture and migration wave plan.

2. Mobilize (Weeks 6–12)

• Build the AWS landing zone (accounts, networking, IAM, logging, security baselines).
• Implement controls aligned to FedRAMP, CJIS, HIPAA, and state mandates.
• Set up connectivity (AWS Direct Connect or VPN) to on-premises data centers.
• Provision initial AWS services based on assessment findings.
• Run a pilot migration of a low-risk workload to validate the approach.
• Finalize the wave plan with timelines, resources, and risk mitigation.

3. Migrate (Weeks 12–36)

• Execute wave-based migrations, prioritizing workloads with the highest VMware licensing burden and the clearest migration path.
• Use one or more of the four AWS migration pathways:
  • Path 1 – Amazon Elastic VMware Service (Amazon EVS): Fastest way to run VMware Cloud Foundation in your own Amazon VPC. Good for rapid moves (e.g., data center closures) while preserving VMware tools and skills. Requires bring-your-own VCF subscription initially.
  • Path 2 – EC2 Rehost (Application Migration Service): Lift-and-shift VMware VMs to Amazon EC2 with near-zero downtime. Ideal for eliminating VMware licensing and moving to pure EC2, with 40–60% compute and 45–77% license savings often identified in OLA.
  • Path 3 – AWS Native Services: Refactor into containers (ECS/EKS), managed databases (RDS/Aurora), file services (FSx), and virtual desktops (WorkSpaces). This is the deepest modernization path, often delivering 50–70% compute savings for container-ready workloads and ~30% storage savings.
  • Path 4 – Enhanced Integration (AWS Transform): Use AI-driven orchestration to mix rehost and replatform in one project. Automatically translate network/security policies and migrate storage to services like Amazon FSx for NetApp ONTAP. Typical savings: 50–70% for container-ready workloads plus 45–77% license reduction.
• Each wave includes testing, cut-over with rollback options, performance validation, and decommissioning of on-premises infrastructure and VMware licenses.

4. Optimize (Ongoing)

• Apply Savings Plans and reserved capacity recommendations from the OLA.
• Right-size instances based on real utilization.
• Retire unused licenses and subscriptions.
• Expand use of AWS native services for additional savings and automation.
• Use AWS Budgets and Cost Explorer for ongoing cost governance.
• Build AI-ready data infrastructure using AWS analytics and machine learning services.

How funding programs fit in

• OLA (Optimization and Licensing Assessment): Fully funded by AWS; recommended starting point.
• Migration Acceleration Program (MAP): Partner cash incentives—up to 5% ARR for assessment (max $75K) and up to 20% ARR for mobilization (max $2M).
• VMware Modernization Program (VMP): Migrate-and-modernize service credits up to 25% ARR, reducing ongoing AWS costs.
• AWS Modernization Assurance (AMA): For larger deals (>$2M ARR), provides up to 25–30% of post-modernization ARR in partner cash, capped at $1M.
• AWS-funded ISV tools: Up to $200K for assessment tools and up to $2M per customer for migration and modernization tooling.

To get started, public sector organizations typically request the complimentary WMA/OLA, review their current VMware licensing and renewal dates, identify quick-win workloads, engage procurement and compliance stakeholders early, and use the migration as a chance to reimagine their AI and data strategy on AWS.