Companies adopt hybrid architectures, move workloads as pricing, provider ecosystem change, ISG Provider Lens® report says
Enterprises users of VMware are modifying their IT environments as they adapt to changing options for licensing and provider services following the company's 2023 acquisition by Broadcom, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a global AI-centered technology research and advisory firm.
The 2025 ISG Provider Lens® global VMware Ecosystem Services report finds many enterprises are reconsidering their virtualization strategies amid an ongoing reconfiguration of VMware's product lineup and provider landscape. The wave of change since the Broadcom acquisition has accelerated adoption of hybrid and multicloud environments that allow organizations to maintain control of mission-critical workloads while exploring cost-optimized deployments for AI, analytics and containerized applications.
"The VMware ecosystem is at a pivotal moment," said Shafqat Azim, ISG partner and Americas lead, Digital Transformation. "As enterprises weigh the benefits of VMware against the need for cost efficiency and a growing number of IT architecture choices, many are exploring new strategies."
Broadcom's overall strategy with VMware is to maximize profitability by emphasizing its high-value platform offering and targeting a smaller number of enterprise accounts, the report says. It has shifted from perpetual licensing to a set of bundled subscription offerings, which has increased costs for many customers. Broadcom has also made the VMware Cloud Service Provider (VCSP) program available by invitation only, sharply reducing the number of recognized partners.
The changes have come as public and hybrid cloud environments challenge traditional virtualization approaches using private data centers, the report says. Companies are rapidly adopting hybrid cloud architectures to unify computing, storage and networking for scalability and security while keeping sensitive workloads on premises. VMware providers are responding to this trend by offering more services to help companies optimize hybrid and multicloud VMware implementations, including security and runtime performance management.
The VMware ecosystem is also changing as more companies modernize applications through containerization and DevOps practices, often with Kubernetes management, ISG says. Service providers increasingly offer platform-agnostic container management, and leading application modernization services now include VMware migration planning to help organizations assess which applications will benefit from staying on VMware or moving to alternative container orchestration platforms.
Rapid adoption of AI and generative AI is shaping enterprise demand for data processing, storage, orchestration and edge computing capabilities in ways that affect the VMware ecosystem, the report says. To take advantage of graphical processing for analytics and ML workloads, companies are looking to implement virtual graphics processing units (vGPUs) on VMware. Many are also seeking guidance and services for edge computing within VMware to perform AI tasks on devices closer to the source of data.
"Organizations are redesigning their infrastructure playbooks for an AI-driven economy," said Michael Barnes, lead author of the report. "They are adopting flexible hybrid architectures to integrate AI, modernize applications and optimize costs under the evolving VMware model."
The report also explores other trends in the VMware ecosystem, including rising demand for subscription cost management, workload assessment services and sovereign cloud strategies to support compliance and data residency requirements.
For more insights into the VMware-related challenges faced by enterprises in North America, plus ISG's advice for overcoming them, see the ISG Provider Lens® Focal Points briefing here.
The 2025 ISG Provider Lens® VMware Ecosystem Services report for North America evaluates 31 providers across three quadrants: Build and Modernize IT Foundations, Optimize and Secure Operations, and Innovate and Scale Applications.
The report names Accenture, Capgemini, Cognizant, DXC Technology, HCLTech, Kyndryl, TCS, Wipro and WWT as Leaders in all three quadrants. It names Tech Mahindra as a Leader in one quadrant.
The 2025 ISG Provider Lens® global VMware Ecosystem report is available to subscribers or for one-time purchase on this webpage.
About ISG Provider Lens® Research
The ISG Provider Lens® Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Canada, Mexico, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.
About ISG
ISG (Nasdaq: III) is a global AI-centered technology research and advisory firm. A trusted partner to more than 900 clients, including 75 of the world's top 100 enterprises, ISG is a long-time leader in technology and business services that is now at the forefront of leveraging AI to help organizations achieve operational excellence and faster growth. The firm, founded in 2006, is known for its proprietary market data, in-depth knowledge of provider ecosystems, and the expertise of its 1,600 professionals worldwide working together to help clients maximize the value of their technology investments.
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