Cloud Services
Microsoft Is Retiring License-Included AVS. Here’s What Actually Changes.
-
Tharindu Ruwanpathirana
- 5 min read
Summary
• Microsoft stopped including VMware licences with new Azure VMware Solution (AVS) purchases from 1 November 2025, this already applies to any new deployment.
• October 31, 2026: License-included pay-as-you-go deployments must transition to portable VCF to remain compliant.¹
• August 30, 2027: Customers with active reserved instances for VCF license-included hosts must exchange their reservations for VCF bring-your-own-license (BYOL) reservations or transition those workloads off AVS.¹
• Every affected customer now has to buy VCF directly from Broadcom. The only real decision left is where to run it.
• Call to action: review your AVS licensing model and renewal dates now, well before either deadline arrives.
What's actually changing
For years, AVS offered something genuinely convenient: a way to run VMware inside Azure with the licence bundled straight into your Microsoft bill. One invoice, one relationship, no separate conversation with Broadcom required.
That convenience has already ended. According to Microsoft’s own Azure documentation, since 1 November 2025, new AVS deployments no longer include a VCF licence at all. Anyone standing up a new AVS environment today is already buying their VMware licence separately from Broadcom.
What’s new this year is that the same change now applies to existing customers too, and Microsoft has published hard dates for it.
The two dates that matter
October 31, 2026: License-included pay-as-you-go deployments must transition to portable VCF to remain compliant.¹ Microsoft’s documentation is direct about what happens if this date passes without action, the private cloud becomes non-compliant, and Microsoft can suspend it until the licensing is sorted out.
August 30, 2027: Customers with active reserved instances for VCF license-included hosts must exchange their reservations for VCF BYOL reservations or transition those workloads off AVS.¹ One detail worth knowing: if a reservation happens to expire before this date, the bundled benefit ends at that earlier date, not the later one. Worth checking your actual renewal date rather than assuming you have until 2027.
Why this is happening
This isn’t a Microsoft decision made in isolation. It’s a downstream effect of how Broadcom now licenses VMware software generally, VCF has to be purchased directly from Broadcom to run on any hyperscale cloud, and Microsoft is simply the latest, and one of the last, major cloud platforms to lock in a firm retirement date for its old, bundled model.
Where we fit in
Macquarie Cloud Services is an authorised VMware by Broadcom Pinnacle Partner. We’ve been through changes like this with our customers before, most recently when Broadcom restructured its wider partner program in 2025.
For AVS customers facing this transition, there’s a genuine choice to make, and it’s worth making deliberately rather than by default:
- Stay on AVS, and buy the VCF licence separately from Broadcom or from a reseller
- Move to native Azure, moving away from VMware entirely, which usually means re-platforming, with significant preparation across discovery, compatibility, design, testing, and migration.
- Move to MCS Launch, keeping the same VMware environment your team already knows, with the licence included and one predictable bill
- Move to MCS Launch and BYOL, built on a VCF 9.1 certified platform that’s typically more cost effective for customers who’ve already purchased their own VCF licence from Broadcom and want to keep managing that relationship directly, while still getting the same private cloud hosting and support.
The good news is you have a genuine choice here. Which option is right, depends on your workload, your team, and your timeline, and we’re here to make sure you’re choosing with the full picture in front of you, not deciding under deadline pressure.
What to do now
- Check which licensing model you’re on. Pay-as-you-go or reserved instance changes which deadline applies to you.
- Find your actual renewal or reservation expiry date. Don’t assume you have until 2027 if your reservation ends sooner.
- Get a real comparison of your options, staying on AVS with a separate VCF bill, rebuilding on native Azure, or moving to a private cloud partner, before you’re deciding under deadline pressure.
- Talk to someone before the deadline is close. A rushed decision at the last minute is how transitions can go wrong.
How Macquarie Cloud Services can help
Frequently asked questions
Is AVS being shut down?
No. Microsoft’s Azure VMware Solution documentation confirms the service continues to operate. What’s changing is how the VMware licence underneath it is purchased, not the platform itself.
Do I need to act if I’m on a reserved instance?
Not immediately, but you do need to know your actual expiry date. Bundled pricing holds until then, but not past 30 August 2027 regardless.
What happens if I do nothing?
For pay-as-you-go customers, your private cloud can be found non-compliant after 31 October 2026, and Microsoft has stated it may suspend a non-compliant environment. For reserved instance customers, the bundled pricing simply ends at your reservation’s expiry or August 2027, whichever comes first.
Does moving to MCS Launch mean our environment?
No. Launch runs the same VMware architecture, same tools, same skills your team already has. The decision is simply where to run it, including on MCS’s certified VCF platform, with a single bill and a more cost-effective operating model.
The bottom line: Microsoft didn’t choose to end this on a whim, it’s the last domino in a licensing shift Broadcom set in motion when it acquired VMware. Every AVS customer now has to buy VCF from Broadcom either way. The only decision left is where it runs.
Tharindu Ruwanpathirana
Contact us
Talk to an expert.
Let’s talk about where you are and what better looks like for your business.
- 1800 004 943
- Level 15, 2 Market Street Sydney, NSW, Australia