The landscape of data center infrastructure is shifting dramatically, influenced by recent licensing changes from Broadcom that are driving up costs and prompting enterprises to reevaluate their virtualization strategies. A new trend — devirtualization, a process of migrating workloads from virtual to physical environments — is taking shape as a response to these changes, according to Gartner’s 2024 Hype Cycle for Data Center Infrastructure Technologies report.

“On-premises virtualized large complex workloads with more marginal consolidation benefits are being considered to rehost on physical servers or devirtualize,” Gartner said in the report. “Clients are seeing increased costs with on-premises virtualization with Broadcom’s acquisition of VMware. Costs are not the only factor alongside service levels, based on resilience, availability and portability of the workloads.”

According to Gartner, Broadcom’s new licensing models, which transition from enterprise license agreements to more complex consumption models, can force businesses to pay 2-3 times more. This substantial cost hike is particularly challenging for large workloads that do not benefit from the density increases and cost savings associated with consolidating smaller workloads.

The high cost would make it difficult for some enterprises to justify maintaining their current virtualized environments.

So, what exactly did Broadcom do that triggered the price rise?

After the acquisition of VMWare, Broadcom merged many VMware products into two main offerings: VMware Cloud Foundation and VMware vSphere Foundation. Some components have been integrated into these two solutions or eliminated entirely, such as the old VMware End-User Computing (EUC), now called Omnissa. As a result, VMware customers can no longer purchase perpetual licenses or just the ESXi hypervisor on its own.

These changes have made it more expensive for companies to run virtual machines, particularly for demanding tasks. As a result, some companies are considering a surprising move: ditching virtual machines altogether and going back to using physical computers for specific workloads. This approach, called “devirtualization,” can offer cost savings but comes with the added complexity of managing physical hardware.

As per Gartner, another factor that is driving this trend is that large workloads running on dedicated VM hosts do not benefit from the same density increases and cost savings as consolidating small workloads.

“This highlights large dedicated workloads as potential cases for devirtualization,” Gartner added in the report.

Devirtualization, while currently applicable to only about one percent of organizations, is seen as a potential long-term solution despite its complexities, Gartner said in the Hype Cycle 2024 report.

Devirtualization is moving a workload or application from a hypervisor-based virtualized host to a physical host consisting of server hardware, operating system, and management tools.

Gartner anticipates that it could take five to ten years for devirtualization to reach widespread adoption and achieve the “plateau of productivity” where the technology becomes mature and widely accepted.

However, Gartner said, it has its own set of challenges and can have varied business impacts.

“As workloads devirtualize and move to physical hardware, the portability functions need replacing in the bare metal physical world of devirtualization,” Gartner said in the report. “This requires investment in high value and high cost replacement functions and buy-in from the business.”

Besides, going back to physical with devirtualization results in the “need to invest in complex and costly infrastructure such as OS or DBMS clusters” to replace the resilience functionality of live migration and host-based recovery.

While large or dedicated server VMs are more marginal workloads to virtualize and good contenders for devirtualization, Gartner said, it is not as easy to look at the impact of replacing live migration and host-based recovery on devirtualized physical workloads.

In addition to devirtualization, the report also points to the rise of “revirtualization” or virtual-to-virtual migrations as another potential solution, which is about moving from VMWare to another hypervisor vendor.

Again, VMWare licensing changes have been attributed to this trend by Gartner.

“With significant changes in VMware licensing, many organizations are considering an alternate hypervisor built on open-source or alternate technologies,” Gartner said in the report. “Clients are also looking at ways of defining the scope of managing enterprise agreements using virtualization vendors as they move to subscription models.”

This trend is driven by organizations seeking to mitigate technical deficiencies or address commercial risks introduced by incumbent providers moving to subscription models.

Revirtualization is typically undertaken to overcome a technical deficiency or to address a viability or commercial risk, the report mentioned.

Gartner warns that while revirtualization might help reduce exposure to increased audit and contractual issues, it can also increase the total cost of ownership and introduce new operational challenges.

While devirtualization is at its “embryonic” stage with about one percent of organizational penetration, Gartner said revirtualization is a bit mature with about five to twenty percent of enterprises already adopting it.

These trends underscore the dynamic nature of data center technologies and the critical decisions enterprises must make to stay competitive and efficient in a rapidly changing environment.

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