Why Portable VCF Turns AVS Into Two Counterparties
Microsoft no longer sells Azure VMware Solution with VMware Cloud Foundation inside the Azure node. New deployments have required portable VCF since 1 November 2025. License-included pay-as-you-go hosts must move to portable VCF by 31 October 2026 to stay compliant. Reserved instances that still carry a Microsoft-managed VCF licence must be exchanged for VCF BYOL reservations (or the workloads must leave AVS) by 30 August 2027. Miss the dates and Microsoft says a noncompliant private cloud can be suspended.
That’s the problem.
This is not a modernization story. It is a license-model change. License-included AVS was a way to consume vSphere, vCenter, vSAN, and NSX as Azure infrastructure without a Broadcom VCF deal. That SKU is being retired. After the cutoff, Microsoft is not your VMware licensor on AVS. Broadcom is.
Microsoft is retiring the license inside AVS, not the service
The portable VCF reference, updated mid-August 2026, is the primary source. “Customers must purchase VCF licenses directly from Broadcom to use hyperscaler cloud services.” As of 1 November 2025, Microsoft no longer includes a VCF licence or subscription with new AVS node purchases.
The dates that matter:
| Date | What Microsoft Learn requires |
|---|---|
| 15 October 2025 | Eligible VCF-included vDefend Firewall cores were frozen. Usage above that number needs a Broadcom add-on. |
| 1 November 2025 | New AVS deployments must use portable VCF. |
| 31 October 2026 | License-included pay-as-you-go deployments must transition to portable VCF to remain compliant. |
| 30 August 2027 | Active reserved instances for VCF license-included hosts must be exchanged for VCF BYOL reservations, or those workloads leave AVS. If a reservation expires earlier, the license-included benefit ends on the expiry date. |
Azure VMware Solution is not being switched off. The VMware software inside it is changing hands. Do not let the announcement reframe this as “are you modernizing.” The question in the room is narrower: which of your AVS hosts are still license-included, what VCF you would have to buy to cover them, and whether you stay on AVS as BYOL or leave.
License-included and BYOL are two invoices, not one rename
License-included AVS is a Microsoft sale. You pay Azure for the host. The VMware licences ride inside that bill. You do not hold a separate Broadcom VCF entitlement for those hosts. That is the model that ends.
BYOL is a Broadcom sale plus a Microsoft sale. You buy portable VCF from Broadcom. You register it on the private cloud. You pay Microsoft for AVS capacity that no longer includes the VMware software. Microsoft reports those registrations to Broadcom monthly.
You can mix the two models inside one private cloud. Existing VCF-included hosts stay covered up to the number of active license-included reserved instances, or for pay-as-you-go nodes deployed before 15 October 2025. Additional hosts need portable VCF cores. You do not tie a key to a specific host. You register the entitlement on the Portable VCF (BYOL) page and keep the registered core count inside what you bought from Broadcom.
Two commercial acts. Two counterparties. One estate. If your file still says “we license VMware through Azure,” you are reading last year’s SKU. After October you cannot grow the old PAYG shape. After August you cannot keep the old reserved shape.
This is not a criticism of the teams who bought license-included AVS. It was the clean path. Traditional SAM tools prove what is deployed. They do not recast the same cluster as an Azure SKU, a Broadcom VCF purchase, and an exit option before a hard date.
If that feels familiar, the problem is not your team’s maturity. A SKU retirement is being answered with a “we have AVS” slide.
The bundle you buy is counted in cores, not in “VMware”
Picture the room. Your CIO forwards the Microsoft note. Procurement wants to know whether this is an Azure change or a Broadcom change. FinOps wants a number. You can pull an AVS inventory. You cannot, by Friday, produce a defensible split of license-included hosts versus anything already on BYOL, tied to the estate a VCF quote would cover, and a written stay-or-exit.
That is how a SKU change becomes exposure.
Microsoft publishes the core table you need: AV36 and AV36P are 36 cores per host; AV48 is 48; AV52 is 52; AV64 is 64. Three AV64 BYOL hosts need 192 registered portable VCF cores. A mixed private cloud with three license-included AV36P hosts and four BYOL AV36P hosts needs 144 portable cores registered, not 252. Mixing the two models against the wrong hosts is how a BYOL purchase gets oversized, or left short, which Microsoft says can get the private cloud suspended.
vDefend Firewall is a second count. If you enabled it under a license-included reservation before 16 October 2025, that eligible core count holds only until the reservation expires or 30 August 2027, whichever is first. After that, you need the Broadcom add-on. The bundle Broadcom wants sold is VCF. After 1 November 2025, preferring a thinner stack is not a buying option on new AVS nodes.
What to count on AVS before license-included disappears
Do this in the next thirty days, as a decision pack rather than a project. The dates that matter are 31 October 2026 and 30 August 2027, not the announcement.
| Date | Who sells what | What you must have |
|---|---|---|
| 31 October 2026 | Microsoft stops treating license-included PAYG as compliant | Host-level count of every license-included pay-as-you-go private cloud, by host type and core count. No growth on that SKU after this date. |
| Now through 30 August 2027 | Broadcom sells VCF. Microsoft sells AVS VCF BYOL capacity. | A VCF purchase from Broadcom that covers the hosts you keep on AVS, or a dated exit. Reserved instances exchanged before they expire. |
| 30 August 2027 | License-included reserved instances must be gone or converted | Completed move to AVS VCF BYOL, or workloads off AVS. Microsoft named this the RI exchange date. |
| vDefend, if enabled | Broadcom add-on above the 15 October 2025 eligible core freeze | A second core count, not a footnote on the host list. |
Can a non-specialist brief the CIO in fifteen minutes from the pack you have today? If the answer is no, you do not have an AVS position. You have a host list.
Put three numbers on one page: how many license-included hosts you run, what VCF entitlement would cover the ones that stay, and the date each path has to be finished. Count by host type, not “VMware” in the CMDB. If you only have the Azure bill, you are negotiating with their SKU list.
The decision layer, not another AVS inventory
You already have Azure invoices, a CMDB full of VMware records, and a private-cloud name in the portal. The gap is not another inventory. The gap is turning that file into a decision: which hosts are still license-included, what you must buy from Broadcom, whether you stay as BYOL or exit, and what has to be done before October and before August. LICENSEWARE sits on the inventory and ITSM tools you already run. It is not a rip-and-replace SAM suite. It is a decision layer: what matters, why it matters now, what should happen next. Audit Defense is the ELP before a suspension risk, not the Azure bill. Infrastructure Mapper is the host topology, and RVTools and vCenter are how that estate gets in. That is cost optimization on two invoices, not a rename; Tesco is the perpetual-to-subscription fight and CISPE is the hyperscaler/channel chapter. Neither is your AVS host count.
If you are heading into the October cutoff or an August 2027 reserved-instance exchange and your current tools still need three weeks to turn “we have AVS” into a license-included versus VCF BYOL number, book an Audit Readiness Review. You can also start on the free plan and run the analysis on your own data.
The question to walk in with
Do not let Microsoft frame this as modernization. Do not let Broadcom frame it as “you were always going to need Cloud Foundation.” The right question is: which AVS hosts are still license-included, what VCF we would have to buy to cover them, and what it costs to stay on AVS VCF BYOL versus leave, against this estate rather than a list price. That is a data question, not a sales question.
The vendor will walk in with a number. The only question is whether you have yours first: current, defensible, and tied to the contract in front of you.
