If you run workloads on Azure VMware Solution (AVS) using the SKUs that come with VMware licences included, you have a deadline you may not have planned for. Microsoft is retiring the licence-included version of AVS: sales stop on 31 October 2026, and existing environments on those SKUs must be transitioned by 30 August 2027. After that, AVS continues only as a bring-your-own-licence service — meaning you buy VMware Cloud Foundation (VCF) directly from Broadcom and bring it to Azure yourself.
Nutanix has, unsurprisingly, published its pitch for the alternative: move those workloads to Nutanix Cloud Clusters (NC2) on Azure instead. The original post is here — Simplify Your Off-Ramp from AVS Bundled VMware Licensing with Nutanix Cloud Clusters — and it’s worth reading in full. What follows is my read on it as someone who spends most of his time moving workloads off VMware, and on what I’d actually check before deciding.
What’s changed, and why it’s disruptive
The licence-included AVS SKUs were one of the last ways to consume VMware in a hyperscaler without a separate Broadcom contract. That door is closing. Under the new model, the Azure side of the bill (bare metal, networking, storage) stays with Microsoft, but the VMware software becomes a separate BYOL purchase — and that purchase means VCF 9, with Broadcom’s current bundling and pricing.
Which leaves AVS customers with three paths: buy VCF from Broadcom and stay on AVS; move to a different hypervisor in Azure; or leave Azure for those workloads altogether. Nutanix’s argument is for the middle option.
The Nutanix case, in plain terms
NC2 on Azure runs Nutanix’s own stack — AHV as the hypervisor, with its data services and networking — on Azure bare-metal nodes. The commercial argument has four parts, and they’re worth separating because they don’t all carry the same weight:
- MACC eligibility. NC2 software bought through the Azure Marketplace counts toward a Microsoft Azure Consumption Commitment. BYOL VCF licences for AVS don’t, because you’re buying them from Broadcom, not through Azure. If you have a MACC to burn down, this is the most concrete point in the whole argument.
- Reservation exchange. Existing AVS reservations can be transferred to NC2 bare-metal nodes through the Azure Reservation Exchange Program, rather than written off.
- Bare-metal pricing. Nutanix cites potential savings of around 40% on NC2-compatible bare metal (AN36P) versus the equivalent AVS node (AV36P). Treat this as a vendor estimate — Nutanix’s own disclaimer says as much — and model it against your actual node count and region before repeating it internally.
- No Broadcom dependency. You skip the VCF 9 upgrade and the associated licensing relationship entirely.
The migration story
This is where it becomes a technical decision rather than a commercial one, and it’s the part I’d be most confident about. Nutanix Move — included at no extra cost — is the same tool used for on-premises VMware-to-AHV migrations, and it handles AVS as a source. It discovers VMs, orchestrates replication, supports test failover, and cuts over with minimal downtime. I’ve written about it on this site before; it is a mature, boring tool in the best sense.
The second technical point is network topology. Flow Virtual Networking lets you preserve existing IP ranges and layout post-migration, which is the difference between “we moved the VMs” and “we moved the VMs and spent three weeks fixing firewall rules.” If you’ve done a cloud migration where addressing changed, you know how much that matters.
Third: Prism Central manages both on-premises Nutanix and NC2 on Azure from one console, with Life Cycle Manager handling updates. For anyone already running Nutanix in their data centre, NC2 is an extension of what they operate today rather than a new platform to learn.
Things I’d want to note before recommending it
Three honest caveats.
NC2 is software, not a managed service. The Nutanix post frames this as an advantage — the NC2 Portal automates cluster expansion and host remediation, you control your own lifecycle — and for many teams it is. But AVS was a managed service, and some organisations chose it precisely so they didn’t operate a hypervisor. If that was your reason for being on AVS, understand you’re taking on operations you didn’t have before.
The savings number needs your own model. A 40% bare-metal difference is meaningful, but it isn’t your total cost. Software licensing, reservation terms, egress, and whether you’re comparing like-for-like node counts all move the figure. Do the comparison properly.
Look at the other two paths too. For some workloads the right answer under this change is native Azure services, or repatriating to on-premises Nutanix rather than Nutanix in Azure. NC2 is a strong option; it isn’t the only one.
Where NC2 fits very well
Two use cases stand out. Disaster recovery: NC2 on Azure supports pay-as-you-go licensing through the NC2 Portal, and Multicloud Snapshot Technology can offload snapshots to low-cost Azure Blob storage — which makes a DR target you only pay properly for when you fail over to it. Virtual desktops: both Citrix and Omnissa are qualified on NC2 in Azure, and EUC has long been one of Nutanix’s stronger workloads.
What to do this quarter
Whatever you decide, the August 2027 deadline means inventorying now. List every AVS environment, note which SKUs it runs on, pull your current reservation terms, and find out whether you have a MACC and how much is left on it. That’s the information every one of the three paths needs, and it takes longer to gather than people expect.
If you’re on AVS and working out which way to go, get in touch — VMware-to-Nutanix migrations are most of what I do, and I’m happy to give a straight opinion on whether NC2 is the right answer for your case.
Source and further reading: Nutanix, Simplify Your Off-Ramp from AVS Bundled VMware Licensing with Nutanix Cloud Clusters (NC2), 18 August 2026. Microsoft’s dates for the AVS licence-included retirement are as reported by The Register.
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