Companies Are Moving From VMware: Sheetz Migrates 11,000 VMs to an Alternative Hypervisor

VMware has become significantly more expensive for some small and midsized businesses following Broadcom’s changes to its licensing and product structure. The move away from perpetual licences, combined with subscription-only offerings, per-core pricing, broader product bundles, and new contract terms, has left some organizations facing renewal costs that are difficult to justify.

Companies are now being pushed to make a difficult decision: pay the higher price, reduce their VMware footprint, continue using unsupported perpetual software, or migrate to another virtualization platform. One such company is Sheetz, the American convenience store and restaurant chain that is moving approximately 11,000 virtual machines from VMware vSphere to StorMagic SvHCI across 838 locations.

TL;DR

• Broadcom has moved VMware from perpetual licensing to subscription and term licensing.
• VMware pricing is now generally calculated per processor core, with products concentrated into larger subscription bundles.
• Some smaller businesses may now have to licence more software and capacity than they need.
• Organizations are choosing between higher renewal costs, reduced VMware use, unsupported perpetual deployments, or migration.
• Sheetz is replacing VMware vSphere with StorMagic SvHCI across 838 stores.
• The project involves approximately 11,000 virtual machines.
• Sheetz is continuing to use its existing Dell PowerEdge R440 and R450 servers.
• More than 600 locations had already been migrated, at an average pace of approximately 200 stores per month.

Why VMware Costs Have Changed

Broadcom completed its acquisition of VMware in November 2023 and subsequently made significant changes to VMware’s licensing, products, partner programme, and sales structure.

One of the largest changes was the completion of VMware’s move from perpetual software licences to subscription and term licensing. Under the old model, a business could purchase a perpetual VMware licence and continue using that version of the software indefinitely. Support and upgrades were normally purchased separately.

Under the new model, new VMware offerings are sold through subscriptions or fixed-term licences. Broadcom also ended the sale of new perpetual licences and the renewal of Support and Subscription contracts for perpetual products.

Businesses can continue using perpetual licences they already own. However, once the existing support agreement expires, they may no longer receive official technical support, software upgrades, security updates, or compatibility updates for those products.

Broadcom has also reduced VMware’s large catalogue of individual products and concentrated the portfolio around VMware Cloud Foundation and VMware vSphere Foundation.

Broadcom describes this as simplification. The company says its subscription model provides continuous innovation, predictable investment, easier product selection, and a more integrated private-cloud platform.

However, the effect can be very different for a small organization that only needs basic virtualization, centralized management, high availability, and backup integration.

A customer may now be required to purchase a larger bundle that includes capabilities it does not intend to use. Per-core licensing can also increase costs for businesses running modern processors with large numbers of cores, even when the number of virtual machines is relatively small.

Small environments can be affected disproportionately

A large enterprise may be able to use the networking, storage, automation, operations management, and private-cloud capabilities included in a VMware bundle.

A small business with two or three physical servers may need only the core hypervisor, centralized management, live migration, and high availability. Paying for a broader platform can be difficult to justify when many of the included functions are not required.

This does not mean every VMware customer will experience the same increase. Pricing depends on processor cores, product selection, contract terms, discounts, reseller arrangements, and the customer’s previous licences.

However, enough customers have reported substantially higher renewal proposals that reviewing VMware alternatives has become a serious business and technical priority.

What Sheetz Is Changing

Sheetz operates a large network of convenience stores and restaurants in the United States. Each store depends on local technology to support payment processing, loyalty programmes, kitchen operations, store management, and other essential services.

Since 2019, each Sheetz location has operated approximately 12 to 14 virtual machines on a pair of Dell PowerEdge R440 or R450 servers using VMware vSphere.

Sheetz is now moving these workloads from VMware vSphere to StorMagic SvHCI. Approximately 11,000 virtual machines across 838 locations are expected to be moved.

The company also plans to replace two additional virtual machines at each store as part of its transition from Windows 10 to Windows 11.

This is not primarily a public-cloud migration. Sheetz is replacing the virtualization and infrastructure software operating on servers located at its stores.

The workloads will remain close to the payment terminals, kitchen systems, store equipment, and business processes they support.

Why Sheetz Is Leaving VMware

According to reporting by Ars Technica, Sheetz cited concerns about VMware’s future pricing, subscription requirements, product bundling, and long-term contractual commitments.

Sheetz infrastructure team manager Scott Robertson said the Broadcom changes introduced too much uncertainty into the company’s future technology costs and planning.

For Sheetz, this was not only about the price of one renewal. The company had to consider what VMware would cost across hundreds of locations over several years.

Even a modest increase per server, processor, or core can become substantial when multiplied across more than 800 stores.

The bundled VMware platform may also include capabilities that are valuable in a large enterprise data centre but unnecessary for a small two-server store environment.

Sheetz therefore had to determine whether remaining on VMware was still the most appropriate technical and financial decision for this particular workload.

The company concluded that it could meet its virtualization, storage, management, and high-availability requirements using StorMagic SvHCI while retaining its existing server hardware.

What Is StorMagic SvHCI?

StorMagic SvHCI is a hyperconverged infrastructure platform designed primarily for edge, branch, retail, and distributed computing environments.

Hyperconverged infrastructure combines several functions that may otherwise be purchased and managed separately. These can include:

• Server virtualization
• Software-defined storage
• High availability
• Clustering
• Centralized management
• Hardware monitoring

SvHCI can operate on a single server, but the Sheetz configuration uses two servers at each store. The two-node design provides redundancy so that virtual machines can continue operating if one physical server encounters a problem.

StorMagic supports server hardware from several established manufacturers. It does not require Sheetz to replace all of its Dell servers with a proprietary appliance.

This is a major advantage in a project involving hundreds of locations. Reusing the existing Dell R440 and R450 servers reduces capital cost, shipping, installation work, project time, and electronic waste.

Sheetz already had experience with StorMagic

StorMagic was not an entirely new technology supplier for Sheetz.

The company had previously used StorMagic SvSAN as its software-defined storage layer alongside VMware. This gave Sheetz experience with StorMagic’s storage, replication, management, and support capabilities before it decided to replace VMware.

SvSAN and SvHCI are related but different products.

SvSAN supplies software-defined storage and high availability to environments that may use another hypervisor, including VMware.

SvHCI is a more complete platform. It includes the virtualization layer, software-defined storage, clustering, high availability, and management.

In the previous design, StorMagic worked with VMware. In the new design, StorMagic is replacing VMware.

How the Migration Works

Migrating 11,000 virtual machines requires more than copying files from one server to another.

Each migration must account for the VM configuration, virtual disks, networking, operating-system compatibility, application dependencies, storage placement, backups, validation, outage windows, and rollback procedures.

StorMagic provides a VMware VM Import Utility designed to transfer virtual machines from VMware vSphere into SvHCI.

The tool can copy virtual disk files and VM configuration data from VMware, create the replacement VM on the StorMagic platform, and queue several migrations for sequential processing.

StorMagic also offers a warm-import process. An initial copy can be performed while the original VM remains available. The remaining changes are synchronized later, reducing the amount of downtime required during the final cutover.

This type of automation is essential for Sheetz because the company is repeating a similar migration across hundreds of standardized locations.

Once the process is tested and documented, it can be applied repeatedly with fewer manual steps.

According to the company announcement, more than 600 stores had already been migrated, with the project progressing at an average rate of approximately 200 locations per month.

Remote migration changes the cost of the project

The migration is being carried out remotely. Sheetz does not have to send a virtualization specialist to every store.

A project requiring in-person technical work at 838 locations would involve substantial travel, scheduling, labour, and coordination costs.

Remote migration reduces those costs, but it does not eliminate operational risk.

Each store still requires verified backups, health checks, a maintenance window, application validation, monitoring, and a documented rollback plan.

Payment processing, loyalty systems, and kitchen operations are business-critical. A failed migration could interfere with sales and customer service.

Why Sheetz Can Move Quickly

A virtualization buyer’s guide supplied to TechBermuda warns that large VMware transitions commonly take between 18 and 48 months. It notes that VMware and the replacement platform may need to operate in parallel during part of the migration.

Sheetz appears able to move faster because several conditions work in its favour.

• The store infrastructure is highly standardized.
• Each location runs a similar two-server configuration.
• The number and type of VMs are relatively predictable.
• Sheetz already had experience with StorMagic SvSAN.
• The existing Dell hardware can be reused.
• Migration tooling and automation reduce manual work.
• The rollout can be repeated in batches across similar locations.

A business with a more complex VMware environment may not be able to duplicate this pace.

VMware can be deeply integrated with storage, virtual networking, backup, disaster recovery, monitoring, security, automation, and application-delivery systems.

A company using VMware NSX, vSAN, virtual desktop infrastructure, large database clusters, specialized backup integrations, or complex disaster-recovery automation may require a much longer project.

VMware Alternatives

There is no single replacement that will suit every VMware customer.

Organizations should evaluate platforms based on workload requirements, staff skills, hardware compatibility, backup support, management features, high availability, disaster recovery, support quality, and total cost.

Nutanix AHV

Nutanix AHV is part of the Nutanix Cloud Platform. It combines virtualization, storage, management, high availability, and related cloud services.

It may be attractive to organizations that want an integrated hyperconverged platform, although licensing and hardware costs must still be evaluated carefully.

Microsoft Hyper-V

Hyper-V is a mature virtualization platform included with supported editions of Windows Server.

It may suit businesses already invested in Microsoft infrastructure, Windows Server administration, Active Directory, System Center, Azure, and related management tools.

Azure Local

Azure Local allows organizations to run virtual machines and selected Azure services on local infrastructure while using Azure-based management and integration.

It may be appropriate for organizations pursuing a Microsoft-focused hybrid-cloud strategy.

Proxmox Virtual Environment

Proxmox VE combines the KVM hypervisor, Linux containers, software-defined storage options, clustering, high availability, backup integration, and web-based management.

It has attracted attention from small and midsized organizations, although businesses must evaluate enterprise support, staff familiarity, application certification, and backup compatibility.

OpenStack with KVM

OpenStack provides an open-source cloud infrastructure platform commonly using KVM virtualization.

It offers flexibility and reduces dependence on a single commercial vendor, but it generally requires greater internal engineering expertise than a traditional virtualization product.

Red Hat OpenShift Virtualization

OpenShift Virtualization uses KubeVirt to run virtual machines alongside containers within Kubernetes.

This can be attractive to organizations that want a unified platform for existing VMs and newer containerized applications.

StorMagic SvHCI

StorMagic SvHCI is designed for smaller, distributed, and edge environments where two-node clusters, hardware reuse, simplified management, and local resilience are important.

The Sheetz deployment demonstrates the type of environment where StorMagic may be particularly well suited.

What This Means for Bermuda

Bermuda organizations may not operate 838 convenience stores, but many rely on VMware to run important systems in finance, insurance, retail, hospitality, healthcare, media, professional services, education, and government.

Some local environments may consist of only two or three VMware hosts. Under the old licensing structure, these smaller installations could provide enterprise-class virtualization without requiring the customer to purchase a broad private-cloud platform.

Under Broadcom’s newer model, smaller organizations need to review whether the subscription bundle and per-core pricing still represent good value.

The answer will not be the same for every business.

An organization with extensive VMware expertise, complex integrations, and mission-critical workloads may determine that paying the higher renewal cost is still safer and less expensive than migrating.

Another organization with a small and relatively simple VMware environment may find that Hyper-V, Nutanix, Proxmox, StorMagic, Azure Local, or another platform can meet its needs at a more sustainable cost.

Do not wait for the renewal quotation

The worst time to begin evaluating alternatives is shortly before a VMware agreement expires.

A rushed decision may force the organization to accept unfavourable terms because there is not enough time to test another platform safely.

Businesses should begin reviewing their virtualization strategy at least 12 to 18 months before a major renewal when possible.

Larger and more complex environments may require several years of planning, testing, and phased migration.

VMware Migration Checklist

• Document the current environment. Record every host, processor, core count, virtual machine, operating system, application owner, storage system, and network dependency.
• Review VMware-specific functions. Identify reliance on vMotion, vSphere High Availability, Distributed Resource Scheduler, vSAN, distributed switches, NSX, templates, snapshots, APIs, and automation.
• Check hardware compatibility. Determine whether the existing servers, storage controllers, network adapters, and processors are supported by the replacement platform.
• Review backup support. Confirm that the existing backup product supports image-level backup, application-aware processing, replication, retention, and granular recovery on the replacement platform.
• Test recovery. A backup is not useful until the organization confirms that full VMs, individual files, databases, and applications can be restored.
• Define availability requirements. Determine acceptable downtime, recovery-time objectives, recovery-point objectives, failover requirements, and maintenance expectations.
• Calculate the full cost. Include software, subscriptions, server upgrades, storage, networking, training, consulting, migration tools, support, staff time, and temporary parallel infrastructure.
• Build a proof of concept. Test representative production workloads rather than only small laboratory VMs.
• Measure performance. Compare processor use, memory allocation, storage latency, network performance, backup duration, application response, and failover behaviour.
• Test migration tools. Confirm how VM disks, configurations, drivers, snapshots, networking, and operating systems will be converted.
• Create a rollback plan. Define how each workload will return to VMware if the new environment fails validation.
• Train the IT team. Staff must understand installation, monitoring, patching, troubleshooting, backup, recovery, and vendor escalation.
• Migrate in phases. Begin with lower-risk workloads before moving payment, finance, identity, database, or customer-facing systems.
• Plan for parallel operation. VMware and the replacement platform may need to run together during the transition.

Final Assessment

Broadcom’s VMware licensing changes have created a difficult situation for some small and midsized businesses.

Organizations that previously purchased individual perpetual VMware products may now face subscription licensing, broader bundles, per-core pricing, and contract terms that do not fit their environment or budget.

Those businesses generally have four choices:

1. Pay the new VMware subscription price.
2. Reduce the size or scope of the VMware environment.
3. Continue using existing perpetual licences without current support.
4. Migrate to another virtualization platform.

None of these options is risk-free.

Paying more may affect the IT budget. Reducing the VMware footprint may require architectural changes. Running unsupported software can create security, compatibility, and compliance concerns. Migrating can introduce downtime, training costs, and operational risk.

Sheetz provides an important example of what a carefully planned alternative can look like.

The company is replacing VMware vSphere with StorMagic SvHCI across 838 locations, migrating approximately 11,000 virtual machines, retaining its existing Dell hardware, and performing much of the work remotely.

Sheetz had several advantages, including standardized infrastructure, an existing relationship with StorMagic, repeated store configurations, and strong migration automation.

Not every organization will be able to move as quickly or select the same replacement platform.

However, the broader lesson is clear. VMware customers should no longer assume that automatic renewal is their only practical option.

Companies are moving from VMware. One such company is Sheetz, and its 11,000-VM migration shows that moving to another platform is possible when the technology, workloads, hardware, and migration plan are properly matched.

Sources

• Ars Technica: Sheetz is quitting VMware, migrating 11,000 virtual machines
• StorMagic: Sheetz chooses SvHCI to replace VMware across more than 830 stores
• StorMagic SvHCI product information
• Broadcom: VMware product and licensing transformation
• Broadcom: VMware business simplification and subscription licensing
• Everpure, The 2026 Buyer’s Guide to Modern Virtualization, supplied to TechBermuda for background research.