Many organizations are balancing near-term continuity for VMware-based workloads with longer-term cloud modernization goals – all while managing cost, security, and resiliency.

Azure VMware Solution (AVS) is built for this moment: a Microsoft-managed service verified by VMware that enables running VMware Cloud Foundation (VCF) workloads (vSphere, NSX-T, vSAN, HCX) on dedicated Azure infrastructure. It gives organizations a practical way to move or extend VMware environments into Azure while maintaining operational consistency and leveraging the skills of existing VMware teams. To help leaders quantify the potential value of this approach, Microsoft commissioned Forrester Consulting to conduct The Total Economic Impact™ (TEI) of Microsoft Azure VMware Solution (March 2026). The study models the financial impact over three years and risk-adjusts results.

Access the full study here: aka.ms/AVS-TEI

Here’s what the study found and how IT leaders can use it as a framework for decision-making:

Topline results from the study

Forrester’s risk-adjusted financial analysis for a composite organization¹ found:

• 341% ROI over three years²
• $5.6M net present value (NPV)³
• <6 months payback⁴

These metrics are meaningful on their own, but the bigger story for leadership is where the value comes from: improved operational stability, reduced infrastructure costs driven by data center exit and hardware refresh avoidance, and the ability to redeploy skilled IT resources from maintenance to modernization.

The customer journey: why organizations turn to AVS

AVS offers a bridge: Lift and shift VMware workloads into Azure without forcing immediate re-platforming then, modernize at a pace aligned to business priorities.

In the study, Forrester interviewed decision-makers with experience using AVS. Interviewees described common challenges that led them to invest in AVS, including:

• Fragmented systems that complicated and slowed operations: Inherited stacks, duplicated tools, and unclear ownership of orphan machines made operations and governance harder.
• Rising cost and complexity of on-premises operation: Colocation fees, energy and cooling costs, server refresh cycles, and tooling renewals were difficult to justify against cloud economics.
• Limited capacity and skills to refactor at scale: Teams wanted the cost and agility benefits of the cloud but didn’t have the time or skills to rewrite hundreds (or thousands) of VMs on aggressive timelines.
• Security and audit pressure: Disparate environments and legacy access models elevated risk and created audit friction.
• Operational variability and end-user experience: VPN dependencies, inconsistent remote tooling, and endpoint logistics led to slow first-call resolution and downtime risks.

Three quantified benefits that drive the business case

1) Reduction in downtime and associated costs by 80%

In the study, interviewees reported that moving VMware workloads to AVS improved day-to-day reliability by eliminating fragile on-premises workflows and leveraging Azure’s managed infrastructure. Examples included fewer VPN-related failures, faster issue resolution through centralized tooling, and stronger service-level performance. For leadership teams, this benefit is about more than avoided cost. Better up time protects customer experience, employee productivity, and reduces the operational noise that can slow modernization programs.

2) Reduced infrastructure costs through data center exit, refresh avoidance, and cleanup

A second driver is the ability to avoid or eliminate significant portions of data center cost and refresh spend. In the study, interviewees described using AVS to close data centers, avoid upcoming hardware refresh cycles, and reduce ongoing capital and operating costs.

Importantly, interviewees also reported that migration waves prompted additional savings through portfolio hygiene by validating each VM, decommissioning redundant systems, and rightsizing oversized workloads. Those actions helped organizations reduce their ongoing compute, storage, and licensing footprint after migration.

3) Redeployment of 50% of IT team members from maintenance to modernization

The TEI study quantifies a practical advantage of a managed VMware environment in Azure: fewer hours spent on hardware lifecycle, cluster patching, upgrades, and other routine data center tasks. In practice, many leaders treat this as capacity created rather than budget eliminated: the opportunity to shift experienced engineers toward modernization, automation, cloud governance, proactive incident prevention, and higher-value business initiatives.

Unquantified benefits organizations should weigh

Beyond the quantified categories, the study also highlights benefits that are strategically important, but not fully quantified in the model:

• Acceleration of future modernization: With workloads running in Azure via AVS, organizations can integrate platform services across security, identity, data, and analytics and build a runway for new capabilities, including AI-driven scenarios in Azure.
• Fast, cost-effective migration of legacy workloads: Interviewees described avoiding major consulting or hiring costs that would have been required to refactor complex workloads into cloud-native designs.
• Improved audit readiness and security posture: Consolidating fragmented environments into governed Azure landing zones can simplify audit preparation and strengthen governance and monitoring.

For many leadership teams, these benefits strengthen the business case because they support broader transformation outcomes that extend beyond infrastructure cost alone.

Things to consider in your own decision process

If you’re building a business case to move workloads to Azure, whether it be lifting and shifting to AVS or replatforming and refactoring to Azure IaaS and managed services, consider mapping your environment across these areas:

• Data center timelines: Refresh cycles, colocation exit deadlines, and contract constraints.
• Operating model readiness: How quickly teams can adopt cloud-native services versus preserving VMware operations during transition.
• Modernization roadmap: Determine which applications are candidates for investment in replatforming, refactoring, replacement, or retirement once in Azure.

Next steps

• Read the full TEI study: aka.ms/AVS-TEI
• Explore more about AVS: aka.ms/AzureVMwareSolution
• Get the VMware to Azure VMware Solution Planning Guide: aka.ms/VMwareToAVSguide
• Learn more about the Azure Copilot migration agent: aka.ms/migrate/AMA

¹Composite organization: Forrester designed a composite organization based on characteristics of the interviewees’ organizations.

²Return on Investment (ROI): A project’s expected return in percentage terms. ROI is calculated by dividing net benefits (benefits less costs) by costs.

³Net present value (NPV): The present or current value of (discounted) future net cash flows given an interest rate (the discount rate). A positive project NPV normally indicates that the investment should be made unless other projects have higher NPVs. 

⁴Payback: The breakeven point for an investment. This is the point in time at which net benefits (benefits minus costs) equal initial investment or cost.