Microsoft has decided to phase out the current licensing system for Azure VMware Solution (AVS), The Register reported on Aug. 20 (local time).

That removes one way for companies to use VMware Cloud Foundation (VCF) in the cloud without licensing it directly. Existing customers must complete the transition by August 2027.

According to the report, AVS currently includes required licenses such as vSphere, vCenter, vSAN and NSX as part of the service. Microsoft will stop selling new AVS environments that include VMware licenses from Oct. 31, 2026.

Customers will need to buy VCF licenses directly from Broadcom. They can then use those licenses within AVS through what is called the “AVS VCF BYOL” model. Customers using the existing approach must switch by Aug. 30, 2027 at the latest.

The change stems from policies Broadcom has pursued since acquiring VMware. Broadcom has continued to reduce the share of standalone products and small bundles as it reshapes its lineup around VCF. It has also barred cloud providers from selling VMware licenses bundled into their own services. Customers must license VCF directly and then bring it into the cloud provider’s VMware environment. Broadcom signalled late last year that it would introduce a BYOL model, and other major cloud providers have already changed how they package VMware offerings.

Microsoft advised AVS customers not to wait until 2027. It said customers should buy VCF licenses from Broadcom and secure time in advance to complete the technical transition to the AVS VCF BYOL model.