This article is based on reporting originally published by Data Center Knowledge in May 2020.
Background: VMware Workloads in Azure Before This Announcement
Enterprise data centers have increasingly adopted multi-cloud strategies, running workloads across on-premises infrastructure and one or more public clouds on an as-needed basis. For organizations heavily invested in VMware, a key requirement is the ability to extend VMware virtual machine environments into a public cloud without re-platforming workloads.
Before May 2020, Microsoft offered exactly one path for this: Azure VMware Solution, a service built in partnership with CloudSimple, a cloud services firm specializing in VMware-as-a-service. That partnership hit a complication in late 2019 when Google acquired CloudSimple, redirecting the company’s web presence toward Google Cloud Marketplace.
What Microsoft Announced: A Next-Generation, First-Party Azure VMware Solution
In May 2020, Microsoft announced what it described as the “next generation” of Azure VMware Solution. Confusingly, the new offering carries essentially the same name as its predecessor, which led to immediate questions about whether it was a replacement or an evolution of the existing service.
The answer, confirmed by a Microsoft spokesperson to Data Center Knowledge, is that the two services coexist:
“Azure VMware Solution by CloudSimple is still a Microsoft first-party offering (sold and supported by Microsoft). The solution announced [Monday] is an additive Azure service, not a replacement. Customers using the Azure VMware Solution by CloudSimple are not impacted.”
Microsoft spokesperson, via Data Center Knowledge
In practice this means enterprises running the original CloudSimple-backed solution do not need to migrate immediately and will continue to receive Microsoft support and sales coverage.
Key Technical Differences in the New Solution
VMware NSX-T as the Default Network Plane
The most significant architectural change in the new offering is its use of VMware NSX-T as the default network virtualization layer. NSX-T is the portable, multi-hypervisor version of VMware’s network virtualization platform, designed to run across heterogeneous environments including public clouds.
What this means in practice for IT administrators:
- NSX Manager remains the familiar administrative interface — no new tooling required for network operations.
- At general availability, Azure Portal will surface NSX configuration options for private cloud setup, offering a simplified alternative entry point alongside native VMware tooling.
- Each private cloud gets its own vCenter instance, meaning administrators can use native VMware interfaces as they always have.
Bare-Metal Managed Service, Not IaaS
Like its predecessor, the new Azure VMware Solution is not an Infrastructure-as-a-Service (IaaS) offering. Instead, it is a managed service that extends Azure capabilities to bare-metal servers running VMware Cloud Foundation. Workloads are deployed through Azure Portal but managed through standard VMware tools such as vCenter and NSX Manager.
According to Microsoft, running VMware Cloud Foundation in Azure differentiates this service from pure IaaS on Azure or competing clouds.
VMware HCX Enterprise for Live Migration
The new solution also includes an option to adopt VMware HCX Enterprise. HCX is VMware’s workload mobility platform, and the Enterprise tier enables organizations to live-migrate non-VMware workloads into a VMware environment on Azure — without downtime and while keeping those workloads within Azure infrastructure.
Licensing and Cost Considerations
Microsoft highlighted two potential cost advantages for Windows Server and SQL Server workloads running on the new solution:
- Azure Hybrid Benefit: Customers with existing on-premises Windows Server or SQL Server licenses covered by Software Assurance can apply those licenses to Azure VMware Solution workloads, reducing per-unit costs.
- Free Extended Security Updates (ESUs): Workloads migrated to Azure — including those running on Azure VMware Solution — can qualify for free ESUs for end-of-support products such as Windows Server 2008 and SQL Server 2008, which would otherwise require paid ESU subscriptions on-premises.
Microsoft indicated that specific pricing for the new solution would be announced closer to general availability, which was expected in the second half of 2020.
How Close Was the Microsoft–VMware Collaboration?
A natural comparison point is the well-publicized VMware Cloud on AWS, which VMware and Amazon Web Services built through a notably deep engineering collaboration. Data Center Knowledge asked both companies directly whether a similar level of joint development occurred here.
VMware’s response was notably reserved:
“VMware is confident in the performance of the VMware stack running in all of its partners’ clouds. Customers will make their own evaluation plans for various cloud options based on their unique business requirements.”
VMware spokesperson, via Data Center Knowledge
VMware spokespersons declined to answer additional questions on the topic. Microsoft, for its part, described the collaboration in more positive terms:
“Microsoft developed the Azure VMware Solution in close partnership with VMware. In addition, the Azure VMware Solution continues to integrate tightly with the Azure native services over time, in collaboration with VMware engineering.”
Microsoft spokesperson, via Data Center Knowledge
The divergence in tone between the two statements suggests the Azure VMware Solution does not enjoy the same depth of co-engineering as VMware Cloud on AWS — though the degree of technical integration may still be significant.
Summary: What Changed and What Stayed the Same
| Aspect | Azure VMware Solution by CloudSimple (Original) | Azure VMware Solution (New, 2020) |
|---|---|---|
| Provider | Microsoft (built on CloudSimple technology) | Microsoft first-party managed service |
| Network Plane | NSX-V (implied by CloudSimple architecture) | VMware NSX-T (default) |
| Management Interface | VMware tools | VMware tools + Azure Portal NSX config |
| Workload Migration | Standard VMware migration paths | VMware HCX Enterprise option available |
| Service Type | Managed bare-metal, not IaaS | Managed bare-metal, not IaaS |
| Status | Continues — still sold and supported | Generally available H2 2020 (at time of announcement) |
Key Takeaways for VMware Administrators Evaluating Azure
- Existing CloudSimple-based Azure VMware Solution customers are not required to migrate and will continue to receive Microsoft support.
- The new first-party solution centers on NSX-T, which is better suited to multi-cloud and heterogeneous environments than the older NSX-V architecture.
- Azure Hybrid Benefit and free ESUs make the economics of migrating Windows Server and SQL Server workloads potentially attractive.
- VMware HCX Enterprise inclusion simplifies migration of non-VMware workloads into a VMware-managed environment on Azure.
- Organizations evaluating this against VMware Cloud on AWS should assess the depth of integration and support SLAs independently, as the level of VMware co-engineering appears to differ between the two offerings.
This article was updated for clarity and technical accuracy based on original reporting by Data Center Knowledge, May 2020.