Source: S&P Global via S&P Global Media Portal.
Alternative hypervisors continue to gain momentum, but VMware’s grip on the enterprise hypervisor market has proved resilient. However, coexistence — both virtual machines and containers — defines the virtualization landscape in 2026. A survey conducted by 451 Research by S&P Global, Virtualization 2026 survey examines current approaches to application packaging, platform adoption and end-user satisfaction.
The Take
Nearly two years after Broadcom’s acquisition of VMware and the ensuing pricing and packaging upheaval, the enterprise virtualization space looks less like a market in revolt and more like one in cautious recalibration. The disruption is real, but so is organizational IT inertia. Given application dependencies, investment in VMware skills, and the complexity of hypervisor migration, a slight plurality of organizations using VMware are opting to manage the Broadcom relationship rather than exit it over the next few years.
As a result, vendors positioning against VMware should not expect a mass migration but rather a long game of displacement, one workload and one renewal cycle at a time. However, the broader opportunity lies in application modernization, organizations’ shift from virtual machines (VMs) to cloud-native approaches, and the need for integrated cross-domain management and orchestration. As unified control-plane capabilities emerge as a key battlefield, the underlying virtualization technology remains critical but is gradually becoming invisible infrastructure.
Summary of findings
VMs remain foundational. Approximately 69% of surveyed organizations run production workloads on VMs using a hypervisor, and the majority report that VM workload volumes have increased over the past two to three years, with more than 60% citing a moderate or significant increase. VM adoption scales sharply with organization size: 90% of organizations with 10,000 or more employees run VMs, compared with about 50% of those with fewer than 250 employees. However, just over 50% of organizations run workloads on both VMs and containers.
VMware leads the virtualization software market, but alternatives are gaining traction. VMware products remain the top pick as the primary virtualization platform for nearly 43% of organizations, split between the vSphere and vSphere Foundation stand-alone hypervisor solutions (27%) and the VMware Cloud Foundation (VCF) full-stack private cloud platform (16%). Nearly 28% of organizations use Microsoft Hyper-V as their primary hypervisor for production workloads. Other organizations’ primary hypervisor choices include Oracle (12%), Red Hat (7%), OpenStack solutions (3%), and Nutanix (2%). Multi-hypervisor environments are the norm, not the exception, with organizations on average running nearly three hypervisors across their IT estates.
Hybrid coexistence is the dominant virtualization mindset, but VMware apparently can count on the VM-first crowd. Nearly half (49%) of respondents characterize their virtualization environments as hybrid (e.g., running workloads in VMs and Kubernetes together for the long term). A cloud-first or Kubernetes-first orientation remains a minority view, underscoring the notion that containers have not displaced VMs. Mindset tracks closely with company size:
Most large organizations (1,000+ employees) describe their virtualization environments as hybrid (57%), compared with 44% of organizations with 1,000 or fewer employees. The VM-first posture is more common among smaller organizations (35%) than among their larger counterparts (24%), likely reflecting lower levels of container technology expertise or less need for the operational scale that container orchestration facilitates.
VM-first organizations, which represent 30% of respondents, also report the highest levels of migration/modernization inertia, with 40% strongly agreeing that the risks of moving away from VMware outweigh the disruptions caused by the new pricing/packaging regime — signaling that this cohort may represent the most durable portion of Broadcom’s installed base.
Virtualization strategy diverges: Stay, modernize, replatform. A plurality of organizations (33%) intend to pursue a retention strategy over the next two to three years (e.g., remaining on the same hypervisors with no other changes to the virtualization environment). Nearly one-quarter plan to refactor (e.g., modernize applications to run in containers or serverless architectures), while approximately one-fifth intend to replatform (e.g., migrate to a different hypervisor). The rehost cohort (e.g., lift-and-shift VM workloads to public cloud environments) — 19% of organizations — likely view cloud migration as a solution to hypervisor market disruption and on-premises IT/organizational data center complexity — effectively shifting both problems to cloud providers. Only about 5% plan to decommission VM-based workloads entirely.
Satisfaction is primarily about product performance, technical support and cost. Sixty-one percent of organizations running workloads in VMs report being very satisfied with their primary hypervisor platform (up from 57% in our 2024 survey), while 36% are somewhat satisfied (consistent with 2024). Among the satisfied VM user cohort, the satisfaction factor rankings have shifted:
Product performance now ranks first at 60% (up from 50% and second place in 2024), followed by technical support quality (50%) and product features (49%). Overall cost/total cost of ownership has fallen to fourth place (at 47%) in 2026, suggesting that satisfied users have absorbed the Broadcom pricing change and now evaluate hypervisors primarily on technical merits.
Satisfaction mileage varies by primary hypervisor. Organizations using Hyper-V as the primary hypervisor posted the largest percentage of satisfied users (71%), followed by VCF users (67%). Organizations using vSphere as their primary virtualization solution trail at 47%, suggesting friction from Broadcom’s packaging changes that position vSphere as a basic solution lacking the advanced automation, integrated networking and hybrid cloud capabilities of VCF.
IT management and orchestration tools: An existential threat to hypervisors? IT operations automation via management and orchestration platforms has shifted the locus of infrastructure control upward from the hypervisor layer. Unified VM/container management is a common feature of virtualization platforms. However, management and orchestration tools have evolved into cross-domain unified control planes that can abstract multiple hypervisors into a centralized resource pool — essentially making the underlying virtualization technology interchangeable. Cross-platform integration further erodes hypervisor retention by facilitating migration and decoupling operational processes (such as provisioning, configuration management and capacity planning) from the virtualization technology. As the market incumbent, VMware risks being displaced as the primary control plane for its customers’ IT environments.
Cloud Maturity Brings Organizational IT Change
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The author used a proprietary S&P Global AI platform in the production of the report that this blog post was based on. It was subsequently peer-reviewed, fact-checked and edited before publication.
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