On IBM’s third-quarter call, chief financial officer Jim Kavanaugh said that Red Hat’s virtualization offering has nearly 800 million dollars of contracts signed since early 2024, with about 750 million dollars more in the pipeline. He did not name customers, and he did not say how much of it comes from organisations leaving VMware. But the timing, and the interest from buyers facing Broadcom renewals, make the direction clear.
For anyone considering the move, the more useful question is what you would actually be buying. Red Hat’s virtualization licensing has its own rules, and they differ from both VMware’s and from the OpenShift subscriptions many people already know.
A virtualization-only edition
Red Hat sells a dedicated edition for this purpose, OpenShift Virtualization Engine. Red Hat’s subscription guide describes it as a bare-metal-only virtualization offering based on OpenShift and the KVM hypervisor, intended for customers who want an alternative platform for running virtual machines. It is sold by bare-metal node subscription rather than by core pair.
That distinction matters. Core-pair subscriptions do not apply to this edition. A bare-metal node subscription covers a physical server, and after a pricing change on 1 January 2025 a socket pair can cover up to 128 cores. For modern high-core servers, that can reduce the number of subscriptions needed. For older, smaller servers it can mean paying for capacity you do not have.
Bare metal changes the hardware picture
A virtualization platform that must run on bare metal changes your infrastructure plan. An independent licensing reference notes that OpenShift Virtualization is supported only when OpenShift is installed directly on the server, not inside a virtual machine. If you currently run on a mix of hosts, some of that estate may need to be rebuilt, and some servers may not suit the licensing model.
Red Hat’s guide also says that where OpenShift is deployed inside virtual machines on third-party hypervisors such as VMware vSphere, core-pair subscriptions apply. That is a different calculation from bare metal, and it matters for anyone planning a phased move where both environments run side by side for a while.
Do not mix up the products
OpenShift Virtualization Engine is for virtual machines only. It does not include the container platform features of the other OpenShift editions, and the licensing guidance says product types cannot be mixed within a cluster. If you want virtual machines now and containers later, check how Red Hat would license that and what it would cost to move up an edition.
It is also worth keeping Red Hat separate from the rest of IBM in your planning. On the same call, Kavanaugh said Red Hat is not part of IBM’s enterprise licence agreements. A Red Hat subscription is a separate purchase with its own term and renewal date, even if IBM is the parent company.
Promotions and price
Red Hat has been pursuing VMware customers actively. On 1 September it advertised one year of OpenShift Virtualization subscriptions at no cost for stalled migrations. The detail of eligibility, the products covered and what happens at the end of the free year all need to be read carefully. A free first year is only a saving if the second year is priced in a way you have already planned for.
Compare options over three to five years, not one. A published cost comparison notes that VMware no longer sells permanent licences and licenses every physical core, with a minimum of 16 cores per CPU, which is the baseline you are comparing against, although its prices date from early 2024 and have moved since. Include the hardware you would need, storage, skills, migration effort and the cost of running both platforms during the move. Include the VMware subscription you would be exiting, and the date it ends.
What to do before you commit
Count your sockets and cores per host and check them against the bare-metal node definitions. Identify which workloads must stay on virtual machines and which are candidates for containers. Check your current VMware contract end dates and notice periods. Ask Red Hat for a written quote that states the edition, the node definitions, the support level and the term. Ask what you would pay at renewal, and whether the price is protected.
Finally, run a pilot on a representative workload. Migration tooling exists, and Red Hat includes a migration toolkit with the edition, but performance, storage and networking behaviour are specific to each environment.
People and operations
A platform decision is also a skills decision. Teams that have run VMware for years know its tools, its failure modes and its ecosystem of backup, monitoring and storage products. A move to OpenShift Virtualization means learning a different operating model, which is built on Kubernetes concepts. Budget for training, for a period of reduced productivity, and for help from a partner if you need it.
Check that the products you rely on around the hypervisor are supported on the new platform. That includes backup, disaster recovery, monitoring, security tooling and any storage arrays. A migration that works technically can still fail commercially if a supporting product has to be replaced at extra cost.
Do not forget the exit date
The strongest part of any negotiation is a credible alternative, and the most expensive mistake is running out of time. If your existing virtualization contract ends in the next year or two, work backwards from that date. Allow time to pilot, to procure hardware, to migrate in waves and to keep the old platform running until the last workload has moved. Many organisations find that an exit needs far longer than the notice period suggests.
A staged move is usually safer
Few organisations move everything at once. A common pattern is to start with development and test environments, then low-risk production workloads, then the critical systems. That reduces risk and builds skills, but it means running two platforms for a time. Count that overlap in your plan, because you will pay for both until the last workload moves, and the VMware notice period rarely matches your timetable.
Keep a clear list of which workloads sit where, who owns them and when each is due to move. It is the document you will rely on when the VMware renewal is being negotiated, and it shows how much leverage you really have.
Conclusion
IBM says Red Hat’s virtualization business has signed nearly 800 million dollars of contracts since early 2024, which confirms that the VMware exit is turning into real purchases. For buyers, the details of how Red Hat licenses virtualization matter as much as the headline.
Check the edition, the bare-metal requirement and the node definitions, keep Red Hat separate from your IBM agreements, and compare costs over several years before committing.
