- \n
- \nNext 12-24 months marks an inflection point for virtualization as enterprises move from planning to active transformation<\/p>\n<\/li>\n
- \nAI readiness\u2013not solely virtualization licensing costs\u2013is the primary force reshaping strategies in favor of a flexible, hybrid operating model<\/p>\n<\/li>\n
- \nSecurity, observability, and data protection rise as essential pillars of modern virtualization<\/p>\n<\/li>\n<\/ul>\n
HOUSTON–(BUSINESS WIRE<\/a>)–
\nAs AI increases operational complexity and cloud costs, enterprises are rethinking whether their infrastructure is equipped to stay competitive, according to a new survey from HPE<\/a> (NYSE: HPE). The survey of nearly 400 global enterprises examines how organizations are responding to changing virtualization needs amid pervasive licensing changes.<\/p>\nThe virtualization market is at a tipping point.<\/b><\/p>\n
\nMore than two thirds of enterprises are planning material changes to their virtualization strategy within the next two years; however, only 5% are fully ready, highlighting a significant gap. CIOs and IT teams are increasingly worried about cost unpredictability, AI readiness, and the need for speed as they assess new virtualization alternatives to stay ahead of the curve. Budget constraints (28%), technical complexity (24%), and migration risk (21%) followed closely by skills gap (20%) are cited as the top barriers slowing progress of the Great VM Reset.<\/p>\n
Companies are overhauling their IT operations\u2014not because of price alone.<\/b><\/p>\n
\nFewer than one in 10 enterprises (4%) cite licensing costs as the single biggest catalyst for virtualization, underscoring the urgency is less about cost, and more about transformation to a hybrid operation model and AI readiness. Companies are taking a deliberate approach and not looking to just swap hypervisors. Data shows that more than half (57%) of enterprises are taking a phased approach to futureproof their IT, with hybrid cloud emerging as the preferred path forward to support AI performance demands. Today, 78% of provisions are in the public cloud, 61% in virtualized clusters, 48% in private cloud and 32% at the edge.<\/p>\n
Enterprises overwhelmingly see advanced AIOps as essential to modern virtualization strategy.<\/b><\/p>\n
\nIT leaders are racing to build systems that can meet the performance, data, and scaling demands of AI, with over a quarter of IT decision makers putting AI readiness at the top of their list. When shaping future virtualization and private cloud strategies, enterprises say access to unified backup and cyber\u2011recovery (70%), cross\u2011platform governance (61%), and integrated observability and AIOps (55%) are very important or business critical.<\/p>\n
\n\u201cWe\u2019re seeing enterprise leaders reassess longstanding IT assumptions to balance cost predictability, AI readiness and performance. This isn\u2019t just a rush to rip and replace, but a deliberate shift toward a more flexible and simplified operating model,\u201d said Brian Gruttadauria, CTO of Hybrid Cloud at HPE. \u201cWhat the data makes clear is that AI readiness now depends on how well virtualization evolves. Our role is to help customers modernize by closing the gap between AI ambition and operational reality.\u201d<\/p>\n
Why Leaders are Choosing HPE for their Virtualization Needs<\/b><\/p>\n
\n\u201cFrom the outset, we saw a change in virtualization strategy as a chance to future-proof our operations both for simplified cloud operations and the AI era,\u201d said Sune T. Baastrup, CIO at Danfoss. \u201cAs part of our HPE Private Cloud Enterprise solution, we benefit from the HPE Morpheus Software, which enables us to run our environments\u2014from data centers to factory floors\u2014with simplicity, agility, and reliability. It\u2019s the kind of stable IT foundation a global industrial business needs.\u201d<\/p>\n
\n\u201cControl and predictability in virtualization now matter more than ever,\u201d said Scott Steele, COO at Thrive. \u201cOur customers rely on us to architect agile IT environments built for change. By partnering with HPE, we can provide reliable virtualization, cost optimization, as well as observability, management, and the right hybrid operating model to meet each customer\u2019s unique needs while preparing their infrastructure for what\u2019s next.\u201d<\/p>\n
\nFor more information on IT virtualization market trends, read HPE\u2019s The Great Virtualization Reset report<\/a>.<\/p>\n
Frequently Asked Questions<\/b><\/p>\n
How are enterprises thinking about their virtualization strategy?<\/b><\/p>\n
\nThe virtualization market is at a tipping point. HPE\u2019s research finds more than two thirds of enterprises are planning material changes to their virtualization strategy within the next two years, but only 5% say they are fully ready, highlighting an execution gap. This is no longer about a vendor swap. Just 4% cite licensing costs as the primary driver but a desire to rebuild hybrid operating models for AI.<\/p>\n
Is the great virtualization rest just about rising VM costs and switching hypervisors?<\/b><\/p>\n
\nVM cost increases were the forcing function<\/i>, not the root problem. They exposed deeper issues already in place: hybrid complexity outpacing operations, vendor lock-in, skills gaps, and an operating model that no longer scales. The answer is not a hypervisor swap. It\u2019s an operating model shift\u2014agnostic to hypervisor, hardware or hyperscaler\u2014and a decision about where workloads live and how confidently the business can run them. If the choice only changes the hypervisor, the reset hasn\u2019t happened.<\/p>\n
What matters most when modernizing IT strategy for AI?<\/b><\/p>\n
\nTo support AI workloads, organizations should prioritize operational capabilities over the hypervisor itself. HPE\u2019s survey finds enterprises rank these next-generational virtualization features as essential for modern virtualized environments: unified backup and cyber recovery (70%), cross-platform governance (61%), and integrated observability and AIOps (55%) are very important or business critical.<\/p>\n
Who helps companies modernize their IT operations?<\/b><\/p>\n
\nHPE helps enterprises modernize virtualized environments across networking, hybrid cloud, AI and compute to transform IT operations for AI readiness, improved resiliency, and reduced operational risk through a simplified hybrid cloud operating model.<\/p>\n
Methodology<\/b><\/p>\n
\nThe findings in this release are based on primary research conducted by HPE between December 15, 2025, and January 4, 2026. The study surveyed nearly 400 IT decision\u2011makers\u2014including CIOs, CTOs, and senior technology leaders\u2014who participate in the global Business Transformers Community. This community is managed by C\u2011SPACE, an independent research partner. Respondents are responsible for, or directly influence, decisions related to enterprise IT infrastructure, cloud strategy and virtualization platforms.<\/p>\n
Additional Resources:<\/b><\/p>\n
- \n
- Transform Data into AI Fuel with HPE Alletra Storage MP X10000 Data Intelligence Node<\/a><\/li>\n
- HPE and Spark NZ partner to redefine hybrid cloud operations to deliver faster, more reliable digital services for New Zealand<\/a><\/li>\n
- Accelerating digital banking experiences: Cambrian Credit Union transforms service delivery to better serve its members<\/a><\/li>\n<\/ul>\n
Recent HPE News:<\/b><\/p>\n
- \n
- HPE shapes future of hybrid cloud with innovations across virtualization, security and AI<\/a><\/li>\n
- HPE awarded $931M other transaction agreement to modernize DISA datacenter<\/a><\/li>\n
- HPE launches the industry\u2019s most advanced private cloud portfolio to transform how enterprises modernize hybrid IT<\/a><\/li>\n<\/ul>\n
About HPE<\/b><\/p>\n
\nHPE (NYSE: HPE) is a leader in essential enterprise technology, bringing together the power of AI, cloud, and networking to help organizations achieve more. As pioneers of possibility, our innovation and expertise advance the way people live and work. We empower our customers across industries to optimize operational performance, transform data into foresight, and maximize their impact. Unlock your boldest ambitions with HPE. Discover more at www.hpe.com<\/a>.<\/p>\n
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View source version on businesswire.com: <\/span>https:\/\/www.businesswire.com\/news\/home\/20260210947512\/en\/<\/a><\/span><\/p>\n
Media Contact:
\n<\/b>
Sanah Sadaruddin
\n
sanah.sadaruddin@hpe.com<\/a><\/p>\nKEYWORDS:<\/b> United States North America Texas<\/p>\n
INDUSTRY KEYWORDS:<\/b> Technology Security Business Professional Services Software Networks Internet Data Management Artificial Intelligence<\/p>\n
- HPE awarded $931M other transaction agreement to modernize DISA datacenter<\/a><\/li>\n
- HPE and Spark NZ partner to redefine hybrid cloud operations to deliver faster, more reliable digital services for New Zealand<\/a><\/li>\n
- Transform Data into AI Fuel with HPE Alletra Storage MP X10000 Data Intelligence Node<\/a><\/li>\n
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