HPE gives VMware refugees a free year: VM Essentials plus $1 Zerto license

HPE is explicitly leaning into VMware’s licensing pain with a customer migration package that does not ask buyers to take the financial risk up front. At the Partner Growth Summit alongside HPE Discover in Las Vegas, the company said that as customers transform their operating model using HPE Morpheus VM Essentials, they do not pay for the first year of licenses. During that same period, they get Zerto migration licenses, positioned as an answer to a problem HPE described as “double expenses” when organizations migrate between virtualization platforms.

The pitch is simple and sharp: free VM Essentials for the first year, plus a $1 license for its Zerto data protection product to help make migrations stick. Fidelma Russo, HPE EVP and CTO, framed the initiative as migration assistance that helps channel partners reduce a customer’s financial risk. She also tied the program to the reality of transformation projects, where teams often need to run old and new environments in parallel, at once, before the migration completes. In HPE’s telling, that overlap is what creates the “double-bubble cost problem,” and the company’s offer is meant to blunt it while customers move from one platform to another.

Even though Russo and HPE did not mention VMware by name in the program pitch, the surrounding context leaves little ambiguity. HPE previously said at its last Discover event in Barcelona that customers were seeing virtualization license fees “skyrocketing,” and that it could provide “a fully integrated enterprise-grade alternative” using Morpheus and OpsRamp management tools, plus Zerto disaster recovery software. This latest move goes a step further, by putting money behind the alternative. If you are a CFO or platform buyer who has to sign off on migration budgets, “we will save you money later” is usually not enough. HPE is removing the first-year license bill from the equation, at least for the Morpheus VM Essentials portion.

Why now? The timing matters because VMware’s economics have changed under Broadcom ownership. Since being acquired by Broadcom, VMware license costs have increased by 800 to 1,500 percent for some customers. In addition, VMware ended partner programs that service providers relied on. HPE’s program is built for exactly this kind of market moment: one where the customer base is already looking for options, but where procurement and finance teams still want a rational path that does not force them to eat the transition cost twice.

The demand-side pressure is not subtle either. A survey recently found that half of VMware users plan to reduce their use of the virtualization pioneer’s products by 2028. That matters because decisions about virtualization are rarely one-off. They are multiyear platform bets, affecting everything from operational workflows to disaster recovery strategies. When license costs jump and partner channels tighten, customers tend to respond by re-evaluating vendors, renegotiating terms, and, increasingly, standardizing on something else before renewal time.

HPE is trying to capture that shift through its channel and partner machinery. The company said it is introducing VM Essentials for Partner IT to help providers transition their virtualized business applications. Under this approach, HPE will provide VM Essentials software licenses free of charge for three years, with partners paying only support costs, to 600 partners who gain Private Cloud with Virtualization competency by the end of the year. That is a meaningful lever because many enterprise migrations get executed through service providers and integrators, not just through direct purchases.

It is also extending its channel-only model to cover additional product lines, including HPE Private Cloud PC3000 (formerly HPE Private Cloud Business Edition), HPE SimpliVity PC1000, and HPE Zerto software from July 1. The company said this follows the success of selling Morpheus VM Essentials through a channel-only route to market. Translation: HPE is not just offering incentives to end customers. It is also trying to ensure partners can offer a consistent, commercially workable migration story across multiple platforms, not only one VM Essentials component.

Meanwhile, HPE is reworking the partner programs themselves. At the same Partner Growth Summit, HPE said it will unify the HPE and Juniper Networks partner programs under its Partner Ready Vantage umbrella. The aim is a single global program for partners to offer services across networking, cloud, and AI. The change will take effect from November 1, and HPE claims that existing investments will be protected while partners operate under one program with a simplified structure, aligned incentives, and a consistent engagement model. Separately, HPE said it will help cloud service providers build and operate differentiated private cloud services with CloudOps Software and the backing of HPE Partner Ready Vantage.

For executives and boards watching this, the second-order story is not just “HPE is discounting.” It is about how vendors respond when a dominant platform’s pricing and partner ecosystem destabilize. When VMware license costs jump by 800 to 1,500 percent for some customers and partner incentives get cut off, competitors can win by reducing transition friction. HPE’s combination of first-year license relief, Zerto migration licensing, and a broader partner ecosystem shake-up suggests it wants to turn a high-risk migration window into a partner-led land grab before the industry standardizes elsewhere.