Server Costs Have Quadrupled, Driving Nutanix Migrations
Nutanix CEO projects ongoing hardware shortages and price hikes will accelerate a decade-long transition to cloud-hosted infrastructure.
Updated on Oct. 13, 2026 in Data Centers
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Nutanix CEO Rajiv Ramaswami announced that the company is capturing 500 to 1,000 new customers per quarter as organizations migrate away from VMware. This shift follows VMware's decision to deauthorize North American partner Insight Enterprises and record increases in server costs.
Why it matters
The persistent shortage of on-premises hardware and 4X to 5X cost spikes are forcing companies to adopt public cloud bare-metal strategies. This infrastructure shift marks the beginning of a decade-long industry transformation as businesses abandon traditional server dependencies.
Server acquisition costs have risen 4X to 5X over the past year, while hardware shortages are projected to persist for the next two years. Nutanix currently adds 500 to 1,000 new customers each quarter, largely by deploying software onto public cloud bare-metal instances.
The players
Nutanix
A cloud computing software company specializing in hyperconverged infrastructure and multi-cloud management.
Rajiv Ramaswami
The CEO of Nutanix overseeing the company strategy for hybrid and multi-cloud migration.
VMware
A major virtualization and cloud infrastructure provider recently restructuring its channel partner programs.
Insight Enterprises
A global technology integrator and solution provider recently deauthorized by VMware in North America.
The details
Nutanix software enables companies to shift workloads by deploying directly onto bare-metal instances — physical servers in a public cloud environment without hypervisor abstraction that the user manages. This allows enterprises to bypass the current multi-year procurement delays for on-premises server hardware. The strategy specifically targets the massive pool of legacy VMware customers seeking alternatives after shifts in partner channel access.
Timeline
October 13, 2026: Rajiv Ramaswami spoke at the CRN XChange Best of Breed conference.
Next 1 to 2 years: Hardware shortages and elevated server costs are expected to persist.
Next 10 years: Industry transformation through VMware migrations is projected to continue.
The Tech Race
This migration trend follows the pattern of volatility established by the 2020 global semiconductor supply chain disruption. Organizations are now racing to offload physical infrastructure requirements to avoid the price volatility that has plagued enterprise hardware procurement for years.
IT administrators should anticipate continued hardware procurement delays and high capital expenditures for at least the next 24 months. Organizations running legacy VMware environments must now evaluate whether to transition to public cloud bare-metal instances to mitigate these rising costs.
The takeaway
The sustained spike in server costs is effectively ending the viability of traditional on-premises scaling for many enterprises. IT decision-makers should monitor public cloud bare-metal pricing tiers over the next two years to gauge the feasibility of their migration timelines.
Further reading
Explore deeper trends in infrastructure management at Data Centers.
Source note: This article includes information reported by CRN.
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