CIOs Put VMware, SAP and Java on the Replacement List — Few Can Actually Move

Ninety percent of IT leaders at VMware customers are hunting for alternatives, according to a Rimini Street survey — yet only 2% have moved even three-quarters of their environments off the virtualization platform. That gap between intent and action defines the current enterprise software market, where licensing costs, end-of-support deadlines and AI-coded alternatives are pushing CIOs to reconsider vendors they once treated as untouchable.

Three names dominate the replacement list: Broadcom-owned VMware, SAP's ERP suites and Oracle's Java. Representatives of all three companies did not respond to requests for comment. The common thread, says Brad LaPorte, strategic advisor at Lionfish Tech Advisors, is commercial, not technical.

What is driving the replacement wave?

Three forces are converging:

• Broadcom raised prices significantly after buying VMware nearly three years ago.
• SAP has announced the end of support for perpetually licensed ECC and is pushing customers toward subscription-based S/4HANA, with shifting deadlines prompting customer backlash.
• Oracle switched Java to per-employee pricing in 2023, meaning subscribers now pay for staff who have never opened a Java application.

"The vendor changed the deal, not the software," LaPorte said.

Meanwhile, AI-powered coding tools keep improving, leading some CIOs to explore building targeted software themselves rather than buying. The prospect of AI replacing SaaS suites fueled the so-called SaaSpocalypse — a sharp decline in SaaS vendor stock prices earlier this year — though actual replacements remain largely theoretical, with only a few IT leaders experimenting so far.

Gartner research puts real numbers on the shift: about 22% of IT leaders are actively reconsidering core systems such as ERP and CRM, while more than nine in 10 expect disruption in the software market. "IT leaders aren't planning wholesale replacements of core systems yet," said Gartner chief of research Patrick Connaughton, but he expects that to change as AI agents replace expensive UIs and seat-based pricing.

"A fundamental buy-versus-build inversion is under way as rapid adoption of agentic coding tools enables organizations to build custom alternatives faster and at lower cost," Connaughton said.

Why do most CIOs stay put?

Institutional trust, regulatory moats and data lock-in will keep most CIOs from major replacements for three to six years, Connaughton noted. Practitioners agree the arithmetic is brutal.

John Burns, senior director of finance systems and transformation at Herc Rentals, calls ERP a huge target — finance departments often pay twice, once in license fees and again in workarounds. But "AI agents aren't replacing ERP yet," he said. "An agent needs a clean general ledger to read from and write to. The ERP underneath stayed."

Burns mitigated his ERP dependence by surrounding it with best-of-breed tools, so the company can unplug the ERP on its own timeline. His advice: ask the CFO how many business disruptions the business will tolerate. If the answer is zero, reconsider the switch.

"Software companies know the aggravation cost of switching is high," Burns said. "On every ERP and enterprise performance management migration I've run, the license was the smallest line item."

Kevin M. Coles, founder of Coles Technical Group, argues surveys overstate likely movement because they measure frustration, not switching cost. "The real costs are the integrations nobody documented, the reports finance depends on, the staff who only know one console, and the year of running two systems side by side," he said. His recommendation: run the exit-cost exercise before the renewal notice arrives. "Even if you stay, a credible exit plan is the best leverage you'll ever have in the negotiation."

How hard is each exit?

LaPorte ranks the difficulty with a housing metaphor. "Java is a studio apartment — pack a few boxes and you're out," he said. "VMware is the house you've lived in for 15 years, with wiring from half your business running through the walls... SAP is the house where the most likely next address is SAP's newer building, on SAP's schedule."

A February CloudBolt survey found 86% of IT decision-makers at large North American companies shrinking their VMware footprint, but detangling fully can take up to four years. During a two-to-four-year migration, enterprises run two estates — two patch cycles, two sets of privileged accounts, two attack surfaces.

"The old house is the one that gets broken into," LaPorte warned. "Nobody is watching the doors at night."

His prescription is blunt: inventory before you price, because most exit estimates cover the license and miss the wiring entirely.