A new global study from HPE (NYSE: HPE) reveals that while most enterprises are planning significant changes to their virtualization strategies, only a small fraction feel fully prepared to execute. The research, based on a survey of nearly 400 IT decision-makers worldwide, highlights a widening readiness gap as organizations confront rising operational complexity, evolving licensing models, and the growing demands of artificial intelligence.
According to the findings, more than two-thirds of enterprises expect to make material changes to their virtualization environments within the next two years. However, just 5% report that they are fully ready for that transition. The data suggests that many organizations recognize the urgency of modernization but face structural and operational barriers that slow progress.
Cost remains a concern, but it is not the primary driver of change. In fact, only 4% of respondents cite licensing costs as the single biggest reason for reevaluating their virtualization approach. Instead, enterprises are responding to broader pressures, including the need to support AI workloads, manage hybrid environments more effectively, and ensure long-term operational resilience. Budget constraints were identified by 28% of respondents as a key barrier to progress, followed closely by technical complexity at 24%, migration risk at 21%, and internal skills gaps at 20%.
The study indicates that organizations are not simply looking to replace one hypervisor with another. Rather, they are reassessing their overall operating models. Many enterprises are shifting toward hybrid strategies designed to balance flexibility, performance, and control. Today’s IT environments reflect a highly distributed reality: 78% of respondents report provisioning workloads in public cloud environments, 61% operate within virtualized clusters, 48% use private cloud infrastructure, and 32% maintain workloads at the edge. This fragmentation has increased operational demands, prompting leaders to rethink how infrastructure decisions align with AI ambitions.
AI readiness is emerging as a defining factor in virtualization strategy. More than a quarter of IT decision-makers rank AI preparedness as their top priority. As AI workloads require greater scalability, performance, and data management capabilities, enterprises are placing new emphasis on operational features rather than focusing solely on core virtualization technologies. Respondents identified unified backup and cyber recovery capabilities as critical, with 70% rating them as very important or business essential. Cross-platform governance was cited by 61%, while 55% emphasized the need for integrated observability and advanced AIOps to ensure visibility and control across complex environments.
Brian Gruttadauria, CTO of Hybrid Cloud at HPE, said the findings reflect a broader strategic reassessment among enterprise leaders. “We’re seeing organizations revisit long-standing IT assumptions as they balance cost predictability, AI readiness, and performance requirements. This is not about replacing technology for its own sake. It is about building a more adaptable and simplified operating model that supports future innovation while reducing operational risk.”
Customers echo this perspective. Sune T. Baastrup, CIO at Danfoss, noted that virtualization strategy changes presented an opportunity to simplify operations and prepare for AI-driven workloads. He said that through HPE Private Cloud Enterprise and HPE Morpheus Software, the company is able to manage environments ranging from data centers to factory floors with improved consistency and reliability.
Scott Steele, COO at Thrive, emphasized that predictability and control have become essential priorities. He said that partnering with HPE enables Thrive to design agile IT environments that support cost optimization, observability, and hybrid flexibility tailored to customer needs.
The research was conducted between December 15, 2025, and January 4, 2026, among members of the global Business Transformers Community, managed independently by C SPACE. Participants include CIOs, CTOs, and senior IT leaders responsible for enterprise infrastructure, cloud strategy, and virtualization platforms.
The findings suggest that enterprises recognize the scale of the virtualization shift underway. However, with only 5% reporting full readiness, the data underscores the challenge of translating strategic intent into operational reality as organizations prepare their infrastructure for the next phase of AI-driven growth.
