MSP Migration:
VMware to Proxmox
How a managed service provider migrated a 40-host VMware cluster, eliminated six-figure licensing costs, and launched a profitable Proxmox-based cloud offering — without disrupting customers.
40
VMware hosts migrated
400+
virtual machines
A$448k
annual VMware cost
65%
infrastructure cost reduction
What this case study covers
Broadcom's 2024 licensing changes ended the VMware VCSP program and made per-core subscription pricing untenable for most managed service providers. This case study documents exactly what one MSP did about it: a full migration from a 40-host VMware cluster to Proxmox VE, completed without customer-visible disruption.
It covers the commercial decision, the technical execution, and the commercial outcome — including how the MSP restructured their service offering around Proxmox and launched a new cloud tier within 90 days of project completion.
The business case
How the MSP modelled the cost delta between staying on VMware VCSP and migrating to Proxmox — including hardware, licensing, internal time, and customer risk. The numbers that forced the decision.
Environment assessment & planning
A 40-host cluster with 400+ VMs, complex SDN, and customer workloads across multiple tenants. How the environment was assessed, workloads classified, and a migration sequence designed around operational risk.
Proxmox VE cluster design
The target architecture: cluster topology, Ceph storage design, SDN and VLAN structure, Proxmox Backup Server layout, and HA configuration. The design decisions and why they were made.
Migration execution
The actual migration: tooling choices per workload type, how cutover windows were structured to minimise customer impact, what went wrong and how it was handled, and the final rollout schedule.
Commercial outcome & new service launch
The final infrastructure cost, customer retention through the migration, and how the MSP launched a Proxmox-based cloud offering — with pricing models, service tiers, and onboarding processes — within 90 days.
Who should read this
MSPs and CSPs evaluating the commercial case for Proxmox, technical leads planning a large-scale VMware migration, and service providers considering launching a Proxmox-based cloud offering.
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