Spending in hybrid environments is forecasted to increase by a CAGR of 22% through to 2032. According to Shouvik Nag, Senior Research Analyst at IDC, this is a consequence of the market “currently witnessing a trend toward greater optimization of their cloud spend to reduce cost while maximizing value from cloud investments”.
Against this backdrop of cloud optimization and cost management, IT leaders across industries are reassessing their virtualization approaches. Once serving as the backbone of enterprise IT infrastructure, and enabling organizations to maximize hardware utilization, virtualization is now seeing its role being reevaluated.
Traditional virtualization approaches, while effective for many years, now present substantial drawbacks—notably high costs and operational complexity. With recent changes in the market having led to significant increases in licensing costs, many businesses are reconsidering their virtualization strategy, often seeking alternative solutions. Navigating this shift requires organizations to adopt new approaches, shaped by emerging trends in 2025.
Trends influencing virtualization in 2025
What does modern virtualization look like? Prem Pavan, Vice President & GM, South East Asia & Korea (SEAK) at Red Hat, suggests this was being influenced by a few factors. “The first is diversification that minimizes vendor lock-in. Market shifts have caused organizations to prioritize diversification in their virtualization strategies as it offers greater flexibility and negotiating power,” Pavan says.
However, this introduces complexities in managing multiple platforms, each with its own operational requirements and cost structures. AI-driven solutions can play a role in simplifying operations and bypassing steep learning curves, enabling teams to work seamlessly at an operational syntax level rather than mastering complex systems.
Accelerated application modernization, which typically involves rearchitecting to containers and microservices, also influences virtualization strategies as organizations recognize the benefits of enhanced developer productivity and application delivery agility. But Pavan cautioned that success in modernizing applications often hinges on having a platform that offers flexibility to run both virtual machines (VMs) and containers in a unified manner for operational agility and cost efficiencies.
Organizations are simultaneously repatriating workloads to on-premises infrastructure while embracing multi-cloud strategies for virtualized workloads. While this hybrid approach offers flexibility, it underscores the need for solutions that deliver standardized operations across diverse cloud environments with seamless portability, ultimately simplifying management in a complex landscape.
Navigating the path forward
Red Hat has continuously invested in an extensive partner ecosystem, and this is particularly important when it comes to selecting a new virtualization platform. The vast Red Hat partner ecosystem gives customers the ability to build their solution exactly as they want, without having to go with solutions imposed by other platform vendors.
For organizations looking to modernize their virtualization strategy, Nicu Sasaran, Senior Director, Partner Ecosystem, SEAK, at Red Hat, advises keeping some key considerations in mind.
“Simplify IT with a unified platform. Managing separate platforms for VMs and containers can lead to increased complexity, resource, fragmentation, and operational overheads. A unified approach reduces complexity, streamlines training, improves governance, and simplifies management. These will ultimately deliver cost efficiencies and reduce risks,” Sasaran explains.
He also highlights the importance of operating consistently across hybrid and multi-cloud environments. Having the ability to deploy workloads across on-premises and cloud environments is key for organizations to unlock the flexibility to optimize for cost, performance, and compliance.
Even if modernization is a longer-term goal and VMs remain a critical part of an organization’s IT strategy, any future plans will involve modern technologies such as containers, edge and Generative AI (GenAI). To take advantage of these innovations without leaving behind VM investments, organizations need a unified and future-proof platform for managing all types of applications.
This is where open-source solutions can shine, offering a way to integrate cutting-edge innovation with your existing technologies. Open-source virtualization solutions, for example, not only offer modern ways to manage VMs but also let organizations tap into an entire ecosystem of certified technology, unlocking the flexibility and most importantly the control and stability that many IT leaders are looking for in a market that has seen increasing uncertainty.
Red Hat and AWS to drive the future of virtualization
Red Hat has forged a partnership with AWS to support businesses as they rethink their virtualization approach. This is best demonstrated through Red Hat OpenShift Service on AWS (ROSA): a comprehensive application platform built on open-source technologies, allowing users to build, deploy, run, and manage applications at scale on AWS infrastructure. It supports both containerized and virtualized workloads to support VM modernization and consistent management for legacy applications across environments.
“ROSA empowers organizations to simplify migration. Moving existing applications to the cloud now requires minimal refactoring, reducing time-to-deploy and preserving existing investments,” Sasaran adds.
It also accelerates modernization initiatives and application development by providing developers with self-service capabilities and consistent tooling. For applications already containerized on-premises, ROSA provides a familiar API surface and keeps deployment toolchain consistent so developers can focus on refactoring the data model instead of the entire application stack. Having operational consistency across hybrid environments results in reduced complexity and improved governance. ROSA is also available as a managed cloud service for operational efficiency; organisations can now quickly build, deploy, and scale applications across the clouds so they can refocus on innovation.
“We believe that by combining Red Hat’s expertise in open-source technologies with AWS’s cloud infrastructure, we can help organizations modernize their virtualization strategy that prepares for future innovation,” Sasaran concludes.
For more information on how Red Hat sits at the forefront of this transformation, click here.
