As AI increased operational complexity and cloud costs, enterprises are rethinking whether their infrastructure is equipped to stay competitive, according to a new survey from HPE.
Conducted by HPE between December 15, 2025 and January 4, 2026, the study surveyed nearly 400 IT decision‑makers—including CIOs, CTOs, and senior technology leaders—who participate in the global Business Transformers Community.
More than two-thirds of enterprises are planning material changes to their virtualization strategy within the next two years; however, only 5% are fully ready, highlighting a significant gap.
CIOs and IT teams are increasingly worried about cost unpredictability, AI readiness, and the need for speed as they assess new virtualization alternatives to stay ahead of the curve.
Budget constraints (28%), technical complexity (24%), and migration risk (21%) followed closely by skills gap (20%) are cited as the top barriers slowing progress of the “Great VM Reset.”
Fewer than one in 10 enterprises (4%) cite licensing costs as the single biggest catalyst for virtualization, underscoring the urgency is less about cost, and more about transformation to a hybrid operation model and AI readiness.
Companies are taking a deliberate approach and not looking to just swap hypervisors. Data shows that more than half (57%) of enterprises are taking a phased approach to future proof their IT, with hybrid cloud emerging as the preferred path forward to support AI performance demands.
Today, 78% of provisions are in the public cloud, 61% in virtualized clusters, 48% in private cloud and 32% at the edge.
AIOps is seen as essential
IT leaders are racing to build systems that can meet the performance, data, and scaling demands of AI, with over a quarter of IT decision makers putting AI readiness at the top of their list.
When shaping future virtualization and private cloud strategies, enterprises say access to unified backup and cyber‑recovery (70%), cross‑platform governance (61%), and integrated observability and AIOps (55%) are very important or business critical.
“We’re seeing enterprise leaders reassess longstanding IT assumptions to balance cost predictability, AI readiness and performance. This isn’t just a rush to rip and replace, but a deliberate shift toward a more flexible and simplified operating model,” said Brian Gruttadauria, CTO of Hybrid Cloud at HPE.
