On day one at AWS re:Invent 2025 in Las Vegas, Amazon didn’t just announce new tools. It laid out a fairly transparent plan to systematically dismantle the licensing revenue streams that VMware and Microsoft have been extracting from enterprises for decades. The vehicle? AWS Transform, an AI-powered modernisation service that promises to eliminate up to 70% of maintenance and licensing costs by automating migrations away from legacy platforms.
This isn’t corporate positioning. It’s a declaration of intent.
On a shuttle to the Las Vegas showgrounds during re:Invent, an AWS PR representative read from a prepared script that explicitly mentioned “the end of Microsoft licensing fees” when discussing Transform’s capabilities. That’s not spin. That’s AWS saying what it actually means, which is rare enough in enterprise tech to be noteworthy.
The targets are deliberate
AWS Transform goes after two specific pain points that have cost enterprises billions: Windows Server dependencies and VMware infrastructure.
For .NET applications, Transform’s automation agent migrates code from Windows-dependent .NET Framework to cross-platform .NET running on Linux. AWS claims this removes Windows Server licensing requirements and reduces operating costs by up to 40%. That’s not a side benefit. That’s the entire point.
For VMware environments, Transform offers automated migration to native EC2 infrastructure, with the explicit goal of helping customers escape VMware licensing fees. The timing matters here. Broadcom’s acquisition of VMware and subsequent licensing restructuring has created widespread dissatisfaction. AWS isn’t just offering an alternative. It’s offering an exit strategy, and it’s positioning that exit as inevitable.
Microsoft’s 2019 licensing changes set this up
There’s context that makes AWS’s aggression more understandable. In 2019, Microsoft changed its licensing policies to make it significantly harder and more expensive to bring your own licenses to AWS and other cloud providers that compete with Azure. The changes were designed to push customers toward Azure by making Microsoft workloads less economical on competing platforms.
AWS clearly hasn’t forgotten. If Microsoft was going to weaponise licensing to protect Azure, AWS would help customers eliminate the need for those licenses altogether. Transform is the response, and it’s been years in the making.
AI makes the offensive viable
What’s changed is automation. Migrating from Windows to Linux or from VMware to native cloud infrastructure used to require enormous manual effort. The licensing costs often seemed preferable to the migration pain, which is exactly how vendor lock-in is supposed to work.
AWS Transform uses AI agents to automate dependency analysis, code refactoring, configuration updates, and testing. This doesn’t just reduce cost and time. It removes the primary barrier that kept enterprises paying licensing fees they resented: the sheer difficulty of leaving.
The broader implication is that AI-powered automation is becoming a tool for breaking vendor lock-in at scale. That’s genuinely new, and it changes the economics of enterprise IT in ways that go beyond AWS’s specific ambitions.
The multicloud angle complicates things
AWS also announced AWS Interconnect for multicloud networking, starting with Google Cloud. The pitch is that AWS wants to help you escape vendor lock-in, which is ironic given that modernising with Transform means committing more deeply to AWS-native services.
This is the paradox AWS is selling: we’ll help you leave VMware and Microsoft, but you’ll be replacing one form of dependence with another. The difference, AWS argues, is that its lock-in comes with lower licensing costs and better integration. Whether that’s true depends on how tightly you’re willing to bind your infrastructure to AWS’s ecosystem.
What this means for South African enterprises
For IT leaders in South Africa, this matters in a few specific ways. Licensing costs for VMware and Microsoft have always been painful, but exchange rate fluctuations make them particularly unpredictable. Moving to AWS-native infrastructure with Linux-based workloads reduces exposure to both licensing increases and currency risk.
The challenge is skills. Modernising from Windows and VMware to AWS-native Linux environments requires expertise that isn’t evenly distributed. AWS Transform automates much of the migration, but someone still needs to manage the result. That’s a staffing and training question, not just a technology one.
There’s also the question of data sovereignty and localisation. AWS has a Cape Town region, which helps with latency and compliance, but shifting to AWS-native services means accepting AWS’s operational model. For organisations with strict data residency requirements, that’s not always straightforward.
The competitive response will be messy
Neither Microsoft nor Broadcom is going to accept this quietly. Microsoft has been investing heavily in making Azure the default platform for Microsoft workloads, while also expanding its Linux and open-source support to counter exactly this kind of positioning. Broadcom, meanwhile, has been restructuring VMware’s business model, though customer satisfaction with those changes has been mixed at best.
But AWS has identified something real: enterprise frustration with licensing complexity and cost has reached a point where many organisations are actively looking for exits. AWS is positioning itself as the way out, and it’s using AI automation to make that exit feel achievable rather than theoretical.
This isn’t just about AWS
The broader story here is that AI-powered automation is becoming a weapon in cloud platform competition. What AWS is doing with Transform, others will attempt with their own tooling. The question isn’t whether enterprises will modernise away from legacy licensing models. It’s which cloud platform they’ll modernise onto, and how much new lock-in they’ll accept in exchange for escaping the old kind.
AWS Transform isn’t just a modernisation tool. It’s a strategic bet that enterprises are ready to trade one dependency for another, as long as the new dependency is cheaper and comes wrapped in the language of liberation. Whether that bet pays off depends on execution, customer trust, and whether the promised cost savings actually materialise.
But at re:Invent 2025, AWS stopped pretending its ambitions were anything other than what they are. The company wants to systematically dismantle VMware and Microsoft licensing revenue, and it’s built tooling specifically to do that. The only question left is whether enterprises trust AWS enough to help them do it.