A Norwegian startup faces a $17,600 Claude bill and two vendors pointing at each other, after running Anthropic models through Microsoft Foundry while $21,168 in Azure sponsorship credits expired untouched.

Vegalabs AS said it received $25,060 in cloud credits through Microsoft for Startups and deployed Claude in Foundry in August. The company expected its analysis workloads to draw against the credit balance.

Microsoft’s sponsorship rules exclude that scenario. Anthropic models purchased through Azure Marketplace fall outside the credits, and an account with a card on file gets charged for them.

Microsoft attempted to collect $16,500 from the card Vegalabs had on file, and the invoiced total later reached $17,600 before tax. The sponsorship portal kept showing available credits while Marketplace charges accumulated alongside them.

Microsoft’s deployment documentation states the terms: credit-only sponsored subscriptions don’t work for these models, and an account with a card attached gets charged. Vegalabs deleted the deployment within an hour of spotting the charges. The card issuer declined the payment over suspected fraud, and the remaining $21,168 in sponsorship credits expired Sept. 8.

Vegalabs said it never read the credit exclusions and never configured a budget alert. The company disputes neither the usage nor the documented rule. Its complaint targets the deployment interface, which it says presented a sponsored subscription and a Marketplace purchase as one continuous billing picture.

The refund request then ran into a wall.

Vegalabs sent it to Microsoft support first. The reply said Marketplace transactions process through a billing pipeline tied to the third-party publisher, and that Azure Support cannot waive, refund, or adjust those charges. If Anthropic approves the request, the reply said, Anthropic can initiate the refund authorisation through Microsoft.

Anthropic support said Microsoft did not require its authorisation to process a refund and sent Vegalabs back to Microsoft.

Four of the seven support replies Vegalabs received were AI-generated, including both from Anthropic. Those Anthropic replies described the account as an “Azure Student Sponsorship,” a program name that does not apply to the company.

Reporters asked Microsoft on Oct. 6 for comment and received an acknowledgement plus a request to be told what Anthropic had to say. Microsoft offered nothing further. Anthropic did not respond.

The billing pattern has a trail. A similar case in March involved third-party model charges that sponsorship credits did not cover.

Nine out of ten respondents to a survey of VMware customers say higher licensing costs were prompting them to consider alternatives.

Unisphere Research surveyed 269 executives, managers, and professionals at VMware user organisations between December 2025 and February 2026. The study, commissioned by third-party support provider Rimini Street, also found that 54 percent cited the end of perpetual license support as a reason to evaluate other options.

The study showed cost remains the leading driver of virtualisation roadmap decisions. Seventy-three percent said savings were a top priority. Respondents also identified barriers to change: operational complexity (40 percent), multi-vendor management challenges (38 percent), securing the increased attack surface (37 percent), and team skills requirements (37 percent).

Users were looking for choice, flexibility, and control over their virtualisation strategies, said Keith Costello, chief operating officer with Rimini Street, which sells third-party support for VMware.

“These survey findings reinforce the need for practical, vendor-independent strategies that put business priorities back on the client’s terms.”

Sixty percent of respondents were considering a multi-hypervisor strategy. Forty-eight percent said they did not currently plan to move any assets to VMware Cloud Foundation (VCF), Broadcom’s subscription platform and preferred migration path.

Broadcom agreed to buy VMware in 2022. By November 2024, Gartner was arguing that customers were worse off because of the acquisition.

In May 2025, cloud customer group the European Cloud Competition Observatory (ECCO) and cloud trade association CISPE claimed that Broadcom had upped VMware licensing costs to between eight and 15 times their previous levels since it acquired VMware.

At the time, Broadcom said it was working to advance the European Union’s sovereign cloud objectives and enable enterprises to “accelerate innovation, provide more choice, and address their most complex technology challenges.”

In June, UK retail giant Tesco said it was replacing VMware with an alternative product and pressing ahead with its licensing lawsuit against the virtualisation pioneer’s parent company, Broadcom, with a High Court trial scheduled no earlier than November 2027.

Last month, Gartner predicted that more than half of enterprises would begin proofs of concept for alternatives to their VMware deployments by 2029, while still rating the Broadcom business unit a leader in two major markets.

“By 2029, 55 percent of enterprises will initiate proofs of concept for alternative distributed hybrid infrastructure products to replace their VMware-based deployments and embrace hybrid cloud infrastructure delivery, up from 25 percent in 2026,” it said.

Gartner predicts that by 2028, 70 percent of enterprises will abandon agentic AI systems built with vendor assistance as costs climb and customers struggle to modify the technology without outside help.

What the consultancy calls forward-deployed engineering (FDE) embeds a vendor’s engineers with a customer to build and deploy software for its particular requirements. Gartner argues that the model can deliver rapid early progress but leave customers dependent on expensive external expertise.

According to Gartner, FDE engagements can fail when customers do not acquire the knowledge and control needed to maintain and develop the resulting systems after the vendor leaves.

FDE “success starts with getting the engagement structure right, from scope and incentives to governance, ownership, and exit,” said Gartner senior director analyst Mukul Saha.

“The best-scoped FDE engagements have clear guidelines on governance, business value delivery, IP ownership, project co-ownership, knowledge transfer, and an exit strategy from day one,” he added.

“Many providers now use ‘forward deployed’ as a label for implementation, professional services, solution engineering, or AI consulting; some thoughtfully, others because it sounds more strategic. Some charge premium fees without the delivery depth, program management, or change management maturity to justify them.”

Gartner advises software engineering leaders to use FDE only for problems requiring deep product expertise, rapid adaptation, or close integration between the vendor’s technology and the customer’s operating environment.

Otherwise, customers may see rapid early progress without building the internal capabilities needed to take control. They could then end up paying premium rates for work that a traditional services or partner model might deliver more cost-effectively and predictably.

Gartner also predicts that through 2028, fewer than 20 percent of FDE engagements will turn recurring customer requirements into features in the vendor’s core product. It warns of a growing risk of “FDE washing,” in which conventional consulting services are marketed as something more specialised.

This isn’t the first time that Gartner has warned of the potential costs and pitfalls of AI projects.

Earlier this year, it forecast that at least half of generative AI projects will exceed their budgets due to poor architectural choices and lack of operational know-how, while most organisations that try to build custom models will abandon them for similar reasons.

It also said it expects 40 percent of AI agent deployments would be scaled back or decommissioned as organisations run into governance problems with the technology.

More recently, the analyst predicted that nearly a third of employees laid off because of AI will need to be rehired again at a future date, often at significantly higher cost.

Worldwide AI spending will increase 49.5% in 2026, to $2.7 trillion, and grow another 36.2% in 2027 as AI usage continues to expand, Gartner predicts in the latest quarterly update to its IT spending forecast.

But there’s been no diversion of money from other areas of IT to feed AI, said Gartner Distinguished VP Analyst John-David Lovelock. CIOs got some net new money for AI back in 2024, and a little in 2025, he said, “so there wasn’t a diversion, and now more of their spending is about rebranding than diversion.”

By 2030, “every dollar is going to be an AI dollar in one way or another,” he said.

Instead of buying just a laptop, companies now buy a laptop with AI chips in it, while enterprise software now has AI embedded in it. And instead of doing a project about business strategy, they now do a project about how AI might change business strategy.

“In one way, it’s kind of rebranding,” he said. “Net new spending is going more towards AI, and existing spending is being transformed towards AI.”

It’s similar with hyperscalers: “The hyperscalers haven’t diverted one dime away from their cloud. So AWS, Google, Microsoft, Meta are all continuing to build out their cloud infrastructure at the same rate they were in 2022.”

The AI buildout “is the largest infrastructure project humanity has ever undertaken,” he observed.

Gartner updates its spending forecasts quarterly. In its latest report, it predicted AI infrastructure spend will grow 51.2% this year, and AI software 60.2%. Spend on AI agents and assistants, which it breaks out separately from other software, is forecast to increase by 77.3%, and AI security spend to almost double.

As AI development platforms prove themselves, Gartner sees spending on them accelerating: It has increased its 2026 growth forecast for them from 28% in its May report to 39%, attributing the change to the development of custom AI applications by enterprises and software and service providers.

AI model providers are seeing a “small but growing opportunity” for domain-specific language models aligned with enterprise use cases, upping the 2026 growth rate for generative AI models to 117%.

Analyst firm Gartner believes over half of VMware users will start evaluating alternative hybrid cloud platforms yet still rates the Broadcom business unit a leader in two major markets.

Gartner predicted increased interest in VMware exits in its Magic Quadrant for Distributed Hybrid Infrastructure (DHI) – aka hybrid clouds – which opens with a “Strategic Planning Assumption” that “By 2029, 55 percent of enterprises will initiate proofs of concept for alternative distributed hybrid infrastructure products to replace their VMware-based deployments and embrace hybrid cloud infrastructure delivery, up from 25 percent in 2026.”

Gartner’s mention of 2029 feels noteworthy, because that year will be six years after Broadcom’s acquisition of VMware. As previously written, plenty of VMware users acquired fresh three-year subscriptions in the months before the deal closed. Migrating from VMware to a rival platform is a risky and complex project, and we often hear of customers deciding it is safer to stick with Broadcom for longer while they hatch plans. If orgs in that position refresh for another three-year sub during 2026, 2029 would be a natural jumping off point.

Numerous virtualisation contenders are trying to lure Virtzilla’s customers, yet progress is slow. Nutanix CEO Rajiv Ramaswami has often said it will be several years before some are ready to move. While Gartner predicts a majority of VMware customers will contemplate a move, the Broadcom business unit will keep most of its customers for at least another three years – and recently turned its attention to refreshing its low-end vSphere Standard product, a move that will give it a chance to retain more current users.

The DHI Magic Quadrant rates VMware as a leader in the field, alongside AWS, Nutanix, Microsoft and Oracle. Gartner rates VMware’s core virtualisation technology, formal sovereign cloud ecosystem, and AI-native infrastructure as strengths.

One of the main motivations for quitting Microsoft 365 and adopting Google Workspace is spite, an emotion that sadly doesn’t produce a return on investment.

The source of that disappointing news is Domenico Scriva, a senior principal analyst at Gartner, who told the firm’s IT Symposium event in Australia that moving between the suites is also unlikely to save buyers much money.

He pointed out that Google Workspace licenses are cheaper than the E5 bundle that is Microsoft’s most popular M365 license, but that Google’s suite doesn’t cover telephony, security, business intelligence, or an OS license.

By the time users add all those bits to Google Workspace, he thinks they will pay $2 a month more than the cost of Microsoft’s suite – even after considering the fact that Google bundles its Gemini AI with Workspaces but Microsoft charges extra for Copilot.

Scriva said Google’s suite can be more cost effective when paired with an Apple Mac or Chromebook. Mac users get lower costs because their machines last longer than PCs, while Chromebook owners save on hardware purchase price but need to replace their machines more often.

Those numbers don’t consider the complexity of migrating between the suites, and the cost of moving. Scriva said dependencies built into either ecosystem are a likely source of migration complication, and the need for user training is another element that those who contemplate migrations sometimes neglect.

The analyst said he’s seen some M365 users trying to use the threat of migration as a negotiating tactic when renewing their Microsoft deals. He said that won’t work if you leave it too late, because Microsoft knows it’s not possible to make the move quickly.

He therefore advised starting work on a migration almost as soon as you sign a three-year M365 deal, because it takes at least two years to get it done.

If you do decide to move, he recommended having a specific outcome in mind, rather than just swapping one suite for another.

Productivity suites have scarcely changed in 30 years, he said, so it’s currently hard to see an outcome that makes a move worthwhile.

Happily, Scriva thinks AI may soon change that. He thinks we’re in a new wave of development of productivity suites in which AI assists with content creation. An imminent third wave, he predicted, will properly shake up the market by removing the need to use individual apps like word processors or presentation graphics packages, which he thinks will be replaced by some kind of AI interface that allows users to express what they want to do and then sit back and watch as their suite has a crack at the job.