Leaving VMware: How A Credit Union Cut Costs And Rebuilt Hybrid IT On Azure

What does infrastructure modernization actually look like for a midmarket IT team? In this episode of MES’ Ready.Set.Midmarket! podcast, guest Ali Molavi, infrastructure solutions architect and team lead at Publix Employees Federal Credit Union (PEFCU), breaks down a real-world migration from VMware to a hybrid cloud environment powered by Azure.

Facing rising costs, aging infrastructure, and increasing disaster risks (including hurricanes), PEFCU rethought its entire IT strategy—moving from a dual data center model to a hybrid cloud architecture with Azure as a disaster recovery platform.

Molavi shares how his team consolidated infrastructure, migrated workloads with minimal downtime, and delivered measurable business outcomes—including lower licensing costs and improved uptime—all while operating with a lean IT team. The success of the project led to it being published by Microsoft as a case study.

The conversation also covers a critical but often overlooked factor in modernization: culture change. As Molavi explains, successful transformation isn’t just about new technology: it’s about whether your team is ready to adopt it.

“Our entire environment is just a little bit less than a rack. And as far as the cost ... lots of savings happened. One was mainly VMware licensing, which was about $35K at that time. I’m 100% sure if we [had] it now ... we [would] have to pay more.” — Ali Molavi

Topics covered:

Full episode can be watched on YouTube and heard on Spotify and Apple Podcasts.

https://www.youtube.com/embed/lSsPy-JpDz8?si=yD7_x1xWaDn8Tz1c

Previous RSM! episodes are here.

https://player.simplecast.com/5650aca4-62ba-4565-a393-6eef116890cd?dark=false

Transcript:

Adam Dennison

Hello and welcome to another episode of Ready, Set, Midmarket. The podcast for all things midmarket IT brought to you by MES Computing. I’m Adam Dennison, vice president of Midsize Enterprise Services with The Channel Company and with me is my co-host Samara Lynn, Senior Editor of MES Computing. Welcome Samara. And today our guest is Ali Molavi. He is the infrastructure solutions architect and team lead with Publix Employees Federal Credit Union. Welcome Ali.

Ali Molavi

Thank you so much. Thank you for having me.

Adam Dennison

Absolutely. So today’s podcast from a topic standpoint is going to be around infrastructure modernization. We’re also going to talk about a move from VMware to a hybrid cloud environment. But before we do get into that, Ali why don’t you talk a little bit about, you know, tell us who you are, what organization you represent, and a little bit about your organization overall.

Ali Molavi

Sure. My name is Ali Molavi. joined Publix Employees Federal Credit Union. We call it PEFCU. It’s easier. I’ve been in IT since I was 16. I haven’t done anything else. And most of my career I’ve worked for financial institutions, credit unions and banks other types of like a financial institution like the software development and rest of that. Mostly I work for infrastructure design, engineering and management and maintenance of those areas.

Adam Dennison

Thank you so much. So let’s get into the topic a little bit. And before we do that, I want to just set the stage a little bit. Because again, this is a migration from VMware and it’s something that we’ve been, you know, we’ve had our thumb on the pulse of this for a couple of years now at MES. We partner with Gartner. We do our state of the midmarket research with them twice a year. Just a couple of stats I want to share that we received from our most recent State of the Midmarket Spring study before we get into your particular case study here, Ali. 62 percent of our midmarket respondents are currently running in a hybrid infrastructure. So that is up year over year from what we’ve been seeing. Top two benefits around that, number one is cost and followed closely behind that is better alignment between technology and business needs.

Adam Dennison

And then the final stat that I’ll share before we get into your particular instance here is 50 percent of our respondents right now have or are actively pursuing VMware alternatives. So that’s definitely been something that’s been a hot topic for I think over about two years now. We’re still looking at it, hearing different instances around various CIOs and verticals and what they’re doing. But let’s talk about your particular case study here. What made you make this move to a hybrid cloud environment, modernizing your infrastructure? What were sort of those kind of key pillars behind that and how did you go about that?

Ali Molavi

So, you know, let’s just go a little bit back when I joined PEFCU. I think I was lucky I joined in a good time. It was a time for lots of hardware refreshments. And when I joined, instead of just looking at changing or replacing the hardware, going box by box, I was just trying to see what can we do better.

Before we do it over like the server infrastructure, we have done some of like modernization over the network, converting everything to SD-WAN prep the infrastructure to going to 100 percent hybrid server environment. And then I was looking at different solutions. So just as a background, we had two data centers owned by a company in east part and west side of Florida.

And the concept behind that was like, you know, there was a lower chance if both sides get hit at the same time by Hurricane, you know, Florida is very famous for the hurricane during hurricane season. At least we have one or two direct hits. So, but that changed because like 2023 and also 2024 and I think 2021 we had Ha hurricane hitting the west part of Florida coming from Tampa all the way to Daytona Beach and hitting both way at the same time. So we were looking at different options, maybe having two data centers, maybe moving one of the data centers completely out of the Florida. And I came up, I checked like different like, yeah, assess like different technology, like different vendors.

And one of the things I find out, and that was like one of the reason I went to Azure, we have lots of partnership with Microsoft. And at the same time, you know, this is like, Azure is like our preferred, preferred partner by most of the vendor. So the Azure Local that time they call it Azure Stack HCI, come under my radar. And I start researching and designing everything based on one data center and using Azure as our like a DR site. And this is like not just, you know, converting from like VMware to like Azure Stack or Azure Local. It was like more redesigning the data center, where data sit, how the DR works and everything in those nature.

So what happened was like, so technically I consolidate two data centers in one and then we have started using Azure as our main DR site. This project was like some of the feature that was coming out from Microsoft, the time that I was doing this was so new and like some of the feature I was using like the preview mode or like more like a beta tester, like Azure Migrate for Azure Local was that time was not available for public. And I was the first person using it over the WAN. And it was very, like, it was a very good experience for both me and also [the] Microsoft team. I was closely working with their dev team to make sure, you know, they have this, like a live experience and data because this is like something -- migration over WAN didn’t happen for Azure Local in those, like those testing, but it was a very good experience. And the just migrating from VMware to another solution, you know, it’s not easy, but what we have done was like moving from like two data center at least like a hundred miles away over the WAN to the new data center with minimum downtime.

And that was the reason the Microsoft [was] very interested for actually doing that case study because it was not just about conversion. [It] was redesigned from scratch and relocation as well.

Adam Dennison

Yeah. Let me ask you about the environmental piece of this and the location of Florida. I have family that lives in Florida. We happened to have our MES Fall event in Tampa, literally days before one of the major hurricanes hit several of our employees and our MES customers were affected and impacted. Was this decision from the, you know, the environment standpoint, was it as a result of an impact or was it more preparedness and I see what’s happening here and we need to get out ahead of this?

Ali Molavi

No, it was like more for preparedness. Because since we already had two data centers, you know, you can be lucky once or twice. There’s few times you’re going to be lucky the third time. And other things I learned, this is like in case of disaster, many times you’re thinking about the power, you’re thinking about other type of infrastructure, which is like under your control, but sometimes like connection, it’s out of your control. We had situation in Jacksonville when I was working for another company, like three days after hurricane, half of like city connection went down because they ran out of gasoline and the generator went out of the gas and they couldn’t handle any more like the traffic. So you think then everything has a backup, but sometimes things happen, out of the control. And going to a hybrid gave us this opportunity to have -- if I want to go one step back -- we could not move everything to the cloud. There are lots of requirements from vendors, from latency, from cost to move everything to the cloud, but we were looking more, I was specifically looking more as for the cloud as like a DR plan.

Adam Dennison

Mm-hmm. OK. Talk to us a little bit about, are we now complete with the migration? I know nothing’s ever complete. Things are still always ongoing. But where are you at as far as the, you know, look at a football field from receiving the kickoff to goal line? Where are you in terms of that? And then, you know, what are, how are you measuring success around this both from a cost standpoint and a business standpoint?

Ali Molavi

The main project for moving our main application was done like a year ago, think almost like by February of 2025, everything was moved. Had some like older application we couldn’t move and they were like a part of a life cycling to convert them to the more SASE solution, which all of them are done like Jacksonville data center. We did commit completely back in June, 2025. And the other data center in Lakeland, which is in our, our headquarter is almost done. We have some equipment left just for like a compliance as far as like data retention, but not, we don’t have anything left.

Far as the cost, what you mentioned, it’s very interesting because in the past, in this company, we had our own data center. I came from an environment that I prefer to outsource as much as I can. If this is not my main business, I don’t want to learn it. And that’s what I did here. We started looking around to find data center with co-location. So we partnered with HostDime for our co-location facility.

"And we just actually compact everything in one rack. So our entire environment is just a little bit less than a rack. And as far as the cost ... lots of savings happened. One was mainly VMware licensing, which was about like $35K at that time. I’m 100% sure if we [had] it now ... we [would] have to pay more."

Also like the Azure Local is the hyperconverged solution, which means it doesn’t need the SAN storage. And for our environment, we could just use the hyperconverged part using the same sort of a storage provided by Azure. DR, like, you know, and as I said, like, you know, we become too big data center, all of the cost.

Some of those I cannot say like, you know, all of the maintenance, fee for generator, UPS, all other stuff, but hardware costs, think one time our CPA told me we were paying about like 200, 300K per year for all the maintenance for hardware and everything, but just giving you one shot, I think the entire cost for hardware side for this project was about like less than $50K per year.

Adam Dennison

OK, so you don’t have to answer this, but are you able to reinvest that or do you have to give that back to the business?

Ali Molavi

The amount of savings we had, we just modernized everything. It’s not just like I didn’t sacrifice the performance or quality and actually it went up. Our uptime and everything is much, much better compared to the past.

The amount of, think, you know, this is just one area, right? As I mentioned, like my first project was converting all of our traditional connection to SD-WAN solution. That alone saved us about 30K per month. That’s like the telecom communication. you know, with just 30K less, I didn’t, I actually like,

Adam Dennison

That’s awesome.

Ali Molavi

We have more redundancy and more bandwidth compared to when we paid more. But this is just more the design and more about like renovation and thinking a little bit out of the box. Not just go based on like, know, replacing the box with the box, replacing the hardware with the hardware, replacing the router with the router. So it was like a lots of change as far as the design. But I have to say that I had a very good leader. Usually this because these change was super aggressive. Like, you know, changing data center, consolidated two in one in like less than six months or replacing the entire or redesigning the entire network. It needed lots of support from leader. And I was lucky that I had that trust behind me and support.

Adam Dennison

Yeah.

Ali Molavi

And yeah, I think, you know, at this point they get it back.

Adam Dennison

Now tell the CFO you’re saving 10 grand a month and then go reinvest in some good stuff.

Samara Lynn

You work with the CIO or CFO?

Ali Molavi

We have CFO at this point. We are all reporting to CFO, our IT department.

Samara Lynn

Oh, OK. That’s good. I just want to jump in for a second. You know, that cost savings in hardware is pretty astounding. Was the VMware licensing price hike, was that a big factor in switching over? And before you went to Microsoft, did you look at any alternatives besides Microsoft?

Ali Molavi

So, I can say that was like, the time that I started this project, it was lots of answer certainly about VMware, if the transition didn’t happen yet. So, it was a factor, but not 100%. But as far as like looking at other vendors ... I was lucky to redesign at least three more environment in the past so I was a familiar with other vendors but the things that Microsoft Azure and especially Azure Local, you know attract me because two, three things I had in my mind one is reducing the number of vendors and I already know I have to deal with Microsoft and you really know I have to deal with Azure.

So that was like one of the main factor. And another thing was simplicity. One things I learned, and this is like, if you talk to me like 10 years ago, my point of view was totally different. One things I learned after 2020, especially after COVID is try to design more simple. Two reason is one, finding a right skill and finding the right people to work is hard. And when you have like a more simpler environment, it’s easier to onboard engineers and have them being like productive much, much faster till you just target a specific, like, you know, I’m looking for someone knows about this type of SAN storage. But when you go more on general or simplify things, then you have a pool of people that you can hire. This is comes to my attention when I had the opportunity to manage people for six, seven years and I find out as far as the hiring manager, it’s very important that you can find the right skill and right person. So when I come back to the designing, I was like, then I have to think about that part of business as well. If I make things simpler, then the other part is easier and I don’t need to worry about finding a right skill anymore.

Adam Dennison

What does that look like right now? You just brought up the talent gap, skills gap. That’s something that’s been talked about for 20 years in IT. And I like that you’ve been through some of the pain, right? So let’s simplify things so I can have a broader pool of folks. Talk to us a little bit about what that looks like right now in your industry, in your vertical, in Florida, know, do you try to hire local, do you hire remote, and what’s that skills gap look like right now for you in the infrastructure space?

Ali Molavi

You know, we try to hire from Florida and in all of my past jobs, one of the things I mentioned in the first, like, you know, I try to outsource a lot and I try to make my team smaller. And especially for midsize, this is what I find out is very important. You have like a smaller team, but you know, expert in multi area and you know, I don’t want -- this is like another point is, you know, many a stuff you don’t need to be expert if this is you’re dealing with like once or twice in like four or five years, it’s better to just outsource it. And for that reason, as I said, finding, making things simpler, help more to find or onboard people, train people when you need them.

I’m talking about my team, like at this point, the entire infrastructure for our company with about like 300 employees, like three people, the core infrastructure. I’m not talking about the help desk. And this is just me, one network engineer and one system engineer. So this is like some of the area we have to make sure we can cover each other. And especially as far as the skills, if it’s easier, then you can teach them and they can cover for others.

Adam Dennison

Do you find that the vendor community right now is, let me back up before I ask the question. First, I’m hearing a lot of this right now. Let’s reduce outsource, let’s simplify things. Do you see that the vendor community at large is helping in that regard? Take Microsoft out of it.

You know, because you have all these new players that are coming up a lot. We’ve had probably 20 new sponsors at MES two weeks ago in Houston. You know, are they coming in here with a simplified message for folks like you and your peers? Or are they coming in here with, ‘I’ve got this incredible new technology, but man, is it going to take a lot from a ramp up time to learn this?’ What are you, in general, kind of seeing out there as far as the vendors being on board with that strategy?

Ali Molavi

This is like one of the things I haven’t seen, someone that can, you know, I have a background for design, but I have never seen a good solution. Someone coming to us and say, ‘OK, this is a solution I have. These are what you are gaining. These are what you are losing.’ And the end of the day, this is how your environment looks like. I haven’t seen that to be honest, but.

Going back to another question, yes, for project-based or very isolated like a staff, I see lots of MSP, but not overall. Because as I said, this entire project was not just replacing the hardware or coming from VMware to Azure Local. I’m talking about if someone look at the entire environment and bring a comprehensive report or suggestion. This is what you can do. This is how you should look like if you want to do the modernization. No, I haven’t seen that. But I think for other parts, like, you know, if you just have like a very isolated scope, there is a lots of vendor and I use some of them from MES, that was very helpful.

Adam Dennison

Thank you. Samara, do you have any final questions before we wrap?

Samara Lynn

I know we’re running out of time, but I got one geeky question for you, I love the case study, which was really cool. And I noticed at one point it said that you guys migrated 120 virtual machines and 30 terabytes of data over like a 500 MB bandwidth WAN. And you kept the downtime under 10 minutes per VM. How did you do that?

Ali Molavi

Azure, actually this is like one of the tools at that time was like more in preview, Azure Migrate. At this point, it’s like for public so everyone can use it. And this is like a very cool product that helps to migrate from VMware to Azure. we had like, if I wanna go one step back, we needed to retain the IP address. So technically we need to move the VM as is from one environment to another environment. It is a little bit difficult. I have to go a little bit in the technical term because imagine you have the VM running in one network in Lakeland and you have to move that VM to Orlando, our main data center, and keep the same IP address. So it was a little bit challenging because you don’t just have one VM in one network. There is like 20, 30 in each network.

So moving all of them together or you have to have a split for it, like sometimes which is not good because then you have latency and all other issues. What did I do? Migrate. And again, these are like production VM data in each VM change every second. So the Azure migrate has this feature you replicated from location A to location B. And whenever you are ready, you just say want to move it now and it just take the last like change, the Delta change, send it over there. And then you can turn on the machine in the new location or from VMware, move to the Azure local and you have all of the recent data. So that 10 minutes that I was talking, it was like, and this is like a very cool feature. It was not available till 2024. And now,

I think starting 2025, it’s available for public, which made the migration much, much easier and much, much more efficient for us. And it’s like a free tool. It doesn’t cost anything.

Ali Molavi

One thing I have to tell you, and this is like when you said about the vendors, it was very interesting because I came to MES Orlando in April of 2024. I was like a visitor. I wasn’t attending, but I wanted to come to the booths and actually meeting Juniper in one of your booths saved me about 40k.

Adam Dennison

You’re on the record right now. This is fantastic.

Ali Molavi

I don’t remember the name of the... I’m not kidding because I was like looking around for like a solution because as a part of this hyperconverge we needed to purchase like switches and Juniper was on my radar and when I saw this is like happening

Ali Molavi

I asked your colleague, said can I just come over there as a visitor and I made it. I spent like around two hours just the boot time and I met the Juniper guy and he said like this is what I want and he just told me go to this vendor go to this guy and then like the price went down. I cannot say because both vendors are in MES so

Adam Dennison

Yeah.

Ali Molavi

It would be better if bought resellers like in the VMEF. If said, don’t use this one, go to this one and you save money.

Adam Dennison

That’s outstanding. So thank you for sharing that. So my final question is, others that are out there looking to take advantage of what you’ve, again, nothing’s ever complete in IT, but what you’ve completed, what’s the first steps that they should take?

Ali Molavi

First step, would say, beside of the assessment, first step is they have to make sure the culture in IT is ready to accept this big change. Yes, there is a lot of good things I can say about Azure Local, but the technology is totally different from VMware. That’s like the point, no one likes the change unless you are

ready and I think that’s the main point. The lesson I would say like you know the culture is very important to accept the change and ready to make the change.

Adam Dennison

That’s a great point and in my 20 plus years, that’s something we never hear varying, Cultures matters most, absolutely. So we are at the end of our time. Ali, I want to say thank you so much for sharing your story and going into detail with us. Thank you for attending and buying from our MES sponsors as well. That’s fantastic.

Samara, thanks again for another solid episode and we’ll see you, the audience, again soon on the next episode of Ready, Set Midmarket.

Ali Molavi

Thank you, thank you so much. Thank you.

Adam Dennison

Thank you.