The managed services market is navigating an unprecedented inflection point: For many service providers, recent changes in virtualization licensing and vendor partner tiers have elevated costs from a standard operational challenge into an existential threat to business continuity. For highly regulated industries like financial services and healthcare, this shift is even more complex. Security, continuous uptime, and compliance mandates mean that infrastructure changes cannot risk operational stability. At Red Hat Summit 2026 Community Day in Atlanta, Georgia, Paul Ponzeka, Chief Technology Officer of Abacus, shared how his organization navigated this transition. Similar to how many are responding in the face of this virtualization disruption, Abacus took the opportunity to build a modern, unified hybrid cloud foundation. Featured technologies included Red Hat OpenShift Virtualization, Red Hat Advanced Cluster Management for Virtualization, Red Hat Ansible Automation Platform, and the migration toolkit for virtualization.Three core challenges: Scalability, strict compliance, and the hypervisor taxAbacus operates as a global managed service provider and managed security service provider. The company manages a private cloud infrastructure that supports over 4,000 virtual machines (VMs) across 4 global datacenters. Their client base includes hedge funds, private equity firms, and healthcare providers, meaning every system must comply with strict SEC, FINRA, and HIPAA regulations.The catalyst for change came when Broadcom acquired VMware and eliminated the VMware Cloud Service Provider program, which Abacus had used since 2008. The commercial changes brought an immediate 30% price increase, with plans to eventually shrink the program by 95%. This placed Abacus on a hard deadline: migrate all 4,000 VMs to a new platform by September 2026.This scale presented 3 distinct challenges:Reusing a significant capital investment in existing SuperMicro hardwareMaintaining or increasing performance for roughly 90% Windows-based workloadsProtecting strict client disaster recovery profiles, including a 4-hour recovery SLAThe modern architecture: Escaping the find and replace trapWhen planning the migration, the team initially fell into the trap of trying to find direct, tool-for-tool replacements for their legacy stack. They quickly realized this was the wrong approach. Instead of asking what tool replaced their legacy virtual center or datastores, they focused on their desired business outcomes.This reframe led them to deploy Red Hat OpenShift Virtualization on their existing bare-metal SuperMicro hosts. This modern architecture runs VMs directly on Kubernetes, allowing the team to manage legacy VMs and modern containers side by side."We fell into the trap of doing a find-and-replace on our legacy stack, asking what is the equivalent of this tool or that datastore," Ponzeka explained. "We had to stop and realize this is not just a platform swap, but a complete shift in how we think about infrastructure."When building out this hybrid cloud foundation, the team realized that defining the storage topology was their most important priority. They made key physical infrastructure changes to support the new deployment:Transitioning to hyperconverged storage: Centralized, LUN-based storage hit physical limits quickly, and iSCSI became a major network bottleneck even at 25Gb. Ponzeka emphasized this lesson: "If there is one thing we learned, it is that storage is your number-one architectural decision. Centralized, LUN-based storage hit limits instantly. Moving to a software-defined layer on top of our arrays was the breakthrough that actually unlocked zero-downtime live migrations." To resolve this, Abacus deployed Portworx by Everpure as a software-defined storage layer on top of their Everpure (formerly Pure Storage) arrays. This resolved network bottlenecks, allowing automated asynchronous volume-level replication across datacenters, integrated snapshots, and live migrations of persistent volume claims without downtime.Upgrading the network fabric: OpenShift hosts required more physical connections. The team upgraded from 4 10Gb ports per host in VMware to 8 25Gb ports in OpenShift, connecting directly to Cisco Nexus core switches. They also segmented worker nodes from control plane nodes to handle the high network throughput.