By President Ntuli, Managing Director, HPE South Africa

South African companies are entering 2026 in a more stable but no less demanding operational environment.

While progress on energy reform and infrastructure investment is easing some constraints, economic growth remains modest, and capital discipline is tightening. At the same time, organisations face growing expectations to modernise, adopt AI, strengthen cyber resilience and deliver seamless digital experiences. In this climate, the technologies that underpin IT environments can no longer be treated as background utilities, and enterprise virtualisation has moved from the engine room to the boardroom. 

Recent global research from HPE highlights how significant this shift has become. While more than two-thirds of organisations acknowledge that they need to rethink their virtualisation strategy over the next two years, only 5% consider themselves fully prepared for what is being described as the “Great Virtualisation Reset”.

That gap between awareness and readiness mirrors what many South African CIOs and business leaders are experiencing. In a recent CIO survey, only 37% of local organisations consider themselves digital leaders, with the modernisation of legacy environments ranking higher than cloud adoption for many IT executives. 

 What has triggered the tipping point?

The renewed focus on virtualisation is a direct response to how dramatically AI is reshaping infrastructure requirements. AI models require significant computing power, rapid data movement and the ability to expand dynamically. With the architecture beneath the virtualisation layer evolving, enterprises will have to rethink their role and design assumptions of the layer. At the heart of the virtualisation reset is a new architectural reality, where stability is anchored in the data layer. 

In addition, cost volatility is a growing concern. Changes in licensing models and pricing structures have exposed how dependent many organisations are on specific platforms. Leaders want to avoid being locked into environments that are expensive, rigid or difficult to adapt to changing business needs. 

Most enterprises now operate across a mix of on-premises infrastructure, private cloud, public cloud and edge environments. While this hybrid approach offers flexibility, if done without a clear strategy, it can also introduce fragmentation. Without a coherent control layer, visibility declines, governance weakens and operational risk increases. 

Just as an air-traffic control system manages the movements of numerous aircraft, ensuring safety, efficiency, and coordination in complex airspace, a modern virtualisation platform orchestrates diverse workloads across hybrid environments. It maintains visibility and control and streamlines operations by directing resources where they are needed most.

This enables organisations to manage dynamic demands, scale efficiently, and reduce operational costs and risk as their infrastructure evolves and new technologies like AI become more prevalent. In doing so, virtualisation has become a strategic lever for business performance.

Rethinking the operating model

At moments like this, it is tempting to look for quick fixes: swap one hypervisor for another, renegotiate a contract and move on. While such actions may provide short-term relief, they do little to address their risk potential within the broader operating model. 

According to HPE’s research, more than half of organisations are pursuing a phased approach to modernisation rather than attempting large-scale transformation in a single step. This is a pragmatic path, particularly for South African enterprises operating under constraints. A phased strategy allows organisations to stabilise core workloads, improve visibility and governance, and expand modernisation efforts incrementally without disrupting critical operations. 

Equally important is embedding security, observability and resilience directly into the virtualisation layer – capabilities that can no longer be treated as bolt-ons. In an environment where security threats continue to escalate, the ability to recover quickly and maintain operational continuity is fundamental. 

Virtualisation should sit within an integrated private or hybrid cloud experience designed to simplify operations and accelerate time to value. Solutions such as HPE Morpheus VM Essentials Software support this approach by enabling organisations to manage diverse virtual environments through a single management layer, reduce vendor dependency and modernise at their own pace while creating a stable foundation for both traditional workloads and emerging AI use cases. 

From invisible infrastructure to competitive advantage

Virtualisation may once have been a behind-the-scenes enabler, but it is now a visible determinant of strategic success. Organisations that modernise their virtualisation strategy within a unified hybrid operating model will find it easier to adopt AI initiatives, manage volatility and strengthen resilience. They can spend less time wrestling with complexity and more time focusing on innovation and growth. 

The virtualisation reset isn’t a technical debate – it’s a strategic fork in the road and South African organisations have a choice to make: They can wait and risk higher costs, slower innovation and needless exposure, or they can choose to lead and modernise their virtualisation now. Acting now will not only enhance their business resilience and speed, it will unlock critical competitive advantage – not someday, but today.