For decades, Citrix has been the default platform for delivering virtual desktops – now that’s about to change.
The venerable desktop provider’s decision to retire perpetual licensing and move customers to subscriptions marks a turning point for Australian organisations. From April 2026, file-based on-premises licences will no longer be recognised, with systems required to connect to Citrix’s cloud activation service. For CIOs and IT managers, this is not a technical footnote but a shift that directly affects budgets, compliance and continuity.
Citrix’s announcement is reverberating across boardrooms and data centres alike. Many enterprises have long amortised upfront licence costs across multi-year cycles. Subscription pricing changes that model entirely, moving costs onto operating budgets and raising the risk of being locked into three-year contracts that include bundled features customers may never use.
“It is a classic squeeze play,” says Paul Heaton, chief executive of home-grown cloud consultancy cubesys. “Citrix is effectively saying sign up for three years on our terms or face disruption. That has left some large clients facing 200 to 300 per cent price increases at renewal.”
The licensing changes arrive at a time when workforce expectations and budget pressures are already reshaping technology decisions. Hybrid work is entrenched. Staff expect secure access from anywhere, while CFOs are demanding clarity on total cost of ownership.
Azure Virtual Desktop, part of Microsoft’s cloud ecosystem, is increasingly being considered as an alternative. The appeal lies not only in its technical features – elasticity, automation, multi-session capability – but also in its financial model.
“With Azure Virtual Desktop, if you already have a Windows licence you don’t pay twice,” Heaton says. “Costs shift to compute, storage and network. That makes it easier to scale up and down, and to demonstrate to finance chiefs exactly what you are spending.”
“The shift from Citrix to Azure Virtual Desktop isn’t just an infrastructure upgrade, it’s a strategic transformation,” says Silvan Maeder, co-founder and chief technology officer at cubesys. “Beyond modernisation, it unlocks agility, scalability and deep native integration across the Microsoft ecosystem.”
“At cubesys, we’ve built and proven repeatable migration frameworks that accelerate adoption, strengthen security posture and optimise performance.
“The message is clear – modernisation done right isn’t a risk, it’s a competitive advantage.”
The conversation is as much about optionality as it is about technology. “CIOs and IT managers want flexibility,” Heaton says. “The risk is getting locked into agreements that no longer align with strategy or budgets. Having viable alternatives puts negotiating power back in their hands.”
“Unfortunately, it’s become common that many legacy technology vendors are seeking to exploit the difficulty organisations face when moving off their technology platforms” says Greg Spencer from independent technology advisory firm Beyond Technology.
“Knowing that the technology platform will eventually be removed they focus on charging as much as possible before they get the boot,” says Spencer.
Senior partner for Beyond Technology Consulting, Greg Spencer says the shift away from perpetual licensing is accelerating conversations with CIOs who want more control over how they scale and secure their desktop environments.
Spencer says many organisations are looking for ways to make budgets stretch further without compromising performance or user experience.
“Azure Virtual Desktop’s elasticity and multi-session Windows capabilities scale resources dynamically. Empowering infrastructure that can optimise costs, and deliver a seamless user experience is vital – especially for teams with fluctuating demand or remote workforces,” says Spencer.
“Azure Virtual Desktop’s elasticity and multi-session Windows capabilities empower organisations to scale resources dynamically, optimise costs, and deliver a seamless user experience – especially for teams with fluctuating demand or remote workforces.”
Microsoft’s approach is focused on supporting customers through that transition rather than leaving them to navigate it alone.
“Our strategic partnerships and local investments from Microsoft are designed to give customers clarity and confidence as they transition to modern desktop solutions,” says Heaton.
“With robust support models and co-funded pilots, we help organisations accelerate transformation while managing risk.”
A good example of how this shift plays out in practice is Uniting NSW.ACT. Like many large, distributed organisations, Uniting had been running on legacy infrastructure that was nearing end of life.
Overburdened, on-premises servers created frustrating delays for frontline workers and pushed up maintenance costs. Leadership also faced a strategic crossroads: reinvest heavily in on-prem hardware or use the shift as a catalyst to modernise.
“Our people need to be able to open client records in a timely manner, and the system just wasn’t letting them do it,” says Sharyn Oswald, client systems management lead at Uniting NSW.ACT.
“When you’re supporting vulnerable people, every minute matters. We needed a modern platform that could deliver speed and reliability,” says Oswald.
This emphasis on flexible scaling and structured migration support reflects the broader pressures CIOs are facing as renewal deadlines approach. For many, the appeal lies not only in technical capabilities but also in the ability to move at their own pace while keeping costs transparent and predictable.
Heaton says Citrix is relying on inertia. The company is counting on customers signing renewals at the last minute rather than taking on the complexity of moving.
“The danger is what some are calling the laziness tax,” Heaton says. “If you do nothing, you accept a three-year line item in your budget. That’s a big commitment when technology and business needs are moving so fast.”
Heaton adds that timing is critical. “You cannot leave it until the final month of a renewal cycle. Organisations need two to 12 months to run a proof of concept, compare options and be ready to move if they choose. Otherwise inertia will dictate the outcome.”
Early pilots demonstrate the benefits of moving side-by-side rather than cutting over cold. “Run controlled pilots, validate identity and profiles, and only then move cohorts,” Heaton says. “That way you have the option to step back if needed, but in practice people don’t once they see the performance and cost profile.”
For Australian organisations, the takeaway is that desktop delivery is now part of mainstream strategic planning for security, compliance and financial governance, not just a technical footnote.
The shift is being felt across the wider ecosystem. Jarred Foley, senior director for enterprise at Nerdio, says enterprise customers are increasingly recognising the value of Microsoft’s desktop-as-a-service technologies as a modern, cost-effective alternative to legacy VDI solutions.
“Through Nerdio’s automation and optimisation, combined with cubesys’s migration expertise, organisations can accelerate their cloud journey, de-risk migration off legacy solutions and focus on delivering better digital experiences rather than managing infrastructure,” he says.
Early adopters in government, health and energy have already tested the waters. One large Australian energy provider ran a side-by-side proof of concept comparing Citrix and Azure Virtual Desktop for thousands of call centre users in the Philippines. The outcome was clear – half a million dollars a year saved on licensing with comparable service levels.
“The lesson is that scale and flexibility matter,” Heaton says. “With cloud you can measure usage down to the individual user, rather than paying for capacity that sits idle. That changes the economics and makes the business case clearer.”
Operationally, migrations have highlighted the need for disciplined image management and attention to video and voice optimisation. “If you don’t configure collaboration tools properly from day one, you burn goodwill with staff,” Heaton says. “But if you get it right, the user experience is better than legacy systems could deliver.”
For finance leaders, the shift requires more than technology briefings. Moving from perpetual entitlements to subscriptions, or from fixed capacity to elastic consumption, changes cash-flow profiles and sometimes balance-sheet treatment.
“CFOs understand this is a one-off event that can be accounted for differently,” Heaton says. “IT leaders must come prepared with models that show net present value over three to five years and demonstrate how spend will track against user outcomes.”
Heaton says Microsoft partnerships can help offset project costs. “In many cases we can access funding pools from Microsoft to cover transition services,” he says. “That reduces the upfront barrier and makes it easier to get CFO approval.”
Citrix remains a significant player and continues to partner with Microsoft globally. But the shift to subscription licensing is pushing Australian enterprises to reconsider strategies. Some will stay put, accepting the new model. Others will dual-track – negotiating renewals while piloting alternatives to keep options open. A growing cohort will take the opportunity to pivot to cloud-native solutions.
“The decision is not about brand loyalty,” Heaton says. “It is about whether your desktop strategy reduces risk, maintains user experience and gives you financial flexibility. That’s what CIOs and CFOs should be testing now, not at the 11th hour.”
As renewal cycles roll through 2026, the stakes are clear. Virtual desktops have moved from back-office IT to a board-level issue. The organisations that prepare early will shape their own terms. Those that do not may find themselves paying a high price for inertia.
For Australian organisations, the question now is how to manage this transition strategically, on their own terms. cubesys have a special offer for you so please contact here.