Apple is not renewing a contract with server virtualization software provider VMware, reports CRN — a move that could save the company millions of dollars.

According to the report, Apple was using VMware ESXi internally to run its internal server infrastructure. Originally, Apple was planning to renew its four-year-old licesning deal with VMware at a cost of around $US20 million for the next two years.

VMware, a $US33 billion publicly traded company, makes software that helps tech companies like Apple run their data centres more efficiently, at higher scales. It makes money by charging fees to licence its software.

There’s a growing demand in the tech industry for free, open source software that can do what VMware does. With the rise of smartphones and cloud computing, data centres are growing ever-larger to meet swelling demand. That means licensing fees like the kind VMware demands can become a real headache for enormous companies like Apple, who run massive data centres to do things like sell apps and content and push software updates.

This report says Apple will be ditching the VMware ESXi software in favour of KVM, a free alternative that does largely the same thing. The kind of software is called a “hypervisor,” a way to essentially trick one server into thinking it’s multiple servers, enabling for a higher level of efficiency.

Apple is no stranger to free software: It uses the Apache Mesos tool to run Siri, the digital personal assistant that runs on the iPhone and iPad.

Meanwhile, VMware seems to recognise the threat that free software like KVM poses to its business, and has been aggressively partnering up with companies like the $US1 billion startup Docker for joint solutions, while it tries to figure out how to stay competitive.

Neither Apple nor VMware had responded to a request for comment at the time of publication.

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