VMware Changing vSphere 5 Licensing

http://www.crn.com/news/data-center/231300048/vmware-changing-vsphere-5-licensing-to-allow-monster-vms.htm

VMware Communities: Change to vSphere 5 Licensing Policy -

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Tackle

Wow. That is awesome! Pretty much doubling the amount of vRAM you can have for the same price. Going to make alot of SMB IT managers smile...

Very good news. I still don't understand the need for a change in their licensing/pricing structure.

Starke

They needed to, here is a copy/paste from the email I just got as a VMware Partner.

Dear VMware Partner,
On July 12, 2011, VMware announced our new Cloud Infrastructure Suite. The launch featured vSphere 5, the newest version of our flagship product.

As many of you know, as part of this announcement, we introduced changes to the vSphere licensing model in order to align costs with the benefits of virtualization rather than with the physical attributes of individual servers. While our goal was to provide a licensing model based on consumption and value rather than physical components and capacity, we strived to make the new model as non-disruptive as possible.

These changes generated much debate in the blogosphere, in conversations with our partners and customers, and across VMware communities. Some of the discussion had to do with confusion around the changes. We have been watching the blog commentaries carefully, and we have been listening to the partner and customer conversations very intently. A great deal of feedback was provided that examined the impact of the new licensing model on every possible use case and scenario, and equally importantly, reflected our partners’ and customers’ intense passion for VMware.

Our success depends on the active involvement of our channel partners. We are a company built on partner and customer goodwill, and we’ve taken your feedback in earnest. Our primary objective is to do right by our customers, so we are announcing three changes to the vSphere 5 licensing model that address the most recurring areas of your feedback.

• We’ve increased vRAM entitlements for all vSphere editions, including the doubling of the entitlements for vSphere Enterprise and Enterprise Plus. This change addresses concerns about future-looking business cases that were based on future hardware capabilities and the previous vSphere licensing model. Below is a comparison of the previously announced and the new vSphere 5 vRAM entitlements per vSphere edition:

vSphere edition Previous vRAM entitlement New vRAM entitlement
vSphere Enterprise+ 48 GB 96 GB
vSphere Enterprise 32 GB 64 GB
vSphere Standard 24 GB 32 GB
vSphere Essentials+ 24 GB 32 GB
vSphere Essentials 24 GB 32 GB

• We’ve capped the amount of vRAM we count in any given VM, so that no VM, not even the “monster” 1TB vRAM VM, would cost more than one vSphere Enterprise Plus license. This change also aligns with our goal to make vSphere 5 the best platform for running Tier 1 applications.

• We’ve adjusted our model to be much more flexible around transient workloads, and short-term spikes that are typical in test & development environments for example. We will now calculate a 12-month average of consumed vRAM to rather than tracking the high water mark of vRAM.

Finally, we introduced the vSphere Desktop edition to address vSphere licensing in a desktop environment. The vSphere Desktop edition does not have any vRAM entitlements, and allows customers to purchase vSphere for VDI use case on per user basis. Our price books are being updated and will be distributed shortly.

We are confident that our vSphere 5 licensing model based on pooled vRAM is the right one for the cloud computing era. We are fully committed to meeting our partners’ needs, and have several resources on Partner Central available to help you and your customers understand and calculate how the new licensing model applies to existing environments. We also have a vmLIVE session available for replay as well as an additional vmLIVE session on August 10th.

We would like to hear from you about this change; please join the conversation on our Partner Blog.

Thank you for your continued passion in our mutual sucess and partnership.

Bogomil Balkansky
SVP, Product Marketing, Infrastructure Product

powerfool

Good deal, those changes were definitely necessary. I know folks that are creating VMs that would require a single license just for the amount of memory they have.

VMWare needed to change the model as they were going to lose with the CPU model as cores continue to increase, and RAM has largely been the main bottleneck. You could buy a one (1) CPU server and pack it with RAM and get tons of mileage out of it.

The first announcement was a bad set of numbers because it would have made VMWare obsolete with the new capabilities in Windows Server "8" Hyper-V. I still think VMWare is the best product, but as the performance and feature gaps close, cost is going to play a bigger role.

cyberguypr

They had to change it. Otherwise it would've been giving away a good share of the SME segment to Citrix or M$. Funny thing is that the thread in VMware communities is approaching 80k views and all the cronies and vExperts would say was "you have to size your VMs right", "run this script so you can understand the model and the impact", "but price is justified as there are tons of new features", "this will affect a tiny percentage of customers". Either VMware realized the percentage was bigger than they thought or were amazed with all the noise that "tiny percentage" made.

Whoever came up with the low vRAM entitlements should be looking for a new job.

blargoe

That is very reasonable.

jibbajabba

Makes me wonder if this is a "stunt" they pulled off .. Spoolful of sugar hides the bad tasting sandwich they wanna give you and all that .. Although it doesn't bother us as we had the change with VSPP 3 anyway, we do however have a very large customer who lost the confidence in vmware now (may do that again in the future etc. etc.) so they already look into Hyper-V right now ..

tbgree00

I went from needing 41 GB of vRAM to having a 215 GB surplus in the change so I'm thrilled. It also saved a few of our clients quite a bit of money.

Claymoore

It's a shame, as a Microsoft partner I was really looking forward to all the new installations of Hyper-V, SCVMM, and V2V conversion work in the next couple of years.

The price is still going up (are there any new features that truly justify it?), just not as much. Makes this post from the MS Virtualization team less relevant, but you can understand why customers were looking at switching when a certain VMWare deployment would cost $1.5 million vs $183,000 for the same Hyper-V deployment (without hardware - just licensing). This still screams of a money grab from a desperate company. Is VMWare seeing their install base and margins erode and they are doing anything they can to make as much money as possible before virtualization is simply another commoditized OS feature?

VMWare still raised the price, only now customers can be happy about it. Looks like they have learned to manage expectations:

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odysseyelite

We had our vendor come in and speak to us about upgrading to 4.2 and he is not recommending his clients to go to 5 anytime soon.

He said the price increase was from shareholders pushing for income. He also mentioned, vmware has made several changes to the pricing model already and it could change again by the time they release it. He also noted it would cost us 75k+ to upgrade under the current pricing model.

Fugazi1000

odysseyelite wrote: »

We had our vendor come in and speak to us about upgrading to 4.2 and he is not recommending his clients to go to 5 anytime soon.

Is there such a thing as v4.2?

Unless there is a feature that you need from vSphere 5 (such as 1TB of ram in a single VM!) then you don't need to move until VMware choose to drop support for 4.1U1 (many years) so most current users will stick to what they have. It's new/expanding environments that have a harder decision to make.....

Forsaken_GA

You're still getting screwed.

The only difference is that it'll take some time for that to set in. As memory consumption goes up (which is a safe bet), so do your licensing costs. It's still a consumption tax.

Microsoft and Citrix have an opportunity to steal the market in the next few years.

jibbajabba

Fugazi1000 wrote: »

Is there such a thing as v4.2?

No .....

odysseyelite

Well that is what he stated, but looking on VMware's site I only see 4.1. So either he mispoke and knows something the rest of us do not. I sent an email to clarify.

Zaits

Forsaken_GA wrote: »

You're still getting screwed.

The only difference is that it'll take some time for that to set in. As memory consumption goes up (which is a safe bet), so do your licensing costs. It's still a consumption tax.

Microsoft and Citrix have an opportunity to steal the market in the next few years.

I don't see how anyone is getting "screwed". As a few posters already mentioned you don't have to go to vSphere 5 and can stay on the platform you are on now until VMware stops supporting that version.

Now that VMware has changed the model to set a cap even if memory consumption goes up the cost remains the same at least that's the way I'm interrupting it.

odysseyelite

jibbajabba wrote: »

No .....

The response I got from our vendor
"4.2 is pushed through via 4.1 Update 1 Upgrade manager."

Claymoore

Zaits wrote: »

I don't see how anyone is getting "screwed". As a few posters already mentioned you don't have to go to vSphere 5 and can stay on the platform you are on now until VMware stops supporting that version.

Now that VMware has changed the model to set a cap even if memory consumption goes up the cost remains the same at least that's the way I'm interrupting it.

But the cost doesn't stay the same - its still going up - it just caps out so that a single VM will not require more than one Enterprise Plus license. That's still $6000 in VMWare licensing for a single virtual server. A physical server with 2 sockets and 256GB of allocated vRAM is going to cost $18,000 in Enterprise plus licensing because you need 3 licenses to cover the vRAM and SnS is required for every vSphere purchase now.

Look at the following comparison from the MS Virtualization team using the original vTax and my changes for the new vTax. The MS cost includes the full Datacenter licenses for the System Center suite to better match feature sets.

10 Physical Servers (4 Sockets) with 1024 GB RAM
Original vTax Licensing Cost - 10 x 22 licenses - $1,512,860
New vTax Licensing Cost - 10x11 licenses - $756,430
MS Hyper-V R2 & System Center - 10x4 licenses - $183,360

You must really hate MS to want to spend another $573,070. VMWare has also set the precedent that they can change their licensing scheme at will to exploit how their customers are leveraging their product. Before, licensing was per processor slot, then it was taxed per processor core, now it is taxed per virtual RAM. Next it could be taxed on storage or on number of guests - who knows. That makes it hard for IT departments to project licensing costs over 3-5 years when comparing the lifetime ownership costs of a product.

Zaits

Claymoore wrote: »

But the cost doesn't stay the same - its still going up - it just caps out so that a single VM will not require more than one Enterprise Plus license. That's still $6000 in VMWare licensing for a single virtual server. A physical server with 2 sockets and 256GB of allocated vRAM is going to cost $18,000 in Enterprise plus licensing because you need 3 licenses to cover the vRAM and SnS is required for every vSphere purchase now.

Thanks for the clarification I guess I overlooked that the cap was for the VM not the pool.

Claymoore wrote: »

Look at the following comparison from the MS Virtualization team using the original vTax and my changes for the new vTax. The MS cost includes the full Datacenter licenses for the System Center suite to better match feature sets.
10 Physical Servers (4 Sockets) with 1024 GB RAM

Original vTax Licensing Cost - 10 x 22 licenses - $1,512,860

New vTax Licensing Cost - 10x11 licenses - $756,430

MS Hyper-V R2 & System Center - 10x4 licenses - $183,360

You must really hate MS to want to spend another $573,070. VMWare has also set the precedent that they can change their licensing scheme at will to exploit how their customers are leveraging their product. Before, licensing was per processor slot, then it was taxed per processor core, now it is taxed per virtual RAM. Next it could be taxed on storage or on number of guests - who knows. That makes it hard for IT departments to project licensing costs over 3-5 years when comparing the lifetime ownership costs of a product.

I'm not going to argue the math because I haven't done any number crunching myself, but these examples seem to always take the most extreme situation to bash VMwares new model. These customers that have 10 Physical servers with 1TB of RAM each have to be the exception not the norm, of course I have no evidence to back my statement up. I'd also be surprised in the next couple of years if Microsoft/ Citrix didn't change their licensing model to reflect the changing industry.

And yes I hate Hyper-V enough that if I was forced to use it I would go back to school for Fashion design just because I hate it that much. I'd choose a Cloud provider or Citrix first

jibbajabba

odysseyelite wrote: »

The response I got from our vendor
"4.2 is pushed through via 4.1 Update 1 Upgrade manager."

4.1.0 Build 381591 is the latest patch level you can get through the Update Manager (ESXi) and build 320092 for the full blown ESX and the latest files you can get manually are also 4.1.0 - so God knows where he got that from ..

meadIT

jibbajabba wrote: »

4.1.0 Build 381591 is the latest patch level you can get through the Update Manager (ESXi) and build 320092 for the full blown ESX and the latest files you can get manually are also 4.1.0 - so God knows where he got that from ..

Yeah, I think you need to find a new vendor...

If I were you, I would run one of the PowerCLI scripts available and see if he is being truthful about an extra $75k. Or post up your current number of licenses and we can help you see if you're being misled.

Claymoore

Zaits wrote: »

I'm not going to argue the math because I haven't done any number crunching myself, but these examples seem to always take the most extreme situation to bash VMwares new model. These customers that have 10 Physical servers with 1TB of RAM each have to be the exception not the norm, of course I have no evidence to back my statement up. I'd also be surprised in the next couple of years if Microsoft/ Citrix didn't change their licensing model to reflect the changing industry.

And yes I hate Hyper-V enough that if I was forced to use it I would go back to school for Fashion design just because I hate it that much. I'd choose a Cloud provider or Citrix first

From Jeff Woolsey, MS Virtualization Program Manager:

Next question: Does Microsoft plan to do anything similar to the vTax?

NO, we have no intention of imposing:
A VM Memory vTax

A VM Core vTax

A VM Replication vTax

Per VM taxes are what virtualization vendors do, not strategic cloud providers.

You may hate Hyper-V that much, but the person who signs the checks for your new virtualization cluster probably doesn't. They don't want to spend another $573k, and they would happily save another $20k by bringing in a cheaper, younger person to replace you after you quit in protest.

I think a customer building a 10 server cluster is probably still leaning towards VMWare because they need more advanced features, like site replication, or are using 3rd party tools for specific management needs. The VMWare advanced feature set and developer community still beat Hyper-V in the near term, although that gap continues to close.

I have no problem with VMWare charging as much as possible for their products. In fact, you could argue that they have an obligation to their shareholders to do exactly that. They will charge what the market will bear, and it turns out that the market may bear $750k in licensing costs but not $1.5M.

Drug companies often increase the price of blockbuster medications the last few years they are still under patent protection to maximize profit. Once the generic producers step in, all that margin will be gone so they need to make as much as they can while they can. I get the feeling that VMWare is doing the same thing here. They see other vendors closing the gap in features, which will force VMWare to narrow the gap in price. Until that happens - say when Windows Server 8 is released - VWare will squeeze all the cash they can out of their customers. Nothing personal, just business.

ITdude

jibbajabba wrote: »

4.1.0 Build 381591 is the latest patch level you can get through the Update Manager (ESXi) and build 320092 for the full blown ESX and the latest files you can get manually are also 4.1.0 - so God knows where he got that from ..

Perhaps it is a virtual 4.2 update?

cyberguypr

ITdude wrote: »

Perhaps it is a virtual 4.2 update?

Nice! v4.2 HA!

Forsaken_GA

ITdude wrote: »

Perhaps it is a virtual 4.2 update?

I'd ask him if he plays WoW