vSphere 5 Licensing

[SuperSpike]

I took a minute to read the licensing guide for vSphere 5 and I'm still trying to pull my jaw off the floor. VMware has completely screwed their customers this time. Why?

What I used to be able to do with 2 CPU licenses now takes 4. Incredible.

Today

BL460c G7 with 2 sockets and 192G of memory = 2 vSphere Enterprise Plus licenses
DL585 G7 with 4 sockets and 256G of memory = 4 vSphere Enterprise Plus licenses

Tomorrow

BL460c G7 with 2 sockets and 192G of memory = 4 vSphere Enterprise Plus licenses
BL585 G7 with 4 sockets and 256G of memory = 6 vSphere Enterprise Plus licenses

So it's almost as if VMware is putting a penalty on density and encouraging users to buy hardware with more sockets rather than less.

I get that the vRAM entitlements are for what you use, not necessarily what you have, but who buys memory and doesn't use it?

Forget the hoopla about a VM with 1 TB of memory. Who in their right mind would deploy that using the new license model? It would take 22 licenses to accommodate! You could go out and buy the physical box for way less than that today, from any hardware vendor.

Anyone else completely shocked by this move?

[hellraiser]

There's one thing I don't understand in all this - AMD and Intel keep on bringing out new CPUs with improved performance, additional features to aid virtualisation,etc, and yet don't really charge any more. VMware perform a few minor upgrades to their existing software (which, let's face it, is overpriced in the first place) and then increase its price by a ridiculous amount. Where's the sense in that?

At the moment we are running mostly Dell R710 hosts, some clustered and some standalone. Average cost per server is roughly £5-6k. VMware licencing come in at around £4k for Enterprise ESXi 4.1, and will increase still further with vSphere 5 (I'm not even going to get into the "vRAM isn't physical RAM" argument - I generally aim for 90%+ utilisation of memory on my servers, and am not in the habit of buying RAM I don't need) However, if I get a datacentre licence for 2008, I can have Hyper-V for free and an unlimited number of VMs on the same hardware. Guess what I'm going to be doing with our development and test boxes? If successful, then I see a number of production boxes being moved over, and a subsequent reduction in the size of our ESXi farm.

JD

[bilalhashmi]

One thing that we will also have to keep in mind that if we want a vSphere 6 down the road, the licensing has to change. Maybe the vRAM limits can be a bit more relaxed, I dunno. However its important for VMware to have such a licensing model.

You may have noticed the core restrictions have been taken away, no applause for that from anyone. Why not? A year or so down the road these quad cores will be the thing of the past (they already are in some cases) and we may be looking at 10 plus cores as the norm or even more. Wouldn’t that also mean the VM density will be further increased. The organizations will benefit from this but VMware’s revenue will continue to decline. I think for that reason we must understand that a model such as this is needed.

Besides with the new hardware, we may end up having fewer hosts, however with a vRAM model, we will still need more CPU license if we want to fully leverage the added cores in our new host. No you dont really have to buy more licenses this time, use the spare licenses from the hosts that no longer exist. So for instance if we had 10 host and with the hardware being upgraded we can run the same load on 5, use the remaining licenses from the 5 hosts that have been removed to increase your vRAM pool.

This way you still save money and the company whose hypervisor we all trust the most continues to do what they have been doing. If we dont accept the vRAM reality, we will kill vSphere 6. Perhaps a vRAM upgrade program or a  revised vRAM entitlement might ease of some of the anger.

Follow me @ Cloud-Buddy.com

[hellraiser]

If that's the case, then base it solely on RAM rather than being greedy and trying to cover it from both the CPU and memory angles. I don't see any of the other hypervisors using such a ridiculous licencing scheme. I also find it hard to believe that VMware are doing this as they are losing money, they know they have the best product and already charge a serious premium for it - they do not need to charge more when the competition is getting better by the day and costs several times less.

JD

[ats0401]

Bilal,

I think most of us aren't angry at the vRAM licensing in general, but the absurd low amount that is given with the license.

If they revises the vRAM entitlment to a realistic number to match todays servers, AND set a roadmap in place for how they will

deal with increased memory amounts as the technology increases, I will be happy.

Your second point is absolute and pure BS. Where did you get the idea that VMware's revenue was in decline?

VMware had RECORD profit and revenue growth last year, during a GLOBAL RECESSION.

Let's look at Q1 2011

"First-quarter net income rose 60 percent to $125.8 million, or 29 cents a share, from $78.4 million, or 19 cents, a year earlier."

"Sales rose 33 percent to $843.7 million, the Palo Alto, California-based company said today in a statement."

So tell me again how the old licensing model was killing vmware and would lead to no vsphere 6??

[leeroyrichardso]

How appropriate that vmware have a ticker across the website explaining how much more money IT departments need to save within the public sector.

We are (were) looking to replace our existing physical, citrix and hyper-v systems as part of this process, although vmware does not come cheap we would have still made savings across the group.

Thanks to the new pricing this has been thrown into dis-array, we cannot justify the spend on licensing anymore.

Its going to cost us twice as much to support our infrastructure.

Every get the feeling you have been cheated?

[Vince77]

We could be killing vSphere 6, but if every customer is leaving VMware for this, the result will probably be that one big company will buy VMware in the end and VMware's techniques will be build into that company's Hypervisor and we will get a "best of both"? (i hope!). maybe for less money?!

I agree that the idea of memory based licensing isn't that bad, but only 32Gb for my Enterprise licenses? thats making me really mad!

When I would buy 32Gb of memory at this moment it would cost me only 1900 dollar, what will that be in 2 jears? i will have to buy a additional licens for VMware which costs 2875 dollar!?!

Then, who will buy Enterprise licenses when you can get Enterprise Plus for 620 dollar more so you can use 16gb more?

so everybody with Enterprise will have to upgrade to Ent Plus. strange way of making (forcing) customers to upgrade.

3 years ago my servers had 64Gb of memory and 2 CPU's so this licensing model was ok, but no my servers run 128Gb memory (>80% allocated) is about >100Gb in use. so 2 x Ent PLUS licenses won't be enough for one server!. (i have to upgrade to ent Plus first and buy additional licenses).

What will happen in the next 3 years? my LAPTOP will probably have 32Gb of memory and my servers 256Gb or even 512GB? then I have to buy even more Ent. Plus licenses for the memory i need to use. The reason for the extra memory is of course Windows which uses a lot more memory since 2008 (compared to 2003) and the next version will probably even use more.

VMware was a expensive platform in the past, but if this really is going to be the future i beleive a lot of customers will walk away.

I really hope VMware's management will sort this out so i can continue to use thes wonderful product.(and they earn their bonus!)

[AXI]

It seems everyone is giving more for less,

Storage vendors giving you deduplication, and other great features generally overall prices going down.

Drive Manufacturers - Bigger faster More, lower price.

Tape drives, double capacity prices the same,

CPU - Wow good work guys we can barely use all that power, same price.

RAM - Bigger chips - prices falling all the time.

VMWare - lets peg our prices to RAM, the amount of that required doubles every 18 months. Wait a second lets do the Math..... Jackpot!

Lets hope VMware are in it for the long haul, and not just to fleece their customers, because right now their market share has hit its high water mark, Enjoy it while you can VMWare because you might look back and remember those days fondly.

[DANCHUFT]

Andy Schmid wrote:

Bilal,

I think most of us aren't angry at the vRAM licensing in general, but the absurd low amount that is given with the license.

If they revises the vRAM entitlment to a realistic number to match todays servers, AND set a roadmap in place for how they will

deal with increased memory amounts as the technology increases, I will be happy.

Your second point is absolute and pure BS. Where did you get the idea that VMware's revenue was in decline?

VMware had RECORD profit and revenue growth last year, during a GLOBAL RECESSION.

Let's look at Q1 2011

"First-quarter net income rose 60 percent to $125.8 million, or 29 cents a share, from $78.4 million, or 19 cents, a year earlier."

"Sales rose 33 percent to $843.7 million, the Palo Alto, California-based company said today in a statement."

So tell me again how the old licensing model was killing vmware and would lead to no vsphere 6??

Couldn't agree more, i'm not against the whole vRAM model, just the absurdly low entitlement's that come with ENT and ENT+, an entitlement of 64GB vRAM with an ENT license would be far more realistic for your Jo Average. 32GB vRAM for ENT? What "average user" research was this based on, a survey from 2005?

It makes me laugh when I think back to a UCS demo day I was at earlier this year, there were a couple of VMware guys there who were getting all excited about the the amount of memory that new 2 socket half height blades are now supporting, the consolidation ratios that could be achieved and the upcoming release of vSphere 5. They failed to mention the extra bucket load of licenses that everyone would need to justify the cash for.....

[rickardnobel]

Bilal wrote:

If we dont accept the vRAM reality, we will kill vSphere 6.

I wonder if there really is the consumer that should be responsible for a theoretical version 6 before version 5 has even been released?

[pcmanning]

Ok just checking some figures for our Microsoft Environment, we are on the Microsoft Campus VLA, so we can buy:

• Windows Data Center Edition Per CPU @ £75 per year
• Windows System Center Server Management Suite Data Center  @ £28 Per CPU per year

Assuming we keep our 26 Dual CPU blades running we're looking at a bill of £5356 per year.  This gives us SCVMM 2012, SCOM, MSDPM etc.

Now VMware current costs us £28,000 a year in maintainance and we're going to have to upgrade from Enterprise to Plus to cover our RAM use, then buy vCloud Director/vShield/Chargeback to get us a self service environment.

The bigger trick here is we already pay the microsoft stuff so we can have unlimited MS VMs and SCOM/DPM use!!

So is Hyper-V + SCVMM 2012 a viable solution - it's certainly cost effective!!

Paul

[Ohhno]

Ohhhh f.. I was soo excited comming back from vaccation talking to my customers about the new features in v5... It seams that i will have to Defend the new lic ... If i want too.. Ive done afew hyper-v installations.. And im lucky that i have one of the best guys at hyper-v in my company so i can have him get me up to speed.... Ohhh f... 😞  I started to read all about the new things .. Then the lic paper just stoped me reading and about the technical stuff ... Perfectly done VMware.. Have us techguys stary to rethink what we are doing... . . . ..  Bhaa frustrated....

[rickardnobel]

VMware says it has sized the vRAM allocations based on customer surveys and that the typical ratio for VMs to physical CPU is 5.7. Since vSphere 5 is likely to be around for at least two years VMware must also think that this is a ratio that will suitable for this time period.

However, if we already are seeing 12 core CPUs and soon 16 cores, what will the 5.7 VM/pCPU be? For a 16 core CPU that would be as low as 0,3 VMs / core. Even now CPU is not the limiting factor and the upcoming processors will only be faster.

So is it reasonable to put out a licensing model based on a consolidation ratio of 0.3 VMs / Core for the years to come?

[FrankB201110141]

John,

thanks for your posting. I've done the math and I am sorry, but the entire argumentation still misses the point that this is clearly a step back for ANY customer with high consolidation rates. Nothing else.

You know, his talk about "rightsizing" simply does not work, because in most cases the requirements for RAM are defined by the application vendor, and cannot be freely defined by the infrastructure guy. Face it, rightsizing is just an euphemism for "you haven't done your work right", which is a slap in the face of thousands of admins and consultants.  Windows Server 2008R2 has a recommended minimum of 4GB. Want to "righsize" this and use only 1 or 2 GB and prove Microsoft wrong on their own product ? Yea, sure...and we're all going to deploy the Webserver edition on server core only in the future...
It's like buying a new car where the new GPS system leaves one with only 5 targets to navigate to - "please understand mister customer, we wanted to make sure that you only go to the right places in the future"....WTF....?

Our company sells Cisco UCS boxes pretty successfully and the smallest system we've ever sold had 48GB of RAM (which was already a year ago !). The average system currently ordered holds 192GB, with some customers even going for 256GB as standard. With the old licensing scheme, all of them would have been done with 2 x Advanced or Enterprise Plus, leaving room for additional products like Cisco 1000v, vShield or vSphere Operations Manager or whatever. Now with V5, they would need to purchase 4 or even 6 Enterprise Plus licenses to utilize the servers RAM ALONE. No additional products possible because the hypervisor sucked in the entire budget. Why would somebody buy a server with that amount of physical RAM without wanting to really utilize the system ??? And yes, it's pooled RAM. But this would mean, that I have lots of Servers licensed that do not use any vRAM at all to have "spare-vRAM" in the pool for serves with higher demand - makes no sense at all in an average consolidated enviroment - so what is this repeatedly started discussion good for anyway ?

Doing annother math ? Buying vSphere Essentials Plus 5 entitles a customer to 8 GB per Server (24GB total) if all the vRAM is fully consumed. 8 GB of RAM in a vSphere host does not make any sense in a production environment. And no, many of them simply do not use HA, instead the restart machines manually or with the help of a script. Enables them to utilize all three servers as production machines. We've several customers starting with this license and 2 or 3 UCS-C with 24 - 48 GB per Server. To use this memory with V5, they would either have to buy 4 Essential plus licenses (!) or go for a bigger versions anyway. Makes sense ? No. Congratulations, you've given away the SMB market to Microsoft as a free gift.

Edit: I've been proven wrong on the Essentials Plus Kit, thanks for letting me know. In fact, the Pricelist states "24 GB per Kit", but on a later page it is clarified that this is "per CPU". So I'm sorry for fals assumptions here.

UCS math ? Okay. Buying a fully loaded UCS-B250 Bladecenter with 4 blades and 4 x 384GB = 1.536GB addressable RAM would have been covered on V4 by 8 x Enterprise Plus Licenses. With V5, a total of 1.536 / 48 = 32 Enterprise Plus Licenses would be required for the same system. And hey, if you pay for 1.5 TB of RAM, there is a reason behind why you do so and you want to use it fully, otherwise your business case must have been looking quite interesting !! So where is the "spare-vRAM" in this example, one can take the neccessary entitlements from ? Maybe VMware came across some fancy customers who run the remaining 12 Dual-Socket systems that did not consume any vRAM but where fully licensed...never seen such customes in my life ! Got the nonsense in this "pooled-vRAM discussion" ?

Again, the entire concept of "pooling" does imply that there are free resources that can "give away" licenses to other systems. If this is NOT the case - and it ISN'T in an average consolidated environment of today - you ALLWAYS have to spend DRAMATICALLY MORE money for the SAME benefits you used to have with V4.

It is totally intolerable to have the customers pay for SnS to cover upgrades, and then REDUCE their usage rights dramatically. Again, many customers with bigger licenses like Enterprise Plus DO already have bigger servers with 192+GB and DO use the RAM installed, for at least 75%. Why do you slap their faces as well ? Sending angry customers to Microsoft or Citrix - obviously on purpose - does not look like a good strategy to me to keep the competition off the heels.

An additional boost for Citrix you did with the upgrade rights for View 4.x customers, by NOT entiteling them for V5 Desktop licenses. Thinking about the average RAM configuration on a View cluster, this means that EXISTING View-customers either have to buy additional licenses as you take away RAM usage rights from them. Or they simply have to buy the V5 environment again to receive Desktop licenses. Good for Citrix. Bad idea for VMware to keep and reward loyal customers. You may not have noticed it, but the "VDI-war" about the gold standard for virtual desktops is still not won and the XenDesk solution is absolutely comparable with View - VMware is NOT that far ahead like they might be in the hypervisor-area. So congratulations, you have just helped Citrix to kick VMware off the VDI playground as well.

In a nutshell, if you rip off the marketing blabla: the new licensing scheme is a huge increase in price for the vast majority of the existing customer base as well as future customers that plan to consolidate large environments on as few servers as possible (VBlock and Flexpod are good examples here. Thanks for making this business harder as well...).
It kills the ROI of highly consolidated architectures and leaves customes with large amounts of already installed RAM obviously only with the options to stick with vSphere V4 for some time and then pay a huge premium to upgrade to V5 - or to move to the competition while accepting some drawbacks in functionality but for a reasonable price, so TCO still works.

This huge increase in effective pricing helps Microsoft and Citrix to take over the SMB and upper Midsize market from VMware without any efforts and will rise the amount of people becoming certified for Hyper-V and XEN pretty soon - especially among us consultants: not that we want, but customers soon WILL ask for help with migrations and building alternative architectures - so thanks for that as well...

I've loved VMware and its genius products for many years and have been one of Europes first VCPs, but this time I don't get it why the market leader want's to loose this position desperately by milking the customers briefcases dry...maybe the senior management of VMware has a hidden agenda I don't get yet...

Happy to read the answers from VMware guys and please prove me wrong - but with REAL arguments please. Yes, I've understood the "rightsizing" argument and the pooling concept pretty well, so please be so kind to answer with real facts, not marketing nonsens. Have a look into the real world datacenters please before you answer, okay ?

[Frank_Heidbuche]

john will just tell you to run their tool, and you will be surprised you don't have to pay...

well i runned to tool...

already on 9 customers...

good thing we also sell citrix...

i just got a cool tool, to convice people to buy new xenserver licenses from us.

thks john.

[GVD]

Hey Frank,

I think your whole Essentials licensing thing is wrong. The Essentials kit includes 6 pCPU licensed (across max 3 servers) with 24 GB vRAM per pCPU. This means a total of 144GB vRAM can be used across the 3 servers' vRAM pool.

You also can't stack Essentials licensing. They can't be extended like you suggest they can. One "kit" is all you get and if you want to go above it, you need to upgrade to vSphere Standard or something similar and pay 3 to 4 times more than before (even if your increase is only from 144 GB vRAM to 145 GB vRAM).

So it's bad and very hard to digest (especially with high consolidation rates), but luckily not quite as bad as you make it out to be.

For really small SMBs, it's the free hypervisor being limited to 8GB (lol, I have more in my laptop...) and the eventual upgrade they will have to make once they grow past Essentials kits that will hurt most.

[Ohhno]

I woulndt want to  be a blogger defending this lic modell now...

[FrankB201110141]

Hi GVD

are you really sure about the 24GB per CPU in the Essentials Plus Kit ?

According to the Pricing paper:

Entitlement by

vSphere edition

- 24GB vRAM for

Essentials Kit

- 24GB vRAM for

Essentials Plus Kit

- 24GB vRAM for

Standard

- 32GB vRAM for

Enterprise

- 48GB vRAM for

Enterprise Plus

To me this looks like a 24 GB per KIT, not per CPU - which equals 8GB per Server (or even worse, 4 GB per CPU if you want to).

I know that you cannot stack Essentials currently. But I'm not sure that this won't be possible with V5, just to increase the vRAM licensing (not that you would be allowed to run more than one vCenter).

[rickardnobel]

Since the other values of vRAM in the list is per CPU it is most likely the same for Essentials.

[RJC75]

Being an owner of a 50+ licenses with many 96G+ servers, I am now forced to look at XenServer and Hyper-v. This is after years of using and defending VMware religiously.

Take a poll... and who knows maybe VMware will listen.

http://twtpoll.com/r/w7f0cj

[GVD]

I know you mean well, RJC75, but with a poll like that you achieve absolutely nothing.

Your questions/answers are very biased and fail to cover several very important scenarios. Due to this bias, your poll never even had a chance of being 'heard' by VMWare at all...

That said, maybe we should make a poll with the following (feel free to modify it & create it as you please):

Has the new licensing scheme for vSphere 5 affected you negatively?

Yes, but I will continue to use vSphere regardless
Yes, and while I will continue to use vSphere for now, I'm exploring alternatives
Yes, I've already decided that we are dropping vSphere in favor of other virtualization platforms (Xen, Hyper-V, KVM,...)

Yes, I've already decided that we are dropping vSphere in favor of non-virtualized solutions

No, nothing changes for me
No, the new licensing is actually cheaper for me