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SuperSpike
Contributor
Contributor

vSphere 5 Licensing

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?

@Virtual_EZ
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gaznet
Contributor
Contributor

This could go on a bit...

A couple of figures... and apologies for directly linking blog posts but these help to explain it a bit better than I ever will

http://www.yellow-bricks.com/2011/07/21/scale-upout-and-impact-of-vram-part-2/

and this one...

http://lonesysadmin.net/2011/07/21/vmware-scale-up-vs-scale-out-the-big-picture/

oh and i spelled neck wrong...

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Bigi201110141
Enthusiast
Enthusiast

Hosts 16
Sockets 2
Cores 6
RAM 128

Enterprise vSphere 4 = 32 Licenses = $92K
same config above upgraded to vSphere 5 = 64 Licenses = 184K or Enterprise Plus = 150K

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tomaddox
Enthusiast
Enthusiast

Bigi wrote:

Hosts 16
Sockets 2
Cores 6
RAM 128

Enterprise vSphere 4 = 32 Licenses = $92K
same config above upgraded to vSphere 5 = 64 Licenses = 184K or Enterprise Plus = 150K

Actually, this is wrong. The pricing listed assumes that you have not overcommitted your RAM. If you have overcommitted your RAM, there is no cost cap! You are basically on the hook for unlimited cost. Although, of course, there is a practical limit to how much RAM you can assign, your license cost is not limited by the size of the host but by the amount of RAM assigned to VMs, so you could easily wind up paying much more than $150K, depending on how much RAM you ultimately assign, which is part of what makes this pricing model so insidious and abusive.

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GaryHertz
Enthusiast
Enthusiast

gary evans wrote:

This could go on a bit...

A couple of figures... and apologies for directly linking blog posts but these help to explain it a bit better than I ever will

http://www.yellow-bricks.com/2011/07/21/scale-upout-and-impact-of-vram-part-2/

and this one...

http://lonesysadmin.net/2011/07/21/vmware-scale-up-vs-scale-out-the-big-picture/

oh and i spelled neck wrong...

I think you are completely missing the point.  This discussion isn't about scale up vs. scale out, its about increased costs due to the licensing changes.  It doesn't take a spreadsheet to realize that 16 processors spread out over 16 servers is going to cost more than 16 processors in 4 servers.

The entire licensing issue comes down to this for Enterprise licenses.  Substitute 24G or 48G for other licenses.

vRAM usage per socket is equal to or less than 32G - pay the same.

vRAM usage per socket is more than 32G - pay more.

Notice in no case do you pay less.  I know I didn't factor in n +1 but it doesn't change things that much.

Look at it this way.

I currently have 4 dual socket servers with 256GB RAM each configured for N+1 and Enterprise plus licences.  With 4.x I need 8 licences.  With 5.0 I'll need 16,  (3x256)/48, double the licences.  If I have a DR site with the same equipment I'll need 16 licenses under either licensing model, but I'm only actively using 3 out of 8 servers.  Theses senarios assume 1:1 vRAM to pRAM usage.  Under real conditions I'll need more licenses under 5.0 to fully use all my RAM.

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tomaddox
Enthusiast
Enthusiast

John,

It's nice to see someone from VMware weighing in here, but this seems like more of a job from someone in the Enterprise Products division (or whoever manages the vSphere product line). It seems like two major errors have been made by VMware:

1) There was no outreach by VMware to let customers know ahead of time what was happening and to see what the impact would be. To date, I can sum up the total communication by VMware to my organization as "...". I have asked my VAR to schedule some time with VMware, but apparently our VMware rep has better things to do than deal with our petty concerns about tripled license costs.

2) The licensing model itself is completely ludicrous, insofar as it represents a massive licensing cost increase for many customers, especially ones seeking to take advantage of high consolidation ratios.

I'll dig deep into the old guide to Netspeak for a phenomenon which VMware seems to have embraced:

CIS: Customer Implosion Syndrome, a form of price competition that induces customers to disappear

(For the younger members here, CIS was Compuserve Information Services, an ISP who failed to adjust to new competition and kept their prices high, figuring that their "added value" would keep members around. It didn't, and their ignominious fate was to be bought by AOL. Any parallels with the current situation are left to the reader to infer.)

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VidarK
Contributor
Contributor

GaryHertz wrote:


The entire licensing issue comes down to this for Enterprise licenses.  Substitute 24G or 48G for other licenses.

vRAM usage per socket is equal to or less than 32G - pay the same.

vRAM usage per socket is more than 32G - pay more.

Notice in no case do you pay less.  I know I didn't factor in n +1 but it doesn't change things that much.

That's right. A number of VMware fanboys are blogging about how small servers they have built in the past for their customers. It's quite sad to see how they don't seem to realize these facts:

With vSphere 4.1 Advanced each license entitled you to 256GB of RAM per host and 12 cores per CPU.

Their calculations with, at the moment, pretty underspec'ed servers with 2 cpus of 4 cores each and 96GB RAM would mean a 12GB/core ratio.

Now take these 12GB and multiply it with the 24 cores you could possibly put into a 2cpu system with the old 4.1 license. The result is that with the old license, if you were to actually utilize it for what it was worth (and marketed as), you'd have 256GB RAM in that host (thanks to the 256GB/host limit). Then comes vSphere 5 along and if you want to stick to using VMware you now need 8 vSphere 5 Enterprise licenses to run the same server. That's 484% price increase and it still has a cap for 256GB vRAM usage so you cannot scale up further by using memory compression without getting additional licenses. (You'd have to purchase 6 additional Enterprise licenses which cost more than the Advanced licenses). Of course your SnS also increases at the same rate.

My point is that it is terribly wrong to look at what the average VMware customer used to do 3-4 years ago like it seems those VMware-boys are doing when they make their misleading calculations.  I'm talking about what the vSphere 4.1 license permitts vs what the vSphere 5 license permits - a plain and simple comparison which shouldn't need very high IQ to be understood.

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Rumple
Virtuoso
Virtuoso

Actually...

V4 would be $139, 808 (assuming 32 CPU+S&S) at list price

V5 would require 8 Additional licenses of enterprise assuming 100% allocation, no oversubscription and N+1 design = $174,760

32 CPU = 1.536TB RAM Licensed…2.048TB of RAM Available…to license 1.920TB of RAM (15 hosts) that’s 8 licenses @48Gb of RAM

Assume you have 20% oversubscription or 400MB (not unrealistic on 2TB of RAM), then that’s an additional 8 licenses $34,952

Total to fully utilize your v5 environment to get best ROI = $209,217

Obviously discounts come into play in both v4 and v5 scenario’s….

What is comes down to is this…

If you overspent on v4 licenses and run a 30% utilization across all your hosts (aka you thought you were running Hyper-V) , you are not going to have a license problem.

If you actually utilized your environment and built it according to vmware recommendations (2 hosts, 50% utilization, 3 hosts 66% utilization, 4 hosts 75% utilization, 5+ hosts (85%) or n1, maybe n2 as you got beyond 5 hosts, and used the marketing speak to drive virtualization within your company…you are going to be bent over the barrel and shown a good time.

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Bigi201110141
Enthusiast
Enthusiast

There is very few that you pay the same

10 Hosts and 2 Sockets

With (8) cores and ram at (96GB) Enterprise Plus = $69,900 for vSphere 4 and 5

With (16) cores and ram at (128GB) Enteprise Plus = $94,365 for vSphere 4 and 5

95% of other combos you pay more for less.

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aroudnev
Contributor
Contributor

<<

  • Firstly and probably one of the biggest benefits is the removal of hardware constraints on CPU cores. I have been limited to 6 cores per CPU (Standard & Enterprise Edition) in the past to keep cost down but now can move to the latest 12 core CPU’s without penalty – whereas before I would have needed Advanced or Enterprise plus licensing.>>

*

Who said that it is a big benefit? It's not a problem to be limited to the 6 cores per CPU; in reality, most systems are memory limited and not cpu limited, and those which are cpu limited are often single thread or 2 - 3 thread limited.

If I need more then 6 cores per cpu, I can really decide upfront - maybe I'll restrict my hardware purchase to have 6 cores per cpu, or maybe I'll try to get a better license.

So, it is just miserable benefit TODAY and even if it can became a limitation in a 3 - 4 years it is not still a prohibiting limitation. It never was an issue for smal busines installations and small sites (which used essential) at all, and big players alredy did not have this limitation.

Second - it is much more difficult to purhcase license upgrade vs getting all in the initial purchase. V4 model allow it, I can have 12 cpu / 6 host licenses and then upgrade HW as I need, until I reach 256 GB memory and 6 cores per server - which even now can take a few years. So I know that my license investment will pay off well.

With the new model... I see problems even today; they became worst in a few years, and this model is really 100% prohibitive for the small businesses with essential and/or free version. No free version means no people ready to go forward with paid one -> XEN win the competition -> Eventially money will go to redhat, Oracle, Citrix, Microsoft and not to VMware.

As I said, even if we incerase the new memory limits to 24 GB / free cpu, 128 GB / essential cpu, and 256 gb / enterprise cpu, I am not sure how much new model will cost us in a few years. With the current limits, it will cost at least 2x - 3x more in a few years, and having much cheaper (and now much better then they was 4 years ago) alternatives, you can guess what we wil decide if they insist on the new model.

We spent 3 - 5 years to build infrastructure, learn VMware, learn all tricks, find a way to use Vmware better, and are almost ready to say we want 90% of production and 100% of all other systems on VMware, and we can encourage managers to pay for advanced features. And it all IS (not can, be but already IS) killed by the news about Vmware 5. Yes, we need 2 - 3 years to build another infrastructure and learn new system, but we can do it and we already started to evaluate (and find out that NOW alternatives are MUCH better then they was 5 years ago).

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jsinclair
Enthusiast
Enthusiast

Thanks VMware. I have stuck by you since 3.0 and probably sold tons of licenses with my enthusiasm  for your product. I am running vSphere 4.1 with 8 enterprise licenses on dual processor hosts and 96GB of memory (upgradable to 148GB). The best thing about this, is I have Windows DataCenter licenses on all of these hosts. I never thought I would say it, but Microsoft got it right with their licensing for VM's with DataCenter. Ouch. I will not upgrade to 5. However, I will upgrade to Hyper-V. I see Steve Ballmer with the biggest sh*t eating grin right now, and it makes me sick. Thanks for the time we spent together. It's been fun. On another note, I blame EMC. To our EMC sales rep: Please let me know when you can stop by and pull out this Clariion and Avamar system. I will no longer be needing it. They all have this unbearable odor...I think it smells like greed...

R.I.P VMware - Another tech company falters with poor decisions and marketing hype..

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scowse
Enthusiast
Enthusiast

Hmmm...I am wondering if we are not witnessing a reprise of the (in)famous Coke marketing ploy?

http://en.wikipedia.org/wiki/New_Coke

p*ss your customers right off - then backflip and enjoy the spoils of the huge free publicity generating increased sales volumes.

Either that or they are incredibly stupid Smiley Wink

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Dracolith
Enthusiast
Enthusiast

Bigi wrote:

Hosts 16  Sockets 2 Cores 6  RAM 128

Enterprise vSphere 4 = 32 Licenses = $92K
same config above upgraded to vSphere 5 = 64 Licenses = 184K or Enterprise Plus = 150K

Another way of underscoring the cost difference would be to concentrate on the VMs/applications.

Let's look at what a typical  "basic"  deployment looks like,  for a small/medium sized e-commerce org.

General requirements:   In case of a catastrophe, up to  1 business day of downtime is acceptable, for anything except

the e-commerce services, costs to business are minimal if no data loss, no need for VMware HA.

Downing applications off-hours for maintenance is fine.    Backup done traditional way with backup agents.

VMs

3x    Wind '08 R2 Domain Controllers;   must be on different physical hardware;  must have an absolute minimum of 5GB of RAM  each;

        due to exchange      

        Total: 15GB

1x    Fedora Linux   Syslog Server   1GB

1x    Fedora Linux  RADIUS server  2GB

1x    Windows '08 R2   Central antivirus/endpoint management server  6GB

1x    Windows '08 R2   DHCP Server  2GB

1x    Windows '08 R2  File server       7GB

1x    Windows '08 R2 server running  MS Exchange 2010,   Edge Transport, CAS

                                 Absolute minimum supported RAM allocation:  8GB.

1x   Windows '03 64-bit Terminal server, legacy  4GB

1x   Windows '08 Enterprise CA, Network Policy Server, WSUS  6GB

1x   Windows '08 Server,  Accounting applications,  8gb

2x   Windows XP PRO virt workstation for remote management of Windows servers

                                 Minimum RAM allocation: 2gb

1x   Windows '08 R2 server running  MS Exchange 2010,  Hub transport and

        storage of 300 Mailboxes;    Minimum supported RAM allocation, per the Exchange admin:  24GB.

1x   Windows '08 R2 server running SQL Server Standard for the vCenter database, and some

        intranet enterprise apps,   Minimum acceptable RAM allocation:  18GB

2x   Windows '08 R2 server running mirrored SQL databases for business-critical

        eCommerce app,   Minimum acceptable RAM allocation:   18gb.

        Total: 36gb

2x  CentOS 5  MySQL servers,  Minimum allocations:  4gb each

        Total: 8gb

1x  Windows '08 R2 server running vCenter  and  VMware Update Manager

        Minimum supported RAM allocation: 10GB

1x   Windows '08 R2 server running IIS, Sharepoint, and a Java tomcat server for a few intranet applications.

        Minimum supported RAM allocation: 18GB

  2x  Windows '08 R2 server running IIS,  Load balanced servers for external website,

        must be on different hardware.  Minimum supported RAM allocation: 8GB each

         Total:16GB

  2x  Windows 2008 R2 server for continuous development/testing of external website

        Minimum required RAM allocation: 6GB

         (Total: 12gb)

  2x   OpenBSD server  running only BIND,  for external authoritative DNS

         Each must be on a different physical server;  required vRAM:   1gb each

             (Total: 2gb)

Total required vRAM: 205gb of  vRAM

Optimal configuration:

3     quad-core  single socket servers

96gb RAM each   (288gb of pRAM)

-----

3 server virtualized hardware cost:  approximately $2,500  per server, once all the SATA hard drives are

added.     $7,500

OS License cost:  ('08 Datacenter) $3290 x3  + (XP Pro) $200 = $10,070

*CALs and applications not included.

Virtualization cost:

vSphere4.1      License Cost:   vSphere Essentials  $500

Annual virt support cost.   $250

vSphere5

Anticipated License Cost:

Essentials kit only licenses 192gb vRAM

Standard Acceleration Kit: $10000

+ Standard accel kit Basic annual SnS  $2,100

+1 Standard Socket License  for vRAM enablement  $1000

+1 Standard Socket Basic annual SnS  $273

= $13,373

Annual support cost:  $2,373

Virtualization License cost difference:  2674%

Virtualization Support cost difference:  greater than  237300%.

vSphere 4.1    Total solution cost:    $18,070

vSphere 5      Total solution cost:    $30,943

vs5 Total solution cost increase:  171%

Non-virtualized cost

----------------------------

1x Windows 2008 R2 12GB RAM 2x RAID1 SATA  $1000

    domain controller + central AV + CA + management + DHCP + policy + File server + sharepoint

2x Windows 2008 R2 5GB RAM secondary DCs, no RAID, desktop towers,  $700 each.

1x Fedora 1GB, slimline cases         $300

1x Fedora 2GB, slimline cases        $300

1x Windows '08 Exchange server all roles combined,  32GB RAM    $2300

1x Windows '03 Legacy terminal server 4gb,  old desktop  $500

2x Real XP workstations for management [old hardware] $200

2x Combined SQL+IIS+app servers  external website 64gb RAM  $2500 each

2x old desktops used as MySQL servers, $500 each.

2x  old workstations for dev/testing  $500 each

No need for VMware update manager or vCenter  in physical env.

Total non-virtualized hardware cost:  $13,200

Total non-virtualized OS license cost:  6 *  $1029 (Windows '08 Standard) +  $200 (windows xp) = $6,374

Virtualization license cost: $0

Annual costs: no support costs.

Electricity difference between   ~15     750watt  servers and   3  2000w servers.

approximately  $2000/year.

5 year ROI for virtualizing using vSphere5,  vs physical:     ($13200 + $2000*5) - ($30,943 + $2373 * 5) / ($30,943 + $2373 * 5)

      =   negative 45%

Conclusion: don't virtualize this environment.

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aroudnev
Contributor
Contributor

THis is really excellent example; even now it makes VMware 5 out of the game; now image how memory requirements will change in 2 - 3 years!

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devilz666
Contributor
Contributor

From the New Coke wiki...

Coca-Cola's sudden reversal on New Coke led to several rumors and conspiracy theories that have circulated in the years since to explain how a company with  the resources and experience of Coca-Cola could have made such an  apparently colossal blunder.

Some explanations that have been proffered are:

  • The company intentionally changed the formula, hoping consumers  would be upset with the company, and demand the original formula to  return, which in turn would cause sales to spike.[1] Keough answered this speculation by saying "We're not that dumb, and we're not that smart".[1][57]

Im sure something like this will be in the wiki in a few years under Vmware, the company the started it all, before their collapse

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hmtk1976
Contributor
Contributor

gary evans wrote:

I'll try and point out a few things here on the positive side...

  • Firstly and probably one of the biggest benefits is the removal of  hardware constraints on CPU cores.  I have been limited to 6 cores per  CPU (Standard & Enterprise Edition) in the past to keep cost down  but now can move to the latest 12 core CPU’s without penalty – whereas  before I would have needed Advanced or Enterprise plus licensing.

  • Another advantage I can see is that you do not need to purchase all your  licenses up front for a project that may take quite a bit of time to  complete.  For example: If you are planning a major deployment of VMware  in your environment and migrating all your physical servers into the  virtual world then you can purchase the minimum licensing to get you  started, then add additional licenses as you get close to the vRAM  limits.  Might not be the best scenario but it will give you the ability  to move the workload in stages without frontloading the cost.  I can  see this being a major benefit when looking at companies moving their  DEV environments first – waiting for the mandatory grace period and then  starting to move their production over.

  • Final point here is that it does not effect View Environments where huge amounts of RAM are a major requirement...

...If anything it will stop admins deploying VM's with too much RAM in the first place.

...there is also a lot of talk about poeple jumping over to hyperV and Xen...  Might seem like a wise move now but wait and see how long it is before ESX makes its way back into your environment.  There was a reason why you installed it in the first place and while the vRAM model changes a few things the underlying technology is still the same and will save your kneck time-and-time again...

my 2c.

You're reasoning is just rehashing the VMware sales talk.

- The limits on cores was idiotic even in 4.1.  VMware sales was behind the tech curve even then.

- Purchasing licenses up front is the advantage, not buying a few every couple of months because you need more capacity.  A decent IT department PLANS its deployments and doesn't do things piecemeal.

- This idiotic licensing doesn't affect View you say?  Wake up!  VMware has been saying that you could existing vSphere licenses to host virtual desktops.  Guess what, now you're suddenly limited in how much RAM you can use if you purchased add on View licenses in stead of the View bundle.  There isn't even a possibility of upgrading existing vSphere licenses to the new desktop SKU.  So much for those Enterprise licenses we've been using for our customers.  AFAIC we're going to look what incentives Citrix offers to replace server and/or VDI environments.

- Admins usually deploy VM's with a decent amount of RAM.  That VMware has the gall of telling us how to deploy and OS and apps is disgusting.  They're not into running AD, Exchange, Oracle, ...  They're only the company that provides a virtualization environment.

The main reason why VMware is market leader now is because they were the first.  Competitors are catching up and VMware is not that much superior that people will swallow this crazy licensing scheme.  Very small deployments will not be impacted in the short to mid term and very large customers can get huge discounts anyway.  It's everyone in between that will either pay vastly more or switch.  I for one am not willing to sponsor other VMware customers by paying far too much for what the product is worth.

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admin
Immortal
Immortal

hmtk1976 & scowse,

My main goal with that last note was to let people know that, although we haven't been responding a great deal in this thread, we are indeed reading everything, but also we're having a lot of conversations with customers and partners offline. So I do recommend that after saying your piece here, you also give us feedback via your normal channels with VMware.

As far as data goes, we've been working with real-world data both before and after this change. From what I've heard, most customers do have plenty of headroom for vRAM now and moving forward. Of course, if that's not you, "most customers" doesn't apply, so again, give direct feedback to your sales team.

hmtk1976, I'm sorry that we've disappointed you. Ultimately, you've got to do what makes sense for your environment. I do know that we make kick-ass software that adds a lot of value, and I hope we continue to talk with your VMware business contacts and we can continue to do business with you.

Regards,

John

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depping
Leadership
Leadership

Real world data has been used indeed John. I was also suprised that the averages are that low, but when you look at http://www.v-index.com/ (sponsored by Veeam) it appears that our 10:1 (5:1 per CPU) per host ratio is even higher than that. Now I am not saying this is the correct value or that I agree with the values. I am also not the spokesperson when it comes to licensing.

As John said, please provide your data if possible to your VMware sales representative or post it in this forum. All feedback will be heard.

Duncan

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VidarK
Contributor
Contributor

John,

The upset people aren't your alleged real-world SMBs running underutilized servers with way underutilized VMware licenses.

Let's take an example. Please respond how you would handle this as a defender of the new licensing:

If I a few months ago bought 20 2socket 24 core servers with 256GB RAM and bought vSphere 4.1 Advanced with a 3 year SnS for each of them - how would you justify the new licensing to me? Presuming that I had plans to take advantage of all the vRAM the original license entitled me to use I would have a 484% price increase (i'd have to purchase 120 vSphere 5 Enterprise licenses to catch up) + I'd see a similar amount of price increase on my SnS going from 48 Advanced SnS subscriptions to 160 Enterprise SnS subscriptions...

How can you defend a licensing change that extreme even if it was only for 1 of your customers?

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VidarK
Contributor
Contributor

depping, John; real-world averages based on a ton of small SMBs don't cut it. Those averages will have data from lots of people under-utilizing the vSphere-license they bought.

Don't you understand that those who bought vSphere 4.1 licenses expecting to utilize them for what they were marketed as are now pissed off that the price has increased by many hundred percent and in some cases 2000% and more as we have seen recent examples of in this thread?

It's sad to see such lack of insight into your own customer's needs.

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depping
Leadership
Leadership

Vidark, I understand your concern and frustration. Once again we will feedback all the data presented here and provided to our VMware Sales reps to the licensing team. That is all John and I can do for now.

Duncan

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