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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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kmcferrin wrote:

Again, that is SIMPLY NOT TRUE!  There is no host license requirement with Hyper-V.  It is free and DOES NOT REQUIRE a 2008R2 license as you state.  The free "Hyper-V Server" product includes everything that you need to install and configure Hyper-V and has no licensing requirement.  If you actually read the link it says NOTHING about this make-believe 2008R2 license requirement that you have invented.  You could take my word for it, because I MAKE MY LIVING selling virtualization services on Hyper-V and VMware (mostly VMware in the larger businesses), but you don't have to.  You can read the text yourself:

You are correct;

before yesterday I did not know MS Made Hyper-V into a seperate server Download. I knew Hyper-V as the server snapin, and not a standalone server like it is today.

I downloaded it, installed it on spare hardware, and got it up and running with 6 guests in a little under an hour. Even connected back to our iSCSI san.

and my costs were $0.

so yea, Hyper-V is 100% free.

But I still wouldn't rely on it since its still using windows's Core with Hyper-V On top. But I am going to test it by runnng a couple Backup DCs in it for a while.

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Please tell me what you're smoking so I can avoid it!

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hmtk1976 wrote:

Please tell me what you're smoking so I can avoid it!

What is this in reference to?

Please refrain from making such comments with out atleast quoting what you are targeting.

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jmounts wrote:

hmtk1976 wrote:

Please tell me what you're smoking so I can avoid it!

What is this in reference to?

Please refrain from making such comments with out atleast quoting what you are targeting.

Did you read his post?  All rant and no substance.  And idiotic words like Microsteal...  come on.

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For all the people bashing Microsoft here I'd like to point something out.  They came out with Datacenter which licenses the product by socket.  It allows you to install unlimited instances of the software in a virtualized environment up to the limits of the hardware.  They didn't change the licensing model on Standard or Enterprise editions.  I can still purchase those editions just as I always did.  At some point it become cost effective to switch to Datacenter and your costs become fixed from that point forward as long as you don't add more sockets.  If I run out of memory on a server I can add more and then continue adding servers without purchasing additional software licenses.  Smaller datacenters aren't penalized, larger companies save money.

Microsoft has moved to a licensing model based on socket count which saves money for larger customers while allowing smaller customers to keep their licensing the same maintaining current costs.

VMware has moved away from a socket only licensing model to a model that at best keeps customers at the same cost level but will increase costs by VMware's own figures for 5% to 10% of it's customers.  By the feedback seen online that 5% to 10% was grossly underestimated as are the amount of the increased costs.

VMware can no longer support a licensing model based on socket count because hardware is getting to powerful.  Microsoft doesn't share that opinion and is moving to that model.   From the posts on this thread it seems there are a lot of people that agree with Microsoft.

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But I still wouldn't rely on it since its still using windows's Core with Hyper-V On top. But I am going to test it by runnng a couple Backup DCs in it for a while.

I don't know, I'm cautious when it comes to MS products myself but we have a 2008Core server running here and most of us forget it exists because we just never have to touch it. Its never crashed, never locked up and never had any resource issues. Granted its running a minor workload but it just works so i for one would be willing to give Hyper-V 2k8R2 a shot.

The Marines have landed and the situation is well in hand.
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Shane wrote:

But I still wouldn't rely on it since its still using windows's Core with Hyper-V On top. But I am going to test it by runnng a couple Backup DCs in it for a while.

I don't know, I'm cautious when it comes to MS products myself but we have a 2008Core server running here and most of us forget it exists because we just never have to touch it. Its never crashed, never locked up and never had any resource issues. Granted its running a minor workload but it just works so i for one would be willing to give Hyper-V 2k8R2 a shot.

we are a hybrid Windows/Unix-Linux shop.

all of our LDAP servers are 2008R2, exchange2007 on 2008R2, and our main Database server is 2008 with SQL 2005.

We never have to touch these servers either. They are extremly stable and never have issues (Knocking on wood, cause this is just calling out Karma).

Ive got my single Hyper-V host running 6 VMs (a couple RODC's for testing the host, our Jabber Chat server running Ubuntu, a freenas BOX with CIFS, and my personal win7 and XP Test Stations) Time will tell on how stable it is with all the crap i put my servers through.

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nolent wrote:


First, we all know hyper-v isnt FREE. It has it's associated Windows license cost. Beyond that, your licensing costs are the same as they would be with VMWare. You have to have a valid license for each guest OS REGARDLESS of which hypervisor you use.

Third, Hyper-V WASNT that great, and maybe ISNT so great, that's why we all use VMWare. But then again, their costs were rational, and their SnS should allow us to upgrade at will without this ridiculous new licensing scheme a-la EMC Mafia type tactics.


I agree with almost everything you said except Hyper-V Server is utterly and completely FREE i'm not sure why this is still a confusion point for people. And yes we are all running VMWare because Hyper-V wasn't that great but Hyper-V today is far superior to what VMWare was when I first started running it. So even though it doesn't have all the current VMWare features (most of which i cant use because they screwed us with Enterprise+) It has all the features we NEED. I'm not saying everyone should switch to Hyper-V but its worth a look and its totally a viable alternative to VMWare.

The Marines have landed and the situation is well in hand.
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Gary H wrote:

For all the people bashing Microsoft here I'd like to point something out.  They came out with Datacenter which licenses the product by socket.  It allows you to install unlimited instances of the software in a virtualized environment up to the limits of the hardware.  They didn't change the licensing model on Standard or Enterprise editions.  I can still purchase those editions just as I always did.  At some point it become cost effective to switch to Datacenter and your costs become fixed from that point forward as long as you don't add more sockets.  If I run out of memory on a server I can add more and then continue adding servers without purchasing additional software licenses.  Smaller datacenters aren't penalized, larger companies save money.

Microsoft has moved to a licensing model based on socket count which saves money for larger customers while allowing smaller customers to keep their licensing the same maintaining current costs.

VMware has moved away from a socket only licensing model to a model that at best keeps customers at the same cost level but will increase costs by VMware's own figures for 5% to 10% of it's customers.  By the feedback seen online that 5% to 10% was grossly underestimated as are the amount of the increased costs.

VMware can no longer support a licensing model based on socket count because hardware is getting to powerful.  Microsoft doesn't share that opinion and is moving to that model.   From the posts on this thread it seems there are a lot of people that agree with Microsoft.

You can't compare the MS Licensing model to VMwares.

Apples and Oranges.

MS is the CORE of most environments. Everything you run will require an OS. for shops that run more then 5 2008R2 servers, Datacenter makes the most sense per socket (ESP if you are vitualizing). MS HAD to do this, else more and more people would switch to Linux/Unix for non MS Based systems.

Where you don't need VMware to run your servers. You can run it on hardware, hyper-V. Xen, Virtual Box, Vmware server 1.0/2.0, Free ESXi, then start looking at the paid versions of the software.

VMware had to move into a new licensing model cause not only were they losing money in sales (Really, we don't have proof of this, now do we?), but the future on hardware compression is looking bleak for them (again, i don't see this being true either).

where as with MS, you will always find yourself using windows OS in your environement. You will have atleast a AD server, Exchange (most organizations run this now) and a MSSQL (even if its MSDE).

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jmounts wrote:

Ive got my single Hyper-V host running 6 VMs (a couple RODC's for testing the host, our Jabber Chat server running Ubuntu, a freenas BOX with CIFS, and my personal win7 and XP Test Stations) Time will tell on how stable it is with all the crap i put my servers through.

Agreed I think its worth a look. My biggest concern is the clustering. Our MS Clusters here are running 2003 and 1 2008 cluster. Overall i'm not really happy with 2003 clustering, too many issues have come up during maintenance on those servers. So far the 2008 cluster has proven reliable except for a 3rd Party AV issue. So I would want to test the Hyper-V Clustering extensively before I deployed it to production.

The Marines have landed and the situation is well in hand.
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jmounts wrote:

.

so yea, Hyper-V is 100% free.

But I still wouldn't rely on it since its still using windows's Core with Hyper-V On top. But I am going to test it by runnng a couple Backup DCs in it for a while.

Fair enough. All I wanted was to ensure that people were making comparisons based on accurate information.  If it doesn't meet your needs then you have to use something else.  As I stated before, if I wouldn't use Hyper-V in a primarily Linux shop.  On the other hand, if people trust Windows enough to run their database, email, collaboration, web, DNS, directory, and LOB application servers then it's a bit of a stretch to say "I trust it to run all of those things but not my virtualization."  Smiley Happy

Gary H wrote:

VMware can no longer support a licensing model based on socket count because hardware is getting to powerful.  Microsoft doesn't share that opinion and is moving to that model.   From the posts on this thread it seems there are a lot of people that agree with Microsoft.

Actually, I'm not convinced that Microsoft isn't going to run into the same problem eventually.  Right now spending $2500-$3000/socket for the OS license sounds high.  But let's assume a dual socket server with 24 cores and 128 GB of RAM.  How many Windows VMs can you fit in there?  30?  40?  Let's go low and say only 20.  If you license Datacenter Edition for that server you have still saved $8000-$9000, nearly 60% of your Windows licensing cost versus stand-alone Standard Edition licenses.  If you can get 40 VMs into that host then you've cut licensing costs nearly 75%.

Now fast forward a few years when a two-socket server has 64 cores and 512 GB of RAM.  How much money does Datacenter Edition save you now?  Nearly 90%, and that's based on what I consider a conservative estimate of 80 VMs on that host.  At some point Microsoft will have to either go to a "usage-based" pricing model for their OS or start selling "per-VM" licensing.  Something is going to have to give, the only question is when.

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Core-based licensing, Physical CPU-based licensing, RAM-based licensing is all academic. If existing users do not get perceived value for their ongoing investment in SnS, they will turn elsewhere.

Paul Maritz (VMware CEO) has announced to the customer that they are no longer an important part of the picture. With the release of rosy 3rd quarter profit estimates on July 19 (Subsequent to the announcement of the vSphere 5 licensing model), Maritz was able to direct the VMware stock to a 52 month high, immediately in the face of a disastrous policy announcement.

We are all complaining on the VMware communities, nothing is going to change until the stock market sees the impact of people not buying and not upgrading and discontinuing SnS. When it impacts Maritz and the board of directors, things may change.

+The Invisible Admin+ If you find me useful, follow my blog: http://johnborhek.com/
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Microsoft has moved to a licensing model based on socket count which saves money for larger customers while allowing smaller customers to keep their licensing the same maintaining current costs.

VMware has moved away from a socket only licensing model to a model that at best keeps customers at the same cost level but will increase costs by VMware's own figures for 5% to 10% of it's customers.  By the feedback seen online that 5% to 10% was grossly underestimated as are the amount of the increased costs.

VMware can no longer support a licensing model based on socket count because hardware is getting to powerful.  Microsoft doesn't share that opinion and is moving to that model.   From the posts on this thread it seems there are a lot of people that agree with Microsoft.

Do not forget that while Microsoft has provided a per socket model that isn't where Microsoft makes it's money. It is CALs. Consider that almost every MS server you deploy is hosting some other application or service that also requires a CAL. So enabling unlimited numbers of Datacenter servers is somewhat trivial. In Microsoft's licensing model you do pay for use by way of the CAL. VMware the equivalent to the CAL is becoming vRAM.

VMware does not have CALs or per a VM license. When it became more inexpensive to swap a VMware license for additional RAM VMware needed to change the model. Hopefully it gets adjusted to help some transition to the new model but it will change.

-- David -- VMware Communities Moderator
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kmcferrin wrote:

Actually, I'm not convinced that Microsoft isn't going to run into the same problem eventually.  Right now spending $2500-$3000/socket for the OS license sounds high.  But let's assume a dual socket server with 24 cores and 128 GB of RAM.  How many Windows VMs can you fit in there?  30?  40?  Let's go low and say only 20.  If you license Datacenter Edition for that server you have still saved $8000-$9000, nearly 60% of your Windows licensing cost versus stand-alone Standard Edition licenses.  If you can get 40 VMs into that host then you've cut licensing costs nearly 75%.

Now fast forward a few years when a two-socket server has 64 cores and 512 GB of RAM.  How much money does Datacenter Edition save you now?  Nearly 90%, and that's based on what I consider a conservative estimate of 80 VMs on that host.  At some point Microsoft will have to either go to a "usage-based" pricing model for their OS or start selling "per-VM" licensing.  Something is going to have to give, the only question is when.

Or they could just slowly increase the per socket price to keep revenues growing.

There are 2 parts for our outrage. One is new aquisitions. The other is having to pay more to upgrade our current infrastructure after paying SnS. If VMWare had come out and simply stated that because new technology allows for greater density, they were increasing per socket and SnS pricing. We may not have liked it, but it would have gone over much easier. I can totally go to the CEO and tel him that SnS is going up, and the new licenses are going to be more expensive. he'll understand that.

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DSTAVERT wrote:

Microsoft has moved to a licensing model based on socket count which saves money for larger customers while allowing smaller customers to keep their licensing the same maintaining current costs.

VMware has moved away from a socket only licensing model to a model that at best keeps customers at the same cost level but will increase costs by VMware's own figures for 5% to 10% of it's customers.  By the feedback seen online that 5% to 10% was grossly underestimated as are the amount of the increased costs.

VMware can no longer support a licensing model based on socket count because hardware is getting to powerful.  Microsoft doesn't share that opinion and is moving to that model.   From the posts on this thread it seems there are a lot of people that agree with Microsoft.

Do not forget that while Microsoft has provided a per socket model that isn't where Microsoft makes it's money. It is CALs. Consider that almost every MS server you deploy is hosting some other application or service that also requires a CAL. So enabling unlimited numbers of Datacenter servers is somewhat trivial. In Microsoft's licensing model you do pay for use by way of the CAL. VMware the equivalent to the CAL is becoming vRAM.

VMware does not have CALs or per a VM license. When it became more inexpensive to swap a VMware license for additional RAM VMware needed to change the model. Hopefully it gets adjusted to help some transition to the new model but it will change.

But even the CAL model is predictable. A device or user CAL allows that device/user to access as many servers as are available. I can virtualize, and go the single role server way. I know that when i buy a workstation, I need to buy a CAL for it. Simple, predictable, budgetable. 

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sergeadam wrote:

There are 2 parts for our outrage. One is new aquisitions. The other is having to pay more to upgrade our current infrastructure after paying SnS. If VMWare had come out and simply stated that because new technology allows for greater density, they were increasing per socket and SnS pricing. We may not have liked it, but it would have gone over much easier. I can totally go to the CEO and tel him that SnS is going up, and the new licenses are going to be more expensive. he'll understand that.

Absolutely true.  It seems like raising the price per socket is probably the best way to go for established customers, but you still run into a couple of issues:

1.  The barrier to entry gets higher.  Today deploying 2-3 vSphere servers and a VC box is not cost prohibitive (within vRAM limits, right? Smiley Happy).  But if they gradually have the price creeping up those smaller customers who don't need to scale up to meet their needs find their price continuing to increase.  If you're a larger client where you can continue to meet your capacity needs by deploying scaled up hardware then your prices go up, but you see higher densitives and consequently the value of the higherr price.

2.  If you give someone a free upgrade to v5, core-for-core, and then make new purchases cost more per license then people can still continue to scale up their servers without buying new licenses.  Then repeat the process for the next version, and so on.

I think that there definitely needs to be a change, and the most fair answer probably is going to be something utilization-based (cloud, anyone?).  The model for vSphere 4.1 wasn't going to work long-term, and neither will the model for vSphere 5.  Even if it didn't drive away customers it would still have to be ammended every year to accommodate the new reality.

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This evening a blogposting from Gabrie van Zanten was published titled VMware changes vRAM licensing on vSphere 5 after customer feedback on vTAX

http://www.gabesvirtualworld.com/vmware-changes-vram-licensing-on-vsphere-5-after-customer-feedback-...

According to a rumour he picked-up VMware will change the vRAM policy!!

As Gabrie is well informed, has his contacts  I think this is could very well be true  and thus good news for all of us!

The new policy:

  • VMware vSphere 5 Essentials will give a 24GB vRAM entitlement
  • VMware vSphere 5 Essentials Plus will give a 32GB vRAM entitlement
  • Max vRAM in Essentials / Essentials Plus will be maxed at 192GB vRAM
  • VMware vSphere 5 Standard vRAM entitlement has changed to 32GB ( <- my assumption)
  • VMware vSphere 5 Enterprise vRAM entitlement will be doubled to 64GB
  • VMware vSphere 5 Enterprise Plus vRAM entitlement will be doubled to 96GB
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kmcferrin wrote:

Absolutely true.  It seems like raising the price per socket is probably the best way to go for established customers, but you still run into a couple of issues:

1.  The barrier to entry gets higher.  Today deploying 2-3 vSphere servers and a VC box is not cost prohibitive (within vRAM limits, right? Smiley Happy).  But if they gradually have the price creeping up those smaller customers who don't need to scale up to meet their needs find their price continuing to increase.  If you're a larger client where you can continue to meet your capacity needs by deploying scaled up hardware then your prices go up, but you see higher densitives and consequently the value of the higherr price.

2.  If you give someone a free upgrade to v5, core-for-core, and then make new purchases cost more per license then people can still continue to scale up their servers without buying new licenses.  Then repeat the process for the next version, and so on.

I think that there definitely needs to be a change, and the most fair answer probably is going to be something utilization-based (cloud, anyone?).  The model for vSphere 4.1 wasn't going to work long-term, and neither will the model for vSphere 5.  Even if it didn't drive away customers it would still have to be ammended every year to accommodate the new reality.

yes, entry level gets higher, but so does everything. It's called inflation.

As for just upgrading, that's what the SnS increase comes in. In a well managed model, SnS on a product pays for the R&D and also contributes some to the bottom line. Then new sales increase the top line.

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I don't see how people think VMware needs to charge more money going forward. They aren't losing money in the slightest if you look at their recent forward looking statement. Keeping the existing 4.1 model and tweaking the core count limitations would still leave vmware highly profitable.

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I don't see how people think VMware needs to charge more money going forward. They aren't losing money in the slightest if you look at their recent forward looking statement. Keeping the existing 4.1 model and tweaking the core count limitations would still leave vmware highly profitable.

I absolutely agree!  The product was overpriced to begin with.

VMWare is just looking to make more green, when in reality they should've just keep the Greene that they had.  (I'm pretty sure she wouldn't have done this to us.)

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