chanaka_ek
Enthusiast
Enthusiast

vSphere 5 Licensing - The Reality

OK, now that the whole vSphere 5 launch has taken place and folks around the world are trying to digest everything,  I thought I'd share my views on the new licensing model (yup you got that right....a brand new licensing model....) being employed by VMware for vSphere 5 and beyond...

So... listening to the webcast yesterday and looking at the literature today, their main marketting line for changing the licensing is to enable...or make it compliant with how the cloud operates.. Makes sense right?? However if you peel off all the fancy marketting  paint, underneath they've just make changes

which im my opinion slightly favours VMware (yes more money in the bank....!!)

So the 'Goners' are

  1. Removal of the number of cores per CPU for each licensing category = You can have as many cores per physical CPU irrespective of the license type
  2. Removal of maximum memory limits (per ESX host) based on license category = you can have as much physical memory on ESX servers as possible irrespective of the license type

The new introduction is,

  1. Licensing is still CPU based (per CPU) but now you have a cap on the maximum number of running virtual memory (active vRAM = memory allocated to all running VMs) at a given time. This is referred to as vRAM and is additive amongst the ESX hosts in the cluster.

The vRAM limitations are as below and are per CPU

          24GB vRAM per CPU for Essentials Kit
          24GB vRAM per CPU for Essentials Plus Kit
          24GB vRAM per CPU for Standard
          32GB vRAM per CPU for Enterprise
          48GB vRAM per CPU for Enterprise plus

This sounds complicated and VMware is obviously painting this as cloud friendly and user friendly...etc. But really this is going to make licensing vSphere more expensive to the average customers.

Think about it, the removal of maximum physical memory limit really is a distraction and delivers no real benefit to the customers because without (potentially) buying additional licenses you cannot really allocate those physical memory to running VMs??

Take the below as an example (a common setup amongst most of the VMware customers)

  • 2 ESX servers, each with 72 GB pRAM & 2 quad core CPUs (HT enabled)
  • 9 SQL VMs, each with 16GB of vRAM running on the ESX cluster

  • Cost of the vSphere enterprise license at present = $3,495.00 per cpu  (same on vSphere 4 & 5)
  • Cost of the vSphere standard license at present = $994.00 per cpu (same on vSphere 4 & 5)


The license costs under vSphere 4 licesing - Enterprise

  • Total Number of CPUs = 4
  • Hence the license cost for 4 CPUs = 2875 x 4 =  $11500.00


The license costs under vSphere 5 licensing - Enterprise

  • Total vRAM requirment = 16gb * 9 = 144 GB
  • Number of vRAM allowed "per CPU" = 32GB
  • Hence the number of "per CPU" licesnes required = $144 / 32 = 5
  • The new cost = $2,875 * 5 = $14,375.00


Thats an increment of 125% approx in licensing costs alone for vSphere 5.


This is even worst if you were on vSphere Standard

The license costs under vSphere 4 licensing - Standard

  • Number of CPUs = 4
  • Hence the license cost for 4 CPUs = 994 x 4 =  $3,976.00


The license costs under vSphere 5 licensing - Standard

  • Total vRAM requirment = 144 GB
  • Number of vRAM allowed per CPU = 24GB
  • Hence the number of "per CPU" licesnes required = 144 / 24 = 6
  • The new cost = $994 * 6 = $5,964.00

Thats is an increment of 150% approx

The way I see it, one of the main reasons why everyone prefers VMware (myself included) was because of the clever memory management techniques they employ which allows you to do memory over provision. The avaialbility of memory reclamation through memory single instancing (TPS), ballooning and compression are all pretty powerful ways that allows us to use more vRAM on a host than the available pRAM without substantial performance degration and it appears that VMware is now using this to manipulate their licensing costs.

So it now goes, the more memory you allocate to VM's the more you pay and while lot of large enterprise businesses may not care about this additional cost, VMware may be pricing themselves out of lot of SME's...(Microsoft...smell blood??)

Anyways this by no means would affect my loyalty to VMware as vSphere is still (and will be for a while to come) the best of bunch for the hypervisors out there. But the new licensing model is a bit of a sucker punch to the average customers and, in reality it is in stark contrast to how it is protrayed out on the marketting materials. instead I would have preferred if they'd come clean and said, here's a new version it cost us money to develop and we need to buy food so the licensing costs would go up a notch.

Cheers

Chan

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54 Replies
turkina
Contributor
Contributor

Here's another example:

One of my clients is running vSphere 4.1 Enterprise.  We recently installed 4 blades in their datacenter, each with a pair of 6 core CPUs and 192GB of RAM.  They currently have 8 Enterprise licenses for a total cost of approximately $20,000 with 3 years of support (assuming 40% off list).

The client plans to use up to 576GB of their available RAM (1 host for failover) and has laid out an aggressive virtualization strategy to acheive this.  However, if they move to vSphere 5, they'll need to purchase either 10 additional Enterprise licenses for approximately $28,000 or 12 Enterprise Plus licenses for approximately $38,000.

This increases their licensing costs from $5,000 per blade with vSphere 4.1 Enterprise to $12,000 with vSphere 5 Enterprise or $14,500 with Enterprise Plus.

I love VMware's products but I fear this is going to push a lot of customers away from upgrading to vSphere 5 and many towards switching to Hyper-V between now and when vSphere 4.1 reaches EOL.

VCP3/4/5, VCAP5-DCA
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vheff
Enthusiast
Enthusiast

Hi Chan,

I don't think you've calculated this correctly. vSphere 5 is still licensed per CPU, but there is a 32GB limit per CPU license. Using your example of 3 hosts with 2 CPU's each, an Enterprise license will entitle you to 192GB vRAM. Remember this is pooled across the cluster, not per host.

Regardless of vSphere 4 or 5, you still need to license each CPU.

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chanaka_ek
Enthusiast
Enthusiast

Yes you are correct about the calculation as I had a typo....changed that to 2 ESX servers now..

However I have taken the licensing per processor in to account. just didn't mention it because total vRAM / vRAM limit per CPU > total number of CPU's.

However the point still stands whereby if you oversubscribe memory this new licensing model penalises you which is a little unfair. Are they trying to say something??

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jsehmi
Enthusiast
Enthusiast

I think in all VMWare products are becoming more expensive for organisations that are not cloud or IaaS service providers, but have deployed VMWare products for internal use only. All plug-in products (like Orchestrator etc) are licensed per VM, except for VC and Host license.

What does this licensing model have an impact on 'memory oversubscription', which was VMWare's key selling point. Some users have installed local NAND based flash drives and move the VM swap files to these high-I/O devices. This way they could have less physical memory on the hosts, but still able to oversubscribe memory (more than what exists on the host) to the VMs. Now oversubscription is still allowed as long as you do not cross the vRAM pool limit. What the $$#$$#??

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golddiggie
Champion
Champion

IMO, VMware is going to have a LOT of enterprise customers up in arms over this (if they're not already). We just recieved 4 new 2U servers with 192GB RAM each for a View pilot. IF we were to go to version 5 for this (not sure when View will be updated) the cost per virtual desktop would go way up. We're looking to, eventually, virtualize up to 2000 desktops. IF VMware stays the course on this pricing, I believe the project is going to be inserious jeopardy of being stopped or shifted to a different platform. I also see us not moving to version 5 anytime soon. Even IF we want/need the enhancements it brings to the table. That is, unless they decide to make sure we keep under the virtual RAM usage... Issue I see with that is there will be times when your VM's use all the memory they're allocated. If you over-allocate in version 5, you'll have VMs going down due to license violations. Can't exactly have domain controllers going dark from this. Or Exchange servers, or SQL servers, or pretty much any server in our environment...

VMware needs to take note of the outrage being generated over this and address it ASAP. Otherwise, IMO, they run a very real risk of losing a LOT of long time customers.

Hosted Systems Engineer IV (VMware environment)
Brewing beer again!
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mikeyes
Enthusiast
Enthusiast

I would object to your conclusion.  This is not moving VMware license cost "up a notch".  Up a notch would be double their existing per license costs and leaving the old model in place.  This increase is huge and will scale up as you add ram to physical servers.

(enterprise plus license model)

2 CPU server with 512GB ram = 2 (ver 4) licenses

2 CPU server with 512GB ram = 10 (ver 5) licenses

Removing list cost from the picture that is an increase of 400% over the old license model.  400% is NOT a notch.

Doubling the list cost of each license would have doubled the cost for any VMware implementation but would have protected existing customers with maintenance.  As it is what I could run yesterday with version 4 is a pale comparison to what I can run tomorrow on 5.  After paying maintenance on the product VMware is stripping me of capability during the upgrade process.

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MWachholz
Contributor
Contributor

So is anyone looking at upgrading? I haven't really seen any big benefits for us (at least until Apple changes their licensing model).  We have four 2 cpu servers with 148gb of RAM in them, with the new model I'd have to buy at least 1 more license for each server.  For what? I guess we'll stay at vSphere 4...

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BrendonColby
Contributor
Contributor

As a small shop we're in the same boat. We have 3x2 socket boxes with 144GB memory each. We'd have to buy another THREE Ent Plus licenses to utilize the full 144GB and another SIX licenses to utilize the full capacity of the servers. I'm going to stay at vSphere 4 while I test Hyper-V and other products.

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Full_Halsey
Contributor
Contributor

I will be testing alternatives for virtualization. I cannot continue to patronize a company that introduces a licensing model that blatantly targets customers deploying 2 CPU, 256GB RAM servers or even larger. This would require at least twice the licensing for an upgrade to vSpere 5. VMware's marketing has made it clear that their customers owe them a percentage of their virtualization savings from now on.

I disagree. If VMware wants to cash in on my company, they need to buy stock in it like everyone else.

**Note to VMware moderators--please don't respond to this post with comments that I don't understand and that I need to "right size" my environment because I don't get it. I am a VCP with over 5 years of VMware experience. I get it, but VMware will not "get it" from me.

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devilz666
Contributor
Contributor

We''ll i've just had a customer cancell a massive order for Vsphere enterprise+ due to the new Vmware licensing scheme.

Congratulations Vmware you just gave the opposition a massive advantage!

This would be like Apple putting the price of the Iphone up 500%, who would benifit? Google and MS and all of a sudden Iphone sales would plummet.

Also had another customer complain and I had to recommend that they dont renew their Enterprise systems license which expires soon, more $$$ lost for vmware.

What the hell were they thinking???????????????????

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chanaka_ek
Enthusiast
Enthusiast

This probably is a very good lesson for most of us for putting all eggs in one basket. I for one would definetely going to start eval'ing Hyper-V as a potential candidate for future workload consolidation. MS has traditionally been very good at coming out with a less than perfect product and then working on improving it with SP1...etc and I think hyper-V now has gotten a lot better.

This will hurt VMware...... (if anyone has any stocks in Vmware... now is the time to sell i'd say.....)

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vheff
Enthusiast
Enthusiast

Important note:

I'm not agreeing or disagreeing with this, but when calculating the new licensing requirements remember this is active vRAM (not physical RAM in each host). Why does that matter?  Well, you are surely not overcommiting on every host. What about HA?  You are going to leave capacity for at least one host failure, or two. Therefore don't think you need to purchase enough vRAM licenses for every host at full commitment.

In regards to VDI / VMware View environments, these are typically the ones with the most vRAM with hundreds or thousands of Window 7 VM's. But VMware View licensing includes vSphere for Desktops and you don't have limits on the number of ESXi hosts or vRAM as you license per user.

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rickardnobel
Champion
Champion

Ray Heffer wrote:

but when calculating the new licensing requirements remember this is active vRAM (not physical RAM in each host). Why does that matter?  Well, you are surely not overcommiting on every host. What about HA?  You are going to leave capacity for at least one host failure, or two. 

It is true that you would leave room for perhaps one HA failure and keep the memory load on about 75% on the hosts, depending on the number of hosts in the cluster. But, that would be physical memory on the host. We still do not know how much vRAM that is given to the guests, which very well could be far above the physical memory limit and taken care of by the TPS.

My VMware blog: www.rickardnobel.se
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ats0401
Enthusiast
Enthusiast

Another important note:

It is based on vRam "Allocated", not active or consumed ram.

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AlbertWT
Virtuoso
Virtuoso

Yes Sir, I agree with that, nothing is last forever 🙂

/* Any kind of comment or input would be greatly appreciated */
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AlbertWT
Virtuoso
Virtuoso

So does this means if that I do not have enough license, I won't be able to allocate the additional physical memory capacity into my VMs ?

what a waste 😐

/* Any kind of comment or input would be greatly appreciated */
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mikeyes
Enthusiast
Enthusiast

The whole issue that this isn't that bad because most of us don't use all of our physical ram is pointless.  If I own the hardware I want the option of using the hardware whenever I want.  Would you purchase a hard drive and then license it per GB?  Most of us don't fill up the HD because it hurts peformance.  You always have some free space on the HD so why not license it per GB used.  The reason is that when the time comes that you need to unzip an ISO or something like that you need the extra space and you don't want to have to purchase a software license to be able to use the hardware you already own.

If I own the hardware I want to be able to use the hardware whenever I want and for whatever I want.

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Gabriel_Chapman
Enthusiast
Enthusiast

They can't have their cake and eat it too. It should either be an all vRAM based license or a CPU based license, not a highly restrictive combination of the two. As it stands, this new scheme is a vTAX on scale-up, but not quite as expensive as scale-out. Really the only people this benefits are the larger cloud providers who tend to deploy scale-out deployments (yes those 100+ host farms) not the vast majority of VMWare customers who are scale-up (more ram, fewer hosts higher consolidation ratios).

It's going to be a very hard sell to upper management that the benefits of vsphere5 are worth the near doubling  of costs. The magic number from what I can tell is 75% for memory utilization. Once you go past that with 128GB dual socket hosts then your costs rise significantly.

I for one think that at a bare minimum, the Ent+ memory limit should be raised to 64 if not 96GB per CPU. This would cover the vast majority of the scale-up customer base who are building blades with dual sockets and 128GB of RAM or 2U boxes like the 3950X5's from IBM with 192GB of RAM.

Ex Gladio Equitas
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Gabriel_Chapman
Enthusiast
Enthusiast

Support for 4.x runs till 5/21/2014 and a lot can change between then and now.
8GB hard limit essentially makes ESXi a non-starter for using it as a platform for anything other than feature testing. Its simply going to be a test drive version instead of something you can use for home labs, test/dev.
From what I can tell, VMWare appears to be completely caught off guard with the licensing push back, or simply didn't anticipate the ripple effect it would cause from their much larger SMB market, as opposed to the larger cloud types. My reasoning for this is the lack of a calculation tool for upgrade path on the same date that they make the announcement of the licensing change. I tend to see this new scheme as a trial balloon thats being floated, of course this one was made of lead. I really do hope they listen to their customers and make appropriate adjustments to the license model. Hell even Oracle listened to customers when it came to their support for Oracle on VMWare and insistence that the only supported virtualization platform they would accept was Oracles.
The cost increase for the groups who can do external chargeback isn't a big deal, they will simply raise their prices to offset the licensing increases and sell it based on "new features". For those of us who use the product internally and cannot pass the costs onto some third party, the price increases hurt. How VMWare missed this is beyond my comprehension, but I'll assume it has something to do with being a market leader.
This said, as much as the new improvements are a nice addition to the platform, I can't justify migrating just yet, nor would I. I can't see a huge adoption rate of a fresh release, at least with it being untested. So I will wait 6 months post release before even approaching management to do the upgrade, and who knows what will change in the licensing structure between now and then.
Ex Gladio Equitas
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