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Understanding the vSphere 5 vRAM Licensing Model

With the Cloud Infrastructure Launch on July 12 we announced changes to the vSphere 5 licensing model. vSphere 5 will continue to be licensed per physical processor with a new vRAM entitlement pooled across the entire environment.

We're monitoring the feedback very closely, we take it to heart, and we do want to do the right thing for our customers.  In this post, I’d like to point out a couple of things that may have gotten lost in the discussions, share with you some of the thinking behind the vSphere 5 licensing model, and point you to a tool can help you assess what these changes will mean to you.  

We are noticing a critical misconception that is permeating many of the discussions around the changes we’ve made.  I’d like to clarify:  the new licensing model is NOT based on physical RAM.  It is based on the amount of virtual RAM (vRAM) configured to a virtual machine. We have seen a lot of instances where people are trying to calculate the number of vSphere 5 licenses needed by taking the physical RAM in a server and dividing it by the vRAM entitlement for a particular vSphere edition.   That isn’t quite how the new model works.

The vSphere 5 licensing model has a pooled vRAM entitlement. vRAM is total amount of virtual RAM allocated to all VMs, and it is important to note that the total allocated vRAM for most customers is substantially smaller than the available physical RAM.  Most customers reserve at least 20% of spare physical RAM capacity that is not allocated as vRAM.  

To really get an understanding of how many vSphere 5 licenses a customer needs, you need to sum up the total amount of vRAM allocated in all powered-on VMs, and divide that total amount by the entitlement for the particular vSphere 5 edition you are running.  Let’s look at an example: if you have 100 VMs with 4GB of vRAM each, then you need a vRAM pool of 400GB. If you are running vSphere 5 Enterprise (with 32GB of vRAM entitlement per processor license) then you need 400GB / 32BG = 13 licenses.  As you notice, there is no mention of physical RAM in this calculation.  To recap, vSphere 5 licensing needs are determined by only 3 factors:

  1. Number of VMs
  2. Amount of vRAM per VM
  3. What vSphere 5 edition you are running. The entitlements for the different editions are available here.

Our Technical Marketing team has developed a tool that can help you add the total amount of vRAM allocated in your VMs so that you can run this calculation.  There is also an accompanying video explaining how to use the tool.  In addition, we have noticed a few similar tools developed by the community.

How we got to vRAM

When we began the process of developing the new model, we set out to find a way to evolve vSphere’s licensing to lay the foundation for customers to adopt a more "cloud-like" IT cost model.  We were looking to develop a model that would be more congruent with the technology architecture of the virtual and cloud world, where resources are pooled for maximum utilization.  In short, we wanted a model based on consumption and value rather than physical components and capacity.

The design point of the licensing change was not to increase licensing costs, and we believe  90+% of our customers will not see a licensing cost increase.  Before we introduced the new vSphere 5 licensing model, which is based on pooled vRAM entitlement, we did a great deal of research, and carefully analyzed available customer data. Let me tell you what we found:

  • The average amount configured vRAM per VM is 3GB
  • The average number of VMs per physical processor is 5.7. I know this may be counter-intuitive to some customers who are pushing the envelope, but the detailed distribution of consolidation ratios is on the graph below.

Image001

So based on the above two metrics, even if you disregard the effect of vRAM pooling, the vRAM entitlements far exceed the common customer practice. In fact, some customers may see a decrease in their licensing costs: customers of vSphere Essentials, Essentials Plus, Standard, and Enterprise had 6-core per proc restrictions in the previous licensing model. In order to deploy vSphere on a new server with more than 6 cores per processor, these customers would have had to purchase additional vSphere licenses. 

Image002

We are confident that as we move into the cloud computing era, our vSphere 5 vRAM licensing model will allow our customers to best take advantage of the benefits and flexibility of cloud computing by allowing the pooling of licenses for maximum utilization and value:

  • As Forrester’s James Staten writes in his blog: “This change ties licensing more to the use of the product and encourages greater VM consolidation as it counts VMs by size, rather than per physical server. This incents packing lots of VMs on a single system and even lets you share vRAM entitlements across physical systems to accommodate more seamless growth of your environment and management of the pool, a key operational change called out in our Virtualization Maturity Model. Basically, now you can entitle your virtual environment in total, based on its capacity and fill it up as much as you want. This is much more consistent with their service provider pricing model; and if your goal is to build a private cloud, isn’t that the point? All in all, this shows that VMware gets it and is taking an active role in helping educate its customers that virtualization and cloud operations are two different things and making these distinctions clear is critical to their and your success. Well done, VMware.” http://blogs.forbes.com/forrester/2011/07/12/the-cloud-computing-market-grows-up/
  • And as the Taneja Group remarked: “We welcome this new approach, and believe it addresses the majority of licensing concerns that we’ve heard from VMware customers over the past couple of years.  First, it’s much simpler – users can now focus on how they actually use vSphere virtual resources on a given pool of physical servers, versus having to worry about how those underlying servers’ processor and memory configurations might grow.  And since baseline licensing is still tied to number of server cpu’s, the new licensing will not force changes to customers’ existing purchasing and budgeting processes.http://tanejagroup.com/news/blog/cloud/vmware-takes-vsphere-licensing-to-the-cloud

To wrap up, I would like to point to some of the advantages of the new model as articulated by some of our customers:   

I encourage you to download the tool and estimate you actual vRAM usage across your entire environment. Talk to your VMware or partner sales team to go through the numbers. For more information and materials, visit the vSphere 5 Upgrade center.

Bogomil Balkansky
VP, Product Management 

 

104 thoughts on “Understanding the vSphere 5 vRAM Licensing Model

  1. Jose Ruelas

    I remember a video, where Microsoft tried to explain how you should license your environment if you wanted to use VMotion technology…….
    and I seem to see now something similar from VMware……

  2. Edwin Weijdema

    What we have seen with our customers is that a majority is still on Microsoft 2003 and are migrating towards 2008 currently. We see an increase in utilized memory by a factor 4 than.
    Also customers who utilize VMware for the hypervisor on their Citrix XenDesktop deployments get pushed out and towards other hypervisors and thats a shame.
    Calculating on the Exchange 2010 deployments we have done recently we see an average of 7.1GB per VM in use and thats for the whole Exchange 2010 deployments where Mail Box Server role servers take a minimum of 12GB vRAM per VM and in DAG deployment this doubles the numbers.
    Another thing I would like to point out is that deployments we have done with Microsoft RDS and Citrix XenApp on the vSphere hypervisor without those servers being managed through vCenter server how are those going to be lifted into the vSphere 5 licensing model?
    Another thing is about the other business critical deployments like Cognos, Oracle, Sharepoint and many other business applications we see at the moment the average vRAM allocated to VMs isnt 3GB to be honest its way more.
    Don’t get me wrong I think going vRAM for licensing is The Way to go, but I think the numbers needs tweaking a little bit, because customers with valid SnS on Enterprise Plus get stuck in the process of migrating to vSphere 5 and are bound to stay on vSphere 4 and that would be a shame because of all the new great features and evolving the datacenter even more.

  3. Eamon

    Bad move by vmware. Has killed our vmware plans just as we were going to purchase licenses….. We are moving ahead with KVM now!

  4. Dan Hayward

    I can’t think of any of my customers who run 6 VM’s per processor… per core is more likely to me…
    Whichever way you go, a lot of people are running large clusters with 192GB RAM+ per 2 socket host, this still means in a 3 host cluster you need 8 licenses of enterprise plus to cover max usage and still have N+1. Go to 4 hosts and its at 12 licenses with just 8 CPU’s.
    I think people would agree with the new license model as long as the vRAM entitlement per license was higher.
    For hosting providers its about getting as many VMs running as possible per host. With CPU’s coming with large numbers of cores, the temptation on vSphere 4 style licensing would be to put as much RAM as possible in a host avoiding CPU contention. This can’t happen with this scheme as they’d be better off with more, smaller hosts from a performance and licensing perspective at least.
    At the end of the day, why have a per CPU based licensing model when the new ruling limit will be vRAM entitlement limits? Why not just change purely to memory based licensing?

  5. Glen

    VMware needs to explain how this license will evolve over time. Will 48GB of vRAM per socket make sense in 18 months? Will is may sense in 3 years? I don’t think so.
    As I see if right now the cost of running VMware versus the competitors is going to double every 18 months. This new vRAM licensing model seems counter-intuitive to the way the IT industry has operated since its inception.
    In my environment 48GB per socket is just enough for now, but as you know IT environments aren’t know being static.
    I’m not sure if I can trust VMware for the long haul when right now I feel like I’m getting screwed.

  6. nate

    I haven’t gone into a lot of depth as to what is new in vSphere 5 myself, I have seen a few headlines about new management stuff, new scalability at the high end.
    I haven’t seen anything that would make me even remotely interested in using vSphere 5 with the new licensing.
    I don’t even see anything in vSphere 5 that gets me too excited even if the licensing scheme was unchanged. Just give me a rock solid hypervisor that lets me run on as many cpu cores and memory as I can throw at it.
    Unless something drastic changes I’ll be using vSphere 4 for the foreseeable future and then change to something like KVM once it becomes a more mature product.
    As a VMware customer and user for 12 years now (since before 1.0) this makes me sad more than angry.

  7. gchapman

    so after years of pushing your customer base to scale up, you skewer them with a new licensing model that penalizes them for doing so.

  8. gchapman

    honestly I want to meet this “common customer” because so far I have yet to meet them.
    we push for 30:1 ratios not 5:1 as your pathetic licensing document offered.
    not all of your customer base is a cloud provider, face it, the vast majority of your customer base that made your company successful is SMB looking to consolidate.
    the cloud is marketecture, its not the future. as much as you want to shove everythint into the “cloud” its not a valid business model for the vast majority of your customer base.
    we want to be able to leverage advances in hardware technology to squeeze out 80 to 90% utililzation rates, not be forced to build scale-out clusters locked to paltry memory limits.
    48GB per proc? really? who in their right mind architects for that pitiful level?
    memory has always been the constraining factor in virtualization environments, and then you go and put the screws to your customer base after years of pushing them to build bigger boxes to host more and more machines.
    then you penalize them after you have them hooked.
    kvm, hyper-v, proxmox, citrix, are all catching up on feature parity.
    enjoy being the new Novell.

  9. TIM

    VMware just pushed a whole bunch of system integrators in the VMware camp to MS HyperV. We are an Enterprise partner who has been dilligent selling your products for years and has spent massive amounts of money keeping our engineers up to speed through the VCP process. We will no longer be able to justify doing so because you have now effectively priced yourselves out of the SMB market. It was already a tough sell in many cases to deploy VMware over other solutions in our space, yet we still managed to sell 500k of your product a year. Not a big amount in your overall revenue numbers, but multiply that against the hundreds of SMB integrators who are now having the same internal discussion and it starts to become a big number. As a point of reference in 1998 we were the only Novell Gold Partner in our area. We saw the writing on the wall and made the shift to Microsoft and became the first Gold Partner in our region. We have been holding off our Microsoft reps influence to start pushing HyperV for the last couple days. That all changed yesterday. We are enrolling our the first of 14 engineers in HyperV training immediately. We are the dominant VMware partner in our area, but we haven’t forgotten what happened to Novell.

  10. Squuiid

    Dan, my thoughts exactly.
    We need clarity from VMware as to the future of this pricing model. Will the ‘memory bands’ be raised in 12 months? They should be.
    So many companies are going to stick with version 4. We were waiting for 5 but have been sorely disappointed by this licensing change and will stick with 4 without a shadow of a doubt.
    VMware have not handled this well at all. It has confused a lot of people, angered a lot of people and ultimately pushed people away from their product.

  11. JoshD

    The new licensing model was discussed in an Engineering meeting today at my workplace. The outcome? We will push a project another month to see if VMWARE will react to customer’s wrath. If nothing happens, our instructions are to engage our vendor and price out Hyper-V.
    I’ve been loyal yo VMware for years, but since I love my job I will have to start looking into Hyper-V. You leave me no option.
    This is real. SMBs will not play your money grabbing game as the budget is simply not there to support the vision they were sold a couple of years ago. I know you promote the cloud, but had no idea you lived on it. Wake up before its too late.

  12. Harry

    Regardless of how VMware got to vRAM, the allocated amounts for the various licenses were shortsighted. For customers to get the most out of their new virtualization optimized high core-count processors for the past year or more they have had to deploy upwards of 4-6 guests per core. In an Enterprise where your average guest uses 2-4GB of RAM a 12 core system today at a conservative minimum would eat up 2 Enterprise Plus licenses. That’s today. I ran my calculations, and my current allocations are just barely under what I have licensed, leaving me no room to grow on my existing hardware without buying more. I have a system that I sized and licensed for 5 years of growth last year, and in a year VMware capped my growth.
    There’s no misconception about having to buy what the hardware supports as Mr Balkansky puts it. The reality of enterprise deployments are that you deploy to the max utilization of your hardware with room for HA, and you purchase licensing that is in line with what you plan to deploy. Therefore yes, if you want to use your hardware to its full potential (a founding justification for virtualization) then you must license to the full potential of your hardware. There’s no getting around that by saying that you only need to license what you allocate.
    Furthermore, telling customers who bought unlimited hardware licenses under Enterprise Plus 4.x that their supported upgrade path now only gives them a maximum that is at the very low end of what today’s hardware is capable is sheer lunacy. Dual socket hardware today is capable of upwards of 512GB of RAM or more. In a large scale cluster deployment you should be getting 70% or more out of your hardware and so would allocate accordingly. The only time an Enterprise Plus vRAM license makes sense today is if that 2 cpu host has less than 128GB of physical RAM. That’s a middle of the road deployment, not an Enterprise Plus deployment. At 96GB allocated and in use, my dual socket Intel westmere processor machines aren’t even breaking a sweat. I run them today at close to 150GB allocated.
    The only reason I’ll sneak by at 93% of my vRAM when I upgrade is because I have a few development small clusters that have to reserve more for HA. The pooling “feature” of this licensing model is my only savior. If I ever want to upgrade the physical RAM on them to match the need of my organization, then I will have to buy more Enterprise plus licenses. VMware has not separated the physical server capabilities from the licensing as they propose because the very nature of virtualization, the very reason we started down the path to VMware, was to use our hardware to its fullest. The very nature of IT is to meet the demand of our customers’ growth. VMware has taken away years of growth potential from my company that we previously budgetted and bought VMware licenses to provide, and level set us at todays low end numbers. People here and in other forums have griped about the impact on SMBs, but I think the impact will be felt even more at large entities that really tax their hardware. The cap on Enterprise Plus is too low. Unless they double it I’m going elsewhere. I already have to purchase Windows Datacenter licenses to support installing many windows VMs per host, so a move to Hyper-V is a $0 proposition. I’ll learn to live without a few VMware features for that price.

  13. Andrew

    Your blog post does not address the fact that the price for “the remaining 10%” of your customers has jumped up, in some cases by huge amounts, multiples of the old pricing.
    Has vSphere jumped in value by several times for these customers? VMware has failed to explain how. Imagine if your utility provider rang you and said “Sorry, your electricity bill will be 4x what it was last year. Its the same electricity as before though”, how are you supposed to feel?

  14. Bards

    One of the significant features that has made VMware brilliant for me is the broad OS support, and in particular linux support. My guess is that If it wasn’t for VMware, hyper-v would only be able to support windows vms. Now if organisations start to move to hyper-v (which I’ve read has very immature linux support and practically no support for anything else) the whole thing could backfire on VMware and the linux customers could also move to KVM or Xen or worse still OracleVM (Xen).
    Interesting times.

  15. Brandon Riley

    If this is what pushed you to Hyper-V, you are better off. I mean you weren’t extracting the value this product brings to the table.
    Having said that, I do agree with the “lose the socket count” comment. Go all vRAM. There’s no downside for VMW, and it is less confusing for sure.

  16. Brendan Perez

    How does VMware’s VCE partner Cisco feel about all of this?
    I’ve been in meetings and seen presentations about the Cisco UCS platform and how the platform makes sense as it has extremely high memory densities to allow consolidation, etc.
    There’s not much of a point in outfitting even a single M2 blade server, much less a whole chassis of them with even half (256GB) of the maximum memory if you can’t use it without paying through the nose.
    Imagine a company that foolishly wishes/needs to use the memory they paid for in a chassis with 4 M2s with 512GB each. Pretend they run memory intensive apps and keep the cluster to around 75% of available memory.
    As I understand it, at 1536GB, they’ll need 32 processor licenses vs the 8 they would have needed before (assuming dual sockets and enterprise plus licensing).
    I can’t pitch the UCS and its high memory density as an upgrade path for our VM environment if this happens. People will look at the 32 (or even 16) processor license requirement and point out that we only have 8 processors. Even after explaining the whole pooling thing, I know people will view those 8 unused CPU entitlements as a waste. Combined with an inherent feeling of being taken advantage will reduce support for the new platform.
    I sort of understand of why VMware did this, but it can’t have been a surprise. It was a big selling point for all those VMware cert\fied hardware resellers to push customers to load up with high density memory setups on their prospective host server.

  17. Jeremyp

    It’s shocking that you can honestly try and spin this as beneficial to your customers. Do you think your existing (soon former) customers are idiots?
    Comparing our existing licensing to new we’ll need to caugh up an additional $50K.
    Microsoft is waiting with open arms and we’re running toward them.

  18. MIKE

    From the Taneja quote “First, it’s much simpler – users can now focus on how they actually use vSphere virtual resources on a given pool of physical servers, versus having to worry about how those underlying servers’ processor and memory configurations might grow”
    This makes no sense. With v4 enterprise plus the customer had access to unlimited pRAM. They could allocate whatever amount they wanted whenever they wanted. If the customer added more pRAM to the server all they had to do was purchase the pRAM and install it. Under the v5 license the customer would have to purchase the pRAM then purchase the VMware licenses.
    How does moving from an unlimited plan to a limited plan make things SIMPLER???

  19. Russell

    This licensing model discourages large VMs and overcommitment. My UCS blades will go from requiring 7000 dollars worth of licensing to 14,000 dollars worth of licensing. One of my customers will literally need to buy 1 license for every 2 VMs they run in their datacenter (1000 servers each with 16GB of RAM at 95% utilization.)
    I know of at least 1 ELA that isn’t likely to be renewed. One of my customers with over 400 ESX hosts has started to seriously evaluate if its worth the cost to move to 5.
    My small business customers are already planning to move “low hanging fruit” to Hyper-V and have put off purchasing further licensing.
    My take is what do I gain by virtualizing a server with 1TB of RAM when the VMware licensing alone will be over 80 thousand dollars?

  20. dbis

    Might as well scrap the certification programs now on the way to bankruptcy.
    There won’t be much demand for VMWare certified professionals anymore.

  21. Chris

    Clearly, working from the fact that the average VM is running 3 GB of RAM should not even be considered. It’s a meaningless number for those companies who have adopted virtualization on a larger scale and are running their primary apps on VMware now. The pooling model is easy to understand and makes sense. You say that “we wanted a model based on consumption and value rather than physical components and capacity”, and we all can grasp that this model is based on the virtual RAM configured in VMs, but this is at a time when 24-48 GB servers are now at the low end of ESX hosts, so that range is ultimately physically restrictive for your larger customers and forces us to buy additional licenses to account for the additional vRAM above the included entitlements.
    We, in particular, have an ever-changing test environment where we bring up groups of 10 to 30 or more VMs sometimes totaling over 100 GB of used RAM. Why would we not license up to the total amount of physical RAM in our environment?
    Also, vSphere 5 supports 1 TB of RAM in a VM, but why would I virtualize that server if I have to pay VMware 22x Ent Plus licenses at $3,500 ($77,000) to run that much RAM in a VM? Why wouldn’t I just save the $77K and keep it a physical server…?
    Also, enforcing a measly 8 GB vRAM entitlement in the free ESXi 5 makes it pretty much useless. 8 GB max in a physical server of any kind is circa 2007. That clearly needs to change as well.
    It’s easy to understand that VMware is trying to make us pay them to actually use the RAM that we already paid our server vendors for and it amounts to a vRAM tax. Either VMware has simply made a really bad judgment with the 24-48 GB range across its versions or they are deliberately milking its better customers for more revenue. I guess what else can we expect from the former Microsoft #3 in Paul Maritz…? The 24-48 GB range might actually make sense for Essentials and/or Standard, but it clearly needs to be in the 512 GB to 1 TB ranges for Enterprise and Enterprise Plus with the availability of 1 and 2 TB servers, and that fact VMs now support up to 1 TB of RAM.

  22. Andy

    VMware,
    Here is a fact: You have ALREADY lost customers because of this, REGARDLESS if it affects them or not right away. I personally am having to deal with cancelled orders and customers switching to hyper-V. You are the one who doesn’t understand, not us. Quit telling us we are stupid and don’t understand your new licensing policy.

  23. ThatFridgeGuy

    Bogomil, First let me say I appreciate your efforts to help clarify the licensing changes. When looking at it closer the last 36 hours or so, I will say it’s not as bad as my first impression of it was. That being said I’m still not thrilled with it either.
    The following are some thoughts of my own and that I have heard from others: (BTW, sorry if there is some overlap in the comments below, they were copied from a couple of places)
    - Horrible marketing job by VMware
    - VMW needed to recognize many people are memory constrained and have purchased or are looking at hosts with larger memory capacity. So they needed to realize that to suddenly change licensing to not only go by processor but now also by memory would be something that would get a huge amount of interest. Features are great but these days, more than ever cost is often a critical factor for most of us.
    - Licensing calculators, even just a downloadable spreadsheet at time of announcement would have helped
    - Huge mistake to announce vRAM change to licensing and they say we made licensing simpler just because they got rid of the Advanced option.
    - Should have had more examples of many different scenarios prepared and made available at time of launch
    - a vRAM upgrade SKU would be helpful. Even if it’s just for perception reasons because while we may dislike the idea of having to pay more for being able to use additional memory for our hosts; the idea of doing it by buying full licenses that include the right to use additional processors that we’ll probably never need makes it even less appealing.
    - Using and talking about 5:1 consolidation ratios was a mistake. Way too many people have much higher consolidation ratios in place (15:1 for me) so right away we starting thinking that VMware is way out of touch with the real world. I’ll leave the debate of that being the case or not for another day.
    - For years you have been talking about low resource utilization on physical servers, in particular processor and memory. Working off that concept and with the advances in servers, we have been working towards leveraging vSphere to use as much of our server capabilities as possible. With increasing RAM capabilities we are seeing dual socket (4-8 core) servers with 96, 192, 256, 512gb of RAM becoming reality. All of the sudden our visions of a cluster of high RAM hosts with room for plenty of future growth room until proc & memory utilization is maxed out could have greatly increased licensing costs. If someone has an environment of 6 hosts with 192gb that today is only using 96gb of vRAM then they may be fine licensed with E+, but they now looking at having to buy more licenses just to be able to run all of those hosts with 150gb of vRAM 4 months from now.
    - A warning such as saying that with vSphere 5.1 our licensing model will change would have gone over better so we all have more time to plan future growth would have been better received.
    - While VMware is pushing cloud and everyone is talking about it, the reality is many of your customers aren’t there today and a large number of those won’t be operating that way a year from now.
    - I understand that with changes in server capacities in processor resources and with people moving to cloud that your licensing model needed to change, however it appears you either focused on too narrow of your market segment when researching this licensing or you should have looked more at how people expect to be using their host resources a year from now rather than how are they using them today
    - Should have announced the vSphere 5 for Desktops licensing at the same time.
    - Microsoft pounds on the message that VMware costs more than Hyper-V. Whether they are right or wrong, why do anything to help that perception?
    - you quoted “The great thing about the new licensing model is that you don’t have to buy all your licensed capacity up front”. What is missing here is that we thought we had already bought all our licensed capacity!
    For me personally, my concern is not where we are today as I know I’m fine today. The real concern is with what this does to our projections and the plans we were moving forward with. At the very least this is causing me several days (which I really can’t spare) of reworking projections, various scenarios and plans. Worst of all, it has also caused my management to ask me to start looking into comparisons of costs for now and future projections of VMware vs. Hyper-V.
    Don’t get me wrong, I love VMware, I often tell people that introducing VMware virtualization into our company is the best decision I have made in my 20+ year in IT.

  24. Andrew

    I can see the thinking in moving to this way of licensing, in many ways it makes sens and some of the in built limits of previous models have now been removed which is great. However, please don’t pass this off as being purely for the benefit of the customer. To me, it looks like VMWare have seen all the new CPU’s coming out with huge cores per socket and thought “wow, customers will only need half the number of per-cpu licenses soon, we better review our licensing model. but no-one will go for per core licensing.. Hmm, how about a model based on vRAM??”
    This works because they can pass of all the pay as you use/cloud based stuff, and if they throw in that there are no longer physical limitations then they can pass it off as a customer win.
    But all this really does is limit their flexibility when virtualising, especially when virtualising key apps like Exchange & SQL.
    Incidentally, I’d like to see more detailed info on where these stats came from, mainly what the breakdown is for orgs of various sizes and how it looks with fully virtual environments vs partial virtual environment.
    I imagine, that for many customers there won’t be that much change, a recent customer of mine had 3 hosts, 128 RAM & 4 CPU’s in each, Enterprise licensing so we’re fine as long as we don’t over comit on the vRAM. But isn’t that one of the key points of virtualisation? So if they upgrade, and keep the hardware they’ve got, then they are limited to 384GB of vRAM, which is fine but just saying they no longer have the felxibility to overcomit RAM if they chose to (at least without an additional cost).
    There are also some questions which VMware need to address quickly, mainly how the vRAM limits will change as time goes on.
    So, I’m sure shareholders will like this (at least short term) but I think many organisations will give more serious thought to Hyper-V (and other solutions) now. I certainly will be, in fact looking for hyper-v, XEN & KVM courses now..

  25. Dave

    I cant see how this can do anything but make people move away from vSphere and look for alternatives im running dual socket 96GB hosts on vSphere standard so this is basically doubling my licensing cost if wanted to mvoe to vSphere 5. also how does this affect SnS costs? do i need 1 SnS per socket or 1 SnS per vRAM entitilement block?

  26. GriffinBoy

    At a UK EMEA event (very end of last year) VMware tried to explain the change from their VSPP2 to VSPP3 licensing model (for Service Providers).
    The explanations about vRAM pricing made no sense whatsoever and the model was even more flawed and insane than the one proposed today.
    Out of a 100 or so people in the room 80 or more complained that their costs would double or even quadruple in some cases.
    Since there were so many complaints and no sensible answers, some VMware exec took over the debate and admitted that one of the real reasons was that they were effectively losing money because businesses exploited the system by putting a much smaller amount of larger VMs (loads of allocated vRAM) into production serving multiple services rather than many smaller ones serving a single service.
    During the following months complaints kept flowing in about the VSPP3 model and VMware ended up bending over by slashing the new VM-points-per-bundle by half, but the vRAM model remains. The question VMware have to ask themselves is ‘why do those people try to exploit their licensing system in the first place?’ Fundamental flaws in pricing maybe? After reading the above article, seems like the pill sill hasn’t been fully swallowed.
    How can a business adapt its product prices for its existing customers with such a steep model change?? I thought virtual guests were soon to become a commodity, probably not if you run vSphere 5 as your hypervisor of choice. :-(

  27. Brad

    Vmware now underutilizes our blades so badly we are immediately evaluating Xen product range. If vmware withdraw this crap before we start converting machines over we would probably stay, but we will have experience and training with competition we wouldn’t have otherwise had.

  28. mk

    I’m not even going to start how I disagree with this article’s reasoning and flawed, because plenty of others have done so already here and in the VMTN thread, including countless real-world examples.
    VMware doesn’t seem aware of the situation they are in now. This licensing change turns out as a huge PR-disaster, and companies like Microsoft who were preaching all the time how vSphere was “way too expensive” will now yell even louder.
    Until a few days ago, I strongly disagreed with such competitors FUD and didn’t feel like I was paying an unnecessary “premium” going with VMware, because I really got some good bangs for my bucks. Now I still get good bangs, even better ones, but the bucks I have to put on the table for it are simply too much.
    Seeing how the competitors catched up recently with features and market share and will continue to do so, I don’t think VMware can afford a step like they took with this licensing change. While the gap is still large, it diminished significantly recently is now “good enough” for a good number of deployments.
    At the end of the day, VMware will make a lot of existing customers turn to the competition and scare new customers away from even considering virtualization or moving from the competition to VMware. They will lose a lot more money because of this than they will gain in return with this new model.
    Please VMware; reconsider this change reasonably, for the sake of both, your loyal customers who would love to continue running the best Hypervisor out there, and your own sake as well.

  29. Yahya

    What does the new licensing model with the ESS package do? Can I now operate with an ESS package for up to 6 processors and a maximum of 144 GB, or is there a need for additional licenses purchase. My understanding is that I can use up to 144GB totaly, but only 24GB vRAM per processor? Is that right?

  30. Sunny

    If you were going to cover 90+% existing customer, why use 50% of survey result, should you use 90+%?
    Raise the bar of what? Cost!

  31. Mysidia

    Such dishonesty on VMware’s part… they sold their product under one set of conditions/licensing, take annual money for “maintenance and upgrades” to be free/included.
    Then when the upgrade is to happen, force you to pay anyways by introducing new restrictions and making licensing more adverse.
    All with _no_ significant improvements in VSphere5; unless you have an Enterprise Plus, Enterprise, or Advanced license, maybe.
    Are vSphere4 Advanced customers getting upped to Enterprise features for free?
    I think they might be the only ones to benefit from this release; assuming they aren’t using modern servers with a high memory density environment.

  32. jan

    mm… 3GB on average VM’s euh excuse me I’ve a lot of W2K8R2 servers virtualized and they all have at least 4 to 8 GB ! A lot of people offcourse virtualized there old servers but what about the future?
    Nope, not happy, not happy at all …

  33. Frank

    Im sure glad the we just purchased new blades with 384 GB on them. This model is going to make our costs rise substantially.
    I’m not sure if any of the improvements in VM5 are significant enough to make me want absorb such huge licensing costs over what we were previously paying.
    I am leaning towards staying at 4.1 until something makes me need to upgrade or causes me to change to a different virtualization platform.

  34. Shane Liptrap

    First off Bogomil we aren’t idiots so stop treating us like we are. We all FULLY understand the vRam entitlement and pooling. Right now i have 210+GB of provisioned vRam yet i’m only using 175gb of Physical memory. The whole point of even running VMs is to allocate unused resources to the guests that need them when they need them and over provisioning memory is one of the major benefits but now the price point does not even come close to the actual value.

  35. Chappy

    I think that this just became VMware’s vista. Few will upgrade until something forces it.

  36. ThatFridgeGuy

    I know for a fact that multiple people at VMware are reading your comments here, in other blog posts, on Twitter, on the Communities forums, etc…
    I also know they are funneling your feedback to others within the company and that it’s being looked it and discussed by the people that we want to have involved in this.
    You may not agree with their licensing changes, their reasons for the change, the examples they provide or the numbers they use in their calculations. However to maximize the impact we have here and our opportunities to provide valid feedback it would be helpful for all of us if we can try to understand VMware’s reasoning (even if we don’t agree with it), be fair and honest in our feedback and in general try to play nice.
    Thanks to Bogomil and others within VMware for interacting with us on this hot topic.

  37. ThatFridgeGuy

    Chappy, I have to disagree with you on your comparison to Vista.
    Vista failed for technology reasons and people didn’t leave MS, they just waited for a better OS version. This is a licensing change, it’s not realistic to wait for a next release with expectations that the licensing will be something we may like better. ESX and vSphere have been successful for technology reasons and I expect vSphere 5 will be as well.
    Some may delay upgrading to vSphere 5, some may move part of their infrastructure to another solution, some may drop VMware all together or not start with it, some will upgrade without hesitation, some will re-architect but in the end most of us will determine that while we think the possible increased cost is unfair we still want the best technology in place and that will be vSphere 5.

  38. RyanN

    3GB of allocated ram is just not realistic in today’s 64-bit environments. The point of 64-Bit is to allow applications and services access to more RAM, not just a happy fun time thrill of migrating OS’s that Admin’s get.
    The vRAM limits are plain and simple just too low. This absolutely penalizes those that use or plan to maximize their investment by using a high memory density. Yes, the bar is set at the average, but the average is too average and doesn’t reflect accurately on each business segment. Its far to low for SMB’s that would run with a single server. It doesn’t capture the usage of the the large business that is scaling up.
    Sure not all customers would react by scaling out, but if the processor licensing is there, almost no incentive remains to not spread the workload out. vMware itself has helped make server hardware little more than an inexpensive commodity cost. So why would a customer push past the average that vMware is now setting?
    The real kick in the shorts is not only the scaling issue, but how vMware itself built the model, encouraged its use and now is quite clearly looking to extend profit by ‘taxing’ a basic feature that is a primary reason to use virtualization technology.

  39. Chad

    Myself I am not impressed with the new model and am evaluating Red Hat and Microsoft options and will most likely not recommend VMware any more and will be looking to switch anyway from your products.
    I must say though, thank you for making me feel violated in a way that only Microsoft could make me feel in previous years of renewals of their products.

  40. Steve

    Simple question.
    You state that the average amount configured vRAM per VM is 3GB.
    What’s the median amount of configured vRAM per VM, and wouldn’t that be a better stat to base a license model on?

  41. Peter

    It is disappointing to see VMware make this change which appears to be precisely timed with the availability of much higher RAM densities at lower prices. The data evaluated according to the article may not have taken into account the fact that decisions regarding the amount RAM allocated to a VM is greatly affected by how much physical RAM is installed on every host. Given the opportunity we will allocate much more RAM for greater performance when needed. The inability to allocate larger amounts of memory will also slow down the virtualization of Tier 1 applications which seems to be in direct conflict with what various VMware presenters have stated as a goal over the past few years.
    As others have said or implied this appears to be little more than deceptive marketing and price gouging as a huge number of companies have probably just invested or are just about to invest in servers with very large amounts of RAM. Memory over-allocation, while not a desired practice in my VI, is very common in many companies. In fact I would think that this tenet would be key for cloud service providers to make the economics work. This is important because it seems that VMware is simply trying to funnel some of the dollars that cloud providers charge end-users per GB of allocated RAM back home, but affecting everyone else in the process.
    I am already tired of fighting off Hyper-V requests by management whose members argue that we have an EA with Microsoft and installation is a server role away. VMware has just made that fight that much harder. I can explain the benefits, features, business needs, and the lack of many of those options with competitors all I want, but none of that matters to those looking at green dollars alone. Any company can juggle the math to make their solution look better but who is actually heard? In many shops upper management will likely listen to MS account reps over VMware reps any day because MS software is not going away. And for some reason many companies seem to be happier giving a larger amount to money to MS for as much software as possible rather than giving many companies smaller amounts of money each. Easier contract licensing and vendor management is very appealing, and anyone who has dealt with the VMware licensing group over the past 7 years knows how bad the experience can be.
    If you want to make this more realistic then the amount of vRAM allowed per physical CPU needs to at least double, if not triple to be in line with the servers available today. And we most certainly do not need an Enterprise++ license in the future either. We’ve been burned enough by licensing changes in the past. Please do not continue to burn your long time custoemrs and advocates.

  42. Steven

    VMW had this problem with hosters for a while and now they have extended this to enterprises, good job!!!
    As a hoster, I’d need to pay 7 points for every GB consumed. As my VMs increased and memory size changed, I started paying 4X-6X to VMware. This is ridiculous. VMW needs to find another way to make money. Why should we choose you when we have comparable products?

  43. Danny

    My CIO was already wanting to re-evaluate our virtualization vendor choice before this was announced… and now it looks like I’ll be learning Hyper-V.
    We are in the process of purchasing UCS blades with 192GB of RAM and we won’t need to buy any more licenses for about a year if our growth continues at its current rate, but with other groups in my company already using H-V I can’t argue to stay with ESX or, even more importantly, argue that the other groups switch to VMware. Net result will be no renewal from my team at the end of the year and no new purchases of licensing for the other groups.
    Its like VMware looked at Oracle’s licensing methods and said “hey, let’s find a way to milk our customers even better than them!”

  44. Cwjking

    Well you could always cast a vote on what the numbers really are for your cost. 100%.
    http://virtualnoob.wordpress.com/2011/07/15/vsphere-5-licensing-cast-your-vote/
    So far even the polls show most dont break even. Vmware you are screwing people over because your the number virtualization platform? Novell pulled the same thing and everyone took a dump on them. Be careful what you try to do… You obviously expected some customers to drop ya with this move. I cannot see how you wouldn’t lose a customer base. Most environments dont implement an IaaS model or having because there isn’t really a need. I tell you what… if you really want to add value why don’t you just go ahead and add vCD, VCOPS, and you know an “ACTUAL CLOUD SUITE” then maybe – just maybe it might be worth it.

  45. UnderSiege

    Name one single benefit of the new licensing scheme to customers.
    If VMware truly believes that this is a better way to licence, why not offer customers the choice to license either according vRAM or CPUs?

  46. Joe

    It will cost us too much to continue with VMWare. I just bought 4 big Dell servers with 256GB RAM in each. I was going to use all 4, but now I’ll use 2 and test Xenserver on the other 2.

  47. Pete

    Does VMware really expect people to believe that “The average number of VMs per physical processor is 5.7″?!?!? The typical server has 6 cors per processor, so this would equate to less than 1 VM per core. We’re running 4-6 VMs per core in our dev environments. Our licensing costs would go up 4-5 times with this terrible model. Our relationship with VMware will be over if this goes through. 4.1 is the end of the line.

  48. Not Happy

    Should have been called: Rethink you virtualization provider.
    The vsphere 5 pricing is incredible as is your assumption regarding physical RAM.
    Face facts: you are increasing the price (or decreasing the per-dollar capacity) four fold.
    Think about it.

  49. mike

    I have been a vmware customer for many years…. no more. I will be switching to alternative solutions

  50. AgentDuke

    This is going to hurt them. I notice most of the comments here are from larger deployments. Smaller companies may benefit from this, but not the ones with the large budgets. Us ‘large budget’ companies will not be upgrading to this model while this pricing is in effect. We use 512 GB RAM systems, so you can see why we are in arms…this is not going to happen.

  51. Vidar

    VMware should try do a calculation on how many CPU-licenses would be required with vSphere 4.1 vs vSphere 5 on an HP DL580G7 with 4x Intel E7-4870 10core cpus (80 logical cpus total) and 512GB RAM… business case for going with VMware lost before we even started.

  52. Xanco

    Probably the flaw in VMware’s calculations is that 5.7 VM is not per physical CPU, but per physical core as these two intermixed in a lot of place. This can be a 4x-6x difference with today’s CPU core counts. This would make sense and should be corrected.

  53. Keith Chambers

    Early in my career a wise man told me “pigs get fat and hogs get slaughtered”.
    If we are to believe that vRAM promotes a more “cloud-like” IT cost model, then why license per socket at all? Why not forget all about physical resources and license strictly based on vCPU and vRAM? The vSphere 5.0 licensing model is inconsistent at best and ignorant at worst.
    A “cloud-actual” IT cost model is one based on actual resource consumption — not potential resource consumption.
    I do understand the need to adjust licensing to reflex the changing hardware landscape. But this was not the way to go about it.
    Pigs get fat and hogs get slaughtered…
    Keith Chambers
    VMware vExpert 2009

  54. Rotem Agmon

    Disclaimer: I work for HP
    For several years we’ve been encouraging our VMware customers to “scale-up” by purchasing ever-increasing amounts of RAM when they reach a hardware refresh cycle or decide to expand their virtual infrastructure capacity.
    Recently, We’ve been able to provide customers with 2-way servers configured with 192GB, 256GB of RAM (and even more) at highly competitive prices.
    Now the same clients are extremely disappointed of your new licensing policy for vSphere 5.0 and some have even mentioned something about exploring “other options”.
    Something has to change. And quick!

  55. Cody

    I have to agree with the other commenters. Some of my friends in the field are also highly critical of the change in licensing terms.
    Also, one company I work with has just approved a massive update of their core infrastructure, which is heavily reliant on virtual servers (running in vSphere).
    Though it’s not my area,I’m definitely going to let them know this is the new deal, and let them make their own choice on switching to another provider if it’s going to be cost effective.

  56. John Gibson

    3Gb or RAM per VM is just too darn low, averaging out my 11,000 VMs Windows is 4Gb RAM and Linux is 6Gb RAM, with newer VMs deployed in the last 12 months being more like 6Gb for Windows and 8Gb for Linux as we now start to deploy larger VMs. Scale up has been the way to go, as we were currently discussing a new ELA, im now tempted to stick with 4.1 and start a process to transition to Hyper-V however much I dont want to i cant see I have much choice anymore.
    Unless you increase the vRAM figures, more like 48Gb for Enterprise and 96Gb for Enterprise Plus.

  57. Tony Bourke

    Also, what’s up with the 8 GB vRAM limit on the free version of vSphere 5.0? I run ESXi 4.1 on my home lab, and I understand that the current 256 GB limit might be a bit much, but 8 GB? 8 GB is useless on a host, even in a test lab. You’re making the alternatives very, very attractive.

  58. David Abowitt

    Who came up with 3GB is the average Server usage. I don’t think I have had a server configured with less than 4gb since the days of NT. Every single server since 2003 I have had has 4GB and my new 2008 and R2 servers have at least 8GB and my e-mail and Lync servers have 12gb to 16gb each.
    I agree with my fellow posters that VMWare is shooting themselves in the foot. If after I run the evaluator I need to up my licenses I suspect that my CIO will ask us to begin evaluating Hyper V especially since we already have DataCenter licenses that have no limits on VM’s or RAM requirements.
    Additionally, I am an SMB non-profit and unless VMWare provides some relief on pricing Microsoft’s non-profit program pricing is looking very attractive.
    I have 30 VM’s with approximately 5GB of Ram average, so that means 150GB, on two ESX servers each running 2 CPU’s. My Ram on each ESX is 64GB and I’m utilizing approximately 40-45GB so I am overprovisioned. With each server having 2 Enterprise licenses, so 96GB of allocated VRam, it looks like I would be required to purchase additional licenses which I can’t afford to do.
    Good luck VMWare getting this to fly as it sounds like your user base is going to revolt with their feet.

  59. Phil Jaenke

    This is definitely one of the worst decisions VMware has made in a long time, and I’m surprised nobody has brought up that this will basically cripple virtual appliance development.
    I just had to make the call to discontinue my startup’s efforts to building a virtual appliance of our product for VMware environments. It wasn’t a decision taken lightly, or happily. But the licensing changes make the economics of it unreasonable.
    When the issue was cores and not memory limits, our concern was “will calculations be fast enough?” With the new license, installing our appliance consumes a minimum 25% of your vRAM entitlement on an Enterprise license – 8GB.
    I can’t honestly tell a potential customer that this is a value proposition in their favor; that 8GB can easily and is likely to increase. The advantage of the virtual appliance was that it permitted running it on less expensive resources on vSphere 4. Under vSphere 5, it is in fact cheaper for people to go buy another 8GB for a POWER system that will be covered under service, than it is to pay for 8GB worth of one year of vSphere 5 support.

  60. Bad Dos

    Is that graph correct? 14% of vmware customers are using 1 VM per socket?
    I also agree that 3gb per VM is silly for today and will be hysterical 1-2 years from now.

  61. Jason Neeley

    In my opinion what VMware has completely missed the boat on is the fact that software demands on physical resources run just behind Moore’s law. Yes, we’ve seen the amount of physical resources in a single system increase significantly in the last 3 or 4 years. At the same time software requirements have increased significantly as well. Seriously, do a simple comparison. How much vRam does it require to run a 50 vm pool of Windows XP vs a 50 vm pool of Windows 7. Any increases in hardware density have been completely offset by the increases in the requirements of software.
    Like so many others have mentioned in this column. Maybe its time I start paying attention to Hyper-V and Citrix.
    Oh, and I love VMware’s argument regarding “you’re not licensing your physical ram, you’re licensing your virtual ram”.
    Here’s a survey question for you VMware.
    Why don’t you ask your customers if they oversubscribe their ram. I know I do.
    Seriously why should I stop an SQL server or an Exchange server because I had an increase in peak ram use of 20% for 3 hours every day?
    Not sure about other admins but I know my backups cause an increase of about 20% ram utilization over normal ops.
    Now I either have to over pay so I can oversubscribe to cover the peak, or face significantly reduced performance. Thanks for that choice!
    Let’s just think about how that capEx request will go over with my CFO.
    I need an additional 20% of our annual licensing budget currently for VMware.
    Why’s that, what’s it get us?
    Well to be honest, nothing. Except we can continue to operate the way we do today.
    If we don’t pay it we’ll see a reduction in system performance
    In summary, there is no way that this change in licensing will not cost more for all customers in the long run. I guarantee that if you look at the number of VM’s (and that’s what matters) per ESX license, you will see a reduction over the next few years under this model.
    I’m betting VMware doesn’t win the JD Power Associates award for customer service this year!

  62. ChrisS

    There is no doubt this new license plan has limited what their software is capable of. As someone else stated, this is contrary to what they have worked toward for the last several years. The vRAM is so limiting that the CPU license almost becomes a non issue. If you utilize a (Modern) server properly, you will reach the vRAM limit far before you need an additional CPU license.
    Let take a look at this from two different views with my Enterprise+ & 48GB of vRAM Entitlement.
    Software Point-Of-View
    3GB per server isn’t realistic so using a still very conservative 4GB per server; I can only run 12 servers per Core. This does not account for Tier 1 and even some Tier 2 application requirements. Now that doesn’t sound too bad, right? Take a look at what the hardware is capable of with the Hardware Point-of-View.
    Hardware Point-Of-View
    Say I purchase a Dual Socket (6 core ea.) CPU with 192GB of Memory. (This is a conservative config for an Enterprise+ lic.) This entitles me to (48GBx2) 96GB of configured vRAM. With 192GB installed, I’m only able to allocate half of the installed memory before I have to purchase another CPU license… Now, How to I explain to my CIO & CEO that I need 4 CPU licenses for a 2 CPU server? Please Remember, This is a conservative hardware config paired with VMware’s “Top Shelf” license plan.
    I can only hope that VMware will compensate by increasing the number of CPU licenses when/if I convert to vSphere 5 and reduce the cost of the per CPU license when purchased.
    To the VMware Employees monitoring this post:
    Some are saying “There is a big misconception”, and I’m sure some people are confused, but please don’t apply this label to everyone. Many are not confused and have a legitimate cause for concern.
    If I said anything incorrect in my post then please consider me one that is confused and correct me.

  63. Jeremy Edwards

    VMWare, please go back to the old license model. Your explanation of this is insulting the intelligence of VMWare admins, particularly those with larger deployments. You say that vRam is not physical RAM however what you are leaving out is that most admins overallocate RAM, one of the key benefits of virtualization. Therefore, it is more costly than if you were basing licensing on physical RAM. I love VMWare and have been loyal to VMWare for the past 8 years. I work in big environments and we’re about to spend 4 million on a new ESX deployment. If you go messing with licensing like this, I will look elsewhere! Tell whatever executive made this decision that his study is a joke and that they shouldn’t try to pull the wool over our eyes.

  64. David Abowitt

    OK, just ran the script fromhttp://www.virtu-al.net/2011/07/14/vsphere-5-license-entitlements/
    I have two sites; 1 site has 2 ESX servers each with 2 CPU’s licenesed Enterprise. 2nd site is single ESX server with 2 CPU’s lic.
    From the report
    Site 1
    Pooled VRAM 128GB
    # VM Powered: 31
    Current VRam Usage: 141GB
    % 110
    Site 2
    Pooled VRam: 64GB
    # VM Powered: 5
    Current VRam Usage: 26
    40%
    So my primary site is overprovisioned and if I don’t consolidate a couple of TIer 3 servers then I need more licenses but I’m stopped dead in my tracks on deployment of newer OS 64bit systems that I typically give 8GB. I big time underprovisioned at my 2nd site but its just a branch office.
    I am a SMB and having 35 servers, AD, F/P, Mail, OCS, Link, BB, Web, system Management, etc… I’m not that far out there on my design based on consolidations that virtualization was going to provide us. I currently pay 10K for annual support and I know I won’t get any more money for new licenses or support funds as we have a 10% budget cut as it is.
    Thanks VMWare

  65. Matt

    I have just migrated our company to a new vSphere 4.1 setup with nearly 2TB of memory, some of our Dev servers run at a very high density and the fact we have to pay full cost at the moment compared to the cut price Microsoft Dev licence is hard to stomach.
    I’ll just be duplicating comments already made on here but I cannot stress enough how difficult it is already to defend against Hyper V as we already buy a dacenter licence per host.
    Please back down on this and sack the guy who thought it was a good idea.
    Thanks
    Matt

  66. Andrew Upson

    The vRAM Entitlement should be something like: Std 64GB Ent 128GB Ent Plus 256GB
    This would make more sense and provide the same value as 4.1.
    But with the current vRAM Entitlement, I will be going Hyper-V with my new deployment.

  67. Mark

    Well I hope vSphere 4.1 sticks around long enough for everyone to migrate to an alternative, cost effective vplatform .
    Does anyone know of a good V2P tool…..

  68. jeffloo

    If this doesn’t change then we will be forced to implement hyper-v or xenserver. I can’t pay more money to limit our options. Say good bye to our 500k worth of patronage.

  69. Greg

    We have an IBM HX5 blade with a MAX5 memory expansion blade attached, combined that gives us access to 320GB of Ram, While there are only 2 processors we’ve found that processing power is never used above 25%, it’s all about the ram so we’re going to allocate it. So we need 10 Enterprise licenses with vSphere 5, in vSphere 4 we needed 2…
    And that’s not the half of it, below is the physical capacity of this blade if we loaded it fully. Tell me who wins… VMWARE.
    Up to two Intel® Xeon® E7-4800 or E7-2800 series processors. Scalable to four processors in a double-wide form factor
    Up to 256 GB of memory with 16 VLP DDR3 DIMMs per single-wide 2-socket node; up to 512 GB in double-wide 4-socket configuration
    Scalable MAX5 memory expansion module for up to 640 GB capacity in a double-wide

  70. geekinabox

    This licensing scheme boggles my mind. I fully understand that VMware wants to ensure an on-going revenue source. Can’t blame ‘em.
    *However*, with this pricing model you’ve effectively disicentivized me to want to virtualize many workloads. A week ago I was asked to create 3 8 vCPU VMs w/ > 128GB of memory each. I happily said yes, welcoming a large-workload posterchild into the virtual environment under a set of economics that were still relatively efficient and made sense (I’d bite the bullet on the infrastructure). Today, because I’d now have to account for and justify $28k for vRAM entitlements here, I called that customer and said NO: Go physical.
    VMware’s hubris has finally caught up with it. They seem to think that cost is no longer an issue … i.e., that all of the other benefits of virtualization technologies such as DRS, HA, SRM, vMotion, etc. will outweigh cost factors @ the end of the day. So not true. At the end of the day, at our corporations, the almighty $$ is our bottom-line, too … and in the time of tight budgets and efficiencies the soft benefits don’t win the argument, even when they have longer-term value.
    At the end of the day, this revised licensing scheme makes the “100% virtualized enterprise” all the more infeasible. Great, VMware … your technology now allows me to create Monster VMs, but your pricing is telling me to do anything but. Now I have to skimp. Micro-manage. Fight political battles on whether a VM gets 3 or 4 GB of memory. You’ve just made ‘virtualization everywhere’ into a less compelling direction. You’ve made me, a staunch VMware advocate, actually utter the words “Hyper-V” and “KVM”. Your competition thanks you.

  71. Greg

    I just checked out Citrix Xen Pricing.
    VMware goes to a RAM, er excuse me vRam (psst same thing, unless you buy Ram to leave it idle…) based licensing driving up the cost on newer high ram capacity servers
    Citrix adopts a per server license regardless or Ram or CPU.
    Citrix must be sending VMware flowers….
    Good thing I don’t have any VMware stock, perhaps I’ll invest in Citrix…

  72. Iceland

    Sad to say but Vmware has just priced them out of the market, i have right now 6 Enterprise customers doing a recap on there license with Vmware, and as of right now will not renew there version 4 license or exempt EUL on the version 5. HyperV and Xen are going to be the high flyer for this year.

  73. jmart

    For a bunch of technical folk, you would think that there would be less emotion and more calculation. I’ve run the #’s with 12 of my customers so far and all but 1 is going to reap some serious benefit to the change. The 1 that isn’t runs UCS blades packed dense with RAM (2 sockets & 256GB RAM).
    Priced out of the market? VMware stock going down? Many of you sound like that crazy wench Nancy Grace. All noise with no facts. RUN THE CALCULATORS FOR YOURSELF. Of course there will be some outlying cases, you can’t please all the people all the time, but 90% of the customers are either unaffected or will benefit to some degree. If not, you also have the option to do what you should have done a long time ago….RIGHT SIZE YOUR VM’s.

  74. mrideia

    Remember one ESX update patch fiasco years ago that put our licensing in doubt and we couldn’t start our vms once stopped? – Well i recall that i tried vmware phone support that day and all lines where flooded including the ones outside my country. I only got support through local reseller…
    That gave me the idea to us act as one:
    I suggest to all with support contract or not to call country vmware phone assistance on the 29 July to tell to the operator what are our polite thoughts about the new licensing and how it affects our organization if not discontinued. Those on vacation can delegate task to coworker.
    -what better customer dislike feedback vmware gets through their phone recording assistance system?
    If you actively approve please post this message in all community forums where not available to pass the message.

  75. Marcus, Bristol. UK.

    I agree with this comment above:-
    The vRAM Entitlement should be something like: Std 64GB Ent 128GB Ent Plus 256GB
    This would make more sense and provide the same value as 4.1.
    I have been specifying VMHost Servers with 120GB of RAM for either Essentials Plus or Standard edition. The proposed new licensing model is very unfavourable for some of our 2, 3 or 4 x VMHost Server environments.
    We’re not a huge reseller but do have quite a few successful deployments of Ess Plus, Standard and Enterprise.
    We’ll be re-assessing our VM vendor strategy based on the unfavourable licensing model proposed in vSphere 5

  76. Adam

    It appears as if the pricing wizards at EMC have finally placed their price jacking for capacity hands in the cookie jar. Huge mistake by VMWare! The math of quad proc 8 core boxes that max at 198gb ram to break even with todays pricing model is simply unrealistic of the way machines can grow today. Quad proc boxes that can max 2TB of memory to really take advantage of scale requires roughly 40+ licenses under the new pricing model vs. 4. I’m not sure VMWare’s key business partner Cisco is going to like their UCS dual proc 384gb ram boxes requiring roughly $30k in software licensing each. For the pricing not to affect you, it’ll require more money in hardware as smaller memory footprint pc’s are required with more proc power that will just sit wasted due to memory constraints. If VMWare thinks they are untying the licensing from physical hardware they are sadly mistaken. One Ent Plus license is now tied to 48gb or Ram. Sounds like a physical hardware limitation to me

  77. John E Pace II

    This article starts out correctly. Many people are confusing the new vaporRAM licensing with actually RAM. They are different. If you have a server with 48GB of RAM and a 20% vaporRAM overcommitment, you will NOT be charged $4369 for an enterprise license, you will instead be gouged $8738 for 2 Enterprise plus licenses. That’s correct, you will be charged for the 58GB of allocated vaporRAM.
    This article really is smoke and mirrors. VMware is calling this change a memory “entitlement”. That is a misnomer. An entitlement is a guaranteed beneficial extra. In other words, an entitlement gets you more of something and a guarantee that it will be available in the future. So let’s look at that.
    Prior to this licensing change, we could use an infinite amount of vRAM. VMware themselves encouraged us to over-commit vRAM (using more RAM than we actually had) in order to increase consolidation and ROI. This new licensing model caps vRAM commitment, This is not an entitlement, but rather a restriction or, since we are using economic terms, rationed allotment.
    This creates a huge cost increase for many of us in terms of virtualization. Further, since VMware themselves encouraged us to scale-up our server farm virtualizations, this move amounts to a bait and switch tactic. After getting customers to commit to a product feature, they jack the price out the roof. The trouble here is two-fold. Not only did VMware gouge their customer base, they also encouraged customers to move in a direction that pinched them in a corner. It borders on a breach of ethics.
    Here is a last set of numbers for you. If your server farm has dual 12 core CPUs in each server and 256GB of real RAM with a 20% RAM overcommitment, your previous scale-up cost of virtualization for each server was $4,369. Now, under the new “cap and ration” model, your scale-up cost will be $26,214 per server. This buys 6 Enterprise plus licenses which “entitles” you to use 288MB of vaporRAM. OOPS!! Don’t forget the 20% overcommitment of RAM!! That’s right, the 20% overcommitment of RAM means that you allocated 308GB of vaporRAM as VMware encouraged you to do. This server now costs you $30,583 instead of the $4,369 you originally budgeted. That is a whopping 700% increase in cost!! If you have 25 physical servers in your server farm, your budgeted cost of upgrading would have been $109,225. You real cost is now $764,575. Yup, you read that right. Your cost increase from $110,000 for upgrades to over three quarters of a million dollars!! To put it bluntly, your CFO ain’t gonna be happy, but VMware’s CFO will love you!

  78. Henry Foblers

    Bottom line is most existing customers will have to pay more to upgrade to vSphere 5. We are now getting a charge for how much vRAM we use and the vRAM limits that have been proposed are a joke for most medium to large companies using vSphere. Another thing is I have been loyal to vSphere whilst other have been really looking at other virtualisation products, now I have egg on my face.

  79. C. Smith

    If I’m reading this correctly, the license model is based on existing customers, the vast majority if which are running 3 gig memory systems.
    ??
    So, we’ve now configured a pricing model for every school, NotForProfit, Govt.Agency, home-sk00led fanboy and we’re applying it to the rest of us that actually work for a living trying to make money so we can support your idiotic 3-gig calculation per VM.
    Like they say in the movies, ‘It never pays to go Full Retard”
    Congrats, I think you’ve done it.

  80. James

    So my existing Enterprise Plus licenses for unlimited physical RAM will now be limited to 48GB of vRAM?
    And this is supposed to be an upgrade, right?
    So a dual-socket 128GB box now requires 3 licenses to be fully utilized, and 4 if overcommitted 20%? Under 4.1 Ent+, this was all included.
    Also, if this is supposed to get rid of the “outdated” model of capacity-based licenses, then why is it still bound to CPU sockets? License on sockets, or license on vRAM… not both at the same time. Give us the option, or at least keep Enterprise Plus unlimited.
    I can’t believe the license doc actually says this model can require less licenses. That’s not possible because the minimum number of licenses it STILL based on CPU sockets, and the maximum number of licenses is now based on vRAM, which means an increase in licensing for all large deployments. Small shops don’t use VMWare anyway because the licenses cost more than the hardware required to remain physical and no CFO will sign off on the soft benefits.

  81. Sid

    If VMware is going with a cloud-based licensing model, why is it still based on physical CPU’s? Why not license based on vCPU’s and vRAM instead? And skip the whole Standard/Enterprise/Enterprise Plus versions. That way customers can put whatever hardware they want – they’re licensing VM resources instead, and can grow licensing based on the VM’s they’re running.

  82. Flan5ter

    We will not be upgrading to vSphere 5. We have most of our hosts with 256GB RAM, we have 30 hosts. We haven’t even installed Hyper-V, now we will be investigating it’s use. How stupid can a company be to not realise what this change would cause. This happened from 3.x to 4.x with the additional features of Enterprise Plus and having to pay extra for them, which still leaves a bad taste. VMware have lost out trust and we will not be forced down this licensing model. Just to re-iterate we have never installed Hyper-V, but now we will be doing so.

  83. Mike

    I have 16 sockets with Enterprise Plus on ESXi 4.1. We have 48GB of RAM per socket deployed.
    Prior to the new licensing by VMware, we were going to 24 sockets with 96G/RAM per socket. The new licensing makes dense RAM configurations not cost-effective.
    Given that EMC owns VMware this move is not surprising and was a long time in the making. BTW, we are no longer running on EMC since it is also not cost-effective ….
    Bye, bye VMware. RIP. It was fun while it lasted.
    Xen, Hyper-V and Citrix look really interesting now ….

  84. Paul Woodward

    I believe VMware has chosen the correct new licensing model but think the amount of vRAM per socket is considerably less than most of your customers are using. I’m not sure where you got 5.7 but I believe most large customers whom have been using VMware for more than a year or two would have much higher ratios. I think VMware should consider and look to allocate about twice the vRAM per license model. This is based from my own epxerience where the average VM vRAM has been increasing due to W2K8 and x64 OS’s and consolidation ratios are more like 10:1 to 25:1.
    http://runningvm.wordpress.com/2011/07/13/vsphere-5-release/

  85. Rod

    sad to see that this company is once again pissing their customers into the face, probably best to stay as long as possible with 4.1 and then go KVM, for the saving from licencing costs we can employ a bunch of people who are managing the cluster. and we definitely should not allow a company that over and over again misleads their customers to be successful. when you look how ridiculous it is how the vmware marketing army is depicting stuff like this as an improvement it is really time to go elsewhere, you can’t take those guys serious anymore

  86. Marc

    This is just wrong in sooooo many ways….
    I’ll stick to 4.1 until my HW dies then move on with Citrix or HyperV….
    Thanks you VMware for screwing us!

  87. DanPan

    >> Let’s look at an example: if you have 100 VMs with 4GB of vRAM each, then you need a vRAM pool of 400GB. If you are running vSphere 5 Enterprise (with 32GB of vRAM entitlement per processor license) then you need 400GB / 32BG = 13 licenses.
    In this example I would suggest to run the 100 VMs on 2 hosts (4CPU/256GB), buy vSphere 5 Enterprise licenses, downgrade them to v4 (no vRAM entitlements) and run the VMs on vSphere4 host.
    With this setup you only need 8 licenses (2×4) instead of 13.
    cost saving 13->8 or 62,5% or $17,5k
    To wrap up, stay on 4.1 for another year or two and then migrate to a competing platform.

  88. DanPan

    >> The design point of the licensing change was not to increase licensing costs, and we believe 90+% of our customers will not see a licensing cost increase.
    Are you sure?
    Enterprise customers who invested in a scale-up infrastructure strategy will see a HUGH increase in licensing cost when migrating to vSphere 5.
    Some cases:
    Host 1 (HP DL580G7)
    Sockets 4
    Cores 32 (4*8)
    RAM 1TB
    no memory/CPU overcommitment
    32x VM 1vCPU/32GB
    vSphere 4 = 4 Licenses Enterprise+ (4 * 1)
    same config above upgraded to vSphere 5 = 21 Licenses Enterprise+ (32 * 32 / 48)
    ==> from 4 to 21 = increase of 425% on license cost!!
    ———————————–
    Host 2 (HP DL580G7)
    Sockets 4
    Cores 32 (4*8)
    RAM 512GB
    no memory/CPU overcommitment
    32x VM 1vCPU/16GB
    vSphere 4 = 4 Licenses Enterprise+ (4 * 1)
    same config above upgraded to vSphere 5 = 11 Licenses Enterprise+ (32 * 16 / 48)
    ==> from 4 to 11 = increase of 175% on license cost!!
    —————————–
    Host 3 (HP DL580G7)
    Sockets 4
    Cores 32 (4*8)
    RAM 256GB
    no memory/CPU overcommitment
    32x VM 1vCPU/8GB
    vSphere 4 = 4 Licenses Enterprise+ (4 * 1)
    same config above upgraded to vSphere 5 = 6 Licenses Enterprise+ (32 * 8 / 48)
    ==> from 4 to 6 = increase of 50% on license cost!!
    —————————–
    Host 4 (HP DL580G7)
    Sockets 2
    Cores 16 (2*8)
    RAM 128GB
    no memory/CPU overcommitment
    16x VM 1vCPU/8GB
    vSphere 4 = 2 Licenses Enterprise+ (2 * 1)
    same config above upgraded to vSphere 5 = 3 Licenses Enterprise+ (16 * 8 / 48)
    ==> from 2 to 3 = increase of 50% on license cost!!
    —————————–
    Please show me how i can migrate these realistic workloads to vSphere 5 with an increase on license cost LESS than 50%.
    You can not…
    Why: VMware based there vRAM entitlement on a ratio 5:1 and max. 48GB / phycical CPU, which is NOT the reality for enterprise customers!

  89. DanPan

    >> When we began the process of developing the new model, we set out to find a way to evolve vSphere’s licensing to lay the foundation for customers to adopt a more “cloud-like” IT cost model. We were looking to develop a model that would be more congruent with the technology architecture of the virtual and cloud world, where resources are pooled for maximum utilization. In short, we wanted a model based on consumption and value rather than physical components and capacity.
    For 1 VM with 32 vCPU/1TB RAM you will need to buy 21 (twenty one) vSphere5 Enterprise Plus licenses or $73.500 !!!
    (1TB : 48GB per license = 21 licenses * $3.500 = $73.500)
    This VM can be hosted on 1x vSphere DL580 G7 4CPU 8Cores X7550 1TB RAM.
    VMware has tried to tell us that this new license model was done to benefit the customer. If that is the case let the customer choose between a V4 and a V5 model and let the customer decide what is best. Problem solved and everybody happy!
    What do you think most of them would choose?

  90. Mihai

    VMware, if you’re smart double the vRAM for Enterprise+ license otherwise you will lose big, no one will virtualize enterprise workloads anymore, it will just be too expensive!
    There’s no reason to have a 1TB VM possible if it costs close to $100k in licensing alone, it’s much cheaper to go physical.

  91. Not happy

    Thankyou vmware, you are making this easy for me. I’ve been a huge fan of you’re esxi free server to sell into our SMB marked customers, so that I later could purphase a license since they already had vmware installed. But no more. Not with this BS. We will most likely be switching to eighter Hyper-V or XENserver if you keep up with this pricing. You’re way to expensive

  92. matt

    We are in the process of migrating to a completly virtual environment. VMware WAS the preferred vendor until we saw the new pricing model.
    The CFO just told us that VMware is OUT of the selection mix. This means we are almost assured to go HyperV now.
    I really don’t understand how a company can do this? Microsoft has never REDUCED capability, then just make new features an additional CAL. This still hurts, but if your an SA customer you get the new CALs for free. If you don’t want the new features your not stuck.
    If I was still working for a consulting company that sold VMware I would be getting my techs trained ASAP on the competition.
    Microsoft execs must be laughing. VMware is HANDING them customers.

  93. Rick Wininger

    I have 50 servers that have quad hexacore and 512 GB RAM The average vm has 3 GB RAM. We have no choice but to use the subscription model Enterprise Plus,and be charged for half of the configured VM ram. The Vmware consultant went over everything and confirmed my fears. And what a pretty corporate spin he was giving me. He told me the subscription is based on the first 50% of configured RAM, and “you guys ARE going to be charging your customers when they go over 50%”!!!!!! Are you serious dude!!!! 170 VM’s x 50 servers = 8500 VM’s totaling 25 TB of RAM (obviously I will need more servers to not max out). However, by Vmwares own calculations the subscription price comes to $91000 per month. You read that correctly, per month!!!!! Oh that’s right, I’m supposed to charge the customer when they use more than 50% RAM. That should yield a few hundred dollars per year. On another note Site Recovery Manager is now $495 per vm. Let me see, I have a customer that has 1000 VM’s, wants SRM and it costs $495000? I seriously think SRM will be a player. It would be cheaper for me to hire 2 or 3 programmers and script our own version. These numbers were confirmed folks. We are still on Vsphere 4.1 and will be converting to HyperV. Not looking forward to the mass conversions but vSphere 5 will put us out of business.

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