There has been a fair amount of conversation and blog posts regarding an issue with the VMware Virtual Disk Development Kit (VDDK) for vSphere 5.1 that may cause backup and restore operations to hang or fail. This is no surprise considering successful backup and recovery of virtual machines is mission-critical to many organizations.
To provide a better understanding, let’s first take a brief look at how the VDDK is utilized by many virtual machine backup and recovery solution vendors: These vendors are permitted to repackage VDDK binaries as part of their solution (provided they sign a redistribution agreement). As new versions of the VDDK are released, backup and recover vendors update their software to include and utilize the new VDDK binaries to protect virtual machines running on the latest versions of vSphere.
VMware naturally released the VDDK 5.1 binaries with vSphere 5.1 to ensure continuity in backup and recovery support via third-party solutions. Shortly after this release, some backup partners reported bugs with the APIs. From the moment these bugs were discovered, VMware has been working and continues to work with impacted partners to enable support for vSphere 5.1 platform by leveraging the VDDK 5.0 U1 APIs. This helps ensure that customers can continue to confidently backup and successfully restore data in their VMware environments. Fixes for the reported issues have been identified and will soon be addressed in an updated version of VDDK 5.1. In the meantime, it is recommended you contact your backup partner simply to verify their vSphere 5.1 support statement.
VMware KB article: http://kb.vmware.com/kb/2039931
More information on VDDK: http://www.vmware.com/support/developer/vddk/
@jhuntervmware

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Does this mean we should be OK backing up with Backup Clients that support VDDK 5.0 U1 to backup vSphere 5.1 VM’s?
Mr. Ballmer, Please check with your backup vendor regarding support. Thank you.
Jeff, any idea when a solution can be expected ?
We certainly cannot commit to a date, but hopefully in the next few months. As mentioned in the article, check with your backup software vendor for clarity on what is currently supported – many vendors have support for vSphere 5.1 in spite of the bug that was discovered.
You would think that for such an important issue, that VMware would move on this faster.
We are also frustrated with the waiting for this problem to be solved.
This issue is reported in december 2012, we are now May 2013, that is almost 6 months ahead..
We had to postpone some of our projects because we cannot upgrade to vSphere 5.1 until this issue is fixed, and these projects are still on hold 6 months later.
I’m getting the feeling we’ll be lucky if this will be solved somewhere before vSphere 6 is launched
Some (not all) issues were resolved with VDDK 5.1.1 > http://www.vmware.com/support/developer/vddk/vddk-511-releasenotes.html
I suspect we will see additional fixes in the next few months. Keep in mind the backup vendors also have to update their software to utilize the latest VDDK components.