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Changes to the vRAM licensing model introduced on July 12, 2011

As many of you know, with the introduction of vSphere 5 we also announced changes to the vSphere licensing model in order to align costs with the benefits of virtualization rather than with the physical attributes of each individual server.  These changes generated debate in the blogosphere, across the VMware communities, and in conversations with customers and partners.  Some of the discussion had to do with confusion around the changes.  We have been watching the commentaries on the blogs very carefully, and we have been listening in the customer conversations very intently. We got a ton of feedback that probed the impact of the new licensing model on every possible use case and scenario, and equally important, reflected our customers’ intense passion for VMware.

We are a company built on customer goodwill and we take customer feedback to heart.  Our primary objective is to do right by our customers, and we are announcing three changes to the vSphere 5 licensing model that address the three most recurring areas of customer feedback:

  • We’ve increased vRAM entitlements for all vSphere editions, including the doubling of the entitlements for vSphere Enterprise and Enterprise Plus.

  • We’ve capped the amount of vRAM we count in any given VM, so that no VM, not even the “monster” 1TB vRAM VM, would cost more than one vSphere Enterprise Plus license.

  • We adjusted our model to be much more flexible around transient workloads, and short-term spikes that are typical in test & dev environments for example.

Below is a description of what we heard from our customers and partners, the changes we are making and the impact we expect they will have:

Customer feedback

The vSphere 5 licensing model…

Changes to the vSphere 5 licensing model


1. Affects only a small percentage of customers today, but customers are concerned about their future-looking business cases based on new powerful hardware capabilities

Substantially raise the vRAM entitlements per vSphere edition from 48/32/24/24/24 GB to 96/64/32/32/32 GB

With these increased vRAM entitlements, hardly any customer will be impacted by higher licensing costs upon upgrading to vSphere 5

2.  Introduces additional hesitation for virtualizing business critical apps

Cap the amount of vRAM counted per VM at 96GB[i]

No application, doesn’t matter how big, will require more than one vSphere (Ent+) license to be virtualized

3.  Penalizes short lived usage “spikes” in dev & test, and transient VMs

Calculate a 12 month average of consumed vRAM rather than a high water mark

Short lived “spikes” will increase the 12 month average a little but a customer will not be required to pay for them in perpetuity

[i] Note: this change will NOT be reflected in the native vCenter Server 5 vRAM reporting capability at GA time; it will be included in a future vCenter Server 5 update release. However, before such update release is available, customers will be able to use a stand-alone free utility for tracking vRAM usage that will reflect this change.

To recap, here is a comparison of the previously announced and the currently unveiled vSphere 5 vRAM entitlements per vSphere edition

vSphere Edition

Previous vRAM Entitlement

New vRAM Entitlement

vSphere Enterprise+

48 GB

96 GB

vSphere Enterprise

32 GB

64 GB

vSphere Standard

24 GB

32 GB

vSphere Essentials+

24 GB

32 GB

vSphere Essentials

24 GB

32 GB

Free vSphere Hypervisor

8 GB

32 GB[ii]

vSphere Desktop



[ii] this limit is GB of physical RAM per physical server

I should also point out that the concern around using vSphere 5 for VDI was already addressed with the vSphere Desktop edition. The vSphere Desktop edition does not have any vRAM entitlements, and allows customers to purchase vSphere for VDI use case.  vSphere Desktop is licensed on the total number of Powered On Desktop Virtual Machines.

We are confident that our vSphere 5 licensing model based on pooled vRAM is the right one for the cloud computing era. We are fully committed to meeting our customers’ and partners’ unique needs, and have several resources available to help customers understand how the new licensing model applies to their environment. I would specifically point you to the ROI calculator on upgrading to vSphere 5, as well as a tool you can apply against your VI3.5 or vSphere 4 environment to ascertain your vRAM consumption, and therefore any impact on vSphere 5 licensing.

Bogomil Balkansky
VP, Product Management

49 thoughts on “Changes to the vRAM licensing model introduced on July 12, 2011

  1. Ashraf Al-Dabbas

    That is a welcome change indeed, the only thing missing is a clear intent to increase vRAM Entitlement, with the decrease of physical RAM prices; As every body knows the amount of RAM one can buy for 200$ doubles every 18 months or so:)

  2. William Roush

    Still doesn’t align with modern hardware (with newer stuff due out likely before v5 is released), and penalizes use of TPS and over-commit.
    At least I can use the free one at home, but TCO for v5 is still more than v4, which is going to be a tough one for us.

  3. Unixman

    Sorry but this is still taking the piss, the vRAM limits are still too low in my opinion especially for those who have very high consolidation ratios on big hardware. This basically means we need more servers to fit the vRAM model – Roll on Citrix I think.

  4. anjanesh babu

    At least the customer focused side of VMWare is still alive.
    This is common sense winning over commercial gains driven by someone in marketing who killed the rest by powerpoint.

  5. Roger

    It still means that I will NOT be able to upgrade my 4.1 vSphere Essentials environments to 5.0 without having to upgrade to 8 licences of standard edition, and that’s before Moore’s LAW kicks in over the next 12-18 months.

  6. Steven J

    I thought the original entitlements were too low but believe the new ones are very reasonable for today. Very happy to hear this!
    I think the point is being missed in some of these comments. As RAM increases the density of VMs per host increases. This means if the license model wasn’t changed then over time the costs for running vSphere could decrease dramatically.
    The new license model is to address this and maintain a reasonable level of charges for the level of virtualisation you are doing. You might find with the new licensing the price per host has increased but the overall price of virtualisation (i.e. avg cost per vm) would not have dramatically increased. Since there is no easy way to charge on a per VM basis this is the most sensible licensing model approach in my opinion. With this product, all the features and the fact nothing comes close I think the new charges are fair.

  7. Seashellkc

    In the rare instance of using View Add-on licenses for say, 10x 2GB vDesktops, I take it that this 20GB doesn’t count into vRAM entitlement?

  8. Andrew

    Well done VMWare, you’ve obviously listened. I still thnk 128GB for E+ would be more realistic and I’d still like to know how these limits will change as hardware and apps change (thinking moore’s law and hungrier apps).
    Still, overall a decent change to your original proposal.

  9. Joshdel

    All too common theme. This is equivalent to raising gas prices to 5$/ gal –> dropping the price 6 mo later to $4.50/gal and telling us this we’re getting a great deal.

  10. Steven J

    @Joshdel We in Europe pay 4x what you do for our petrol/diesel (gas) so don’t get me started 😛
    I think the bottom line is the model had to change since it would become less and less profitable for VMware over time. You probably won’t really be paying anymore unless you are scaling up/out your infrastructure and you’d still have to buy more licenses in vSphere 4 to do this anyway. If you were keeping the infrastructure at the same size I bet you wouldn’t be paying any more.

  11. Brendan

    The raising of limits eliminates most of my concerns with upgrading our environment. It also means I can upgrade my ESXi server at home.
    I’m glad to see VMware address this.

  12. Mike Tallman

    While I applaud the effort, it doesn’t go far enough. In our current version 4 Essentials+ environment, we already exceed the RAM allowed under the new and improved version 5 license. The choices aren’t good. We either upgrade and reduce the amount of RAM, or jump to a MUCH more expensive license. This is still providing us a disincentive to upgrade.

  13. Concerned Customer

    Some improvement…
    License vRAM allocations are still too low. I now either have to purchase 4.5 licenses per server of Ent or upgrade to E+ and purchase 3 copies per server. Nine licenses for 3 servers… troubling
    The modern blade server can carry 256GB of RAM. So how about Ent 128GB, E+ 256GB? The disconnect is VMware waited too long to make the shift to this pricing model, it should be introduced in line with modern server capabilities, not the ones I bought almost 3 years ago.
    Can you again tell me again how that’s a great deal, I missed something?
    Long live V4.1 and Citrix – let’s start talking.
    I was about to jump into a VDI initative with VMware, but am now seriously re-considering my options. I don’t want to get raped on a View V5 upgrade when that comes out. Fool me once, shame on you……

  14. Roger

    I agree with posts above, with a 32GB limit on Essentials 4 products why would I would advise my clients to upgrade? It will cost more money. The Essentials market is for SME’s who cannot afford the Enterprise licenses to begin with. I feel this is a big rip off and I’m very dissapointed and will be looking to change over if this isnt rectified. All future business will go through alternative Hypervisors…

  15. 9

    Missed the mark. VMware since its inception has been pushing the value of the raw hypervisor lower and lower by showing how to accomplish the virtualization in hardware. The value of VMware lies with the management of VMs. Most of the newer features (srm…) are licensed by groups of vms which makes more logical sense and scales based on usage. The new licensing model incents people to stay on prior versions and if going to the newest version to utilize less expensive hardware. It makes little sense to tie back to hardware when the product is suppose to enable the use of less hardware.

  16. Tanner

    So I am still confused…. We have to now pay for each VM based on the amount of vRAM per VM, rather than the amount of pRAM on the host machine? So for each time I want to spin up another VM, I have to pay again to use that vRAM?

  17. Charles

    I agree with many posters here that the vRAM limit is way too low, considering how cheap RAM is these days. We can easily purchase a server with a high amount of RAM for a reasonable price, but we get hit with a huge license cost from EMC for VMware.
    This really shows how EMC appreciates its customer base by raising its prices.

  18. Koen

    Why don’t they change the license model so that you can at least address the same amount of memory then on ESX 4.1. for a 2 socket system.
    Or create a license model that is based on the number of virtual CPU”s and get some real word number of VM’s that can run on a dual socket machine let say between 25-50 / vCPU for a license

  19. james machado

    You would think that VMware was just purchased by Microsoft with these antics. In these times of shrinking IT budgets and austerity this is just adding Insult to Injury.
    I had counted on VMware for the future deployments of workstation virtualization and continuation of my server virtualization initiatives. I can see that it is time to look to other vendors.
    There is a difference to paying more for improvements and additional capabilities. It is something else to pay more to do maintain the status quo. Too little too late.
    VMware you have screwed the pooch this time.

  20. Mike

    This is still pretty awful…. I was just talking to my rep how much I love VMware then bam this crap. Even the new limits suck let alone the old ones were nightmare. Yes many of us are using 192-256 GB of RAM on our blades/standalone servers. You are now making us pay a ridiculous amount mount per server than we already pay.

  21. Daniel Priem

    This is still not enough.
    We are running 3 servers, with 96GB pRAM each, under vsphere 4.1 essential.
    Now imagine how much more would be the cost when as example we have 30 VM with 10GB vRAM.
    actual i can run such a setup without paying more under 4.1. The upgrade to 5.0 will require me to buy a lots of licenses.
    No way. vsphere has kicked themselve out of the market for SMB.

  22. Amish Chudasama

    We are blown away by this new model and soon will be penalized for being aggressive adopters of VM. Last year, we made huge investment in hardware (VM hosts) and paid premium for servers with very high memory upgrade capabilities. We also paid premium price for 16gb memory modules so we can scale up to more than half TB and get maximum benefit of VM licenses investment and budgeted the projects accordingly.
    Now, we will be forced to buy more VM licenses to continue on our aggressive plan. I was told by our rep that, we have a choice not to upgrade but the fact is that we all know that in no time, we will get upgrade prescription for any of the issues on version 4.
    We have very strong relationship with MSFT/CTX and have no-choice but get back to the table and explore the options to use VM only in the areas where its absolutely necessary.

  23. Rick Meeker

    So many negative waves…
    It’s obvious that this move was made to stave off the effects of what will be declining revenue. Sorry VMWare, you really need to re-think (again) on the vRAM entitlements, and just simply deal with a short-term loss in projected revenue.
    So, perhaps there might be a good compromise solution to this conundrum. Maybe VMWare should eliminate the CPU socket component to their licensing model and go just on vRAM. In addition to this, how about the idea of tripling the vRAM entitlement from what you’ve just changed it to, VMWare? This may result in a short-term loss in your projected revenue, but you’ll end up with happier customers. Additionally, let’s offer a different disaster recovery component – how about with the removal of CPU-based licensing, we also remove, or significantly reduce, the licensing cost associated with creating a disaster recovery environment that consists of VMWare hosts? Result: DR environments often times have very few VM’s powered on = no vRAM entitlements.
    For everyone else, have fun picking my suggestion apart.
    Btw, how about making suggestions for improvement rather than just complaining?

  24. David in Indy

    As with many other posters I can say that our company followed VMWare’s earlier direction of building hosts to run as many VMs as possible to cut down on power, heat, floor space costs, etc, and now we’re going to be HEAVILY penalized for it with the new licensing model (which, BTW, we will NOT be opting into, VMWare. Hyper-V, here we come.) I spent $4000+ of my own money becoming VMWare certified and now I count that as money lost since very few companies will continue forward with VMWare no matter how superior their products are. I don’t fault VMWare for wanting to raise licensing fees by a reasonable amount but this model (even at the new memory block sizes) will quadruple our costs. There are other mature virtualization solutions we can switch to to obtain a reasonable level of data center operation.
    I think even if VMWare pulls the memory limits in the 5 model many people will leave since this gesture smacks of profiteering and in this time, the money handlers hate that risk. The IT grunts don’t make the final call, VMWare. It’s always the money people and this they will not accept.

  25. Matt

    Crazy… I have 5 servers with 4cpus and 512 gb ram each…and 12 other 128 gb servers… 40 Enterprise licenses in all. Now I have to spend double just to run the same thing. We are already starting a pilot on Hyper-V with plans to find another solution in the next 18 months.

  26. Johannes Rexx

    This is what happens when you build an enterprise solution on a single source proprietary product. Did anybody NOT see this coming? Go find your open systems hats, people.

  27. Al

    There is one major problem with Hyper-V… IT’S A MIRCROSOFT PRODUCT! You should calculate the increased costs for maintaining it, not to mention the increased stress on IT which will affect the moral of the company in general, leading to staff retention problems, etc.. If you have to switch, go open source. Going to Microsoft for the reasons mentioned (vendor lock-in + profiteering, etc.) is a sign of insanity.

  28. unhappy cusomer

    We just Invested over $17K in VMware Licensing for our business (June 2011). Based on our hardware, we calculated, we need upgrade to v5 will cost us an additional $19K. Not possible. We will switch to another v solution. Not happy about it.

  29. Keith Chambers

    I understand the need to protect revenue. Licensing on CPU only isn’t enough to do that. If I were VMware I’d licensing on a combination of CPU and RAM, too.
    Unfortunately the new licensing has been implemented in an inconsistent way: pCPU + vRAM
    Executives in my organization are perpetually confused about the new licensing. I believe it’s the inconsistency.
    I’d prefer pCPU + pRAM. I’d accept vCPU + vRAM.

  30. Steve

    We are now looking very hard at Xen to replace our entire Vmware environment.
    Every one of our hosts has 128G of ram or more.
    We would need to buy an additional 10 licences and to be frank that is a very good reason to look elsewhere.

  31. Ferry

    Still think the current entitlements are quite low.
    Most virtual servers have 4-8G now. 1 CPU, with 6 cores can pretty much run 8-10 of those servers.
    Not to mention it pretty much still bites with memory sharing, if all the servers are running the same OS, you’ll be using *much* less physical ram than assigned virtual RAM. But you pay for the assigned virtual RAM, not the in-use physical RAM.
    We pretty much don’t have issues with the 32GB limit on standard *today*, in 6-12 months, with current RAM increases and prices of RAM dropping, that will be a whole different story.

  32. Chris Scott

    Investigating Hyper-V with VSS2010 Lab Manager. If it works out even reasonably well VMware will probably go away for us. It hurts me to even think that. I love VMware so much, but this new model is just not going to work for us. This is like the Netflix price change, but for corporate users. Take something that everyone loves and then offend every loyal customer. Sad.

  33. Paul Page

    They way i see this is that VMware will definitly loose lots of clients to Microsoft, I cannot believe this stupid changes on licences. After been with VMware with almost 8 years now, they may also loose sales to Canadian Federal Government because they currently drastic cost review and they may decided to go with Microsoft so much cheaper for the new IT Infrastructure departement that will have 8000 employes from each departtement.
    VMware is definitly the greatest product but at what cost….

  34. Ralf Lueders

    I’ve been installing a lot of vSphere servers the last couple of years. This new license model will lead a lot of customers to other vendors, including me. I am looking at QEMU/KVM and OpenQRM right now, and VMware will soon be forgotten. VMWare guys, be smart: make ESXi open-source and market a commercial version for enterprises.

  35. hatari

    96GB of RAM for Enterprise+ is not enough. Its a drop in the bucket. In fact in the few months since this announcement, 96 is laughable. I just put 16GB in my home desktop and you’re telling me that 96GB is the limit for an ENTERPRISE PLUS license. Totally absurd. In another 6 months this licensing is going to look like the stone age.

  36. SAN

    VMware becoming greedy and taking the customers for granted. This will only help other players and I too thinking of alternatives

  37. the rifeman dvd

    96GB of RAM for Enterprise+ is not enough. Its a drop in the bucket. In fact in the few months since this announcement, 96 is laughable. I just put 16GB in my home desktop and you’re telling me that 96GB is the limit for an ENTERPRISE PLUS license. Totally absurd.

  38. Harinder Kohli

    Vmware should immediately remove this cap on RAM.This has generated hate for vmware in end user Community who had invested in vmware.
    Everybody is seriously looking for Hyper v-3 to be released with upcoming windows 8 Server.CIO’s and other IT staff have no time to calculate this vRAM or be under tension.They have enough headches of there own.
    If vmware does not want to go to novell or sun path then they should immediately scrap this.

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  41. Neo Anderson

    I am currently moving toward virtualization. My initial choice was VMware. Even though I currently fall within the limits I fear that this change will spell the death of VMware and I will be forced to go hyper v in the not too distant future. Maybe it’s best to do that now.

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