vSphere 5 Licensing - The Reality

[chanaka_ek]

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

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

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

So the 'Goners' are

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

The new introduction is,

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

The vRAM limitations are as below and are per CPU

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

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

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

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

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

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

The license costs under vSphere 4 licesing - Enterprise

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

The license costs under vSphere 5 licensing - Enterprise

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

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

This is even worst if you were on vSphere Standard

The license costs under vSphere 4 licensing - Standard

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

The license costs under vSphere 5 licensing - Standard

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

Thats is an increment of 150% approx

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

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

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

Cheers

Chan

[turkina]

Here's another example:

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

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

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

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

[vheff]

Hi Chan,

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

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

[chanaka_ek]

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

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

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