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Two Thumbs Up on VMware vSphere 5 Features, Thumbs Down on New Licensing

I have been fortunate enough to be part of the beta program testing and evaluating VMware vSphere 5 for the past few months, one of the many perks of the VMware vExpert program. During this entire time, I have been very excited about all the features that I was testing and evaluating and had been very excited, counting the days to this big announcement, and now that this day is here, I can very happily say, "The best just got better." vSphere 5 is definitely a very feature rich upgrade to its predecessor satisfying most of the features on our wish list.

In this series of blogs, I'll examine all the features of vSphere 5. Today, however, let's dispose of the disappointing licensing news and take a look at what this crown jewel will cost.

While I gave vSphere 5 two thumbs up from a feature standpoint, I cannot but voice my utmost disappointment at the licensing changes that are being introduced with vSphere 5. It's as if someone at VMware took a look at these features and told the technical team, "Awesome job!" and then started whispering into the business ears, "We can charge premium for these quality features and make a killing!"

What is vRAM?
Prior vSphere 5, the licensing model for vSphere was based on processor with the Enterprise Edition having a maximum of six cores with 256GB, while Enterprise Plus was licensed for 12 cores with virtually unlimited memory.

The new licensing is still based on processor, except all limitation on cores and memory has been removed. Instead, licensing is now per-processor with memory entitlements as follows:

  • Standard Edition with 24GB of vRAM
  • Enterprise Edition with 32GB of vRAM
  • Enterprise Plus Edition with 48GB of vRAM

vRAM or virtual memory refers to the memory assigned to a virtual machine. Each edition of vSphere allows a specific amount of vRAM, so if you buy the Enterprise Edition of vSphere with 32GB of vRAM, then you can power up eight virtual machines, assuming each virtual machines is assigned 4GB of ram. That being said, vCenter will pool all the available vRAM from all the ESXi hosts that it manages and is able to compensate for one hosts' lack of vRAM.

So, if you have two ESXi hosts with Enterprise Edition licensing, you would be entitled to 64GB of vRAM. If one host is low on vRAM, and the other host has available vRAM, you can compensate for it. All licenses are aggregated in vCenter in a pool and vCenter will manage the licensing needs based on total available vRAM. When you buy and add an Enterprise license, you increase the pool by 32GB.

I completely understand why VMware changed the licensing model from a per-processor-with-core-limitation to the new model, given Intel's forecast for CPUs with 12 cores or more being a standard -- the old licensing model won't work. But what VMware failed to understand is that it will cost me about three times as much to upgrade to vSphere 5 or to roll out a new environment.

Let's take an example: If you have a 2-socket, 6-core server with 96GB of RAM, you need two vSphere 4 Enterprise licenses. To do the same thing with vSphere 5, you will need three vSphere 5 licenses assuming that all the memory that you have in your servers is allocated to VMs that are powered on.

VMware also must have realized by now that CPU is not the most valuable resource in a virtualized environment. Memory is. So, Intel can increase the number of cores all they want, but we still have about 50 percent or less CPU utilization, even with virtualization. I wish VMware would have left the price the way it was and would encourage enterprises to invest in additional tools that VMware offers, like vShield Endpoint, vCloud Director, SRM and others. Why put a premium on a cloud OS?

Unfortunately, VMware gave Microsoft -- and Citrix, for that matter -- ammo to strike at the cost issue of vSphere 5. I hope that VMware does not suffer from the "greatness" syndrome and think no one will be able to topple it as "cloud king" Citrix just acquired Cloud.com, so you can rest assured XenServer will get significant feature boost. And Microsoft is investing heaviliy in cloud.

Aside from licensing, VMware should be very warmly congratulated on hosting the first real virtual event and generating enough buzz and social interaction, which is only a reflection of how much the community appreciates the hard work and quality software that VMware delivers.

Now, if only at VMworld 2011 in Las Vegas, Stephen Herrod would stand up and announce that based on popular demand, they would be modifying the licensing model to reflect what is in vsphere 4. I suggest VMware keep the vRAM concept, except do it as follows:

  • Standard Edition with 64GB vRAM
  • Enterprise Edition with 256GB vRAM
  • Enterprise Plus Edition with 1TB of vRAM

This more accurately resembles what we are deploying today, makes the customer base happy and encourages an upgrade to vSphere 5.

In my next blog, I'll finally get down to highlighting all the great new features of vSphere 5. Stay tuned!

Posted by Elias Khnaser on 07/12/2011 at 11:48 AM


What is this?

Reader Comments:

Sat, Aug 6, 2011 Elias Khnaser Chicago, IL

I am still trying to make sense of your comment and re-read my blog, the only thing i can see that could have potentially cause some confusion was what i recommend they raise the values to. i should have been clearer and mentioned that my recommendations were on 2 licenses, as a result you would cut my recommednations in half so that it more accurately reflects the per socket license. If that was your complaint, you could have politely asked for clarification and i would have gladly given it. there is no need to be rude, unless something else is bothering you maybe? Eli

Sat, Aug 6, 2011 Elias Khnaser Chicago, IL

I'm sorry, where did i imply what you are saying? that is a poorly written comment while hiding behind an elusive name don't you think? Eli

Wed, Aug 3, 2011

You imply that "we" are today commonly deploying two and four socket boxes with 2TB and 4TB of RAM respectively. I suggest that you are mistaken. Badly mistaken. Shame on you for so poorly comprehending your area of supposed expertise.

Fri, Jul 22, 2011 Filipo Pinto Portugal

I will stay with 4.1 and probably change to Hyper-V later on. I now is not the same but is affordable.

Tue, Jul 19, 2011 harry brown Rochester NY

Being that I have no need for vSphere 5 Standard, I have actually demonstrated that vSphere 5 Enterprise Plus is a better choice (cheaper) than just Enterprise. The prices in the VMware Whitepaper showed the same list prices as vSphere 4. My biggest complaint is that I NOW have to MICROMANAGE my environment. I used to buy large core count servers (48 cores) with a lot of RAM (256GB), and now I have to play Houdini with the numbers. All the while I have to GUESS what I need for budgeting purposes. VMware just screwed Cisco's UCS advantages to having a lot of memory and low core counts. Oh well there goes that relationship.

Mon, Jul 18, 2011

It sounds like you get to use 24 GB per CPU (Std). HW is 2 CPUs (X cores), then you get to use 48 GB of RAM for powered on machines. If your HW has 96 GB RAM you would have to purchase 2 more licenses in order to actually use it. If my example is correct (I may be wrong) then this really sucks. Is VMware trying to help Microsoft with this?

Fri, Jul 15, 2011 Tom Pittsburgh

My only real question is everyone is looking at how many more licenses it is, but I have yet to see a license cost structure. They could very well decrease the per licesne price significantly bringing the price down to where it is now, or even saving costs in some cases. Since you are in with them closer than most of us, can you verify the per license cost is the same?

Thu, Jul 14, 2011 Kartik Singapore

Vsphere is such a great product but you can just force on such expensive licensing. Was very excited and looking forward to this release but very disappointed to see the licensing. It will only drive away customers to Citrix and Microsoft products.

Thu, Jul 14, 2011

Seriously!?, the product is not worth the premium. Like Novell and Banyan Vines before them, when your core technology is relegated to Server OS, you best try to beg, borrow, and steal every customer you can or face their fate... all arguably better product but who cares when 100% of everything you really need is included elsewhere cheaper or at no cost at all. Alta 'la' Vista VMware

Wed, Jul 13, 2011 Chris P Los Angeles, CA

Elias, This is beyond Thumbs Down. This is Epic Fail territory. We've standardized on virtualization servers with 128 GB of memory and this new licensing scheme is insulting, outrageous and unacceptable. I haven't seen what new feature justifies a 3-4x price gouging. Bigger VMs? VM Replication? Microsoft just demo'd both of these this week and announced unlimited replication to boot.

Wed, Jul 13, 2011 Jon

It seems best to look at this at a "per vm" level. By adding more memory (VM capacity) to a host you are paying more money for the host but the cost per VM should stay about the same. Higher consolidation will equal higher price but it's still low. About $250 per VM in my environment. From what I've been reading most companies won't be paying more with their current HW when looking at the total vRAM pool. Licensing is based on allocated vRAM not physical footprint. This new consumption based licensing will bode well in my environment.

Wed, Jul 13, 2011 WS Seattle, WA

This is marketing madness. VMware needs to reign things in - they got to where they are as #1 in market by providing a good combo of free products and fee products with great features. But they have competition and they are opening the door very wide to it. Ever since I put our cluster in, the licensing scheme changes have been painful. Is their goal to create licensing that no one understands (like Microsoft), no one can afford, or both? I have vSphere 4 Advanced licensed to 2 physical CPUs with 96GB of RAM on one host, and 32GB on the other two hosts in the cluster. I can't see any cost-effective way to upgrade. I had thoughts that XenServer might be a better option (still backed by major software company, and more features for free), and now I may have to go to management and suggest that alternative - because they sure don't want to hear in this economy that my supposed cost-savings platform is going up in price drastically. I think VMware is losing track of their core purpose - to allow me to save money by purchasing less physical servers. The break even point on that keeps moving up.

Wed, Jul 13, 2011

All our hosts have 64 GB - 128 GB of RAM. 24 GB for Standard Edition and 32 GB for Enterprise??? Is that a joke? With the utilization of RAM today those limitations won't work for Small Business, let alone the Enterprise market. This will force us to use Citrix or Hyper-V. No way will we continue using vSphere if those limits aren't significantly increased.

Wed, Jul 13, 2011 Jim Barr Cleveland Ohio

We've been happy VMWare customers since the GSX days and have standardized on 12 core 144 GB servers. We still have plenty of headroom in the main farm so the lic changes won't hurt us YET, BUT our Citrix farm will be severely impacted to the tune of approx $30,000 of new licenses. We will either stick with 4.x or seriously consider a move to Xen or HV. The thing is, if we start down that road then I could see us eventually moving it all. I don't mind memory based licensing, it makes sense in the long term but the severe cut from the current memory limits is shameful. And even more so with the SPIN they put on it like it is a new FEATURE. Elias's recommendations of new vRAM limits would go a long way in fixing this disaster.

Wed, Jul 13, 2011 Gary Jackson Loiusville, KY

Wow, what a way to screw all of your loyal customers. I guess that is why a lot of companies are using Linux KVM. Guess I will start to learn :)

Wed, Jul 13, 2011 Philip Coakes Taunton, Somerset, UK

I watched the product launch with interest; some of the new features are very neat and desirable. We are education customers with existing maintenance for Advanced Edition, so we will be entitled to upgrade to Enterprise, which will not present us with licensing problems with our existing VMHosts, but might with our planned upgrades for next year. I will be very interested to see what the price of maintenence for the next year is on Enterprise. I can understand why VMWare have changed the licensing model, but I think they have made a big mistake with the vRam assignments - we could just as easily move to XenServer or HyperV in a couple of years, so this may prove to be the "shoot themselves in the foot moment" for VMWare. Time will tell...

Wed, Jul 13, 2011 Stelios Cyprus

I have 2 ESXi hosts with 2 quad cores and 192GB of memory on each host! I'm afraid to calculate what vSphere 5 will cost me! I have already XenDesktop&XenApp on it so XenServer here we come!

Tue, Jul 12, 2011 Benjamin Salt Lake City, UT

KVM, Hyper-V, or Xen -- at least I won't have to put up with the awful vSphere client anymore.

Tue, Jul 12, 2011 DJ Austin, TX

HyperV or XenServer - here we come. This is not acceptable at all. VMW has already extracted their pound of flesh - no more from us.

Tue, Jul 12, 2011

I expected something was going to happen but this was the worst case. They should have made the limits higher and based it on pram instead of vram. What is the point of paying SA every year when you need to pay each time you want to upgrade. I guess will be staying at 4 in the near future.

Tue, Jul 12, 2011 Rob Merrillville, IN

I am very unhappy with this license change. So on 4.1 Enterprise Plus we could have a dual socket server with 256 gigs of RAM for the price of a 5.0 server with 96 gigs of RAM? No thanks! I don't know if we'll start an instant migration away from VMware because of this but we will not be moving to version 5 any time soon and we will seriously consider alternatives prior to paying for an upgrade. Right now we wouldn't be able to use all of our existing hardware without purchasing more licenses. So much for SnS to get the future versions for 'free'.

Tue, Jul 12, 2011 Michael Melbourne, Aust.

So, we already pay a premium for using vSphere over Xenserver, now we'll be paying an even higher cost to use a sensibly configured server. Looks like we'll have a migration project to plan as well as an infrastructure upgrade !

Tue, Jul 12, 2011 Michael Hart Louisville, KY

I know that this is going to be a hard sell for several of my customers that have ESX/ESXi hosts with over 100GB in them.Looks like they may be stating with vSphere 4.1.

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