Last week VMware officially announced vSphere 5. There are some really great new features in this release and vSphere continues to evolve and get better and better. While many of us knew that there was going to be some changes to the licensing we did not know what the changes included. On Tuesday, we found out and if you’ve been on any VMware discussion groups, Twitter, or other social media sites it’s easy to see that the reaction has been very negative. Unfortunately, the frenzy caused by licensing discussions has all but overshadowed the new technology included in this release.
While I initially recoiled at the licensing I’ve tried to take some time over the last several days to put some thought in to how this will realistically affect our customers. There are some great resources to look at to make sure you understand the new licensing as well as how it applies to your environment. First, the official VMware licensing guide for vSphere 5 is here. Justin Lauer started a thread here on the Community forum with links to scripts that will compare your existing environment to a vSphere 5 licensed environment and also has reponses from many people showing their results.
Why Did VMware Change the Licensing?
When licensing last changed, which included more editions of vSphere and CPU core limits, people were also not very happy, but that pales in comparison to the response this time. So why did VMware do it? In my opinion, it’s a move toward more of a per-VM licensing model. Honestly, I expected a direct per-VM licensing model as they have done with other products such as vCloud Director, vShield, and vCenter Operations. When you think about it, is direct per-VM pricing on a hypervisor really fair? Is it fair to charge the same price for a single vCPU 1GB utiliity server as it is for a quad vCPU 16GB database server? Probably not. So how does VMware try to do this the most reasonable and fair way possible? By doing resource licensing, and that’s what they’ve done.
vSphere 5 Licensing Explained
For many this is probably all review, but I wanted to make sure everyone understands how vSphere 5 is licensed. When you buy a license, you still buy a socket license just as you did before. Unlike the vSphere 4 licenses there are no limits on cores. While the core limits have not been a major obstacle over the past year that was about to change. Intel now has 8 and 10-core CPUs. 6-core CPUs are now included in our standard UCS B200 build for customers. While many people have not been forced in to larger licensing purchases in the past I expect that was about to change.
While cores are not limited in vSphere 5 licensing the amount of RAM you provision to virtual machines, called vRAM, is limited. This is important to understand. You do NOT license the total physical RAM (called pRAM) in the cluster. You license the amount of RAM assigned to active virtual machines. If a VM is powered off it doesn’t count toward licensing. The vRAM included in the licenses is pooled across your vCenter instance. If you have 3 clusters managed by a vCenter instance then you can pool all of that and use it where needed, not just on the host or in the cluster where the socket license resides. That’s also very important to understand. If your DR site is managed by the same vCenter then you can use that DR vRAM licensing in your pool.
Most initial “The sky is falling!” claims were made around licensing all pRAM in a cluster. Now, will you ever use all pRAM in a cluster? Yes, you could. You should have some free pRAM in any cluster to account for HA failover capability, but what if you’re very densely consolidated and using, as has been recommended, the memory overcommit features in vSphere? In that case you could be licensing all or even more pRAM than you have in your cluster. But that situation is going to be rare…that is not going to be normal, at least for our customers.
My Thoughts on the Licensing
I have a feeling I’m going to spend a lot of time over the next few weeks explaining this licensing to customers and working with them to see where they stand. In my role I consider myself to be a customer advocate. For a number of years I was on the other side of the table as a customer dealing with licensing costs. This is why I was very negative toward the new licensing, and I’m still not real positive about it but I want to work with our customers to see how this will affect them. People hate complex licensing. It leads to distrust toward the vendor. What has the complex licensing strategies done for Microsoft and Citrix? Are customers happy with it? Rarely. When you make a licensing change like this, whether it costs the customer more or not, they feel like it’s a money grab. They feel like they are being squeezed further. Many feel like they have standardized on vSphere…pushed it through management…positioned it as the standard deployment option…and now they may have to defend themselves over increased licensing, if that’s how they land.
My initial thoughts on the licensing are that the vRAM levels are too low:
- Essentials – 24GB/socket with a maximum of 144GB (Limited to 6 sockets)
- Standard – 24GB/socket
- Enterprise – 32GB/socket
- Enterprise Plus – 48GB/socket
We (Varrow) do a lot of VMware implementations. Our current build is a dual-socket system with 96GB of RAM now that 8GB DIMMs are in line with 2x4GB. Most vSphere environments are memory limited, not CPU limited. The majority of our customers use Enterprise licensing, though that is starting to shift as the value you get with Enterprise Plus has gotten better with 4.1 and now 5. That puts you at two Enterprise socket licenses per host and that equates to 64GB of vRAM, per host. As I said, most of our customers are memory limited, not CPU so this will cause many of them to have to purchase additional licenses. They won’t need one license per host, but they will most likely have to purchase some additional licenses to add to the pRAM pool. If they go up to Ent+ they’ll most likely be fine.
The amount of vRAM per license was based on industry average numbers, according to VMware. My problem with that is that they take the average consolidation ratio (think it was 5.7:1) and average RAM per VM (3GB) and do the math. For anyone serious about virtualization and consolidation 5.7:1 is very low. I would be curious to see the bellcurve on those numbers. This is why I’d like to see those vRAM numbers bumped a bit across the license levels.
Another idea would be to offer vRAM only licenses that could be added to a normal socket license. License a host, then add vRAM as needed. That way you could do two Enterprise licenses for a UCS B200 blade and then take on some more vRAM to the pool to fill those gaps at a lesser cost than the full license. With this method I think customers would be far more understanding.
There are a couple of unintended consequences to this new licensing scheme. First, any time you rock the boat of licensing it causes customers to rethink options. Anyone doing enterprise level virtualization or building a private cloud is probably going to use vSphere, no matter what. The other options just don’t compete, at least yet. The second consequence is the sizing and sales process. This will further complicate and slow that process. My hope…and really my expectation…is that VMware enhances their Capacity Planner tool that we use for sizing to understand vRAM sizing and licensing. That would go a long way to resolving the sales cycle problem.
What You Should Do
For those wondering how this will impact them I have a couple of recommendations. First, go use those scripts I mentioned earlier and see how your current environment stands against the new licensing scheme. See if there is any impact at all. The majority of those I have seen run those scripts are just fine…no increase in licensing. Not everyone is that lucky, but most are and VMware says 95% of customers should see NO increase in licensing costs. Be sure to also post the output of those scripts on the community thread.
Next, if you are not using something like Capacity IQ or Veeam Monitor to monitor and analyze your VMs for “right sizing” I suggest you start. Since licensing is based on configured VM memory it is in your best interest to NOT over provision memory. In the past this wasn’t too big of a problem as unused memory would be utilized by other VMs, but now you pay for that as it comes out of the vRAM pool even if the server doesn’t need it. One thing that I would like to see from VMware is a cut-down version of CapIQ included with vSphere 5. If you want to license based on a resource you should include at least a basic tool to easily monitor and track that resource. I think that would be a very big olive branch to the community. If that is not the case I still recommend you implement something. CapIQ is not expensive, very easy to implement, and provides very good usage and trending information for your environment so you can plan, prioritize, and budget for the future.
Then, put “right sizing” practices in place for all future VM creation. Make sure you only provision what is needed by the application. My expectation is that even those that think they will have to buy more licenses would be a lot better off after they analyze and resize existing VMs.
Finally, if this new licensing scheme has a negative impact on you and your organization let VMware know. John Troyer has asked on Twitter for feedback. VMware is amazingly responsive to the community. One of the best, for sure. They want your feedback. They want your use cases. They want to see why this licensing isn’t a good fit for how you use their products.
Conclusion
To answer the title question, Yes….I do think we are overreacting to the changes. Once the dust has settled, everyone has analyzed their environments, those of us on the sales side have calmed customers down…I think we’ll feel a lot better about this. Also, for those looking for easy ways to know what a VM costs to deploy I think this also helps. vSphere 5 is REALLY good. The new enhancements are even better than they appear at first glance and will continue to show why VMware leads the industry in the tools used to build the cloud.
Very well said.
Eric
This article attempts to be fair, but it is a little short-sighted in that it stresses companies’ current situations. My company increased our total physical RAM by over 2x since last year, so the 1 and 2 TB vRAM totals are certainly on our horizon in the next 1-3 years. Paying upwards of $150,000 in vSphere 5 licensing compared to what we be paying in vSphere 4 licensing is a big difference. I feel we must at least explore other options solely because of this development.
Firstly I will start by saying I am a huge fan of VMware and have always recommended it as the hypervisor of choice if you have the budget. It just feels wrong for me to say anything bad about them so I am seriously biased towards them if I am honest.
That said I do feel they missed the mark with the vRAM limits and really hope they do come out with a a vRAM bolt on type license or alternatively lower the cost of the licenses. If license costs were lowered it would reduce the cost of adoption at the lower end of the market and drive out adoption of HyperV and to a lesser extent XenServer. The higher end of the market would end up paying about the same or even slightly more (which I am sure they would gladly do for the features) but would be able to utilise the value of high density memory servers. At the moment to use a fully loaded UCS blade with 384Gb memory or even 256Gb just wouldnt make sense.
Before someone states it not pRAM but vRAM, I know but who buys pRAM for it just to sit there apart from for HA. This model makes sense for 3 hosts with Ent or Ent Plus licensing where HA maintains capacity for 1 host and the servers only have 96GB (Ent) or 144Gb (Ent Plus). If you run a cluster with 8 hosts or greater then the spare capacity of 1 host covers less overhead and you once again need to scale up the number of licenses.
I havent looked at the scripts mentioned yet but will do that soon to add more perspective, I have just returned from vacation so am still digesting this, perhaps my opinion will change because as I have stated already I am a big VMware fan. Either way I really do whole heartly hope this doesn’t affect the adoption of VMware in a negative way because I have enjoyed working with the product so much and want to continue doing this with more customers.
Good article though Jason
Steven
As Steven stated, save for customers using servers with low RAM density or utilizing a low amount of RAM, everyone is going to pay extra eventually. While someone may have an environment loaded with hosts that have 192GB of RAM yet they’re only allocating an average of 96GB per host, they will eventually hit their vRAM limit and be forced to buy more licenses.
Worse yet, some customers won’t be able to upgrade without purchasing more licenses. I have a customer who I just installed 8 UCS blades servers for. 6 of them are 2 sockets with 192GB of RAM and 2 are 2 sockets with 96GB of RAM. They are using them to retire their current 8 VMware hosts and currently have 16 Enterprise licenses.
Should they move to vSphere 5, they’ll only be able to use 512GB of their 1344GB of pRAM. Due to HA, they’ll only ever use a maximum of 1056GB (one 192GB and one 96GB excluded).
Their current environment will allow them to upgrade to vSphere 5 without additional licenses. However, as their VM sprawl grows, they’ll be forced to purchase up to an additional 17 licenses to use all the RAM they purchased.
I’m sure many other customers are in the same boat: they can squeak by without buying more licenses to get to vSphere 5, but they’ll be capped and cannot use their pRAM to it’s full capacity, even when HA is taken into account.
I understand why VMware made the change, but they executed it poorly and their “you just don’t get it” mantra to customers and partners is leaving a very bad taste in my mouth.
Someone on the VMware forums described the licensing change as trading in your 2 year old BMW for a new one only to discover it won’t shift past 3rd gear. The dealer tells you more money is required to access the higher gears. “96% of our customers don’t shift above 3rd gear anyways,” he tells you. “If you’re shifting your car above 3rd, you’re not driving it right anyways. You should plan your drives more carefully” You protest the price increase and he simply reiterates over and over that you just don’t understand the new pricing terms.
[...] #vTax FUD real life example (Hans DeLeenheer) VMware vSphere 5 licensing explained (Ivo Beerens) vSphere 5 Licensing – Are We Overreacting? (Jason Nash) Is VMware Killing Itself? (Motley Fool) The new vRAM license model in vSphere 5 [...]
The one element missing here is the free ESXi Hypervisor. Many companies use this as do IT engineers to learn their craft. The limit to 8GB on this platform severely restricts this platform. Now, I can understand why VMware are doing this, but as you say about the paid for platform, this limit is too low.
We have implemented ESXi to host MS SBS servers and I can tell you that 8GB would be taken by the primary server and would not allow for expansion. If you have a Premium server your shafted as you will not be able to host the second server.
VMware’s problem is about perception. People will perceive they are being deprived and this will cast doubt in their minds. Once there is doubt about a brand, then people will look elsewhere. I think VMware could simply address this whole issue by revising the limits upwards just a little.
Thanks for an informative article.
I bought 2 socket, 128 GB servers, planning to form 3 clusters, 8 hosts each.
Was about to issue PO for Ent Plus, and deploy VMs to around 128 GB vRAM.
Now I need to pay more. I asked for discount. Was told yes, but still have to top up. The thing is, I can’t increase the budget as all paperwork already done and I’ve already jumped through all the approval red tapes.
I have no choice but to go for Hyper-V now.
Jason, great post. Curious tho, what’s the average consolidation ratio and memory per vm you typically see with your customers? And also how many customers have overprovisioned ram to their VMs in the first place? When I was at a VAR and then EMC, I still saw a ton of overprovisioning.
for those who are experience in virtualization know that high density on memory is the way to go for large deployment, with this new limit set by VMware, my comment is too little. I spoken to my fren who work with vmware solution everyday about the limit on 48GB per CPU, is backward limit they had set. My fren just laugh and agree on the statement. Despite new capability such as 32 vCPU and 2TB memory per VM, the license they imply here had make those new technology no value anymore. How many license do you need to buy to have the machine to run for 1 or 2TB per VM? VMware need to consider it’s marketing and technology, I couldn’t see it gel with each other. Anyway, market is always open, there are users who think is worth to stay with vmware and there also users who think to switch. Let the market decide itself whether vmware made a smart move.
1. The limits are clearly too low. They barely cover most of the current situations and leave no room for growth.
2. Look at all the things you’re asking VMware customers to do in order to make things work with this new model. A good product means I have to do less, not more. Taking away my ability to over-provision not only means that I have to analyze the environment to figure out what the right size is, but I have to jump through the bureaucratic hoops to get everyone else to buy in to that analysis. This is a bad business decision that makes the technology worth less to me.
VMware needs to get their head out of the “cloud” and start paying attention to what the customers they already have are really doing with their products.
What I dislike is that the new licensing model encourages scale out as opposed to scale up and there is little reason to virtualize anything with more than 48GB of RAM.
Yeah I can make a 512GB or 1TB VM now; but its going to cost me more in licensing than the physical platform that houses that server. It’s also one more thing to track which increases the complexity for some of my customers.
I’ve run the numbers for several customers. Some of them will come out at the same price and all of the higher density server customers see an increase in price. One of them is going to require 1 ESX license per 2 VMs (and they have ~1000 VMs) which is a pretty significant difference even when you upgrade to Ent+.
Basically competing products are starting to get “good enough” to the point where maybe it makes sense to give up fancy things like the vDS and storage DRS to avoid paying high prices for virtual machines. It doesn’t make sense to me when 1 gig of physical RAM is around 18-20 dollars and 1 gig of vRAM is ~72 dollars (assuming enterprise plus.) Any gains I can get from virtualization are suddenly eaten away by restrictive licensing costs on top of the additional tools and training required to manage and support the environment.
Even when I run the numbers through VMware’s TCO/ROI analysis tool I end up with VMware no longer being the clear winner.
Jim – I would suggest pushing your VMware rep on the cost. It can take weeks, but make them understand that they either have to allow licensing vSphere 5 in your budget or you cannot afford their solution now that they changed the licensing. Eventually, I suspect they will cave.
Of course, vSphere 4.1 is still a really good platform. I suspect my platforms will continue to run 4.1 for over another year. It is not the new shiny, but it can hold its own still and support many, many workloads.
I keep wondering if VMware is trying to move their Enterprise licensing to a VSPP-like license. Service Providers are paying based on *allocated* memory *per* VM. Jason, you brought up why VMware just did not move to a per VM-base model. Perhaps they are just moving the Enterprise space there a bit more slowly? Hopefully without the pain of the VSPP point system!
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.
VMWare had sought to be a total solution for midsized and some large customers. You could run all of your large and small applications (even SQL or Oracle) – all on one platform. It made system DR and hardware drivers a snap and provided a myriad of great features. Now memory intense applications (like databases) will likely be migrated back to hardware or to another hypervisor. Vmware will have reduced themselves to a Data Center niche player with great technology and an uncertain future. I think that the new licensing model is a really bad move – a simple price increase would have been far less damaging.
[...] all you’re probably aware of VMware’s recently announced licensing changes as discussed here. The rumor came out last week that VMware was going to make some changes to the proposed [...]
[...] your DR site is managed by the same vCenter then you can use that DR vRAM licensing in your pool. (Source) How much vRAM does a VMware vSphere Hypervisor license provide? vSphere Hypervisor license [...]