5 Ways to Lower your 'VMware Tax' with vSphere 5

Outraged VMware customers can take steps to minimize their costs under the company's controversial new licensing model.

By Kevin Fogarty
Fri, July 29, 2011

CIO — It wasn't exactly a secret that VMware (VMW) was planning to change to a licensing model based on a count of virtual machines rather than CPUs for the next version of vSphere, the virtualization and cloud suite that serves as the core of all its cloud and virtualization product strategies.

VMware executives described the new approach, with few details, in early June, as they fanned out to talk about vFabric 5, the Java-based application development platform from SpringSource, which VMware acquired in 2009.

At the time VMware executives said the company would be shifting to a licensing model based on the number of virtual machines on a host server, rather than the number of CPUs.

When VMware formally announced July 12 that the cost of vSphere 5 licenses would be based on the number of virtual machines and amount of memory devoted to them — a complete reversal of its previous CPU-centric pricing model — there was outrage from customers. The new model left many feeling as if VMware was punishing them for having built whole virtual infrastructures using servers with the smallest possible number of CPU cores and highest possible memory. Some were shocked at the reversal; others said the company was taking advantage of its dominant market position in virtualization to squeeze more money out of them.

In vSphere 4 and vSphere 4.1, users paid according to total number of cores in the CPUs in the host server. A server running vSphere 4.1 Standard on servers with 1 CPU with 8 cores and 24 GB of RAM would cost $795, compared to $995 with vSphere 5. A vSphere 5 Standard Edition server includes 24 GB of RAM and costs $995 for the basic license. (Click here for a PDF of the full vSphere v5 pricing model.)

vSphere 5 licenses are based on "vRAM:" the total amount of memory dedicated to each virtual machine, not the limits of the physical server on which they run, according to Tim Stephan, senior director of product marketing at VMware.

That cuts the financial connection between physical server and virtual, and encourages customers to pack as many VMs as possible into each server  something most are trying to do anyway to make their virtual server infrastructures more efficient, according to James Staten, principal analyst of Forrester's Infrastructure and Operations practice.

It's a big switch from license costs based on CPU cores, but makes it easier to manage performance based on the resources in a whole data center, because it allows customers to treat memory in many servers as one large resource pool that can be distributed to VMs according to need, Staten says.

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