UPDATE (Aug 3, 2011): VMware changed the licensing model addressing many of the disadvantages laid out in this post. Among them: the monster 1TB VM will not be super expensive and the Enterprise+ license went up to 96GB of vRAM.
The new vSphere 5 licensing information has taken the VMware blogger world by storm. So I thought I might join in the fun.
What’s happened? VMware announced vSphere 5 on July 12, 2011. With all its cool new features, is a new licensing model that is different from the old one. So let’s examine how this effects your organization. Most of the material I got from the vSphere Pricing PDF.
What the licensing change is
Before, the license was per CPU socket. This cost was around $3495 for the Enterprise Plus license. Now the cost is based on CPU sockets and variable amount of vRAM. (VMware argues that vRAM is not the same as physical RAM). One common example is that if you buy 2 Enterprise Plus licenses for a 2 socket system, you’ll get 96GB of vRAM available to use.
Why Licensing had to change
VMware’s white paper spins it as a good thing. (no mystery why they did this). But here is what I think the real reason is: We’ve seen in the last decade a trend of adding more CPU cores per socket. What started out as a dual core movement is now in less than 10 years at 12 cores per socket. Imagine the next few years: 24 cores per socket? 64 cores per socket? 128 cores per socket? Not all that hard to imagine. Also consider the memory DIMMs: 16GB DIMMs, 32 GB DIMMS (those are already here!) 64 GB DIMMs… you get the idea.
So what does this mean for a software company like VMware that licenses per CPU socket? It means that in several years, people won’t need as many CPU socket license because they’ll be able to put more VMs on a physical host, so they’ll need less socket licenses. That means less money for VMware.
VMware like any business is in business to make money, and having profits eroded is not a good thing. So they decided to take action now and make it so that innovations in physical hardware do not erode their earnings.
Who is this change bad for?
This is bad for customers right now who have 2 CPU socket systems with greater than 96GB of memory. Hardware vendors like IBM and Cisco have been showing customers how they can save licensing costs on servers by adding more memory to existing 2 socket servers. For example:
A system like the Cisco B250 which allows up to 384 GB of RAM will now require you pay for 8 licenses instead of 2. This is a huge penalty!
A system like the IBM HX5 which allows up to 256GB of RAM in a single wide blade with two CPU sockets will require you to pay for 6 licenses instead of 2.
This is also bad for people that over allocate Virtual memory. Its common practice for people to overcommit memory. Since you’re paying for vRAM this means that you may be potentially paying more. This is funny because VMware in the past has said overcommitting memory is one of the good reasons to move to virtualization.
Its also bad for people with Virtual Machines with large memory. VMware announced that they can now create a VM with 1TB of memory! That’s great news, but consider the cost in vRAM: That’s 21 Enterprise Plus licenses at $3,495 = $73,395! Probably cheaper to use a real machine for that one?
This is bad for people who use Citrix Xen Desktop with VMware vSphere on the backend. Its interesting that there is a completely different pricing model for people using VMware View with vSphere. I think this licensing issue will force people to make a choice: Go with VMware View or go Xen Desktop with Xen hypervisor on the backend.
The above may not be entirely true. There is also a new product SKU called vSphere 5 Desktop that allows for 100 VM desktops priced at $6500. This license supersedes the vSphere license so if you run Desktop VMs then your cost for the higher memory systems like the Cisco B250 would not go up.
Who is the change is good for?
Well for now its good for the standard 2 socket systems that have less than 96GB of RAM like the HP Proliant BL2x220c G7 blade which allows up to 96GB of RAM per server instance will require 2 per server, so 4. No change here. Same with the Cisco B200s with 16GB DIMMS which goes up to 96GB with 16GB DIMMS. The problem is this won’t last for long. As I mentioned before, RAM and CPU core density will only increase meaning you’ll have to pay more for the licenses. 16GB DIMMs will get cheaper and x86 processors will allow more DIMM slots in the future. (The Cisco B250 already allows 48 DIMM slots on a 2 socket system).
The VMware marketing literature states that the vRAM can be pooled. So if one system in your datacenter has only 16GB of RAM on a 2 socket system, then you’ll get all kinds of vRAM that you can use on other systems that may have more memory.
A proposed better solution
I’m not opposed to VMware making more money. As physical server capabilities increase, VMware wants to get more money out of its utilization. Even though the prices of physical servers will most likely remain the same, it appears VMware software will scale with the number of VMs deployed.
I would propose that there be vRAM entitlements decoupled from the CPU cores that cost less money. For example, instead of paying for 8 vSphere licenses for a Cisco B250, why not make us pay for 2 vSphere 5 licenses plus 6 48GB vRAM entitlements that are priced at a different rate? Make these vRents (vRAM entitlements) 1/4th the cost of the socket license? Here’s the analysis of the B250:
vSphere 4.1 license: 2 licenses: $6,990 (2x$3495)
vSphere 5.0 license: 8 licenses: $27,960 (8x$3495)
my proposal: vSphere 5.0 license + vRents: $12,233 = $6,990 (2x$3495) + $5,243 (6x$873)
I don’t like that its double the cost of the previous vSphere 4.1 but at least its better than the 400% increase of what we had before.
VMware has changed pricing models before. Just ask my friends in the Data center space where they now have to pay for hosting solutions. But VMware is so far ahead of anyone else right now, its hard to know what type of backlash they will get. Sure people will grumble when they need to pay more, but most likely people will just pay it. So Hyper-V and Xen and KVM, what do you have to say to all of this? Its your move!