Virtualization Pro

May 8 2009   4:22PM GMT

VMware vSphere licensing commentary and FUD

Texiwill Edward Haletky Profile: Texiwill

VMware’s new approach to licensing has brought on quite a bit of commentary in the virtualization community. People are discussing it on Twitter, in other blogs and over the phone. It’s being discussed in podcasts and whenever virtualization administrators get together. There are several talking points, and they seem to be mostly FUD (fear, uncertainty and doubt), or lack of knowledge.

Here are the main discussion points:

  • VMware should be allowed to make money
  • SMBs want everything for free
  • VMware vSphere is more expensive than Hyper-V or Xen
  • Those at Enterprise license levels are no longer at the top of the license tree
  • Enterprise Licensing is disappearing and there will be a forced upgrade to Enterprise Plus
  • The forced upgrade is timed to correspond to the termination of the most Support and Service (SnS) contracts
  • There is no upgrade path from Essentials to the more advanced license levels without repurchasing
  • VMware does not understand the SMB

So what does this all mean? Do these appear to be in conflict with each other? No. But they are in conflict with the customer in this economic climate.

Most of the above is FUD, but there are grains of truth to every bit of FUD out there.

VMware is a company that is there to make money so it charges for its products, as do the other vendors.  Make no mistake, the total cost of ownership (TCO) for any virtualization product is NOT zero — from any vendor. They all are there to make money, either now, or in the future.  So when talking about TCO you need to look at the immediate costs, such as:

  • The cost of virtualization management
  • The cost of operating system upgrades
  • The cost of possibly replacing existing virtual environment software and licenses
  • The cost associated with training and certification
  • The cost of support
  • and more

All companies are there to make money, but how they do it may not be immediately obvious.

VMware has a new level of licensing, but is it really new? They will expire the current Enterprise License by the end of the year and only offer the new Enterprise Plus license. There will be a cost to upgrade from current Enterprise licenses to the new highest level, but that only happens if you need those features or need to renew your SnS.

The SMB does not want everything for free, but it does want a clearly defined upgrade path. In addition, most SMBs do not mind spending the appropriate monies, although they may not purchase everything at once. They may buy in stages or a la carte instead.

Some SMBs and Enterprise customers may want VMotion, Fault Tolerance (FT) and High Availability (HA) but nothing else. This is basically what’s in the Advanced package, but if a business already has Standard, HA and VMotion, can it easily upgrade to get FT?

Is the new licensing confusing? I think so.

What can VMware do about it? Make licensing simpler or easier to understand for its customers.

How can VMware do this? Solve the problems already brought up by customers.

What should you do as the customer? Until May 21st, you need to go to, click on the Manage Support Contracts link and verify that your current Service and Support contracts are still valid and available. If they are not, get on the phone with VMware and solve the problem. Your SnS must be up-to-date as of the 21st in order for VMware to automatically upgrade your VMware Infrastructure 3 (VI3) licenses to vSphere 4 licenses. If your SnS is not up to date, has expired, or does not exist for some reason, you will need to renew in order to get the automatic upgrade from VI3 to vSphere. Since the license manager is disappearing in vSphere 4, new license keys must be issued.

VMware has some homework to do, so do the customers.  Grades will be issued to everyone based on the ease of receiving and purchasing the upgraded licenses.

3  Comments on this Post

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  • PEdwards
    I agree that VMWare has the right to make money, but it's not like they weren't making money before. Even before this price hike, they were arguably the most expensive of the hypervisor vendors out there. Customers who have been paying maintenance for years should be grand-fathered into the new license model (old enterprise = new enterprise +) and maybe maintenance is based on a percentage of the new price instead of the old. That may cut down on the windfall for VMWare, but they'll get their money, and long-time customers won't feel violated.
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  • MJewell
    Does anybody have an idea what is happening with recent purchases of the ESXi Management Kit? When you purchase it, it says '1 year software subscription'. Does it entitle you to vSphere of a relevant flavor? -Mike
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  • Ttjensen
    I don't think it's that confusing - seems pretty straightforward to me when looking at this chart: Sure they've upped the top price point, but they could have chosen to charge extra for FT, Host profiles, etc. and I'm glad they didn't do that. vSphere is better value than VI3, IMHO. @MJewell: I believe you'll get the vSphere Essentials package
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