The Windows Server Notebook

Aug 8 2011   2:58PM GMT

Hyper-V v. vSphere: Examining the true cost of server virtualization

Frank Ohlhorst Profile: Frank Ohlhorst

Does anyone really know how much server virtualization costs?

I’m not talking about the cost of the hardware, or the management overhead, or any of the ROI or TCO elements: just the straight up cost of buying the software that makes server virtualization work.

Microsoft implies that virtualization is free because it comes bundled with Windows Server 2008 R2, and with the upcoming Windows Server 8 where virtualization figures to play an even bigger role. But it is not really free if you have to pay for it, right? With Microsoft you have to invest in Windows Server along with the costs attached to associated technologies. But if you are buying Microsoft Windows licenses anyway, then Hyper-V at least comes across as free – or does it? And why does this matter?

Simply put, VMware is changing the licensing game with vSphere 5 and those licensing changes may make Hyper-V and other hypervisor offerings more attractive to cost conscious IT managers. These changes also change how vSphere is purchased. In some ways, it simplifies the licensing and in others it nakedly shows that VMware is seeking to increase revenue.

With vSphere 5, pricing is no longer based on physical memory; pricing has changed to reflect virtual memory. What’s more, VMware has switched to a licensing model that incorporates three tiers: Standard, which allows a total of 24 GB to be allocated to all virtual machines, and up to eight virtual CPUs per VM; Enterprise, which allows a total of 32 GB across all VMs and up to eight virtual CPUs per VM; and Enterprise Plus, which allows 48 GB across all VMs, and up to 32 virtual CPUs per VM. The prices are still based on single-socket, but there’s no longer a limit on the number of cores per socket.

This adds up to a significant change in licensing terms. Version 4 of vSphere encouraged a “scale-up” approach, which means buying systems with a few CPU sockets, massive amounts of memory and running lots of virtual machines on them. This, as opposed to a “scale out” approach where IT managers purchase more servers each with much less RAM.

The reason was because adding physical memory was “free,” at least until you hit 256 GB. But adding sockets (or new servers) costs money. The result was enterprises using VMware on two-socket servers with hundreds of gigabytes of RAM.

With Version 5 of VMware, the scale-up model is penalized. A case in point: A two-socket, six-core per socket, 256 GB machine used to require two Enterprise licenses. But now the price changes are based on all of the RAM, so you now need eight Enterprise licenses. Simply put, vSphere 5 will need four times as many licenses, and cost four times as much as Version 4.

That makes free technologies such as Hyper-V all that much more attractive. The real question is: will IT abandon vSphere in favor of Hyper-V? Probably not. If a company already has invested in vSphere, they will probably swallow the price changes and stick with what they know. On the other hand, when Windows Server 8 hits the streets, companies looking to migrate may seriously consider going with Hyper-V.

Only time will tell. However, it certainly doesn’t hurt to take a closer look at Hyper-V to see if it really offers something for nothing.

Frank Ohlhorst is an award-winning technology journalist, professional speaker and IT business consultant with over 25 years of experience in the technology arena. He has written for several technology publications, including TechTarget, ComputerWorld and PCWorld. Ohlhorst was also the Executive Technology Editor for Ziff Davis Enterprise’s eWeek. You can contact him at

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