Major Adjustments to vSphere 5 licensing announced today

It’s been over two weeks since the launch of vSphere 5 and the licensing changes  that ensued. There has been some concern from customers about the changes, and in fact the twitter hash tag “#vTax” has become the popular way to discuss the issues.  Most of the vSphere 5 changes are positive as they reflect cloud type consumption and the technology advances are great too, but many were still unsettled with the new model.

Some reports and blogs out there said that this change would provide significant cost increases, however 90-95 percent of all businesses would NOT have seen a change in what they are currently paying for their licensing.

Just to recap what was first announced:

• On July 12^th, VMware announced they would be releasing VMware vSphere 5 in their Cloud Infrastructure Launch, set to be launched in Q3
• In this Launch they also announce a new licensing model for vSphere 5 that introduced a new factor called vRAM entitlement.
• There would be a vRAM entitlement for each licensing of VMware vSphere 5 as follows:
• vRAM entitlement referred to the allocated virtual memory to a powered on a VM.
• vRAM is not a physical limitation, but a limitation on the virtual memory allocated in a VM.
• vRAM can be pooled across hosts, clusters, and datacenters with the use of vCenter.
• They removed the physical core limitations off their licenses, so a license could support an unlimited number of processor cores.

There were a few common misconceptions:

•  vRAM does not represent the physical RAM.
• You do not need to migrate immediately to vSphere 5 if you do not like the model.  VMware will be supporting vSphere 4 up until vSphere 7 is released.  If you stay with vSphere 4, you still will be supported and will be bound by the previous licensing model.
• Most customer environments were analyzed, the changes only impacted a small handful of customers, and for the handful that it did affect, it represented incremental license costs.

However, based on the feedback from customers and the Partner Technical Advisory Board which Softchoice sits on. VMware announced today some major adjustments to the new licensing program.

The 3 new adjustments to the program are:

1.  To address the issues of additional costs as a result of vRAM entitlement, VMware has increased the vRAM entitlement level for each license level as shown in the below chart.

2. The other concern that customers had was that if they allocated a lot of vRAM for Tier 1 applications, they would need a significant amount of licenses.  (e.g. for an Application like Oracle or SAP with 1TB of vRAM, it would represent almost $70,000 in licensing costs alone).  [Read more...]