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How to determine which VMware licensing option is best

Enterprise Software | Posted on February 25, 2019

Despite the fact VMware has only three core licensing programs – a far cry from other technologies such as Microsoft and Adobe ­– it’s still challenging to know exactly which licensing program is the right choice for your organization.

Let’s take a deep look at the three VMware licensing programs available, and help you decide which is best for your organization.

1. VPP – Volume Purchasing Program

Minimum Initial Purchase: $25,000 License List Price
VPP Discounts: 4%-12%
SnS Term: 1+ Years
SnS levels: Production or Basic
VPP Program Guide: http://www.vmware.com/files/pdf/vpp/vpp-program-guide.pdf

The volume purchasing is a transactional program designed to reward frequent buyers of VMware technology with scaling discounts off VMware licenses.

After an initial qualifying purchase of $25,000 List Price or more. A VMware Partner, like Softchoice, registers your company under the VPP program. Your company is then assigned a VPP Benefit Number and all future purchases, regardless of value, will collect VPP points. As your company continues to invest in VMware, these points push your company into higher discount bands. For every $100 List of VMware licenses, your organization receives 1 VPP point. Points earned remain on the account for 18 months and then roll off. VPP Discount Levels range from Level 1 – Level 4.

VPP Discount Levels range from Level 1 – Level 4

The VPP program also allows companies to name affiliates. These affiliates can also contribute to the overall VPP point pool and help push all entities into higher discount brackets. Multiple affiliates can share the same VPP number. To learn more about adding affiliates to your companies VPP account please reach out to your Softchoice Account Manager.

VPP Program Considerations:

The VPP program is a transactional program that does not require complex agreements or contracts. It has no ongoing requirements other than the initial qualifying purchase. The VPP program is a good fit if:

  • Your company can meet the $25,000 List Price qualifying purchase
  • Over the next 3 years your company does not expect to exceed $150,000 in VMware purchases

If you company budgets 100k+/year in VMware or expects to invest more than 200k over the next few years it would make sense for you to consider other licensing programs from VMware which provide greater benefits for this level of investment.

2. EPP – Enterprise Purchasing Program

Minimum initial Purchase: $250k List Price (25,000 EPP Tokens)
SnS Term: 3 Years
SnS Levels: Production Only

The Enterprise Purchasing Program is a 3 year strategic licensing agreement designed to give greater discounts for a larger upfront investment with VMware.

Instead of purchasing products from VMware your company would purchase EPP tokens, a type of VMware currency for this licensing program. These tokens are then redeemed on an e-commerce site for VMware licenses and support. Similar to the VPP program, as you purchases more and more EPP tokens you company will receive higher and higher discounts.

EPP Configurator

The initial purchase must be 2500 or more tokens. Each token is values at $100.00 USD per token.

The lowest EPP discount level will be higher than the highest VPP Discount Level.

EPP tokens can be used to redeem for any VMware products available in the portfolio at the time the tokens were purchased.  Support is also co-termed to the end of the agreement automatically, making license management easier.

Affiliates can also combine purchasing power and use a built in Fund Owner and Fund User system to easily divide a larger token purchase among many separately managed entities. This makes it ideal for “Hub & Spoke” purchasing models.

Roles and Responsibilities

Companies can also leverage existing VPP points to get greater discounts on the first EPP token purchase.

EPP Tokens can be added to the account at any time in 500 point increments.

EPP Program Considerations:

The EPP Program is designed for companies who are making large investments in VMware but want to protect their investment against changing requirements. Since tokens can be redeemed for any VMware product if a project requirement changes your company can simply redeem different licenses.

EPP tokens do need to be closely managed over the term of the agreement as EPP tokens will expire at the end of the agreement. The EPP program is a good fit if:

  • Your company is making a large 250,000 upfront investment in VMware technology.
  • Over the next 3 years your company does not expect to exceed 250-400k in VMware purchases.
  • You have a requirement to combine the purchasing power across multiple affiliates but retain individual control over the tokens/licenses.
  • You have a budget for VMware technologies but want to be protected against changing project requirements.

If your company has a large existing install base of VMware licenses, is looking to invest in more than 250k over the next 3 years or knows exactly what licenses they require for the 250k upfront purchase, it will make sense to consider the ELA – Enterprise Licensing Agreement program.

3. ELA – Enterprise Licensing Agreement

Minimum initial Purchase: $250k+
SnS Term: 3 Years
SnS Levels: Production Only

The Enterprise License Agreement is a licensing program reserved for companies making a substantial investment in VMware over the next 3 years. The minimum purchase to qualify for an ELA is over 250k. ELA are custom contractual agreements between the End User and VMware facilitated through a partner. ELA discounts are the highest discounts available from any of the licensing programs. Here are some benefits of an ELA.

  • Existing SnS Contract Discounts: ELA not only give large discounts on new licenses it also allows your company to warp your existing VMware support contracts into the ELA and receive ELA like discounting on existing support. In some cases, this discount can help offset the minimum of an ELA and rewards clients who, over time, build an Enterprise Class install base.
  • SnS as a percentage of net: The ELA is the only program that gives discounts on support for new licenses. Normally 1 year of support is calculated at `33% of the list license cost. Under an ELA VMware calculates 3 years of support as a percentage of the discounted license cost. This can translate into significant savings over the 3 year period.
  • EULA adjustments: ELA allow for the standard EULA – End User License Agreement to be adjusted to meet specific business requirements.  A common one is global use rights. This allows companies to deploy licenses globally and move licenses from one country to another. This is not currently available within the Standard EULA.
  • Price Protection: VMware locks the price of licenses for the term of the agreement. Any amendments added to the ELA will receive the same level of discounting.
  • EPP Tokens: It is even possible to leverage EPP tokens and the benefits of the EPP program under an ELA. An ELA can be used to purchase EPP tokens.

ELA Program Considerations:

ELA’s represent the highest possible discount on VMware products and SnS. The contracts are custom for each client which make this program very versatile but require legal contracts and signatures. If your business is looking to make a 250k+ investment in VMware over the next 3 years, willing to pool spend upfront for significant savings this is the program to consider.

Regardless of which program you feel might be appropriate, the VMware Pre-Sales Architect team at Softchoice has helped hundreds of clients navigate the programs to find the best one to suit your business needs.

Make sure you are making the right VMware ELA moves through our resources:

For more information, visit our new VMware ELA Hub or contact one of our experts.

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