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Big changes in licensing model for VMware vSphere 5 UPDATED [VMware]

Servers, Storage and Networking | Posted on July 12, 2011 by Steve McDonald

There has been major adjustments to the vSphere 5 licensing model since this blog post. Please see updated post for full details.

Today VMware announced the release of VMware vSphere 5. This exciting new product comes with a lot of new features that I will explain in a future post, but also important are the significant changes to the licensing structure that you need to be aware of. These changes go into effect today, and as of a to-be-announced date in Q3 2011, you will only be able to purchase new licenses in vSphere 5.0. This means that  if you are already invested in VMware, you should take some time in the upcoming months to understand which licensing model is best for your organization.

The 4 key changes that are explained in this post are as follows:

  1. VMware is no longer licensing just based on the cores within a CPU.
  2. After the official release, VMware will no longer be selling previous versions of vSphere.
  3. In the new release of VMware vSphere 5.0, VMware will no longer be supporting the ESX hypervisor.
  4. In the new version, they will be eliminating the Advanced Edition of vSphere and migrating those customers to the Enterprise Edition.

Why change?

vSphere 4.x licensing did not reflect the fact that vSphere excels at pooling physical hardware resources across the entire data center and presenting them as a single, unified, shared infrastructure—an innovation that is one of the core pillars of cloud infrastructure. The hardware-based licensing model of vSphere 4.x made it difficult for customers to transition to the usage-based cost and charge back models that characterize cloud computing and IT-as-a-Service.

The new licensing model

vSphere 5.0 will be licensed on a per-processor basis with a vRAM entitlement. Each vSphere 5.0 CPU license will entitle the purchaser to a specific amount of vRAM, or memory configured to virtual machines. The vRAM entitlement can be pooled across a vSphere environment to enable a true cloud or utility based IT consumption model. Just like VMware technology offers customers an evolutionary path from the traditional data center to cloud infrastructure, the vSphere 5.0 licensing model allows customers to evolve to a cloud-like “pay for consumption” model without disrupting established purchasing, deployment and license management practices and processes.

The vSphere 5.0 licensing model is per processor (CPU) with pooled vRAM entitlements. It offers customers the following benefits relative to the previous vSphere 4.x model:

  • Simplicity– Removes two physical constraints (core and physical RAM), replacing them with a single virtual entitlement (vRAM). Customers now have a clear path to license vSphere on next-generation hardware configurations.
  • Flexibility– Extends the concept of resource pooling from technology to the business of IT by allowing aggregation and sharing of vRAM entitlement across a large pool of servers.
  • Fairness – Better aligns cost with actual use and value derived, rather than with hardware configurations and capacity.
  • Evolution – Allows customers to evolve to a cloud-like “pay for consumption” model without disrupting established purchasing, deployment and license-management practices and processes.

The new vSphere licensing model applies only to new purchases of vSphere licenses or to existing licenses of vSphere 4.x or older that are upgraded to vSphere 5.0. Although it is impossible to predict the effects of the new licensing model in every type of environment, the licensing model has been designed to minimize the risk of potential impacts in existing environments while also providing room for growth. vRAM entitlements have been set to provide enough capacity to scale well beyond today’s average consolidation ratios of 5:1. In addition, thanks to pooling, you will be able to share entitlements among multiple hosts, thereby making more efficient use of available capacity.

This licensing change will not mean incremental licensing purchases for 90% of customers, and in some cases it will actually mean the requirement of less licenses and/or even a free  upgrade to a better version.  This WILL however mean a different methodology of being more more conscious in provisioning of VMware and require change in your VM Templates. You cannot no longer provision vRam to a VM arbitrarily without the impact on licensing.

Other noteworthy changes

After the official release, previous versions of VMware or vSphere will no longer be available for purchase.  If you are looking for additional licenses for your environment and running a previous version you will have downgrade rights as long as you have active support.  If you downgrade you will also be required to follow the present licensing model in VMware vSphere 4.1. In the new release VMware vSphere 5.0.  the ESX hypervisor will no longer be supported.  They will only be supporting ESXi hypervisor which is a more secure, smaller platform.   If you want to be able to leverage the new features in vSphere 5.0, you will need to migrate to ESXi. The Advanced Edition of vSphere will be eliminated in the new version. If you are on Advanced Edition with Active Support and Subscription, you will get automatic free entitlement to the new Enterprise Edition.  All other customers with active support and subscription will get entitlement with the equivalent edition in vSphere 5.0.

What you need to do in the next couple months.

Let our dedicated VMware team help you understand your options and pick the licensing model that is best suited for the way you currently use vSphere and how you intend to use it in the future.

To help you better understand your options and answer any questions we will be hosting 3 webinars on Friday, July 15th.  Our Softchoice Technical and Licensing experts will discuss and summarize some the major announcements made by VMware this week and what it really means to you and your virtualized environment. We will also have an open forum, where you will be able to ask specific questions related to your needs. This is an intimate event and we have limited seating, so make sure you register for these informative sessions.

VMware vSphere 5 Licensing Changes Forum

Friday, July 15th, 2011

Option 1: 10:00am ET – 10:30am ET

Option 2: 10:00am PT – 10:30am PT

Option 3: 12:00pm PT – 12:30am PT

You can register by emailing with the time of the session you’d like to join, and we will send you the webinar details. If you cannot attend one of these sessions you can email us to request a meeting time that works for you.

*NOTE*Webinars are now over, but you can view and download the presentation here.

We’ve also put together this detailed guide to the new vSphere 5.0 including a FAQ. It gives you a closer look at each of the changes and gives you an idea of what your options are.  Take a look: vSphere Licensing Change FAQ .

Download our guide to the vSphere 5.0 changes (including FAQ)

UPDATE –  July 14th, 2011

I want to thank everyone for your comments over the last few days. VMware’s new product and feature set continue to set a high bar in the constantly evolving market of server virtualization and we are proud to help our customers navigate the choices that this announcement provides.

I would like to take a moment to add some color to the conversation surrounding vRAM and how it is licensed per the vSphere 5 Pricing & Licensing Guide:

  • You still have the option to continue to use and deploy older versions of vSphere through the use of Downgrade rights. For more details read this  article.
  • Licensing as it relates to vRAM is not a per-host license, vRAM is a pool available to all hosts in a vCenter or in linked vCenter instances.
  • vSphere licensing related to vRAM is not based on physical RAM, but rather on the active virtual RAM allocated within a VM. The allocation of vRAM to a given pool will determine the number of processor licenses for the given pool.

As we continue to discuss the opportunities and implications of the new licensing model for vSphere 5 with our customers, we are finding that it affects customers uniquely based on the current design of the their virtualization environments as well as future plans. Our architects and licensing specialists are on the ready to review your current state and to help you understand how these changes will apply to your organization and what plans need to be put in place to take advantage of the wealth of new features available in the vSphere 5 offering.

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