When we look for patterns from the past, sometimes we can really get a good idea of what the future might entail. If you take a look at the way VMware has rolled out licensing changes during each of the major releases you can see a pattern and get an idea of what the future may bestow upon us. When Virtual Center was first released, vMotion and vSMP were licensed separately from Virtual Center as an add-on for Virtual Center.

Once VMware ESX3 was released, vMotion and vSMP pretty much became a standard feature included in ESX3.  Virtual Center was still sold separately and then VMware presented three licensing models for VMware ESX3.

Product Components

Foundation

Standard

Enterprise

ESX Server 3.5

√, Yes

√, Yes

√, Yes

Virtual SMP, VMFS

√, Yes

√, Yes

√, Yes

VirtualCenter Agent

√, Yes

√, Yes

√, Yes

Update Manager

√, Yes

√, Yes

√, Yes

Consolidated Backup

√, Yes

√, Yes

√, Yes

VMware HA

X, No

√, Yes

√, Yes

VMware Vmotion

X, No

X, No

√, Yes

Storage Vmotion

X, No

X, No

√, Yes

VMware DRS

X, No

X, No

√, Yes

VMware DPM

X, No

X, No

√, Yes

When upgrading from VMware ESX 2 to VMware ESX 3, your ESX 2 license would convert to the 3.5 Standard Edition, with VMware having a lot of incentive upgrade offers for the Enterprise edition to be able to take advantage of vMotion , sVmotion, DRS and DPM.

When VMware released vSphere 4 they continued to follow the pattern where if you have the Enterprise Version of ESX3 and a current support contract you would be able to get licenses for vSphere4 at no addition costs.  However, to take advantage of Storage I/O, Network I/O Control, Host Profiles, 8-way vSMP and distributed switch, you had to upgrade to Enterprise Plus.  Below is a graph with the feature sets for each of the different versions.

VMware vSphere 4 – Versions

Standard Advanced Enterprise Enterprise Plus
Overview Server consolidation and no planned downtime Secure and always available infrastructure Powerful & efficient resource management Policy-based datacenter automation
Product Components
Processor Entitlement Per 1 CPU Per 1 CPU Per 1 CPU Per 1 CPU
Memory/Physical Server 256GB 256GB 256GB No limit
Cores per processor 6 cores per CPU 12 cores per CPU 6 cores per CPU 12 cores per CPU
Product Features
Thin Provisioning √, Yes √, Yes √, Yes √, Yes
Update Manager √, Yes √, Yes √, Yes √, Yes
Data Recovery Sold separately for this edition √, Yes √, Yes √, Yes
High Availability √, Yes √, Yes √, Yes √, Yes
vMotion √, Yes √, Yes √, Yes √, Yes
vStorage APIs for Data Protection √, Yes √, Yes √, Yes √, Yes
vStorage APIs for Array Integration X, No X, No √, Yes √, Yes
vStorage APIs for Multipathing X, No X, No √, Yes √, Yes
Hot Add X, No √, Yes √, Yes √, Yes
vShield Zones X, No √, Yes √, Yes √, Yes
Fault Tolerance X, No √, Yes √, Yes √, Yes
Storage vMotion X, No X, No √, Yes √, Yes
DRS X, No X, No √, Yes √, Yes
DPM X, No X, No √, Yes √, Yes
Storage I/O Control X, No X, No X, No √, Yes
Network I/O Control X, No X, No X, No √, Yes
Distributed Switch X, No X, No X, No √, Yes
Host Profiles X, No X, No X, No √, Yes
8-way vSMP X, No X, No X, No √, Yes

In a nutshell, when a new release comes out, if you have a support contract in place, you would be able to upgrade to an equal version but all the newer advanced features would be available as an upgrade option.  There have been no real big surprises when it comes to the way VMware has been licensing their products through the different releases.  The big licensing change happened when vSPhere 5 was released.  In VMware vSphere 4 the licensing model was per physical processor based on the number of cores per CPU and the physical memory. The VMware vSphere 5 license model is based per physical processor and the allocated memory (vRAM) across the entire vSphere environment for a particular vSphere 5 edition.

This was a radical change to the current model and there was a lot of talking and shouting about this change in licensing.  So much conversation about this topic in that VMware took the time to reevaluate the memory part of the licensing to change the amount of memory per VMware version.

vSphere 5 edition Old vRAM (GB) entitlement per Physical CPU NEW vRAM (GB) entitlement per Physical CPU Max vCPU/VM
vSphere 5 Hypervisor (free version) 8 32 Physical limit (no vRAM entitlement) 8
vSphere 5 Essentials 24 (max. 6 processor license, total 192GB) 32 8
vSphere 5 Essentials plus 24 (max. 6 processor license, total 192GB) 32 8
vSphere 5 Standard 24 32 8
vSphere 5 Enterprise 32 64 8
vSphere 5 Enterprise plus 48 96 32

The advanced features that are only available for Enterprise Plus version of vSphere 5 are

  1. Storage I/O Control
  2. Network I/O Control
  3. Distributed Switch
  4. Host Profiles
  5. Auto Deploy
  6. Storage DRS
  7. Profile-Driven Storage

Conclusion:

Following the license pattern, we should be able to get a general idea of the way VMware may license future releases of vSphere unless VMware really decides to change the license rules again.  Later this year, Microsoft 8 and Hyper-V version 3 will get released and there is no denying that Microsoft is making great progress with Hyper-V in playing catch-up with VMware. Microsoft is on the verge of crossing the threshold where Hyper-V is a viable competitor to VMware.

Right now, if you count everything you would need to deploy Hyper-V or vSphere (Systems Center, vCenter ect) the cost is relatively close.  Will this cost basis stay relatively close between Microsoft and VMware?  I am inclined to think that any more major deviation from the licensing norm going forward might cause companies to really reconsider which virtualization technology they want to support and invest in. Here is an example of a comparision of costs between vSphere 4 and Hyper-V to get a rough idea of how close.

Vmware vSphere Microsoft Hyper-V
Std ADV ENT ENT+ DC
License Model Proc Proc Proc Proc Proc
List Price $795 $2,245 $2,875 $3,495 $2,999
Comparision Quantities
VM/Hosts  10 10
Total VM’s  150 150
Req’d Hosts  15 15
Host Processors  2 2
VM OS  Windows Std Windows Std
Management  vCenter Server Management Suite DC
License Model  Host Proc
List Price  $4,995 $749
Operations Manager 2007 R2
Host
$579
Windows Server $999
Base Comparison
Hypervisor $23,850 $67,350 $86,250 104,850 $89,970
Windows Server $149,850 $149,850 $149,850 $149,850 $0
Management $4,995 $4,995 $4,995 $4,995 $23,049
Total $178,695 $222,195 $241,095 $259,695 $113,019
Option 1 — Apply Windows DC Licenses to vSphere Hosts
Hypervisor $23,850 $67,350 $86,250 104,850 $89,970
Windows Server $89,970 $89,970 $89,970 $89,970 $0
Management $4,995 $4,995 $4,995 $4,995 $23,049
Total $118,815 $162,315 $181,215 $199,815 $113,019
Option 2 — Increase VMwareDensity to 15 VM’s per Host
Hypervisor $15,900 $44,900 $57,500 69,900 $89,970
Windows Server $59,980 $59,980 $59,980 $59,980 $0
Management $4,995 $4,995 $4,995 $4,995 $23,049
Total $80,875 $109,875 $122,475 $134,875 $113,019

Now that the competition is getting close, you not would think there would be any radical changes to increase overall pricing but rather a shrinking of the costs of the standard infrastructure and an expansion of the advanced feature sets and other products. I think VMware got more push back from customers about the licensing change than they originally thought they would get.  Would it be worth it for VMware to redefine licensing again to add another tax? Adding taxes did not quite work out well for the English a couple of hundred years ago and we will see if VMware makes another push to change the norm to increase revenue and the revolt that might follow.

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Steve Beaver (159 Posts)

Stephen Beaver is the co-author of VMware ESX Essentials in the Virtual Data Center and Scripting VMware Power Tools: Automating Virtual Infrastructure Administration as well as being contributing author of Mastering VMware vSphere 4 and How to Cheat at Configuring VMware ESX Server. Stephen is an IT Veteran with over 15 years experience in the industry. Stephen is a moderator on the VMware Communities Forum and was elected vExpert for 2009 and 2010. Stephen can also be seen regularly presenting on different topics at national and international virtualization conferences.

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5 comments for “VMware Licensing Past and Present Compared to Hyper-V

  1. April 18, 2012 at 5:49 PM

    That’s an interesting comparison – so it looks like the take away from that is that the pricing becomes “close” when the density of VMs increases? However, why does the Windows server costs drop in the model you’ve given?

    You can assign a Windows datacentre license (based on processors) and then the number of VMs on that device is irrelevant. So I understand option 1, but I don’t follow why the MS Windows cost comes down (for windows licensing) in Option 2 – especially as the VM density has gone up

  2. Steve Beaver
    April 18, 2012 at 6:37 PM

    Andrew,

    Thanks for the comment and let me expand on how I got the numbers.

    Option 1 (Number of hosts) x (Host Processors) x (Windows Data Center cost per processor)
    15 x 2 x 2999 = $89,970
    Option 2 (Number of hosts) x (Host Processors) x (Windows Data Center cost per processor)
    10 x 2 x 2999 = $59,980

    Cheers!

  3. April 20, 2012 at 3:38 PM

    Hi Steve,

    I can follow your calculations. If have two questions:

    1. shouldn’t you switch the costs in the Hyper-V column and say that Hyper-V costs $0 and Windows Server costs the (Server x Processors x DC License). At least the Hyper-V Server is free and you pay for the Windows OS.

    2. In example 2 you decresase the amount of servers for the VMWare column from 15 to 10. Why didn’t you decrease the amount of servers you need in the Hyper-V column also from 15 to 10?

    Thanks,

    Carsten Rachfahl
    MVP Virtual Machine

  4. April 24, 2012 at 3:33 AM

    Hi Steve,

    I can follow you too. But like Carsten Rachfahl i would like to ask, why didn´t you decrease the number of Hyper-V-Hosts in option 2?

    Greetings,

    Eric Berg

  5. Steve Beaver
    April 24, 2012 at 11:56 AM

    Carsten,

    As to point 1, I find that I agree with you on that point but can not seen to edit once published to switch the costs.

    As to why I did not decrease the numbers for Hyper-V hosts, In my experience with both products I was able to get a better VM ratio per host with VMware and ran with that thought process. To be honest and fair it has been a while and I know Hyper-V is making great progress so maybe that was not quite fair. So in the interest of fairness all around let me add the numbers for 10 Hyper-V hosts.

    Option 3 – Hyper-V with 10 Hosts

    Hypervisor costs — $0
    Windows Server (DC) — $59,980
    Management Costs — $15,559

    Total Cost = $75,539

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