VMware vSphere 5 – A Brave New World of Licensing

By Gotham
Posted in Virtualization
On March 21, 2012

When VMware released vSphere 5.0 last August, it modified its licensing model to coincide with the release. The previous licensing model was based on the number of physical CPUs, with limits on the number of CPU cores and amount of RAM per physical host (version dependent). The new model, while retaining the physical CPU basis for pricing, uses a restriction on the total virtual memory assigned to all VMs to determine the pricing.

In this article, we will review these changes at a high level, look at the drivers behind the changes, and examine some (imaginary) real-world scenarios to illuminate the differences in licensing costs, and how they may impact your infrastructure.

What? Why?

According to VMware, the two primary drivers behind the change were (in no particular order):

  • Customers will be able to use a more cloud-like, pay-as-you-go approach to IT costs, or at least that portion of the costs consumed by virtualization technologies. This change, as VMware puts it, "align(s) the vSphere licensing model with IT as a service."
  • The rapid expansion in the number of cores available per CPU, along with the continued reduction in the cost of memory and the capacity of each chip, really does require a more flexible licensing model based upon actual usage, as opposed to capacity.

To put it another way, the recent and seemingly accelerating reduction in hardware costs allows even small and mid-size organizations to deploy servers with capacity that was undreamed of a few years back. This being the case, restrictions in CPU cores and memory (see the vSphere 4x Licensing Restrictions table, below) might actually prevent those organizations from using VMware, as they would have to purchase a far more costly version of the product than they need. A model that tries to adhere more closely to actual usage seems fairer to the customer.

vSphere 4x Licensing Restrictions

Edition Total Core Limit Total RAM Limit
Standard 6 per CPU 256 GB
Advanced 12 per CPU 256 GB
Enterprise 6 per CPU 256 GB
Enterprise+ 12 per CPU Unlimited

The following table shows the primary differences between the 4x and 5x licensing models:

vSphere Licensing Differences

Item vSphere 4.1 vSphere 5.0
Licensing Model Per CPU with core and RAM limits Per CPU with vRAM entitlements
Licensing Unit Per CPU Per CPU
SnS Unit Per CPU Per CPU
Cores per Processor 6 or 12 (varies by edition) Unlimited
RAM per Host 256 GB (Enterprise+ is unlimited) Unlimited
vRAM per Processor NA 32 GB - 96 GB (varies by edition)
Pooling of vRAM NA vRAM entitlements pooled
Compliance Policies Cannot exceed CPUs 12 month rolling average of vRAM
Monitoring NA Built into vCenter 5.0

Not So Fast!

When the first version of the new licensing model was first announced, there was a very public hue and cry, and a powerful private one, as well. VMware was shown multiple instances where a customer's licensing costs could triple or quadruple due to these changes. Responding rapidly, VMware revised the licensing model and increased the per-VM restrictions, in many cases doubling the allowed per-VM memory. The changes are shown in the chart below:

vSphere 5.0 vRam Entitlement Changes

vSphere Edition Original vRAM Entitlement Revised vRAM Entitlement
vSphere Enterprise+ 48 GB 96 GB
vSphere Enterprise 32 GB 64 GB
vSphere Standard 24 GB 32 GB
vSphere Essentials+ 24 GB 32 GB
vSphere Essentials 24 GB 32 GB
Free vSphere Hypervisor 8 GB 32 GB
vSphere Desktop Unlimited Unlimited

Let's Break it Down

vSphere 5 is licensed on a per-processor basis, but with a vRAM maximum that limits the total usage per license, and no limits on the amount of physical cores or physical RAM. The vRAM entitlements (as VMware refers to them) can be pooled across your infrastructure based upon vCenter Server instances, with no vRAM limits on individual machines-as long as total vRAM across the pool stays within restrictions. To add vRAM capacity to the pool, you can either add vSphere licenses or upgrade existing licenses.

More detail can be found at http://www.vmware.com/files/pdf/vsphere_pricing.pdf

Cost Comparisons

The following tables compare costs for specific scenarios: one for a small business, one mid-sized, and one large.

Licensing Costs for Small Business

4 Hosts

  • 2 processors per host
  • 6 cores per processor
  • 64 GB RAM per host
  • 25 VMs using a total of 85% of available RAM as vRAM

Edition CPUs Cores Total RAM Max vRAM Cost Per License vSphere 4 License Required vSphere 5 Licenses Required vSphere 4 Cost vSphere 5 Cost
Standard

8

48

256

218

$995

8

8

$7,960

$7,960

Enterprise

8

48

256

218

$2,875

8

8

$23,000

$23,000

Enterprise+

8

48

256

218

$3,495

8

8

$27,960

$27,960

Licensing Costs for Medium Business

10 Hosts

  • 2 processors per host
  • 6 cores per processor
  • 128 GB RAM per host
  • 80 VMs using a total of 75% of available RAM as vRAM

Edition CPUs Cores Total RAM Max vRAM Cost Per License vSphere 4 License Required vSphere 5 Licenses Required vSphere 4 Cost vSphere 5 Cost
Standard

20

120

1280

960

$995

20

30

$19,900

$29,850

Enterprise

20

120

1280

960

$2,875

20

20

$57,500

$57,500

Enterprise+

20

120

1280

960

$3,495

20

20

$69,900

$69,900

Licensing Costs for Large Business

20 Hosts

  • 4 processors per host
  • 8 cores per processor
  • 256 GB RAM per host
  • 300 VMs using a total of 75% of available RAM as vRAM

Edition CPUs Cores Total RAM Max vRAM Cost Per License vSphere 4 License Required vSphere 5 Licenses Required vSphere 4 Cost vSphere 5 Cost
Standard

80

640

5,120

3,840

$995

NA*

120

NA*

$119,400

Enterprise

80

640

5,120

3,840

$2,875

NA*

80

NA*

$230,000

Enterprise+

80

640

5,120

3,840

$3,495

80

80

$279,600

$279,600

*Option not available due to version restriction on cores per CPU.

Licensing Costs for Enterprise Business

50 Hosts

  • 4 processors per host
  • 12 cores per processor
  • 256 GB RAM per host
  • 600 VMs using a total of 85% of available RAM as vRAM

Edition CPUs Cores Total RAM Max vRAM Cost Per License vSphere 4 License Required vSphere 5 Licenses Required vSphere 4 Cost vSphere 5 Cost
Standard

200

2,400

12,800

10,880

$995

NA*

340

NA*

$338,300

Enterprise

200

2,400

12,800

10,880

$2,875

NA*

227

NA*

$652,625

Enterprise+

200

2,400

12,800

10,880

$3,495

200

200

$699,000

$699,000

*Option not available due to version restriction on cores per CPU.

Conclusion

Although the changes to the vSphere licensing scheme seem complex on the surface, they're pretty easy to understand once you take the time to get to know them. And once you do get to know them, you'll realize that while there are some scenarios where licensing costs will increase, VMware is providing customers greater long-term scalability, as well as the ability accommodate hardware with many cores and/or a significant amount of RAM without needing an Enterprise+ license.