VMware’s vSphere 5 brings new features and performance improvements, as InfoWorld’s Ted Samson reports. vSphere 5 also introduces a new licensing approach, one which many users are claiming will significantly increase prices. Will your organization be impacted by the new pricing? If so, consider using an open source hypervisor to for certain workloads.

New vRAM licensing model
With the introduction of vSphere 5, VMware is evolving its product licensing model to give customers a “pay for consumption” approach to IT.

The new licensing model is still based on CPU cores, but does away with a limitation of physical RAM per server license. Instead, VMware has introduced the notion of virtual memory, or vRAM in VMware’s terminology. vRAM is defined as the virtual memory configured to virtual machines.

vSphere 5 is licensed per processor with a varying amount of pooled vRAM entitlements based on the vSphere package purchased.

According to VMware’s whitepaper on the new licensing model for vSphere 5, vRAM helps customers better share capacity across their IT environment:

An important feature of the new licensing model is the concept of pooling the vRAM capacity entitlements for all processor licenses. The vRAM entitlements of vSphere CPU licenses are pooled–that is, aggregated–across all CPU licenses managed by a VMware vCenter instance (or multiple linked VMware vCenter instances) to form a total available vRAM capacity (pooled vRAM capacity). If workloads on one server are not using their full vRAM entitlement, the excess capacity can be used by other virtual machines within the VMware vCenter instance. At any given point in time, the vRAM capacity consumed by all powered-on virtual machines within a pool must be equal or lower than the pooled vRAM capacity.

Since vRAM entitlements can be shared amongst multiple host servers, VMware suggests that customers may require fewer vSphere licenses.

Prepare for higher VMware vSphere licenses due to available RAM memory
VMware doesn’t mention that the new vRAM-based licensing model could lead to significantly higher license requirements as the per-CPU licensing for vSphere 5 only has limits on vRAM per license.

If your configuration has more vRAM than is entitled for use with the CPU license of vSphere 5, then you would need additional licenses.

For example, the vSphere Enterprise Plus package, priced at $3,495 per CPU, allows up to 48GB of vRAM.

Let’s evaluate a scenario where you have a two socket processor, with no more than 12 cores per socket, with 256GB of RAM. The two processors would require two vSphere licenses, resulting is an entitlement of 96GB of vRAM entitlements (2 x 48GB of vRAM per licensed CPU). However, your server has 256 GB of RAM, all of which needs to be licensed. As a result, you must buy an additional 4 licenses of vSphere 5 Enterprise Plus. In total, you would need 6 licenses of Enterprise Plus which would entitle you to run 288 GB of vRAM, sufficient for your 256GB of physical RAM.

Many users shocked by new VMware vSphere prices
User response to the new licensing at VMware’s community forum has been decidedly negative.

One person commenting on the VMware forum writes: “We just purchased ten dual-socket servers with 192GB RAM each (enterprise license level) and we’ll need to triple our license count to be able to use all available RAM if allocated by VMs.”

Another person claims that their small and medium business will see a 300 percent increase in price as a result of the new model.

The general tone of responses on the VMware community forum has been one of shock at VMware. Fear of having to explain to one’s boss that the cost of VMware virtualization licensing is going to be two or three times higher than expected is, not surprisingly, a key concern.

Echoing the comments of many on the forum, Vince77 writes:

Also, when virtualizing servers the only bottleneck I run into is Memory, VMware also knows that so they now build their licensing (moneymaker) based on that.

And every new version of Windows “likes” more ram to make it run smooth.

Now it’s time to really take a good look at Xenrver or even….. .. HyperV!

An opportunity for open source hypervisors
The new pricing model further increases the price gap between VMware and Red Hat Virtualization or Citrix Xen virtualization solutions.

For instance, Red Hat offers a 1 year subscription for up to 6 managed sockets, regardless of cores per socket, for $4,495 per year. Red Hat’s virtualization offering also doesn’t have any restrictions on RAM entitled for use with a licensed socket.

Over a 5 year period, Red Hat’s solution would cost $26,970.

To compare with Red Hat, a customer would buy at least 6 processor licenses of VMware vSphere Enterprise Plus with product support and subscription over 5 years for $3,495 per processor license and 5 years of support and subscription at $874 per year per processor.

Over a 5 year period, VMware’s solution would cost at least $47,190, or at least 74 percent higher than Red Hat.

I stress, “at least”, to take into account the fact that VMware’s pricing could be significantly higher if additional processor licenses were required to entitle for the amount of RAM being used.

As the pricing gap gets closer to 100 percent higher using VMware versus a leading open source virtualization solution, and open source virtualization solutions become more mature, customers will have to reconsider open source options. I’m not suggesting a wholesale shift from VMware to an open source alternative – such migrations seldom happen, and often never as quickly as pundits would suggest.

I am suggesting that you evaluate the new vSphere pricing and usage of server virtualization to determine if a portion of your virtualization needs couldn’t be better served, at a lower cost, using an open source solution.

This balance between enterprise-grade commercial software product, and less mature, but compelling, open source software product has been playing out over much of the software market.

VMware’s vSphere 5 pricing could simply serve to accelerate the shift towards a mixture of commercial and open source in the virtualization arena.

I should state: “The postings on this site are my own and don’t necessarily represent IBM’s positions, strategies, or opinions.”