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July 12, 2011

VMware jacks up prices too

Filed under: Virtualization — Tags: , — Nate @ 4:34 pm

Not exactly hot on the heels of Red Hat’s 260% price increase, VMware has done something similar with the introduction of vSphere 5 which is due later this year.

The good: They seem to have eliminated the # of core/socket limit for each of the versions, and have raised the limit of vCPUs per guest to 8 from 4 on the low end, and to 32 from 8 on the high end.

The bad: They have tied licensing to the amount of memory on the server. Each CPU license is granted a set amount of memory it can address.

The ugly: The amount of memory addressable per CPU license is really low.

Example 1 – 4x[8-12] core CPUs with 512GB memory

  • vSphere 4 cost with Enterprise Plus w/o support (list pricing)  = ~$12,800
  • vSphere 5 cost with Enterprise Plus w/o support (list pricing)  = ~$38,445
  • vSphere 5 cost with Enterprise w/o support (list pricing)         = ~$46,000
  • vSphere 5 cost with Standard w/o support (list pricing)           = ~$21,890

So you pay almost double for the low end version of vSphere 5 vs the highest end version of vSphere 4.

Yes you read that right, vSphere 5 Enterprise costs more than Enterprise Plus in this example.

Example 2 – 8×10 core CPUs with 1024GB memory

  • vSphere 4 cost with Enterprise Plus w/o support (list pricing) = ~$25,600
  • vSphere 5 cost with Enterprise Plus w/o support (list pricing) = ~$76,890

It really is an unfortunate situation, while it is quite common to charge per CPU socket, or in some cases per CPU core, I have not heard of a licensing scheme that charged for the memory.

I have been saying that I would expect to be using VMware vSphere myself until the 2012 time frame at which point I hope KVM is mature enough to be a suitable replacement (I realize there are some folks out there using KVM now it’s just not mature enough for my own personal taste).

The good news, if you can call it that, is as far as I can tell you can still buy vSphere 4 licenses, and you can even convert vSphere 5 licenses to vSphere 4 (or 3). Hopefully VMware will keep the vSphere 4 license costs around for the life of (vSphere 4) product, which would take customers to roughly 2015.

I have not seen much info about what is new in vSphere 5, for the most part all I see are scalability enhancements for the ultra high end (e.g. 36Gbit/s network throughput, 1 million IOPS, supporting more vCPUs per VM – number of customers that need that I can probably count on 1 hand). With vSphere 4 there was many good technological improvements that made it compelling for pretty much any customer to upgrade (unless you were using RDM with SAN snapshots), I don’t see the same in vSphere 5 (at least at the core hypervisor level). My own personal favorites for vSphere 4 enhancements over 3 were – ESXi boot from SAN, Round Robin MPIO, and the significant improvements in the base hypervisor code itself.

I can’t think of a whole lot of things I would want to see in vSphere 5 that aren’t already in vSphere 4, my needs are somewhat limited though. Most of the features in vSphere 4 are nice to have though for my own needs are not requirements. For the most part I’d be happy on vSphere standard edition (with vMotion which was added to the licensed list for Standard edition about a year ago) the only reason I go for higher end versions is because of license limitations on hardware. The base hypervisor has to be solid as a rock though.

In my humble opinion, the memory limits should look more like

  • Standard = 48GB (Currently 24GB)
  • Enterprise = 96GB (Currently 32GB)
  • Enterprise Plus = 128GB (Currently 48GB)

It just seems wrong to have to load 22 CPU licenses of vSphere on a host with 8 CPUs and 1TB of memory.

I remember upgrading from ESX 3.5 to 4.0, it was so nice to see that it was a free upgrade for those with current support contracts.

I have been a very happy, loyal and satisfied user & customer of VMware’s products since 1999, put simply they have created some of the most robust software I have ever used (second perhaps to Oracle). Maybe I have just been lucky over the years but the number of real problems (e.g. caused downtime) I have had with their products has been tiny, I don’t think it’s enough to need more than one hand to count. I have never once had a ESX or GSX server crash for example. I see mentions of the PSOD that ESX belches out on occasion but I have yet to see it in person myself.

I’ve really been impressed by the quality and performance (even going back as far as my first e-commerce launch on VMware GSX 3.0 in 2004 we did more transactions the first day than we were expecting for the entire first month), so I’m happy to admit I have become loyal to them over the years(for good reason IMO). Pricing moves like this though are very painful, and it will be difficult to break that addiction.

This also probably means if you want to use the upcoming Opteron 6200 16-core cpus (also due in Q3) on vSphere you probably have to use vSphere 5, since 4 is restricted to 12-cores per socket (though would be interesting to see what would happen if you tried).

If I’m wrong about this math please let me know, I am going by what I read here.

Microsoft’s gonna have a field day with these changes.

And people say there’s no inflation going on out there..



  1. Wow this is absolutely ridiculous. Its time to reevaluate my opinion of KVM, Xen and Hyper -V. Enterprise – Plus pissed me off the first time, this “memory” based model is going to send me over the edge.

    Comment by Justin — July 12, 2011 @ 8:59 pm

  2. After reviewing all the latest features, I would say it should be called vSphere 4.5 instead of vSphere 5.0 as there isn’t much improvements feature wise over the previous 4.1 version.

    To my great surprise, VMware launched it’s latest flagship product vSphere in such a hurry, it was originally planed to be released in Q3, 2011 or later. Why is this?

    As people say “the devil always lies in the details”, after half reading the latest pricing guide, I quickly figured out the answer to the above question.

    It’s all about $$$, VMware tells you the latest vSphere 5.0 doesn’t have any more restriction in CPU/RAM on an ESX host, that sounds so fabulous isn’t it? Or IS IT?

    Let’s make a simple example:

    Say you have the simplest cluster with two ESX hosts with 2 CPU and 128GB RAM each, you Enterprise Plus edition for these two is USD13,980.

    With the previous vSphere 4.1, you have UNLMITED vRAM entitlement and up to 48 cores.

    With the brand new vSphere 5.0 pricing model, for the same amount of license (ie, USD13,980), you can only have 192GB entitled vRAM, so in order to have the original 256GB vRAM entitlement, you need to pay extra 2 more Enterprise Plus license, which is USD6,990.

    The more RAM your server has, the more you are going to pay with the new licensing model.

    So my conclusion is VMware is discouraging people going into cloud in reality. Think about this, why would you buy a Dell Poweredge R710 (2 sockets) with only 96GB RAM installed? The maximum RAM Powerdge R710 is capable of 288GB RAM but you need to pay EXTRA (288GB-96GB) / 48GB = 4 more Enterprise Plus license.

    In reality, CPU is always the last resource to run out, but RAM IS! Future server will have much more powerful CPU for sure, but RAM is still the number 1 factor deciding your cloud capacity, IOPS is the 2nd, Network is the 3rd and just to remind you once more, CPU is the last!

    Very clever VMware, but will potential customer buy this concept is another story.

    Hum…may be it’s a strong sign that I can finally sell my VMW after all these years.

    * Please note the above is my own personal interpretation as a user, it doesn’t represent my current employer or related affiliates.

    Comment by user — July 12, 2011 @ 11:05 pm

  3. User – one minor correction you say “With the previous vSphere 4.1, you have UNLMITED vRAM entitlement and up to 48 cores.” when really I believe you can have up to 160 cores on vSphere 4.1, you just can’t have more than 12 cores per socket. So you could have a HP DL980 with 8×10 cores with hyperthreading totaling 80 physical, and 160 logical cores with 1TB of memory.

    Or you could get a 16 socket 10 core system and disable hyperthreading. Though no such system exists yet that is certified for vSphere. Some of the supercomputing people out there like SGI have them but not certified for vSphere – granted the premium for such a system likely would not make it worth using as a vSphere host. 8-way systems already have a pretty hefty premium, 4-way seems to be a really good compromise these days whether your on Intel or AMD.

    thanks for the comments user and Justin! I agree it’s stupid and will cause a lot of people to re-think their use of VMware including me. I just hope KVM is ready in time. If VMware keeps vSphere 4 licensing costs around for vSphere 4 that would be a good stop gap for many(including me), I haven’t seen anything(yet) in vSphere 5 that I can’t live without (even if it was a free upgrade) – short of the per socket core licensing restrictions which has nothing to do with the underlying hypervisor and is purely a licensing decision on the part of VMware.

    Comment by Nate — July 12, 2011 @ 11:18 pm

  4. VMWare simply handed the SMB market over to Microsoft with this. 48GB is not Enterprise by anyones definition. I’d hazard a guess that the limit gets upped to at least 64GB per socket within the next 60 days, if not 96GB.

    To clarify the licensing, its not based on physical memory in the host, but on allocated memory to powered on Virtual Machines. So if you have a host with dual socket 8 cores and 128 GB of RAM but are only utilizing 96GB of vRAM for powered on VM’s you still need only 2 licenses, now if you have 256GB of RAM and have allocated 144 GB of vRAM to your virtual machines you will need 3 licenses for that specific host.

    One other point, this licensing model is based on the entire cluster, so you may have spare capacity on one host that can be used on another from a licensing standpoint. Honestly though I don’t see this as a benefit to anyone but the Cloud providers who tend to run single socket 48GB boxes instead of larger memory configs. SO now we are back to lots of pizza boxes for the sweet spot, instead of fewer larger hosts which flys in the face of everything VMWare has pushed for the last 10 years.

    Best I can see, other than the kool-aid drinkers with VMWare badges, no one is happy about this. Twitter blew up yesterday and no one was talking about the new features, everyone was pissed about the dumb ass new licensing scam which is now refered to as vTAX.

    Comment by tgs — July 13, 2011 @ 9:22 am

  5. vTAX, I like that…I agree on the pizza box thing and how it goes against the direction the enterprise industry has been going for the past several years(time to bring back 4GB memory chips and 1GbE?). Nice to see that it’s causing a big uproar, hopefully VMware is not deaf in addition to being dumb and blind.

    Comment by Nate — July 13, 2011 @ 10:05 am

  6. I’ve talked with a friend who is one of the largest vmware database hosting firms. He has confirmed that unless the CEO changes his mind these prices are going to stick. Vmware isn’t interested in the small to mid market anymore…they are gunning for the higher end enterprise(large enterprise) market. He said large vmware shops like his won’t get hit much by the increase..smaller shops are going to get crushed. Looks like hyper-v and kvm and others are going to fill in the void that vmware has purposefully left.

    One thing that is interesting…the ceo of vmware is the former #3 microsoftie. I’m wondering if this is on purpose to give ms some traction with hyper-v.

    Comment by William — July 16, 2011 @ 5:14 am

  7. @william if true, its very short sited. if you burn the very people who made your company successful you will pay for it in the end. Yeah VMWares stock is peaking, but guess what, a customer revolt is being essentially ignored by the financial press who are pretty clueless when it comes to this stuff. When VS5 starts shipping and guess what, the vast majority of your customer base simply refuse to upgrade or buy, your bottom line will take a hit.

    This absurd push to make everything “Cloud” or IaaS is a foolish trend that really doesn’t apply to the majority of companies out there. Its frustrating to be simply forced into a fad.

    Comment by tgs — July 20, 2011 @ 7:35 am

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