Will VMware's new licensing scheme open the door for Microsoft?

The new pricing scheme that VMware has announced for vSphere 5 has many existing users up in arms, as they face the unpalatable prospect of price hikes that can reach 400 percent or more. How will your organization fare under the new scheme? Does it spell the end of the road for vSphere in your company, or is it just the price that has to be paid for using the market-leader?

<a href='http://meincmagazine.com/business/news/2011/07/what-will-the-vmware-vsphere-5-licensing-changes-mean-for-you.ars'>Read the whole story</a>

 

[bodydown]

VMware licensing was already very expensive and complicated. I think in general people paid for it because they wanted HA capabilities, heretofore non existent in Hyper-V. Once Hyper-V has some HA options it will become a player. They also have to compete with KVM, which seems to be gaining some traction.
At least they stopped penalizing AMD customers for buying AMD instead of Intel.

 

[TechGeek]

Unfortunately if people in business are like the people in my companies ITS group, they are like "Why would we buy anything other than VMware?". I can't convince the stupid idiots that they should *at least* consider KVM, get a Red Hat rep to come in and talk. We are building a new data center which I figure will cost us $500K in licenses just to VMware. We could probably get Red Hat's KVM for free because we are academic. But I can't seem to get through to people, especially the ones that openly proclaim they are VMware fanbois.

 

[Deleted member 14629]

Hmm, looking at the way they're handling licensing, all I can think of is "cloud server infrastructure licensing".

 

[Shannara]

At work, we've been moving away from VMWare to VBox ... screw VMWare.

 

[szlevi]

Upcoming XenServer 6 - available in beta here - blows current Hyper-V out of the water and it even integrates with SCVMM 2012...


...once again, EMC pulled the usual dumb, greedy move - time to move on, Vmware addicts. Just like EMC became just-another storage vendor, VMware will lose market share too, thanks to the same stupid, greedy management.

 

[lohphat]

Unfortunately if people in business are like the people in my companies ITS group, they are like "Why would we buy anything other than VMware?". I can't convince the stupid idiots that they should *at least* consider KVM, get a Red Hat rep to come in and talk. We are building a new data center which I figure will cost us $500K in licenses just to VMware. We could probably get Red Hat's KVM for free because we are academic. But I can't seem to get through to people, especially the ones that openly proclaim they are VMware fanbois.

1. Because the people who are responsible for the 24/7 operational impact of the solution have a greater vested interest than someone in a cube who goes home at 5pm.
2. VMWare has a more robust and mature architecture -- at this time -- That may change, but they're are the industry leader not because of knee-jerk responses because they're better for a lot of scenarios. I know people who have run VMWare, XEN, and HyperV, and VMWare almost always wins out for the manageability and scalability.
3. The new pricing model really hurts high-density deployments hardest -- e.g. domain hosting with tons of low-usage linux VMs.More reasonable SMB deployments should not be hurt that hard.
4. Regardless, this does make the VMWare case harder to sell is some scenarios and I hope VMware loses sales due to this decision. Remember they either raised prices because they could or because they're stupid. My money is on both.

 

[xnyl]

To me it shows where innovation stops the new monetization scheme starts. Too bad for vmware, guess they have grown too big... ? We are however moving away from them thank god!

 

[aduljr]

We'll we have Hyper-V, Xenserver, and vSphere were we work. Xenserver 6 is looking pretty good if vmware sticks with this pricing structure.

 

[wanorris]

So if VMWare has entered the bleeding-its-customers phase, does that mean Oracle is looking to buy them? It seems like they're determined to be a one-stop-shop for price gouging.

 

[[S]Replicant]

Wow. Not good. I'm just in the process of building servers for an SaaS deployment. We'd pretty much decided on VMware, but this announcement changes things going forward. Now I'm really leaning towards Hyper-V.

 

[Abhi Beckert]

I'm not a sysadmin, so I don't know the exact details. But we have VMWare running on a server with 48GB of RAM.

Those prices are a drop in the bucket compared to the monthly lease for the actual server and the bandwidth it uses.

 

[el_segfaulto]

We were considering taking the dive from 4.1 to 5, now my idea of at least trying KVM and QEMU out is gaining some merit. VMware may come to regret this decision...they are not the only game in town.

 

[ferzerp]

Hyper-V is most certainly not free.

Well, technically it is free in the same way ESXi is free.

The hypervisor is free for both, but if you want any useful features or management, you have to pay. In the Hyper-V case, that is with a System Center subscription.

edit: I want to be clear. I'm not defending this greed-induced move, but saying HyperV is free is a misleading claim because you can get a like (ok, greater) feature set with un-managed ESXi for free than you get with the free, unmanaged HyperV.

 

[brianmac86]

@#&k!! I will never buy another EMC product, and I guess that all of our new hosts will have to be KVM or Xen6. Please VMware, gouge my eyes out...

 

[MatthiasF]

At those rates, it's probably cheaper to use KVM or VirtualBox and then hire a programmer to add the features you want.

Better yet, get a dozen or so firms to do it and share the work with the world under BSD or something.

Bam, I just killed VMWare.

 

[lohphat]

At those rates, it's probably cheaper to use KVM or VirtualBox and then hire a programmer to add the features you want.

Better yet, get a dozen or so firms to do it and share the work with the world under BSD or something.

Bam, I just killed VMWare.

Yeah because adding a $80-120K/year programmer to introduce long-term custom code development TCO to teach VMWare a lesson makes perfect sense.

VMWare is playing a game of brinkmanship -- this is how the free-market balances prices.

But don't go double-barrel-at-both-feet stupid. They're betting it's still cost effective. Thay may or may not lose in the long run.

We'll see.

 

[issor]

VMWare tends to look at this from the perspective of the hardware cost of X physical servers vs one server and their software. They can ask for quite a bit and still be a bargain when comparing 10 small servers to 1 beefy server and their licenses.

The third competitor is expertise; you can spend money on licenses and support and save on systems engineers, or you can spend money on good employees who have the ability to deploy and support more complex alternatives.

 

[issor]

At those rates, it's probably cheaper to use KVM or VirtualBox and then hire a programmer to add the features you want.

Better yet, get a dozen or so firms to do it and share the work with the world under BSD or something.

Bam, I just killed VMWare.

Yeah because adding a $80-120K/year programmer to introduce long-term custom code development TCO to teach VMWare a lesson makes perfect sense.

VMWare is playing a game of brinkmanship -- this is how the free-market balances prices.

But don't go double-barrel-at-both-feet stupid. They're betting it's still cost effective. Thay may or may not lose in the long run.

We'll see.

I agree with you in some respects, but in reality we're talking about a task that's within reach of about half of the administrators I work with (if the devs don't have time). KVM and Xen both have features and APIs available that would simply require a good employee to script/automate/report a bit to add features that most people are probably looking for. The functionality is there, the management utilities are not. Most small shops are probably not in need of the extra features the pay licenses add; most large shops probably have existing staff that could make alternatives work well. In the end it comes down to management decisions; does the shop make a habit of hiring good people and solving problems in-house, or cheap people and have a list of phone numbers on the white board? This shouldn't be taken as a call on which is better, I used to work for a large company with 700 VMs in ESX and all the licenses we could buy, now I work for a company that does most things in-house. There are pros and cons to both.

 

[DrPizza]

Hyper-V is most certainly not free.

Well, technically it is free in the same way ESXi is free.

The hypervisor is free for both, but if you want any useful features or management, you have to pay. In the Hyper-V case, that is with a System Center subscription.

edit: I want to be clear. I'm not defending this greed-induced move, but saying HyperV is free is a misleading claim because you can get a like (ok, greater) feature set with un-managed ESXi for free than you get with the free, unmanaged HyperV.

That's true, I had inadvertently removed a sentence saying that the Hyper-V management software costs extra, it should be reinstated now. AIUI it's still a huge difference, because my interpretation of Microsoft's baroque licensing and pricing system is that SCVMM is a single fixed per-server fee (other SC options have per-socket licensing, but the base SCVMM doesn't).

The Windows license on the host does, of course, impose memory restrictions of its own, but as long as you're on Enterprise or Datacenter these are essentially unrestricted (both at 2 TB physical RAM). Datacenter has the interesting feature of also allowing the host license to be used for unlimited guest instances, as long as you're willing to pay $3000/CPU on the host. If you're running a large number of virtual machines, that may become a compelling reason to run Datacenter (and hence Hyper-V) on the host.

 

[DrPizza]

VMWare tends to look at this from the perspective of the hardware cost of X physical servers vs one server and their software. They can ask for quite a bit and still be a bargain when comparing 10 small servers to 1 beefy server and their licenses.

The third competitor is expertise; you can spend money on licenses and support and save on systems engineers, or you can spend money on good employees who have the ability to deploy and support more complex alternatives.

The problem is, I think a lot of companies don't really bother to properly calculate TCOs, so don't consider cooling/power/space considerations of physical servers (unless they have very good reason to, for example if they're literally out of space/cooling capacity/power). Rather, they just look at the purchase price. Putting VMware's pricing even in range of the price of physical servers thus strikes me as a very bad idea.

 

[jalexoid]

1. Because the people who are responsible for the 24/7 operational impact of the solution have a greater vested interest than someone in a cube who goes home at 5pm.

Then they are better off buying IBM System p, though Windows in out of the question on that platform. Otherwise nothing can compete with vShpere Enterprise solutions...

3. The new pricing model really hurts high-density deployments hardest -- e.g. domain hosting with tons of low-usage linux VMs.More reasonable SMB deployments should not be hurt that hard.

Low usage Linux VMs are already mostly hosed on alternatives with better cost/value ratio. vSphere kicks everyone out of the ballpark in heterogeneous environments.

4. Regardless, this does make the VMWare case harder to sell is some scenarios and I hope VMware loses sales due to this decision. Remember they either raised prices because they could or because they're stupid. My money is on both.

Well Hanlon's razor is Hanlon's razor....
To be fair, Microsoft's licensing is still a quagmire.

 

[jalexoid]

Yeah because adding a $80-120K/year programmer to introduce long-term custom code development TCO to teach VMWare a lesson makes perfect sense.

VMWare is playing a game of brinkmanship -- this is how the free-market balances prices.

But don't go double-barrel-at-both-feet stupid. They're betting it's still cost effective. Thay may or may not lose in the long run.

We'll see.

There is always an option to sponsor a management feature for the FOSS project and have a FOSS house then support it. That is how a lot of companies get PostgreSQL features in. Sponsor a feature and get support form the likes of EnterpriseDB.

 

[pepoluan]

Hmmm... this article made me gravitate more toward XenServer...

My employer has been evaluating virtualization since last year, with VMware and XenServer the top contenders. A newly inaugurated subsidiary office has decided to go with XenServer, and we are satisfied with its performance running Windows 2008 R2 + Ubuntu + Gentoo servers.

Plus Citrix's per-box licensing (no matter how many sockets or RAM inside) beat and pulverized VMware's licensing.

Upcoming XenServer 6 - available in beta here - blows current Hyper-V out of the water and it even integrates with SCVMM 2012...

...once again, EMC pulled the usual dumb, greedy move - time to move on, Vmware addicts. Just like EMC became just-another storage vendor, VMware will lose market share too, thanks to the same stupid, greedy management.

Indeed. I'm looking forward to trialling XenServer 6.

Yeah because adding a $80-120K/year programmer to introduce long-term custom code development TCO to teach VMWare a lesson makes perfect sense.

VMWare is playing a game of brinkmanship -- this is how the free-market balances prices.

But don't go double-barrel-at-both-feet stupid. They're betting it's still cost effective. Thay may or may not lose in the long run.

We'll see.

There is always an option to sponsor a management feature for the FOSS project and have a FOSS house then support it. That is how a lot of companies get PostgreSQL features in. Sponsor a feature and get support form the likes of EnterpriseDB.

True.

In addition, the supposedly $80-120K/year operating expense can easily be amortized over several companies willing to leave VMware and go with FLOSS solutions.

XCP, anyone?

 

[pepoluan]

-- bah, dupe --

 

[MatthiasF]

Yeah because adding a $80-120K/year programmer to introduce long-term custom code development TCO to teach VMWare a lesson makes perfect sense.

VMWare is playing a game of brinkmanship -- this is how the free-market balances prices.

But don't go double-barrel-at-both-feet stupid. They're betting it's still cost effective. Thay may or may not lose in the long run.

We'll see.

There is always an option to sponsor a management feature for the FOSS project and have a FOSS house then support it. That is how a lot of companies get PostgreSQL features in. Sponsor a feature and get support form the likes of EnterpriseDB.

This was more what I was getting at originally, but even if it costs $9000-12,000 for a feature it's still worth it for companies with tons of virtual machines to just make the feature they want customized for the task.

Requiring either the employee or the consultant to offer the work under BSD license (GPL is asking too much sometimes) would lead to not only their investment getting better with time (as more people add to it) but developing a cheap standard to follow for future projects.

 

[afidel]

VMWare tends to look at this from the perspective of the hardware cost of X physical servers vs one server and their software. They can ask for quite a bit and still be a bargain when comparing 10 small servers to 1 beefy server and their licenses.

The third competitor is expertise; you can spend money on licenses and support and save on systems engineers, or you can spend money on good employees who have the ability to deploy and support more complex alternatives.

The problem is, I think a lot of companies don't really bother to properly calculate TCOs, so don't consider cooling/power/space considerations of physical servers (unless they have very good reason to, for example if they're literally out of space/cooling capacity/power). Rather, they just look at the purchase price. Putting VMware's pricing even in range of the price of physical servers thus strikes me as a very bad idea.

We calculate it, and there is little ROI for the extra $70k I would need to upgrade my licenses. So, rather than continue to feed VMWare and the idiot MBA's that make such decisions by continuing to renew my subscription and support contracts I'm starting a KVM trial and will be beta testing Windows Server 8 and Hyper-V 3.0 as soon as those are available. We haven't had the best experience with our XenServer 5 cluster so combined with the lack of major progress towards feature parity in XenServer 6 I'm not that serious about Citrix right now. It might take me a year to get off VMWare but if something doesn't change before vSphere 5 goes RTM I will be doing it if it's technically feasible.

 

[ciscog33k]

VMware will bleed high-density windows customers to Microsoft if they don't do a mea culpa fast. The new Hyper-V will have HA and DR features.As for the cost of SCVMM, it's almost nothing compared to what VMware is asking.

I'm running 64 VMs on 3 2-socket/6core per cpu hosts with 64GB each. 6 Datacenter licenses cover me for hyper-v and all my windows guests. You can also buy the entire system center suite on the same model for the tiny price of about 10k. That gets you SCOM, SCCM, SCVMM, SM, DPM, and a couple other things tacked on. That's a HUGE value MS is offering.

For MS customers, Hyper-V becomes a no-brainer.

I really like VMware's software, but they are being greedy/stupid with this move and I hope they realize it fast.

 

[ewelch]

Another alternative is OS X Server, which is now $79, including the Lion license.

Oh, wait, the killed XServe. Doh!

 

[alxx]

microsoft ? no! redhat and kvm for the big win (or centos 6 and kvm for free)

The management tools for kvm are improving and by the end of the year look like they'll be better and more capable that vmwares (supposedly being rewritten in java at the moment from the original dot net)

 

[JRod]

I used XenServer 5.5 for as long as it took to run into their tech support once.

VMWare may be great for big org's but it doesn't make sense for Small to medium businesses. And there's a LOT of small to medium businesses.

 

[GreenEnvy]

This change won't affect my organization. We use essentials plus, and have 3 hosts per site, 24gb per machine, 2 cpu's with 4 or 6 cores per cpu. That is enough for us now. Our two smaller offices it's actually overkill, we run around 5-10 VM's in those offices. The larger office runs dozens of VM's, probably around 12 per host.
This pricing change certainly would get me to look at HyperV if we were larger, and using the standard licenses.
We used XenServer a couple years ago before switching to Vmware, but it was unstable (same servers running esxi 4.1 are rock solid).
HyperV I used a bit for some low intensity servers, but don't need to anymore thanks to having vmware.

 

[UN1Xnut]

We literally just deployed a few million dollars worth of Cisco B230 M2 blades with dual E7-2850s and 256GB each. We're already pushing north of 20:1 consolidation ratio and if this licensing stands, our VMware bill will _more than double_. Fuck you VMware.

 

[coobal]

OK, the people who are looking at Vsphere are not small business to begin with. They download, register, and use esxi - it's free (as in beer.) Yes, they can use kvm, xen, virtual box, hyper-v. The big thing is the lack of High Availability (HA).

The people using Vsphere have already spent several hundred thousand on a SAN, and they have multiple vmware servers, and use HA to move VM's between the servers to as resources change or hardware outages. We run 150 VM's off of 5 servers. Believe me, the license increase is nothing. Licensing the VM's is the expensive part.

 

[LoneBagel]

microsoft ? no! redhat and kvm for the big win (or centos 6 and kvm for free)

Given CentOS' extreme difficulty in producing even a modestly timely 6.0 release I certainly would not be willing to bet my company's datacenter on it. I used to aggresively advocate the use of CentOS in our IRAD environments due to its ABI compatibility so we could go into production on RHEL, but now I wouldn't use CentOS for anything other than ad hoc stove pipes.

I would definitely be more willing to consider kvm once their management tools mature. Yes I know I can script my own, but I work in and stand up many disparate environments and VMware provides a consistent and reliable interface and backend capability. But this new pricing is indeed insane; while I can understand why as core counts and memory densities increase they might need to change their model such a massive increase, during a recession no less, will cause companies that leveraged this technology to SAVE money to run right to Citrix and Hyper-V.

 

[TechGeek]

"1. Because the people who are responsible for the 24/7 operational impact of the solution have a greater vested interest than someone in a cube who goes home at 5pm."


The point isn't that they think VMware is just better. It very well may be. The problem is that they are so entrenched in VMware dogma that they won't even consider listening to a rep from ANY other virtualization provider. Even when $500k is on the line (thats the Ver 4 cost) My employer is penny wise, pound foolish. As an employee though, I can't help think about the fact that the students are the ones who have to pick up the tab. (before anyone mentions, my university is 90% tuition driven).

EDIT: I was misreading the quote.

 

[darkphetus]

this change kills us, as we use high density UCS blades to stack VMs and use HA to replicate them remotely

KVM here we come

 

[afidel]

OK, the people who are looking at Vsphere are not small business to begin with. They download, register, and use esxi - it's free (as in beer.) Yes, they can use kvm, xen, virtual box, hyper-v. The big thing is the lack of High Availability (HA).

The people using Vsphere have already spent several hundred thousand on a SAN, and they have multiple vmware servers, and use HA to move VM's between the servers to as resources change or hardware outages. We run 150 VM's off of 5 servers. Believe me, the license increase is nothing. Licensing the VM's is the expensive part.

Huh? We flipped Enterprise licenses to datacenter for about $140, $280 and two virtualized enterprise systems and the other 19 (on average) VM's on that host are free as far as MS OS licenses. And yes eating up $70-$100k in capital expenditure and however much in additional annual operating expenditure is VERY significant when we are doing things like switching to FEP from our existing Trend just to save the $20k per year (or whatever) in expense. I'm refusing to be held hostage to this and at most vmware will get one more renewal for SnS out of us, within 18 months I will be off ESX unless this policy is seriously modified.

 

[Evil_Merlin]

I've been slowly replacing our entire ESX environment with Hyper-V. Just by getting rid of ESX we have saved over half a million dollars across the next 3 years.

Yes half a million.


Microsoft's licensing is fantastic and Hyper-V itself is quickly reaching parity with ESX 3.5. No it's not at 4's level yet, but its getting there.

 

[PKG]

Another alternative is OS X Server, which is now $79, including the Lion license.

Oh, wait, the killed XServe. Doh!

We're talking about real servers here - linux and windows; if you want to use a hobby toy by all means use osx server ahahahah.