A Look at VMware Licensing & Environment Growth

My previous post on VMware licensing changes focused mainly on the question of “will I be able to upgrade my current setup to vSphere 5?” I concluded yes, easily, and if you would like to see how I did it I encourage you to go read the post.

It’s pretty obvious that futures will change, though. I’ve always subscribed to the “fewer bigger machines” theory, to which I owe a lot to Steve Chambers. Some of his writings espoused the idea that most IT failures are human error, to which I agree. Coupled with that is the idea that the cost of a server isn’t in the price, it’s in the management of it. So why have more machines, more network ports, more SAN connections, more of everything to manage and have errors and problems with? Besides, VM performance is better with larger pools of resources, too, especially with many different sizes of VM.

My last strategy, up until Tuesday, July 12, 2011, was to keep buying Dell PowerEdge R810s with dual Intel X6550s and 256 GB of RAM. That’s 16 cores in total. My environment, like many, eats RAM, so I need more of that than I need CPU. So I set out to see how big of an effect this will have on my budget.

Some things I’m thinking of & assuming as I ramble through this:

  1. You can buy vSphere licenses as you go, so you don’t have to do it all at once. However, it’s my intention, when I acquire a server, to fill it up, so I’ll work with that assumption.
  2. A “full” server isn’t 100% allocated RAM, but really 85% according to Gabrie. That covers overhead and such. It might be lower still if you use the HA/Fault Domain Manager capabilities.
  3. For me, growth is triggered when I reach 90% of “full,” so 90% of 85% of 256 is 196 GB. I will use that number in my work.
  4. This work will assume I’m just adding to my already-full cluster, and I don’t need to worry about spare capacity at all, the +1 in the N+1 cluster sizing.
  5. I will use numbers from Dell’s main web site here, as well as list price of VMware licenses. I will discount all prices by 20% to try to keep it more realistic (nobody pays list price, right?). I’ll also assume SnS is 25% of the price of a license, paid yearly.

So, I spec’ed out my baseline R810, with 256 GB of RAM, dual Intel X6650s, dual power supplies, RAID 1 146GB 10K disks on a PERC H700, additional Broadcom 5709 and Intel X520-DA NICs, a 5 year NBD warranty, and “keep your hard drive” for five years. It comes to $22,626. Minus my theoretical 20% discount that’s $18,149, or $6,050 per year for three years if you depreciate.

196 GB of RAM, divided by 48 GB of RAM per CPU, is 4.08 Enterprise Plus licenses, which I will round down to 4. List price for Enterprise Plus is $3,495, but after my 20% discount it’s $2,796, totalling $11,184. SnS per license is $699, so 5 years times 4 licenses times $699.00 = $13,980.

For five years the vSphere 5 total for one of these servers is:

  • $18,149 for hardware.
  • $11,184 for vSphere 5 Enterprise Plus licenses.
  • $13,980 for SnS.

Summing up to $43,313, over five years. That’s $225 per GB of RAM for five years, by the way, or $45 per GB per year.

Doing the same math for vSphere 4, where the major difference is the lack of two more Enterprise Plus licenses, yields $30,732. That is a difference of $12,582 over five years.

If I break it down according to my depreciation schedule, three years for purchases over $5,000, it looks like:

  1. $12,574 vs. $9,312 ($3,262 difference)
  2. $12,574 vs. $9,312 ($3,262 difference)
  3. $12,574 vs. $9,312 ($3,262 difference)
  4. $2,796 vs. $1,398 ($1,398 difference)
  5. $2,796 vs. $1,398 ($1,398 difference)

Can I shave $12,582 out of the cost of a server in five years? Um, no. But $3,262 a year isn’t as big of a chunk, and if I don’t buy the vSphere 5 licenses until I need them that’ll save me money, too. In fact, if I wait until year 3 to buy the licenses I save nearly $3,000. I could also order the hardware with 128 GB of RAM (16 x 8 GB) and get the other 128 GB in year 3, hoping the price comes down.

I have four other thoughts on how to make this budget-neutral.

First, perhaps I can cut down on my support costs, relying on lower levels of support. I actually have BCS support, so for me I’m going to make this budget-neutral in the medium-term by dropping it. I’m not real happy with BCS support, as I don’t ever need help. I just call to report bugs, and they never fix them. If VMware is going to ignore me & my bug reports I might as well go for the cheapest option available.

Second, I could be much more “just-in-time” about growing the environment. That’s a lot of screwing around with it, though. Perhaps the autodeploy features will ease that, but buying licenses is always a big pain. I’d rather just do it once.

Third, I could look at smaller machines. Thing is, I’m not willing to run 800 MHz RAM on Nehalem architectures, so I’d be limited to 96 GB of RAM on Dell R610 & R710s. License-wise, that’s good, but I will lose money in acquiring and managing extra network switch ports, SAN connections, etc. I’d rather just pay for extra licenses for the bigger hosts.

Last, could we frame this as vSphere 5 saving my organization $12,582 in staff time? If we say that an average staff member costs $40/hour to a business when you figure in pay, unemployment, benefits, etc. that’s 314 hours of time, or almost 63 hours of time per year for five years. That’s actually plausible.

Overall, though, this isn’t a welcome license change if you aren’t done growing your VMware environment. It’s potentially very expensive and VMware knows they have us stuck where we have to pay it. I will have to, as the options to save money just aren’t very good. I can only hope that it opens the door wide for competition in this space. Real competition, not the Xens, KVMs, Oracle VMs, and Hyper-Vs we have now.

And yes, I know, this all sounds like a departure from my previous posts. But I hadn’t really worked through all the numbers, so I didn’t want to talk about it until I had. Honestly, I thought there would be some options for cutting costs, but beyond support changes there really isn’t anything that actually saves any money.

As before, I always welcome factual & professional comments and discussion! You can also reach me at @plankers if you find an error or would like a clarification.

13 thoughts on “A Look at VMware Licensing & Environment Growth”

  1. Thanks for the detailed write up. I’m crunching similar numbers in various scenarios. My strategy has been to continue to move towards larger servers (cores & memory) and to scale up as well. I have found the licensing change to not be an issue today but in the near future (8-18 months out). This all depends on which of several possible scenarios plays out for where we as a company go but most of the scenarios and all of the preferred ones lead us down the path of where this could well increase our VMware licensing costs.

    That being said the increase looks as though in most cases it probably wouldn’t be as bad as I was initially expecting it would be. The vSphere Desktop licensing with unlimited vRAM also looks like it may improve my numbers. I wish they would have announced that yesterday along with the licensing changes. There could also be a few adjustments to how it’s being sold that would help many people. The two that stick out to me are an additional vRAM SKU and bumping up the vRAM limits a bit.

    In the end I think with better packaging, marketing and presentation of this licensing change that there would be much less discussion of licensing going on and much more about the great new features that are available with vSphere 5.

    Thanks for the blog post; the more information, numbers and examples we have along with more discussion I think that this will become less of an issue for most people. Note that I said less of an issue, not that it will go away completely 😉

  2. You mntioned Xen in the last paragraph but so far many of the die hard vmware admins have not looked at the recent ability of Xen.

    Now I’m not trying to push it, but Vmware ( for me at least) has annoyed us financially enough with surpise licensing to push many of the non-critical ( non- HA needed) systems to the Xen platform. Vmware has, by far, he best HA available but for everything else, there is little arguement now against using XenServers.

    And as for VDI, vmware has just given yet another reason to stick with the same vendor throughout – XenDesktop on Xenserver. I’m about thrown the phone across the room dealing with vmware blaming an issue on someone else, I can’t even begin to imagine them troubleshooting a ESX issue with XenDesktop running on it. The vmware licensing has just put another nail in the coffin for use of vmware for that purpose.

    Now vmware does have the best HA but I do think that Xen is comming close. We’ll see in the next year.

  3. Interesting to hear that the general consensus is the VMware support contracts are worthless.
    As a prospective customer, good to know.

    • I wouldn’t say worthless, but if you’re not an idiot you can save some serious cash. They’ve also changed the whole support structure since we did the ELA, from metals (gold, silver, etc.) to production/basic. I’d probably actually just do all production support next ELA iteration, dropping BCS & TAM services which I don’t utilize.

  4. Keep in mind that you might not be able to buy the same system in 3 years, thus forcing you to create a separate cluster or hamstring the new chip with EVC.

    I just finished my first hardware refresh and turned the old hardware into a cluster for test/dev VMs. I may drop these to the free hypervisor and recycle my licenses. I also plan to use some of them to test RedHat/CentOS virtualization.

    If you do a lot of tomcat, vFabric might be worth it. “Available later in 2011, tc Server’s Elastic Memory for Java (EM4J) enables memory to be shared dynamically among Java virtual machine (JVM).” It also does memory ballooning.

  5. There are server which are capable with high density memory and lower cpu sockets had been significant impacted. Cisco ucs b230m2 can offer 2sockets 10 cores with 256GB memory easily, but now you end up require 4enterprise plus license to run it. VMware try to defend thier decision but it does not change the fact that they are imposing double charges for matured and large vmware deployement for existing environment. Of course they claimed you can stick to version 4.1 now, but they will soon announce EOS on version 4 to force all of us to go version 5.

  6. Ed, I’m reading on the VMWare forums that the free hypervisor will be capped at 8GB vRAM total making it basically worthless as a test environment.

    For my particular situation, I was looking to deploy a small cluster, our first real jump into the virtual world outside of the free hypervisor. Moving to VS5 and being allowed to use all of the physical RAM in my boxes will push the licensing up by about 320%.

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