Software licensing is one of the most confusing part within the IT industry. Since virtualization has become wildly popular things are getting worse. Some application software vendors require cpu socket based licensing, which is fair for physical hardware but inappropriate for software running inside virtual machines. With the latest changes VMware has really fair and understandable licensing models. Today i am going to compare the the two license models perpetual and VSPP (VMware Service Provider Program). To make the models comparable i will consider vSphere Enterprise Plus Licenses only, without any additional products, except VMware vCloud Director.
This is the common pricing model by VMware. The price is based on CPU sockets. As of today there is an unlimited virtual memory entitlement. (In 2011/2012 with vSphere 5 the memory entitlement was limited to 96GB per CPU socket within Enterprise Plus.) That implies that the cost factor is only the CPU Power. You do not need to consider virtual or physical memory when buying perpetual licenses. This makes the licensing really easy. Just count the CPU sockets, buy one additional vCenter license and you are done.
Perpetual editions does not include a vCenter Server. Additionally you always have to pay Subscription and Support (SnS) for at least one year. Since vSphere 5.1 there is a new pricing model available, the vCloud Suite which also includes vSphere Enterprise Plus, vCloud Director and VMware vCloud Networking and Security Standard. I will take this into consideration because vCloud director is also included in VSPP.
VMware perpetual retail prices
|Product||License||1 Year SnS|
|VMware vSphere Enterprise Plus|
ESXi License per CPU socket
|VMware vCloud Suite Standard|
ESXi License per CPU socket (Includes vCloud Director)
|VMware vCenter Server Standard|
VMware Service Provider Program
The VMware Service Provider Program (VSPP) is suitable for partners who offer hosted IT services to 3rd parties. This is a non-pertual, pay-per-use model where a service provider licenses VMware products through a points based model where each product costs a specific number of points per month. The retail price for a single point is $1,00. The more points a service provider consumes, the less a single point costs.
The package i want to compare against perpetual licensing is the VMware vCloud Service Provider Bundle - Premier Edition which costs 7 points per month and is charged per 1GB reserved memory. This package includes vSphere Enterprise Plus, vCenter Server Standard, vCloud Director and VMware vCloud Networking and Security Advanced. The lower limit on reservation percentage is 50%, so even when you do not work with memory reservations you have to pay 50% of the virtual machines memory. There is also a pricing cap of 24GB per virtual machine. You will never be charged for more than 24GB reserved memory per vm.
What is reserved memory?
Reserved memory is a pure technical function. It guarantees a specific amount of physical memory to the virtual machine. Per default no reservations are configured. You can reserve all guest memory by selecting "Reserve all guest memory (All locked)" or reserve a specific amount of Megabytes. Because of that 50% and 24GB VSPP rule, licensing should be considered during resource planning.
|VM Memory||Cost (No Reservation)||Cost (100% Reservation)|
1*7 Points (lower limit 50%)
2*7 Points (lower limit 50%)
4*7 Points (lower limit 50%)
8*7 Points (lower limit 50%)
16*7 Points (lower limit 50%)
24*7 Points (24GB Cap)
24*7 Points (24GB Cap)
24*7 Points (24GB Cap)
Configure Memory Reservation with vSphere Client
Configure Memory Reservation with vSphere Web-Client
Perpetual vs. VSPP
There is no doubt that VSPP has a lot of advantages. You can size and buy a large cluster and grow while paying only the resources you actually use. You are much more flexible to run a cluster for a few month. Adding hosts to an existing cluster does not require additional licensing overhead. You do not have to track licenses, you just report what you use. HA failover resources are free. You do not need to consider vCenter Server licenses, because they are included. But are there any drawbacks except that is only available for service providers and not for internal use? Are there any circumstances that make perpetual licensing more attractive? Let's do the math!
Note: I will consider Enterprise Plus and vCloud Suite Standard (vCloud Director included) perpetual licensing. The lifetime is set to 3 years because you usually buy new hardware after 3 years. I assume that no virtual machine reaches the 24GB cap. When you reach that cap, VSPP becomes even more attractive. I also do not use memory overcommitment. With that, and the 50% lower limit in mind, there is a rule of thumb:
VSPP License Cost = at least 1/2 hosts memory
Perpetual License Cost = CPU Socket Count + vCenter
Calculation 1 - Small Entry Cluster
In the first example i want to calculate a small entry cluster:
3 ESXi Hosts with 2 Sockets, 64GB of RAM with one failover node.
vSphere Enterprise Plus+vCenter (+3 Years SnS): $52.194,00
VMware vCloud Suite Standard+vCenter (+3 Years SnS): $61.194,00
VSPP 3 Years ($392,00 per month): $14.112,00
Conclusion: VSPP licensing is really attractive for small entry clusters. Even with memory overcommitment or 100% memory reservation, it is much cheaper.
Calculation 2 - Making it Comparable
Now i want to make both models comparable. How to compare a static cpu socket based license with the dynamic per vRAM licensing? The answer seems to be simple: How much memory is equivalent to one CPU socket? I am going to compare 2 and 4 CPU socket systems against VSPP memory cost where VSPP has a lower limit (no memory reservation) and an upper limit (full memory reservation). To make this example more real-world, the cluster size is set to 10 with one failover node.
Conclusion: As you can see, VSPP licensing is a really price attractive program for service providers. You hit the perpetual cost only when buying servers with much memory or abnormal overprovisioning rates. It is possible to pay more with VSPP licensing, but it's not plausible to have such clusters. Please also note that the cost for a single point drops the more total points you have. The more clusters you have, the more money you safe. To answer the question: As a rule of thumb, 1 CPU socket perpetual license is equivalent to 64 GB of vRAM with VSPP. But the is much more to consider...