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VMware adds vRAM tiering to vSphere 5 pricing

In what some are describing as a sleight-of-hand maneuver to increase revenue, VMware has revamped the licensing model for the soon-to-be-released vSphere 5. VMware is now introducing vRAM tiering into the license model, but they are also dropping the per-core licensing. The per-physical-socket licensing will remain unchanged. So, in essence, customers no longer have to worry whether a physical processor has 2 or 12 cores, the price for that socket will be the same. The major change is that the license level must be increased as you go from 24 to 32 to 48 GB or more of vRAM used.

From what I can gather from the official PDF from VMware (and feel free to correct me if I am wrong), if you previously had a host with 2 6-core sockets and 256 GB of physical RAM, you could have 2 vSphere Standard licenses (one per CPU). The same machine with all physical RAM allocated as vRAM would now require over 5 vSphere 5 Enterprise Plus licenses.

On the other hand, if you had the same server with only 96GB of physical RAM fully allocated as vRAM, you would only need two vSphere 5 Enterprise Plus licenses. Where this will really impact customers is in cases where the server may have only 128GB of physical memory, but is overcommitted (memory-wise) well beyond the 128GB. In this case, it doesn't matter that the server only has 128GB of physical RAM. The end-user will have to pay licensing all the way up to the overcommitted amount. This is mind boggling in a way since one of the main reasons customers switched to VMware was memory, CPU and storage over commit.

In speaking with several of my clients so far, the reactions are mixed. Those with very high core count servers seem to be indifferent since they were already paying for the highest levels of licensing. Those with 6-core (and below) processors in their servers who have overcommitted memory significantly are pretty angry. I can see where VMware is pushing toward a consumption based model with customers paying for what they are actually using in terms of virtual resources, but this could put a major kink in the internal chargeback systems customers already have. An IT department that charges back internal departments based on virtual resources (which are overcommitted on the back end) will now see their licensing costs skyrocket. They will, in turn, have to raise the chargeback rates to remain 'profitable.' This will cause a furor inside many businesses. It will be interesting, to say the least, to see the general reaction from the industry to this pricing shift.

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