With second-generation cloud providers taking the world of cloud computing by storm, one is left to wonder whether on-premise VMware environments and licensing is still the best bet for enterprises and companies of all sizes. Once the go-to solution, VMware’s virtualization platform was never without its share of challenges, but now companies are beginning to look to newer and more flexible options offered by cloud infrastructure providers.
In an effort to put a finger on the pulse of the industry in terms of the overall view of on-premise VMware licensing in light of the new opportunities offered by second-generation cloud providers, we rounded up 18 expert tips and quotes on the challenges of VMware licensing and where experts see the industry headed in the future.
1. Now that virtualization has become an enterprise staple, the question is shifting to where organizations can save money in the virtualization stack. And VMware licensing is finding itself the target of cost savings. “At the heart of vSphere is the ESXi hypervisor. Competitor products include open source hypervisors Xen and KVM and Microsoft’s Hyper-V. The upstart hypervisors have been effective enough to force VMware to offer ESXi for free; and yet, the management stack continues to be the true value of virtualization products.
“I talked with several customers, and there’s no question that vSphere features remain at the top of the heap. However, as companies reach the 80% to 90% virtualized server inventory threshold, VMware licensing becomes a target for cost savings.
“The debate is no longer over physical vs. virtual but which virtualization platform to select. I tried introducing Hyper-V into environments, but I found it difficult to manage heterogeneous hypervisors. With additional hypervisors comes additional operational complexity. Some considerations include backup, integration with IT service management tools, provisioning, and lifecycle management.
“There’s also the level of service that internal customers have become accustomed to from the vSphere suite. Developers depend on features such as high availability and the consistent performance provided by the Distributed Resource Scheduler (DRS).” - Keith Townsend, Why VMware may fall victim to virtualization cost cutting, TechRepublic; Twitter: @CTOAdvisor
2. Changing terms and conditions make compliance a headache. “After chatting with a number of licensing experts lately, including IDC’s Amy Konary, I think I understand what’s going on between software vendors and enterprise IT: Enterprise IT is from Venus; software vendors are from Mars. I chatted with Konary after the VMware debacle, and she laughed. ‘The Venus and Mars that you describe has always existed,’ she says. Software developers have a long history of changing the rules without notice, even when there’s no explicit stipulation for doing that in the license.
“To be fair, Konary says, they usually try to hold 80% of their users harmless. So it’s highly unlikely that VMware took a step calculated to hack off its customers. This wasn’t one of those ‘we can change the licensing terms on your existing product without notice’ moves.
“VMware isn’t changing the license with the new version of its core product. It’s changing the licensing model of future versions, in this case the new vSphere 5.0. This isn’t the first time a vendor has changed the terms and conditions of future upgraded software, Konary points out.
“Changing terms and conditions aside, software licensing is just hard to swallow. We want to own something without complications, without strings attached. Or if there are strings attached, we want to know what those strings are so that we can decide whether we want to deal with them before getting involved.
“Problem is, ownership doesn’t exist with software. Even with open source, you don’t own the bits; you own an entitlement to use the bits. As a software intellectual property owner, you (correctly) feel like you own the software. As a software intellectual property user, you also (incorrectly) feel like you own the software.” - Jonathan Feldman, in a 2011 article, Licensing Headaches: Is VMware Or Microsoft Worse?, InformationWeek; Twitter: @_jfeldman
3. You need a CPU license count matching or exceeding the number of cores for the total server. “With the proliferation of multi-core processor servers, many companies who invest in Business Objects as their business intelligence solution wish to use VMWare to host their installation. From a server perspective, this is often more desirable than having dedicated servers for an App as the initial cost and on-going maintenance will be cheaper with the VMware environment. It is also the typical setup when outsourcing application/data center hosting to a 3rd party.
“However, there are some licensing issues regarding the use of VMware that you need to be aware of.
“First the good news, with the Named User License, you should be fully compliant with SAP’s licensing model when using VMware for your Business Objects Enterprise installation.
“The CPU License is a little murkier. Technically, you need to hold as many CPU licenses as there are processors/cores on the server running VMWare. This means that you must hold a CPU license count matching or exceeding the number of ‘cores’ for the total server, not just the number of processors being used for the VMware instance hosting your BOE installation. If the server is a quad-core processor, and your BOE VMware instance is only accessing 2 processors, a 2 CPU license will not be sufficient. You will need to hold a 4 CPU license to be in compliance.
“This means, that even if you are only dedicating 1 or 2 CPU’s to your BusinessObjects server, if your hardware is running a Quad-core processor, you would be out of compliance with only a 1 or 2 CPU license. You would need enough CPU licenses to cover every processor/core in the server, to be compliant. Another option would be to dedicate one CPU to your BOBJ server running a 1 CPU license, meaning that if that CPU is down, so is your BOBJ server. Of course, this defeats the point of using VMware in the first place.
“Crystal Server and BusinessObjects Edge do not have this little licensing gotcha, as they are both available with a Concurrent user license. These may be better options, price-wise than the full Business Objects Enterprise CPU license.” - Chris Felkey, Business Objects on VMware, Spartan Technologies Blog; Twitter: @Spartan_Tech
4. Isolate your SQL servers onto their own hosts. “With SQL Server 2012’s licensing, when you buy Enterprise Edition for the host’s CPUs, you get unlimited virtual machines on that host. For a while, this wasn’t easily doable in VMware because of their incredibly stupid memory limits with licensing, but thank goodness they fixed that license stupidity recently. I can’t imagine a software vendor being dumb enough to limit their product to 64GB of memory in this day and age. I’m so glad VMware listened to their end users and fixed that limitation. Restricting a database server to just $500 worth of memory, why, that’d be like releasing a tablet with 4 hours of battery life.” - Brent Ozar, Big Changes for Big Virtual Machines in VMware vSphere 5, Brent Ozar Unlimited; Twitter: @BrentO
5. A choice of IT pros for years, some are now rethinking VMware licensing with new options now available. “VMware licensing had been the choice of I.T. professionals and service providers for years, despite its high cost, because it was the only software that offered all the features you needed. Now, we’re starting to think twice about it after seeing Microsoft’s Hyper-V in server 2012 R2. Microsoft Hyper-V licensing is half the cost of VMware because it includes all those features, for free. With VMware, you have to pay extra licensing costs to be able to use all the admittedly very nice features such as VMotion, high availability, etc. within vCenter. And vCenter itself is NOT cheap. With Hyper-V, all you pay up front is your server operating system costs. Pair this with their datacenter edition and you can have unlimited virtual machines on your hypervisor.” - David Xiong
VP of Technology, J – I.T. Outsource; Twitter: @JITOutsource
6. SaaS solutions will continue to claim increased market share, and some predict this will put VMware behind the curve. “VMware is playing a dangerous game, as SaaS continues to eat the on-premise world year after year. In fact, in the enterprise, we’re going to see the change over to more than half of software being sold as SaaS in the next three years. Doubling down on on-premise software will lead to lower margins, little to
no expansionary revenue, and frankly will put VMware behind the curve as nimbler competitors start to nibble at their market share. We’re already seeing the fear in the eyes of the top 100 software companies by revenue who are scrambling to port over to SaaS solutions (and doing a piss poor job – Adobe’s Australia issues with Creative Cloud and Microsoft’s billing debacles with Office as examples of issues).” - Patrick Campbell, Co-founder and CEO of Price Intelligently, Twitter: @priceintel, @Patticus
7. The move to multi-core processors has exposed many businesses to Oracle VMware licensing risks. “From a licensing perspective, it is vital that your business fully understands how its VMware servers are structured, in order to ensure that an accurate count is taken of the multi-core processors in use. Failure to obtain this knowledge could mean that Oracle virtual licensing, when applied to your existing server deployments, is not valid and could result in a fine.
“Oracle audits look closely at the underlying server platforms on which VMware machines are running. An Oracle VMware license is closely tied not only to the processors in use, but also to any additional processors that may come into use if a VM is moved. Does your business have an exhaustive map of its servers and processors? This is a requirement of valid Oracle VMware licensing.” - Sean Dailey, How Exposed are Your Oracle VMware Clusters to Licensing Fines?, Twitter: @bluemedora
8. Up to version 5.0, VMs (virtual machines) could only be moved within one cluster during a runtime — meaning the entire cluster had to be licensed. Extended VMware functionality in later versions led to confusion, particularly among Oracle customers. “Up to version 5.0, the virtual machines (VMs) could be moved only within one cluster during a runtime. For this reason, the entire cluster needed to be licensed. With version 5.1, VMs could be moved during a given runtime across cluster boundaries within a vCenter. Therefore, for versions 5.1 and 5.5, all servers within the vCenter must be licensed.
“So, from Oracle’s point of view, everything remains the same: As before, the hardware must be licensed, which could be used theoretically by the software during a given runtime. Using an example, Paege showed the Oracle managers that this can lead to significant post-licensing costs for companies, without them actually benefiting from increased performance.
“To avoid the problem, the DOAG also recommends a workaround: The license costs can be kept low by allowing administrators to provide a vCenter for Oracle products and use 1:n vCenters for other products. Here, however, the storages of the respective vCenters must be separated as well.” - Licensing in Virtualized Environments: Oracle under discussion with the DOAG, DOAG; Twitter: @DOAGeV
9. Oracle’s per-CPU licensing policy creates some confusion for those using VMware. “Part of the big problem I’ve always had with Oracle on VMWare is caused by Oracle’s per-CPU licensing policy. My original understanding was that, if you have a total of 64 cores in your VMWare cluster, it didn’t matter if you were only using 8 cores for Oracle. Oracle would tell you that you had to pay for 64 cores. The idea behind this is that you could, potentially, resize the virtual machine to suit certain needs. Maybe you need more horsepower during month end?
“What I’ve since learned is that Oracle has a policy document that talks about ‘soft’ vs. ‘hard’ partitioning.
“What I’ve described above would fall under the concept of ‘soft partitioning’. However, ‘hard partitioning’ methodologies allow for a different approach. VMWare has (naturally) a nice document that explains their approach to implementing clusters that are in compliance with Oracle’s licensing requirements.
“From that document, pay particular attention to section 2.2. In that section (specifically Scenario B), they discuss DRS Host Affinity rules and VMWare CPU pinning:
“‘2.2 Clusters: Fully Licensed Versus Partially Licensed Clusters
“‘Scenario B: Partially Licensed Clusters
“‘When a customer does not have enough Oracle application instances to justify creating a dedicated cluster for those applications, only a subset of the hosts in the cluster are licensed for the Oracle application. In this situation, the customer must be careful to restrict the movement of Oracle application instances and virtual machines to only those hosts that are licensed to run the product.
“‘In this case, DRS Host Affinity rules can be used to appropriately restrict the movement of virtual machines within the cluster. DRS Host Affinity is a vSphere feature that enables you to ensure that your Oracle applications are restricted to move only between a subset of the hosts—that is, not all hardware in the cluster is ‘available’ to the Oracle software. DRS Host Affinity is a clustering technology and is not a mechanism for soft or hard partitioning of the servers. As explained in section 2.1, using VMware CPU pinning to partially license a host is not currently recognized by Oracle as a ‘hard partitioning’ mechanism that receives subsystem pricing. However, once you have fully licensed the host, you have the right to design your environment such that the Oracle workloads are free to run on the licensed hosts inside the cluster. At present, Oracle does not have any stated policy regarding clustering mechanisms or DRS Host Affinity. Customers can easily maintain records for compliance purposes as explained in section 2.3.
“‘The advantages of this approach are similar to the advantages achieved with a fully licensed cluster. Because customers are typically able to increase the utilization of licensed processors, they reduce license requirements. However, consolidation ratios tend to be lower, because advanced vSphere features can be employed only on a smaller subset of the hosts.’
“VMWare CPU pinning is a feature that (in my understanding) would allow you to say that a given VM would only use certain cores in a physical host. So, if you have a single host with 16 cores, you can ‘pin’ a given VM to four of them. According to Oracle’s partitioning document (and VMWare’s document), you would still be required to pay for all 16 cores in the box. The basic logic here is that Oracle’s licensing policy is based on the number of cores in a physical server. You can’t license part of a box. Period. No exceptions.” - James Morrow, Deciphering support and licensing issues surrounding Oracle on VMWare, The DBA Life
10. Moving to a world where resources are pooled and everything is linked creates challenges ranging from infrastructure and licensing to skills. “Although the benefits of virtualizing x86 servers have been pushed relentlessly for the past five years or so, much less discussed have been the challenges involved in moving to a world where resources are pooled and everything is linked. The complexity that such a scenario generates can have a knock-on effect on issues ranging from infrastructure and licensing to skills, which means that migrating to the new environment can end up being an expensive upfront proposition.
Adrian Polley, chief executive at IT services provider Plan-Net, says, ‘You are often talking about a complete change in infrastructure, which is why people who started on this path before the recession may have continued, but not many have plunged in since.'” - Cath Jennings, VMware: five biggest challenges of server virtualisation, ComputerWeekly.com; Twitter: @ComputerWeekly
11. VMware has been experiencing a slowdown due to changes in the ecosystem around the hypervisor and more companies being willing to support other options outside VMware. “If you remember, VMware repealed its unpopular and highly controversial VRAM pricing at VMworld, but the damage was done. It’s my belief that, by altering its pricing strategy, VMware cracked the door open for someone to step in, and Microsoft did just that.
“Now, I’m not saying that Microsoft is going to overtake VMware as the thought leader of the space, nor do I feel that Hyper-V is even close to VMware in functionality. However, I do believe that many customers find Hyper-V “good enough” for many workloads. Small and mid-sized businesses in particular do not need all of the bells and whistles of vSphere, and the out-of-the-box Hyper-V will do just fine. I also think large enterprises will use Hyper-V in branch offices or other places where good enough is indeed good enough.
“Another reason we may be seeing a slowdown in VMware is that the ecosystem around the hypervisor is willing to support both Hyper-V and Xen now. When you’re working with company X and they only support VMware, it’s kind of hard to pick anything else. If company X now supports other options, those options become available to the customer.” – Zeus Kerravala, VMware’s problems are deeper than just Microsoft, Network Intelligence; Twitter: @NetworkWorld
12. VMware in Germany recently encountered some legal issues due to an alleged GPL licensing infarction. “A Linux kernel developer is suing VMware in Germany, alleging the company has not complied with copyright terms for using open-source software.
“Christoph Hellwig, who holds copyrights on portions of the Linux kernel, alleges VMware combined proprietary source code with open-source code in its ESXi product line but has not released it publicly as required by the General Public License version 2 (GPLv2). The suit was filed in district court in Hamburg…
“VMware is accused of wrapping its “vmkernel,” which is part of its ESXi virtualization software for servers, with open-source code. The vmkernel is an operating system that manages hardware resurces such as memory, processors, storage and networking controllers.
“Hellwig also accused VMware of not complying with the GPLv2 for its version of BusyBox, a bundle of utilities incorporated in its ESXi products.
“The Software Conservancy negotiated with VMware from late 2011 through 2013 over its concerns, according to a Q and A from the organization. VMware made “substantial and good efforts” to comply with BusyBox but didn’t fix a few minor problems and one major Linux compliance issue, which is the focus of the lawsuit, it said.” - Jeremy Kirk, VMware sued for alleged GPL license infractions, PCWorld; Twitter: @pcworld
13. There’s a phantom menace associated with Oracle FUD: licensing on VMware vSphere. “I have written about the Oracle FUD when it comes to virtualized environments quite a bit before. Now it appears there is some new FUD circulating that might catch out unsuspecting customers. There is a new Phantom Menace from Oracle. This time it is to do with their interpretation of some new capabilities in VMware vSphere 5.1 and above. As with all the previous FUD it is very easy to combat. You simply and calmly ask your Oracle representative to show you the page in your contact, which is the legally binding and enforceable document that replaces all prior verbal and written agreement, where this new policy exists. It simply does not exist (unless you’ve been suckered into accepting some non-standard wording to your disadvantage).” – Michael Webster, Oracle FUD – The Phantom Menace: Licensing on VMware vSphere, Long White Virtual Clouds; Twitter: @vcdxnz001
14. In 2012, a free update to vSphere version 5 causes licensing validity concerns with ESXi5. “As most probably all of you know that VMware release Update1 for vSphere 5. But, not everybody knows that with vSphere 5 U1, VMware created a fix for ‘bug’ in ESXi5 free version. As you know, ESXi5 free is limited to 32vRAM (maximum virtual memory allocated to virtual machine) and non limited vCPU number. In Pre-Update1, one could have 32GB physical RAM or more in physical host, assign ESXi5 free license to that host and everything works fine.
“With ESXi5 free Update1, if one has more than 32GB RAM on physical host and ESXi5 free installed, the license is no longer valid :-/ . In other words saying, if you have physical host with more than 32GB physical RAM and ESXi5 free installed on it, do not apply Update1 or reduce RAM size to exact 32GB or less, otherwise, your host cannot use ESXi5 free license.” - Artur Krzywdzinski, ESXi 5 free version Update 1 – license “problems”, VMwaremine; Twitter: @artur_ka
15. Moving Oracle databases to virtual infrastructure may not result in software savings. “Virtualization and private clouds have delivered hardware savings in a big way for most enterprises. Software savings, however, are proving more elusive, and that’s been particularly true when it comes to virtualizing Oracle databases, according to several sources.
“While virtualization has enabled server consolidation ratios of 3:1 or more, businesses may see little or no reduction in associated software costs. In some cases enterprise software licensing can be so expensive that it overshadows the cost of the rest of the system stack combined, says David Welch, chief technology officer at House of Brick Technologies, an integrator with expertise in Oracle software licensing issues.
“Some consultants and a handful of IT executives say they face licensing obstacles with many enterprise software vendors, but Oracle agreements can present some of the most confusing compliance issues, especially for customers that fall under Oracle’s processor-based licensing models. ‘Using Oracle on VMware provides no licensing savings, just operational cost savings,” says R Wang, principal analyst and CEO at Constellation Research.'” – Robert L. Mitchell, Virtualizing Oracle software: Don’t pay for what you don’t need, ComputerWorld; Twitter: @rmitch
16. Oracle on VMware is supported, but not certified. “Before diving into the Oracle licensing questions, the very first thing you have to know about any Oracle product, not only the Oracle Database, is that there is no Oracle product certified on a VMware architecture. However, all Oracle products are supported on VMware infrastructure. What does this mean, supported, but not certified? Oracle does not guarantee the proper working of these products on VMware architecture, but will support you in case of incidents not related to the VMware infrastructure. In cases where the VMware could be involved, the Oracle support may ask you to reproduce the incident on a certified environment.” – Grégory Steulet, All you need to know about Oracle Database licensing with VMware, dbi Services; Twitter: @dbiservices
17. VMware memory allocation is a delicate balancing act. “Increasing memory allocation is one of the best ways to improve the performance of a virtual machine, but this resource comes at a premium. Not only does the physical host hold only a limited amount of memory, it’s also now priced at a premium according to VMware’s new licensing policies. Pinpointing a memory related performance problem and knowing how to address that problem is now an even more important role for the VMware Administrator.
“Managing VMware memory allocations is a delicate balancing act between VMs with too much memory and servers with not enough. While it may be tempting to simply over-allocate memory to VMs this practice causes two significant problems. First it starves VMs of memory that could truly take advantage of that additional resource. Just like extra memory in a physical server, allocated memory that’s going unused does not benefit the virtual machine at all. The second problem is that there’s a software licensing cost associated with how much memory is allocated per server. Having additional, unneeded RAM in a server not only costs the price of the RAM but also now raises the software costs.” - George Crump, The VMware Memory Balancing Act, Storage-Switzerland.com
18. Installing an Oracle database instance on a VM hosted by a VMware ESX server can be quite costly. “Oracle does not recognize third party soft partitioning technologies when it comes to licensing database instances using the Processor metric (see Part 1 of this blog series). As a result, installing an Oracle database instance on a virtual machine (VM) hosted by a VMware ESX server could be extremely costly. It could be even more costly in a cluster environment, as all processors of all machines within the cluster must be licensed. There are a few ways to mitigate these constraints.” - Vincent Brasseur, Oracle Database Licensing in a VMware Virtual Environment (Part 2 of 3), Software License Optimization; Twitter: @flexerasoftware
If you run a VMware environment, what are your plans for the future? Will you be building a private cloud or deploy new and existing workloads on a public cloud or both? Let’s us know in the comments, we would like to help the community plan for the future.
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