Will VMware's new licensing scheme for vSphere kill companies?

VMware announced vSphere 5 yesterday, and Neowin covered the news, noting that the new version adds support for 32 virtual CPUs and 1 TB of RAM. However, the new pricing overshadowed the announcement and caused concern among current customers, according to Ars Technica.

For the current version, pricing is based on a combination of the number of physical CPU sockets, physical cores, and physical memory installed in a server. There are four tiers: Standard, which gives you one socket, six cores, and 256GB memory; Advanced, which is 1 socket, 12 cores, 256GB memory; Enterprise, which is 1 socket, 6 cores, 256GB memory, and extra functionality; and Enterprise Plus, which is 1 socket, 12 cores, unlimited memory, and even more functionality.

Unfortunately, the new pricing structure operates on virtual memory, not physical. There are now just three tiers: Standard, which allows a total of 24GB to allocated to all virtual machines, and up to 8 virtual CPUs per VM; Enterprise, which allows a total of 32GB across all VMs and up to 8 virtual CPUs per VM; and Enterprise Plus, which allows 48GB across all VMs, and up to 32 virtual CPUs per VM. Scaling up is now penalized. In other words, buying machines with few sockets and lots of memory is punished under the new system.

A two-socket, six-core per socket, 256GB machine on vSphere 4 would require two Enterprise licenses. Now, in vSphere 5, with all of that RAM, it'll require eight Enterprise licenses. Problem is, the price of those licenses is still the same as it was before; $2,875 for Enterprise, $3,495 for Enterprise Plus. The Standard license has gone up, from $795 to $995. The new price is a bitter pill to swallow.

What about those new 1 TB virtual machines that vSphere 5 will support? That'll set you back $76,890 in vSphere licensing fees. By the way, a Dell R910 with 1 TB of RAM will cost $85,000.  The reaction to this announcement has not been warm, and some companies are threatening to move to Microsoft's Hyper-V or Citrix's XenServer. Will vSphere sink or swim?

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