VMware Embraces Per-VM Pricing - About Time

VMware today released an incremental upgrade to its core vSphere platform and took the opportunity to do some product repackaging and pricing actions - the latter being a big win for enterprise customers. The vSphere 4.1 enhancements focused on scalability to accommodate larger and larger virtual pools. The number of VMs per pool and number of hosts and VMs per instance of vCenter have been ratcheted up significantly, which will simplify large environments. The new network and storage I/O features and new memory compression and VMotion improvements will help customers pushing the upper limits of resource utilization. Storage vendors will laud the changes to vStorage too, which finally ends the conflict between what storage functions VMware performs versus what arrays do natively.

The company also telegraphed the end of life for ESX in favor of the more modern ESXi hypervisor architecture. 

But for the majority of VMware shops the pricing changes are perhaps the most significant. It's been a longstanding pain that in order to use some of the key value add management features such as Site Recovery Manager and AppSpeed you had to license them across the full host even if you only wanted to apply that feature to a few VMs. This led to some unnatural behavior such as grouping business critical applications on the same host - cost optimization that trumps availability best practices. Thankfully that has now been corrected. 

VMware has also taken the high road on how it will track the deployment of these licenses. The traditional approach would have been to force customers to plan for the use of these products upfront and buy the number of licenses they think they would need over the next year. A great idea if the typical enterprise virtual environment were static, but no one's is - nor should it be. As we strive to transition our virtual environments into clouds we have to accommodate lifecycle management of VMs and elasticity. This is the opposite of a static environment.

The VMware solution: audit the high-water mark of managed VMs and bill against the trailing 12 months. This gives customers the flexibility to apply these management tools where needed, optimize their virtual pools for max utilization and overall availability while not being tied down by license constraints. Sure, this approach could result in a big bill the following year if you go nuts with the use of AppSpeed, but no longer will unnatural acts be necessary.

For some VMware management products this model makes less sense - such as CapacityIQ and Chargeback. Tools that help you track and forecast your resource consumption should be applied at the pool level. But the change in direction is welcome. Plus the new price points show a greater alignment to delivered value.

This pricing action also sets the stage for the introduction of vCloud later this quarter which will potentially open the door to a per-hour pricing need.