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VMware New Licensing Model: Is Your IT Budget in Danger Too?

Updated: Dec 30, 2023

Broadcom's Impact on VMware Users

Heads up! VMware is making some big changes that might shake up your IT budget. They're stopping the sale of the standalone products we're used to and now they're offering these new subscription-based bundles that come with a higher price tag. Plus, they have moved to a capacity-based vSAN™ licensing model.

VMware New Licensing Model

What does this mean for you? Well, the cost you're going to pay now could be quite different from what you were used to with the old 'buy once, use forever' licenses. So, it's more important than ever to think ahead and plan your IT infrastructure carefully to make sure these changes don't surprise you.

Understanding the New Pricing

Let's look into the new VMware pricing a bit more. Recently, VMware shared that the price for vSphere Foundation™ is now $135 per core. With this information, we can start to figure out how these new prices might affect users, especially when we compare them to the old prices.

When we think about these changes, we're keeping a few things in mind:

  • Plan for at least 5 Years: We're suggesting that you think about how you'll use VMware for the next five years. We noticed that Broadcom's price comparisons are based on using VMware for three years, which doesn't show the full cost over time. Most people plan to update their tech every 5 years, so it's good to think about costs over that longer period.

  • 24 Core CPUs: We're using a 24-core CPU as our standard for these calculations. Just remember, there are CPUs with even more cores out there, which could mean the price changes are even bigger.

  • Comparing Basic Prices: We're looking at the standard prices, not including any special deals or discounts. It looks like the discounts for the new subscription licenses might be less generous than what you got with the old, one-time purchase licenses. This could make the new pricing model more costly in the end.

Three Key Changes in VMware's New Bundles

Let’s take a closer look at three major changes in the new “VMware by Broadcom” packages and what they might mean for you.

Changes for vSphere Enterprise Plus (Ent+) Users

If you've been using vSphere Ent+, things are changing. This product isn't available by itself anymore. Now, if you need features like distributed resource scheduling (DRS) and distributed switches, you have to buy them as part of more expensive bundles. For example, if you buy the “vSphere Foundation” bundle, you'll also get VMware vSAN™ and VMware vRealize™, even if you don't really need them.

VMware License

How Much More Will You Pay? 

Our estimates show that if you're using vSphere Ent+, you might end up paying more than double over five years. To give you an idea, we made a chart comparing the old prices (perpetual licenses) and the new subscription prices for both 3-year and 5-year periods. Basically, for a 24-core CPU, the cost could go up by about 1.5 times in three years and more than 2 times in five years. And if you have a 32-core CPU, the cost increase could be even higher.

Impact on Traditional 3-Tier Infrastructure and vSAN Users:

  • For Traditional Infrastructure: If you've been using SAN/NAS, the switch to needing the vSphere Foundation bundle for vSphere Ent+ means higher costs, and you might end up with vSAN features you don’t need.

  • For vSAN Users: You're going to see some limits on how much storage you can have. In the new bundle, you'll get significantly less storage than before, and you'll pay extra for any additional capacity you need.

Changes for Standalone Product Users:

  • If you were buying products like Aria Suite or NSX Security Suite separately, you now have to get the more expensive VMware Cloud Foundation™ (VCF) bundle. This change could mean a big jump in price – for example, you might be paying $350 per core now.

  • Also, keep in mind that the VCF bundle needs extra work to set up and maintain, as it requires a full system setup using VMware SDDC Manager™.

In short, these changes mean you'll need to look closely at how much more you're paying and what additional services or features are included in these bundles. It's important to compare these new costs with what you've been paying to see how it affects your budget and IT planning.

5 Popular VMware Alternatives

If you're reevaluating your virtualization options due to VMware's new licensing model, there are several noteworthy alternatives to consider. Proxmox VE stands out for its unified management of VMs and containers, offering a free, open-source tool with paid support options. Nutanix AHV shines in hyper-converged infrastructure, known for its user-friendly interface and integration with the Nutanix ecosystem. For those in the Oracle landscape, Oracle VM provides a highly integrated experience at no additional cost to Oracle customers. Linux KVM is an excellent choice for a more open-source, vanilla Linux virtualization solution, allowing for multiple OS options on a single Linux server. Lastly, Cloud IaaS and Kubernetes offer agile and scalable virtual resources, ideal for businesses moving towards cloud-based solutions and containerized workloads.

Hopefully, this article has provided you with some valuable insights. Wishing you the best on your IT journey! And remember, if you're based in the EU and planning to get refurbished servers or server parts, don't hesitate to reach out for pricing.

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