VMware Woes? Explore Server Refresh To Optimize Licenses

Many Forrester clients who depend on VMWare’s virtualization software are complaining about the vendor’s overall price hikes. Some clients have told us their costs have increased by 400%. The price increases have many tech leaders exploring how to migrate away from VMware stack, and competitors amping up their marketing and services to help them. But it is not as straightforward as it may sound and not always viable for businesses because they: 1) have little time to renew; 2) depend heavily on the VMware stack; and 3) realize that migration would be incredibly painful.

Step 1: Understand The New VMware License Packages

A higher VMware bill can significantly impact the IT infrastructure budget, forcing tech leaders to squeeze other budgets or exhaust discretionary spending. In these situations, where the clients must continue with VMware, they want to know if there is any way to reduce their VMware bill? Or does it mean they are stuck with their VMware license renewal on VMware terms?

Well, No.

You can explore many ways of license optimization. Let’s explore the server-based license optimization option here.

First, the basics: understand the VMware license changes. VMware now requires you to license either package (vSphere Foundation or VMware Cloud Foundation) based on the number of server cores for each processor and a minimum of 16 cores/processor. For example:

1. You have a 4-socket server with 16 cores per socket: you must purchase a 64-core license (4 sockets * 16 core minimum). You utilize the full license.
2. You have a 4-socket server with 8 cores per socket: you must still purchase a 64-core license (4 sockets * 16 core minimum). In this case, your license cost compared to usage is higher by 100%.
3. You have a 4-socket server with 24 cores per socket: you must purchase 96-core license (4 sockets * 24 cores).

Step 2: Consolidate And Upgrade Servers

In many client conversations, I have found that IT orgs are running old servers with less than 16 cores ( they fall in the option b above). If you are in one such situation and you have depreciated your old servers, consider upgrading the servers and it will have the following advantages, as you will be able to:

1. Utilize all license cores that you pay for. Let’s say you had 100 servers each with a 4-socket 8-core processor. You would need a 6400-core license.
2. Reduce your VMware license. Hypothetically, if you consolidate to say 50 servers with a 4-socket 16-core processor. You would need a 3200-core license. Savings for the VMware add-on components will also accrue.
3. Consolidate servers, reducing the server hardware spending. It is quite likely that the VMware license savings can pay a large portion of new server’s costs, as standard x-86 servers have attractive price points. Your return on investment is just a few months, if not immediate.
4. Take advantage of depreciation of new servers.
5. Reuse old servers for non-VMware deployments.
6. Expect improved application performance and user experiences with better performing servers.

Caveat Emptor: this approach may not work for all servers as many ISV’s license their applications by the server cores. Assess the ISV licenses situation before upgrading all servers.

As always, I’m here to help. If you are a Forrester client, request a guidance session with me to discuss how to apply this optimization technique (& many more) in your environment.