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VMware customers balk at vSphere 4 upgrade policies

VMware customers with Enterprise licenses will be caught between paying extra for vSphere 4 or downgrading to the less feature-rich Advanced edition.

The good news is that the technical process of upgrading to VMware vSphere 4 from Virtual Infrastructure 3 (VI3) appears to be simple and straightforward. The bad news is that -- at least for VI3 Enterprise edition customers -- the decision to upgrade from Enterprise to Enterprise Plus is complex and probably expensive.

For more on VMware pricing:
VMware pricing draws large enterprises' ire

VMware vSphere licensing

When VMware announced vSphere 4 in April, it surprised customers by revising its licensing. In VI3, the Enterprise edition was the top-level license. vSphere 4 adds another level on top of that, Enterprise Plus, which includes advanced features, such as Host Profiles, the distributed virtual switch, and support for third-party multipathing. Sitting beneath Enterprise is the new Advanced edition, which does not include support for Distributed Resource Scheduler (DRS) and Storage VMotion.

Complicating matters is the fact that VMware plans to stop selling new Enterprise licenses after Dec. 15, 2009. So, while VI3 customers with valid VMware Subscription and Support Services (SnS) licenses are entitled to upgrade to a vSphere 4 Enterprise license for now, as of new year they'll have to choose between the more expensive Enterprise Plus, or downgrade to the Advanced edition for new ESX hosts.

"We are being strong-armed upward," said Rick Vanover, a systems administrator at Belron U.S., a vehicle glass repair and replacement company in Columbus, Ohio. "It's a real bummer that DRS and Storage VMotion aren't included in Advanced." Currently a VI3 Enterprise customer, Vanover is weighing his upgrade options, but one thing is clear: "You have to buy up to maintain."

VSphere upgrade promotion no bargain
Another conundrum for VI3 Enterprise customers is whether to take advantage of a new upgrade promotion that entitles them to upgrade to Enterprise Plus at the discounted rate of $295 per processor instead of the list price of $620 per processor. The only problem with the promotion is that it also expires on Dec. 15, and customers must also renew their SnS service for a minimum of another year to take advantage of it.

You have to buy up to maintain.
Rick Vanover,
systems administratorBelron U.S.

"A lot of people didn't budget for that," said Eric Siebert, a system administrator at Boston Market. In his shop, which has only 12 CPUs licensed for VMware, "it makes sense to go ahead at that price point. But what if you have a thousand sockets? That's a big chunk of change."

The enforced SnS renewal is particularly galling for companies that just recently renewed their contracts, said Andrew Storrs, and independent consultant in Vancouver, Canada. "It's not so bad if you only have six months left [on SnS], but what if you have 2.5 years left?" To take advantage of the upgrade promotion, IT managers are in the awkward position of having to ask to for more money for their SnS, "just for the privilege of using a normal [VMware] edition next year."

"A lot of people are pretty pissed about it," he added.

If customers had been given any inkling that change was coming beforehand or if they had been given more time to take advantage of the promotional pricing, the new Enterprise Plus license might have gone over better.

"The pricing wasn't even announced until the launch, so there's no way people could have budgeted for it beforehand," said Vanover. And for production environments, the seven or so months between general availability and the end of the promotion isn't all that much time. "This is the new computer. You need to be dead sure that it is 100% solid."

Proposed: Extension to vSphere 4 upgrade policy
Both Siebert and Storrs said that one thing VMware could do for its customers is to extend the date of the upgrade promotion into 2010. That way, IT pros could request money to upgrade to Enterprise Plus as part of next year's budget, which typically starts in January or April. "If VMware extends its upgrade window until then, the business justification isn't as hard," said Storrs.

VMware is closely watching how customers react to its new licensing policies. "Based on our research, we expect people to naturally start moving to Enterprise Plus or Advanced," said John Gilmartin, VMware's director of product marketing but added that December 15 was "a target date" by which they hoped to discontinue the Enterprise SKU, dependent on customer feedback.

Gilmartin also said that imposing the SnS renewal as part of the Enterprise Plus upgrade policy was a part of a larger effort to streamline licensing. In the past, VMware customers often found themselves with different SKUs for product and SnS, he explained, and internal discussions continue on how to simplify that. "The process was designed to simplify, but we want to make sure that the process to upgrade [isn't impacted]," he said.

Begrudging acceptance
As VMware customers get their heads around the finer points of vSphere 4 licensing, it's too early to tell how many will opt for Enterprise Plus or downgrade to Advanced going forward.

ABNB Federal Credit Union upgraded its four ESX hosts to to vSphere 4 Enterprise last week and took a pass on the Enterprise Plus upgrade option. "Our environment is small, and a lot of the features would be cool to have, but I'm not sure it would benefit us that much," said Hersey Cartwright, the network operations manager at the Chesapeake, Va.-based bank. "But if I were forced to upgrade to [Enterprise] Plus, I reckon they're going to get their $250 per socket. It would suck, yeah, but I'd probably do it, given the amount of money it's saved us in the long run."

Not all VMware customers have that option, though. Casey Townsend, a systems administrator and program manager for the city of Tucson's IT department, has put all nonessential upgrades on hold as he attempts to deal with last year's 15% budget cut, plus additional cuts of 3% over the next three years.

"We're staying on ESX 3.5," said Townsend. "VSphere is significantly more expensive, and there's no really good upgrade path for us."

For his three-ESX host cluster environment, he'll renew only one support contract this summer and then the remaining contracts next year.

But budget cuts won't stop the city of Tucson from adding new VMware instances. On tap is a new ESX host that will consolidate somewhere between nine and 12 previously physical machines.

"The main reason for VMware is that we can't afford all the hardware maintenance contracts," Townsend said. Increased licensing costs or no, "It's still cheaper for us to virtualize nine to 12 virtual machines than to have 9 to 12 physical servers."

Let us know what you think about the story; email Alex Barrett, News Director. And check out our Server Virtualization Blog.

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