vSphere Upgrade Pricing, the fine print

Let me start by saying, I enjoy using VMware, and feel it is the best virtualization product for my environment. I appreciate the quality products and the people that I have been involved with that work for VMware. But…

I’m looking deeper into the vSphere Enterprise to Enterprise Plus license upgrade, and I’m pretty distraught.

My initial understanding:
From what I initially heard, there was going to be a per socket upgrade cost of $295. So with a decent number of sockets (48), that amounts to $295 x 48 plus SnS, or $16,992. That isn’t a terrible price, but a little inconsiderate, given that I already have the top tier VI3 licensing.

After getting a little more information:
From what I’m hearing now, not only is there a $295 per socket price, but also prepay 2010’s SnS cost for vSphere Enterprise Plus. So that’s:

Upgrade per socket cost + upgraded SnS
$295 x 48 = about $14k

New SnS subscription
$3475 x 48 x 21% = about $35k

I only have Gold support, and have never needed Platinum. And that total comes to about $49k.

With 48 Enterprise licenses + vCenter, Gold SnS is:
((48 x $2875)+$4995) x21% or about $30k

So if I stay with Enterprise, I can expect $30k next year when my SnS is up for renewal.

If I go with the upgrade, it will cost me about $49k now, and $0 next year. Wow, it would be great to go ahead and prepay, but who has 49G’s laying around?

If I wait until my SnS is due, then it will cost me:
($695 x 48) or about $33k and then
($3475 x 48) x 21% or $35k and then
$4995 x 21%
which totals to $69k.

The killer FINE PRINT is, and I quote the vSphere pricing guide on page 11:

When customers upgrade supported licenses to a higher vSphere edition, the original license key is deactivated and a new license key is issued for the upgraded edition. The SnS fee is calculated based on a minimum of one year of the new edition. That is, a customer upgrading from vSphere Standard to Advanced must buy at least one year of vSphere Advanced SnS. This new SnS contract will be extended by the value remaining on the base edition. In the previous example, the value of any unused SnS on the Standard license will be used to extend the new vSphere Advanced SnS contract. This process ensures that only a single license key exists which has a single SnS contract with a single termination date, simplifying renewals.

Need a little clarity:
So does that mean if I upgrade now, I have to pay next year’s SnS too? Does it mean I get a pro-rated SnS cost on the SnS I have already paid? I love how things are worded so sales people can finagle it either way.

Everyone is tightening their belts, why can’t VMware:
I think that VMware should have thought about this a little bit more, give the current economic situation. Many enterprises are tightening their belts, and money is tight. I can understand paying the $295 per socket, and then also paying the appropriate SnS for Enterprise Plus for the remainder of a current SnS subscription, followed by a full SnS renewal when due, but come on. Why should I have to pre-pay another year’s SnS? Well, that’s policy.

This policy is so it will make it easier on VMware in the SnS renewal process. Well, licensing has never been easy with VMware in my experience. (Update: It hasn’t been easy with Microsoft or Citrix either.) I would think when sales are down, you don’t hike prices up, you do what you can to keep the customers you have happy.

After all, it is only a policy to make things easier… Nevermind the fact that it will cost loyal customers some more cash if they wait until they can afford it. Isn’t part of the problem with today, because some companies overextended? So if we want to save money, we have to possibly overextend? But if we behave in a smart, fiscally responsible way, we have to pay more. Hmmm, yep, that sounds like the way we got into the mess we are in.

Comparing today to tomorrow:
I will guarantee, it will be a heck of a lot easier to get $69k approved for next year when there is more time to reflect on 2009, than it will for $49k now. And for that matter, do I really need to be able to use 8 vCPU’s, Host Profiles, a distributed virtual switch, and the pluggable storage architecture?

What about when I need more hosts?
To be honest, maybe when I need new licenses, I’ll just look at Advanced for some of my guests, and keep some of my guests on my perpetual Enterprise licenses. I don’t really have to have SVMotion or DRS on all guests, and who is going to use 8 vCPU’s anyway?

Heck, for the $20k difference, I could buy 8 Advanced licenses, or 20 Standard licenses. At that point, I would just have to decide how many guests I would need to be able to use the Enterprise features with, and which ones I could get by with.

Also, what’s to say I can’t have some Advanced and Enterprise hosts, and simply VMotion a guest from Advanced to Enterprise when I need to perform an SVMotion? And then VMotion it back? Hmmm… There’s a workaround.

Sheesh.

Update: I hear that something is brewing with this. Maybe VMware has listened to their customers. We will see.