7 reasons why VMware vSphere 5 vRAM Licensing is not as bad as it Look at First Glance

Note: VMware vSphere 5 vRAM has dramatically been amended since the original announcement. For more info about what was amended then please check my following article: vSphere 5 vRam Licensing Amendment. Further, this article has been updated accordingly.

While others have decided to cover up all the nice features that is coming up with vSphere 5 & vCloud Director 1.5, I was quite busy explaining to customers that most of them are not affected by the new vSphere 5 vRAM Licensing Schema. Actually none of the existing customers who called me asking about the licensing change was near being affected by the new licensing schema. Let’s be honest when I first heard about the new licensing schema I had panicked too, but only few hours laters of research I have discovered it actually make sense and not as bad as it look at first glance.

I don’t blame our customers for not grabbing the idea of our new VMware vSphere 5 vRAM based licensing as it take to understand the new licensing model to read beyond the surface to find out how it really work. Therefore before you complain about it, please make sure if you are affected by reading the Understand the vSphere 5 vRAM Licensing Model. After that or before it you can read my below 7 reasons why the new VMware vSphere 5 vRAM Licensing is not as bad as it look at the first glance. Actually I start believing its a quite smart and a step forward toward Cloud Licensing model.

1- Most Customers will not be affected by VMware vSphere 5 vRAM Licensing:

Unlike what most customers think at first glance or as competitors try to convey the message to them, their licensing cost will not be affected for most. You will need to clearly understand how vRAM is calculated before judging if your licensing cost will be affected. Its an important first to note that vRAM has nothing to do with how much Physical RAM you install in an ESXi Server. Its actually calculated to be the sum of all powered on VMs RAM managed by a single vCenter or vCenters in Linked Mode, & that will be compared to all the vRAM entitled by all of your ESXi Servers licenses that you have obtained.

Let’s take a small example. If you have licensed 3 vSphere 5 ESXi hosts (2 CPUs per host) using vSphere Enterprise Plus (Which entitle you to 96GB vRAM per CPU) that will entitle you to 96 * 6CPU = 576 GB of vRAM. You will have to have concurrently running VMs with a total of over 576GB of RAM in this environment before your licensing cost is affected.Below are few spots where a lot of confusing will happen.

* Most people will think if they fit more than 576GB of RAM(The Amount of vRAM they are entitled to) in their servers they will have to pay extra & that is not true at all, as the new licensing schema does not look at how much RAM you fit in your hosts at all.

* A lot of people will think if they exceed the amount of vRAM on a certain ESXi host, they will in-occur additional cost. Again, this is not true as vRAM entitlement will be pooled across all the ESXi hosts and even if you exceed your entitlement per one/few host(s) you are more than likely will have some others where vRAM entitlement is not reached and will cover up for this host..

– I believe its important to point out how vRAM compare to physical RAM, as I mentioned earlier a lot of people confuse them. Although as mentioned earlier vRAM is calculated as a RAM pool of all servers entitlement in your environment I want to demonstrate an example where you will be utilizing much more physical RAM on a server than its entitled vRAM and still in compliance:

* First start with a host running vSphere Enterprise Plus with 2 CPU which will entitle you for 2 X 96GB/CPU = 192GB of vRAM.

* Second & which is very important to consider for most large environments which is normally the place where you will find large systems that can fit a large amount of memory, you will always have a disaster recover setup that is setting idle and only utilized in case of a Disaster. In this case & as long your vCenter in DR & Head Office are linked together you are entitled to utilize that sleeping vRAM in DR at your Active head office setup. So if you were doing a 1-to-1 DR and using Enterprise Plus at your DR you will be entitled for double the vRAM at your head office. In this case you will be entitled for 384GB of vRAM

* Third Let’s assume you utilize 16GB of RAM for over head so you still legally utilizing 400GB of physical RAM, as you don’t pay for overhead RAM.

* Fourth lets assume you will reserve 20% of each of your hosts RAM for HA, then you will need an additional 20% physical RAM to accommodate for HA which will get you to utilize 480GB of Physical RAM for this server without breaking your license yet as you don’t calculate RAM reserved to accommodate for HA in your vRAM usage.

Note: The idea of this example just to show how vRAM work and how you can still utilize massive systems with a huge amount of RAM in many cases without having to pay any additional fees. As well it show how vRAM is not related to how much physical RAM you install into each server

2- Desktop Virtualization is not affected by VMware vSphere 5 vRAM licensing:

The most common use of  vSphere scale up design with tons of RAM per server  is in Desktop Virtualization. Actually its the only place it has been recommended for. vSphere 5 vRAM licensing could had a bad affect on the cost of Desktop Virtualization as vRAM would have been easily exceeded in these situations. For that VMware has excluded hosts utilized for VMware View or Third Party VDI Solutions when dedicated only for VDI from the vRAM Licensing Schema. That means you can utilize as much vRAM you desire on ESXi server utilized for VMware View/Third Party VDI without having to worry about it. Further with vSphere being the most popular platform to run Desktop Virtualization on even for third party connection brokers (Ex: Citrix XenDesktop), VMware has excluded these implementations as well from the vRAM licensing Schema and released a special licensing schema for it which is known by vSphere Desktop. More info can be found at: vSphere Desktop Licensing Overview. There is a lot of FUD out there that if you have existing vSphere 4 and using it for third party VDI, that you will have to replace it with vSphere Desktop at an Extra cost to benefit of vRAM exemption. That is not true. You can upgrade your ESXi host to vSphere 5 and as long you are only using them for VDI you don’t have to worry about vRAM.

3- Virtual Licensing has gone Virtual.

The new VMware vSphere 5 licensing Schema has removed two physical constrains that existed in vSphere 4 and replaced them with a virtual constrain called vRAM (Explained earlier in this article). The two physical constrains that was removed were the number of cores per CPU & the amount of memory supported per host. In vSphere 4 the number of cores per CPU supported in Standard/Enterprise Edition was 6 & for Advanced & Enterprise plus it was 12 cores per CPU. This number of cores per CPU constraint has forced a lot of customers to stick to a higher Editions of vSphere in order for it to support the number of cores they have on their newly purchased hardware. Although the RAM limitation of 256GB per host in all vSphere 4 Edition beside the Enterprise Plus one was not a big issue for most, it was still a physical limitation that some customers wanted to get rid of. The good news is that the new vSphere 5 licensing Schema has got rid of both of these physical licensing constrains and replaced them with a virtual one (vRAM) just the way it should be.

4- The Opportunity to buy the Hardware you like with the Specs you like.

As all the hardware constrains have been removed, you never have to worry any more by how many cores or how much RAM is fitted in a server. This gives you the option to look at a wider range of servers configuration and probably give you the chance to opt for a better configuration for a lower price without having to affect your vSphere 5 Licensing.(Did some one say he wanted more cores/cpu in vSphere 4 Standard Edition?)

5- A step forward toward a Cloud Computing Licensing Model.

The more we move toward Cloud Computing the more VMware have to flip its pricing model into a similar pricing method to the utility companies (Per Usage pricing). I believe introducing vRAM and removing Cores/CPU & RAM/host limitation is just one step further into that model. I mean look how would it work out if VMware actually remove the number of CPU sockets in the future and only price things per vRAM so you will only pay per what you use. I am not saying that is where VMware licensing is going as I have no road map what so ever on that, but hey that seems kinda logical way to price when talking about Cloud Computing.

6- Enforce Best Practice Scale Out Design for Server Virtualization.

For long time Scale Out has always been the recommended Design for Server Virtualization for two reasons:

* Avoid the long downtime for HA or equivalent feature to bring all the failing VMs on a massive host up again after a host failure.

* Reduce the affect of a single Server Failure.

Although that has been always recommended to customers, the new schema will take one step forward to encourage customers & get them rewarded for using a scale out design.

7- Enforce customers to take a better care of sizing their VMs

In many environments today, VMs have been provisioned in the same way if the customer would have bought a physical server. If they used to buy servers with 16GB of RAM although they only never exceeded the usage of 2GB, then they will still provision a VM with 16GB of RAM. Over-Provisioned VMs have always been a problem in Virtualized environment as  it kill resources for no reason as well reduce the performance of the host over all. The new Schema will make admins have a better care of properly sizing VMs which will eventually raise the importance of tools like VKernel Capacity AnalyzerVMware vCenter CapacityIQ

Last Note: To figure out if you will be affected by the new vSphere 5 Licensing & vRAM you can utilize the following VMware tool to study your vSphere 4 environment and report to you your vRAM utilization. Have a look at the utility here

Thanks for all who contributing by leaving comments and feedback, as in response to that the entitlment has dramatically increased and other improvement were introduced to the vSphere 5 vRAM licensing Schema. For more info on that you can check the following article: vSphere 5 vRam Licensing Amendment.

I hope this help explain it, & please leave your additional opinion & feedback in the comments area below.


  1. Nice writeup, Eiad.


  2. 1 reason it is terrible (and I only need one to make it worth looking at alternatives) is your reason 7. I have enough work to do already. I don’t want to spend time “right sizing” to meet license requirements that have nothing to do with real world problems. Say what you want about the terrible side effects of over provisioning, but it is not nearly as bad as you suggest. In fact, it used to be a selling point for VMware…

  3. While you make some decent points, mainly around hardware independence, it feels as if you’re trying a little too hard to make your case here.

    You’re OK because you can use your DR licenses to cover you? Thank vmware for making you do what you “should” be doing anyway (#7)? These are not well thought out arguments.

    We all know that the new model’s goal is maintaining revenue going forward. Even if we concede that it’s necessary to keep a vendor healthy going forward, attempts to spin it as a good thing for the companies buying the licenses is always going to be a stretch.

  4. At #1: It shouldn’t be hard to find lots of customers who in the last year bought 2-cpu servers with 6 cores each and put in at least 128GB RAM. Probably 192GB. What customers have of old infrastructure in production since 3 years ago shouldn’t be used as basis for calculating the current need of customers. There has been some development in the past 3 years. Most customers might have moved to 64bit or are moving to 64bit. It needs more RAM.

    At #2: Can’t convert vSphere licenses to vSphere Desktop, can you? So existing customers running Citrix XenDesktop are screwed bigtime?

    At #3: I’d happily purchase 4 Enterprise licenses to cover the per-core requirement of a 2-socket E7-2870 server with 256GB RAM instead of what I now have to do: purchase 8 of them to cover for the vRAM (ok… 7 to be nice and not do any oversubscription).

    At #4: LOL! THe vRAM entitlement in Standard edition being 24GB is so low that again I’d be happy to purchase 4 standard licenses for a server equipped with 2 E7-2870 processors and 256GB RAM instead of what I now have to do: Purchase 10 of them!

    At #5: Why would we want cloud-like licensing in our own server room? If I wanted cloud-like pricing I’d outsource my serverroom to a cloud provider. In my server room I want licensing that offers features without too much performance or scaling constraints. XenServer being the perfect example of how to do that. At any rate the new vRAM entitlements are too low compared to what customers in the last year has been buying hardware for. You’d have to double the vRAM entitlements for them to be acceptable – today.

    At #6: So basically you’re contradicting what you said in #4…

    At #7: Now one have to spend a lot more effort monitoring RAM usage within each VM and reduce RAM usage as much as possible. Using RAM within VM for caching is now bad and lots of extra load is going to be put on disks/SAN adding latency and making the whole virtualization experience worse.

  5. Sorry, but your point 7 is not true. One of the important features of virtualisation was memory overcommitement.. and so it was sold..as one of THE features of vmware. And now we were punnished for exactly this? Most charge back models do not take care about the configured memory of a VM..not even the models of VMwares own Chargeback Server. Its always the actually memory which will be charged back.

    But now?

  6. I agree with this on every level. I also initially freaked out, had a second freakout revolving around VDI and then read further into the model and realized we were not in danger.

    With that being said, I feel VERY strongly that if they’re charging for utilization via vRAM (which is fair) then they should not be doing the CPU AND vRAM licensing. In the grand scheme of the concept that would make the most sense.

    If I’m paying for utilization then I shouldn’t be consuming two licenses on a host that is sitting idle waiting for failover. Granted this raises the collective vRAM number but none the less this model at best case scenario will only allow some customers to only maintain current licensing costs, they will never go down if you’re maintaining the same hardware. If basing off vRAM alone I’m certain many organizations could have found a silver lining knowing that they were able to actually save.

    Either way I had my dissertation ready for management the day after the announcement as we have Microsoft guys on site that are quick to attack VMware whenever they get an opportunity, and this was the golden one.

  7. 2nd missleading post to cover the reason of revise license scheme in vsphere 5. I am not sure had you role out a private cloud with real financial model in any environment before, users do not really require vmware to do this to so call simplify or move them in cloud concept. Every environemtn have the financial model base on different requirements to perform charge back to the business unit. Exa,ple fsi, manufacutirng, transport and travel segments are all different game and behave differently. As long as the cost is increase, it does impact the entire cost to run the cloud for them.

    For the scale out message or reason u put here, i will urge you to look into the limit vmware sets which your post is misslead again. Scale out or not, is not mainly on the host level, is tiers architecture and application base. Hypervisor is only provide the resource virtualization to the compute, but it does not make the final decision on the scale out architecture when you go into real deployment. You can get some advise fro application owner or ERP expert, they can easily explain this to you

  8. Hi All,

    Its great to see all these comments coming. Though I thought to clear up few things that few of you have mistaken about the article.

    1- I have no where said this is the greatest licensing change ever, but I called the article its not as bad as it seems at first glance. If I thought it was the best licensing Schema every, maybe I would called the article The best thing happened to vSphere ever. Though I still believe its not as bad as many believe, & still have a good side to it.

    2- The point of this article is not trying to explain the reasons VMware has done this, but just trying to look at some of the positive sides for the new pricing schema rather than just look at the negative side of it. Further, I am trying to clear up a lot of confusion many customers have had of the new licensing schema. Further, I wanted to do a real example which explain how vRAM does not match physical RAM as that seems to be a large part of the confusion.

    3- I am really glad to hear your good or bad feedbacks. I am pretty sure the VMware team is monitoring the blog sphere and would probably look into these feedback and all other feedback giving directly or not directly. Further, its very helpful to me to figure out how you all viewing this model although I have no impact on it.

    4- Some of you has confused over Commitment with Scale Up architecture. You don’t have to have the hugest host to actually over commit it. The idea of Scale Up Architecture is to have fewer larger hosts which if you do it to the extreme is a bad idea as you will have a longer fail-over time & larger impact in case one host failure.

    5- I loved the comment where it said if vRAM was used alone as a model of pricing without having to count the number of CPUs it would have been a nicer licensing model. I do agree 100% on that, and hope VMware will get there one day. Though that are not there yet for what ever reason above my paygrade :).

    6- I have wrote this article not as an official reasoning by VMware(I don’t even have the right to do so even If I wanted to), but as a part of the Virtualization Community.

    Thanks for everyone who commented, & Please keep these comments coming, & share your good or bad feedback with the rest of us.

  9. BTW, Thanks to this change in licensing, I found an excellent alternative with Proxmox! It utilizes KVM with an intuitive interface. Thank you VMWare!

    The licensing is enough of a change that a VMWare SMB evangelist will switch. VMWare can keep their high-end customers for a little while, but when features of the alternatives comes to parity within a couple of years, the short-sightedness of this decisions will be apparent. Excellent Engineering, terrible management decisions. Sounds like old Novell…

  10. Hello,

    I’ve done a bit of research on this and frankly it is a poor play to charge like this. VMware already is by far the most expensive virtualization platform on the market. Studies we’ve done in our lab indicate that it is $100k more expensive per 16-way Blade Chassis than Citrix XenServer with comparable functions. Now to be clear, VMWare is the Cadillac of Virtualization, but most of us can get to work just fine in a Toyota.

    The problem with this licensing model and for that matter, the author’s comments on #5 is that it’s not conducive to cloud computing. A huge component of Cloud Computing is the ability to grow and shrink compute power based on demand (aka “elastic-cloud” computing), without suffering wasteful costs associated with latent consumption. Before virtualization and automation, engineers designed systems to their peak performance and created a huge amount of waste in unutilized capacity. Virtualization allows for pools of resources to be consumed across multiple machines and allows engineers to design more efficiently. This model will cause us to move in the opposite direction of “elastic-cloud”. Here is why. If we were originally buying (for example) 10 licenses of vSphere to support our small cloud environment and then through no change on our side, we may be required to buy more licensing so that we can properly grow and shrink VM’s. This requirement of course, increases the waste in our cloud data centers.

    The other thing they’re doing is the licensing on View which is as someone else mentioned a nice way of making Citrix XenDesktop more expensive. It’s a trick to get us to use an inferior solution as XenDesktop is simply a better product currently (View is making strides however). I’d rather see VMware compete on its merits of how their VDI performs, and not lower themselves to games like this.

    All in all, I’ve met now with three customers who are very concerned about this licensing model. They agree with my stance in that this is all about VMware sucking us into their product and then completely changing the game in how to cost and design it by stacking nearly all of chips on their side. I would also like to note that I manage roughly 20,000 systems across CONUS, and nearly 150,000 desktops. Citrix and Microsoft would both like to thank VMware for forcing me to evaluate them as a replacement. It’s true they only have about 75-80% of VMware’s function but at this point their overall value has just catapulted.

  11. 1 reasons why VMware vSphere 5 vRAM Licensing is as bad as it Look at First Glance:

    I calculated how many licenses I would have to buy for my current vSphere enviroment and the result is at least 50% more!!!

  12. Hi Jacek,

    Can you please describe your environment as just giving the output alone does not help? Further, I would highly recommend you contact your VMware representative as there might be away around your situation. I am sure they will gladly help.


  13. Hi Sean,

    Before you get so mad at VMware, and evaluate others. Please give it a chance and speak to your local VMware Team, as they can assist your situation on the ground and provide a more related answer.

    I am sure your local VMware Team has something to offer, & after a good explanation & help of the local VMware team you should be on the right track again.



  1. […] vSphere 5 vRAM Licensing Schema you might want to start by reading my following article first:   7 reasons why VMware vSphere 5 vRAM Licensing is not as bad as it Look at First Glance. After the initial vRAM licensing announcement, although most customers did not have a problem with […]

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