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AMD Server TCO Tool Will Soon Cover VMware CPU Pricing Change

'It's going to cut down the advantage that we have, but it's not going to eliminate the advantage by any stretch of the imagination,' an AMD product marketing manager says of the recent VMware licensing change, which charges an additional license for processors with more than 32 cores.

AMD will soon let partners assess the financial impact of VMware's recent licensing change on server processors with more than 32 cores, thanks to a new total cost of ownership tool.

The Santa Clara, Calif.-based company recently released the AMD EPYC Server Virtualization TCO Estimation Tool to let partners and customers compare the total cost of ownership, or TCO, for server virtualization workloads between AMD EPYC processors and Xeon processors made by rival Intel.

[Related: Forrest Norrod Outlines AMD's Plan To Fight Intel In The Data Center]

VMware announced the licensing change in early February, saying it would charge an additional license for processors with more than 32 cores running software that is based on a per-CPU pricing model. The change, which went into effect April 2, is initially set to have a larger impact on AMD because it has "socketable" processors in the market with 48 and 64 core counts while Intel only sells 48-core and 56-core processors that can only be sold with a complete solution.

Thomas Cloyd, a senior product marketing manager at AMD, said in a Thursday webinar that VMware's licensing change "will absolutely double the costs" for licensing in servers using processors with more than 32 cores, which is "limited primarily to AMD EPYC processors." However, he said, AMD's EPYC processors will still lead in TCO.

"It's going to cut down the advantage that we have, but it's not going to eliminate the advantage by any stretch of the imagination," he said. "So this is not a major point of concern. It's a reasonable approach to how the rest of the business world is going, and we're fine with it."

Cloyd said the AMD EPYC Server Virtualization TCO Estimation Tool, which is available for public use, will soon include a calculation adjustment to account for the additional license cost VMware is charging for processors with more than 32 cores.

"As soon as that pricing model becomes effective, we'll update the tool, so you'll be able to go online and recalculate all that information," he said.

An AMD spokesperson told CRN that the change will go into effect on May 1, a day after VMware’s grace period ends for letting customers and partners buy software licenses without the additional costs for processors with more than 32 cores.

The AMD EPYC Server Virtualization TCO Estimation Tool allows users to compare the TCO of virtualization workloads running VMware, Citrix, Red Hat and SUSE between AMD's first- and second-generation EPYC processors and Intel's first- and second-generation Xeon processors.

The tool works by asking users to choose a specific Intel Xeon processor SKU, which will prompt the tool to display comparable AMD EPYC SKUs that the user can choose from. The tool includes the latest Cascade Lake Refresh processors that were added to the Intel Scalable lineup in February.

After letting users enter a number of variables, such as the total number of virtual machines, cores per virtual machine and server chassis size, the tool shows how the AMD EPYC SKU compares to the Intel Xeon SKU across several important TCO factors, including hardware acquisition costs, hardware administration costs, energy costs, real estate costs and licensing costs.

These costs are then factored into an overall TCO comparison between the AMD EPYC SKU and Intel Xeon SKU across one year and three years. For instance, the tool says that the 32-core AMD EPYC 7452 has a 15.65 percent lower TCO per virtual machine than the 28-core Intel Xeon Gold 6258R over one year. Across three years, the advantage narrows to 10.50 percent.

Cloyd said if users want a customized TCO analysis, they can reach out to one of the company's distribution, OEM or channel partners.

"As part of that analysis, all of those fields that were static can be manipulated individually," he said.

While some VMware partners previously told CRN that the recent licensing change will make processors with more than 32 cores unattractive for virtualization workloads, a Wall Street analyst said AMD's 48- and 64-core EPYC processors still have advantages over Intel Xeon processors, including core density.

"They just win on all the metrics. That's the rub for Intel," Rosenblatt Securities analyst Hans Mosesmann told CRN in February. "It's going to be tough to compete. It's not going to change the calculation for the hyperscale guys, in particular, in their use of AMD."

AMD has previously said that the chipmaker "continues to lead the industry on performance, features and TCO in virtualized environments for both one-socket and two-socket systems."

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