VMworld: Microsoft Goes On Warpath Against vSphere 5 Licensing

This year, Microsoft is focusing on vRAM, the new licensing model VMware introduced with vSphere 5 in July. VMware's decision to shift its vSphere licensing entitlement from the number of server cores to the amount of memory that customers allocate to virtual machines on the host (vRAM) could lead to higher costs for customers, according to Edwin Yuen, director of virtualization and cloud strategy at Microsoft.

"The concern is not just how it impacts customers today, but how it will impact them going forward," Yuen said in an interview prior to the opening of VMware 2011 earlier this week.

VMware boosted its initial vSphere 5 vRAM allotments after customers went ballistic, and the pricing controversy has since subsided. Nevertheless, Microsoft sees vRAM as a golden opportunity to attract more customers to Hyper-V.

In fact, since VMware introduced vRAM, Microsoft has heard reports of VMware customers planning to hold off on upgrading to vSphere 5 and taking a long, hard look at Hyper-V, Yuen said.

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"I think we will definitely see customers that will come over as a result of the vRAM change," Yuen told CRN. "VMware shifted from an unlimited model to one where every time an administrator presses a button, they'll have to think about the financial costs. It really hurts those customers that buy higher end servers."

Dave Sobel, CEO of Evolve Technologies, a Fairfax, Va.-based Microsoft partner, believes vRAM could help steer customers toward Hyper-V, particularly in the low end of the market. "I think VMware has struggled in the low end of the SMB space, and [vRAM] isn’t going to make it any easier," Sobel said.

None of this is at all new: Microsoft has been hammering the cost advantages of Hyper-V server virtualization ever since launching it in 2008. But there's a new urgency in its message given that virtualization costs are directly tied to the costs of building private clouds, and Yuen was eager to note the advantages Microsoft enjoys in this regard.

"Our cloud is still licensed on a per-processor, per-server basis, and the customer decides the size of the VM and the density," Yuen said. "As customers buy next generation servers, and get more power out of the systems, they'll get more of the economic benefits. In the VMware model, only VMware gets the benefits."

According to Microsoft's analysis of the costs of each company's private cloud offerings over a three-year period, Microsoft's private cloud is one-fifth the cost of a comparable VMware private cloud when configured for 6 VMs per processor. At 15 VMs per processor, Microsoft's private cloud is one-eighth the cost of VMware's.

"Larger VMs, scale-up scenarios, and memory over-commitment will lead to higher costs on VMware," said Yuen." If you increase the density of VMs, the cost differential grows."

Microsoft and VMware have a history of clashing during VMworld. In 2008, Microsoft handed out poker chips to VMworld attendees along with fliers that highlighted the costs of VMware virtualization. In 2009, Microsoft and Citrix complained about being relegated to small 10 x 10-foot booths on the show floor and shut out of promotional opportunities offered to other exhibitors.

Last year, Microsoft placed a full-page advertisement in USA Today warning VMware customers of vendor lock-in and other alleged problems.

It remains to be seen whether this year's campaign will have any effect on the balance of power in the server virtualization space, but Microsoft clearly thinks vRAM is going to end up being a major windfall.