Buying VMware vSphere Perpetual Vs Subscription?

Buying VMware vSphere Perpetual Vs Subscription?

I get asked a lot about the best way to buy VMware vSphere  now, especially by organizations that may have only ever purchased vSphere in a perpetual model before. I’ll try and distill some of those conversations into this post.

TL:DR – I am yet to see a vSphere only estate that cannot be upgraded to a subscription model for the same price or cheaper than a standard perpetual renewal (and that includes adding a vRealize Cloud Universal entitlement)

Current Licensing Landscape

I come across many organisations that have a cloud first strategy.  That are redeveloping applications new using native cloud technologies.  They also have a long tail of ‘heritage’ applications and services, that will never be redeveloped or migrated, due to data archival, compliance, latency, location or compatibility concerns.  These are often hosted on a vSphere estate.  These organisations have long term investments and commercial contracts in data center facilities that cannot be written off.

The vSphere estates are just that, vSphere only, these are not VMware Cloud Foundation deployments.

Benefits of Subscription Model

The simple benefit of moving the licensing to a subscription model is that as the organisaiton described above executes on the cloud first strategy, the size of the VMware estate can be reduced to fit the hosting need, without leaving the organisation owning a heap of perpetual license entitlements that it has no use for.

The above chart demonstrates how the subscription model enables the procurement team of an organisation to size the purchased entitlement in line with the requirement.  Another way of looking at this is the utilisation of the purchased entitlement

With a cloud first strategy and a shrinking demand for local compute, the utilisation of the purchased resource reduces and the cost per core of entitlement goes up.

License models for vSphere Only

For customer buying vSphere only, there is currently (May 2021) only one licensing model and that is perpetual.

Perpetual

A perpetual license allows an organisation to use the software for as long as the end user complies with all terms of the license agreement.  Which could in principle be in perpetuity.  When an organisation buys a perpetual license they are effectively buying the entitlement to run the version of the software they purchased forever.

Licensing Options to move to Subscription

Procurement Consideration

In my experience in many cases it can be just as cost effective to map any vSphere only entitlement to a vCloud Suite Subscription license.

vCloud Suite Subscription is considered a trade in transaction by VMware.  An organsiation can trade in elements of the existing entitlements and gain discounts against moving to the new subscription based model.  The vCloud Suite Subscription, is also more than just vSphere, it includes entitlement for vRealize Operations, Log Insight and with some editions Automation as well.  The vRealize elements from this model have dual licensing entitlement, that is to say they can be deployed on-premises or consumed as a SaaS offering.

Modernising a vSphere only estate with this approach brings many benefits:

And I am yet to see a vSphere only estate that cannot be upgraded to a subscription model for the same price or cheaper than a standard perpetual renewal.

When working with your VMware or partner teams, ask them to create a model to move your estate to subscription so that you can compare for yourself.

Thanks

Simon