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VMware Kills Off Its Loathed vRAM Pricing

Pat Gelsinger is dumping VMware’s hated vRAM pricing established a year ago when vSphere 5 rolled out

Pat Gelsinger, the Intel honcho who went to EMC as president a few years ago, enters into office as CEO of VMware, replacing Paul Maritz, a hero to his customers.

He's dumping VMware's hated vRAM pricing established a year ago when vSphere 5 rolled out. vSphere licenses were priced by how much virtual memory each virtual machine used. Licenses came with RAM "entitlements" and users would pay for how much RAM they used over that quota.

It was complicated and expensive, more expensive than VMware used to be on the same machines because users had to buy more licenses. Rivals, which VMware thought would follow suit, were astonished and customers were ticked off. Microsoft called it a "vTax" and said it would keep charging by CPU.

Customer protests forced VMware to tinker with vRAM pricing a mere month after it was introduced. It raised RAM limits and set maximum prices. The 48GB of virtual RAM customers assigned to their VMs on a single server was upped to 96GB and it was still wildly unpopular.

Well, Gelsinger said during his keynote speech at VMworld in San Francisco this week that the company polled 13,000 customers. They told VMware "very loudly" to change its pricing. "vRAM is a four-letter dirty word," he said. "We are striking this word from our vocabulary." It's "the wrong model."

His announcement was greeted with cheers, but he was apparently surprised he didn't get a standing ovation.

Maritz told the assembled press that vRAM pricing was a "big mistake." "We made things unnecessarily complex, and we're fixing that."

VMware will return to its original per-physical CPU and socket pricing scheme with its new vSphere 5.1 software and try to make more money from software bundles that take customers to the cloud where they can get more use out their servers and data centers.

Its new vCloud Suite, aimed at private clouds, will be capable of managing "multi-cloud environments," VMware's tacit acceptance of heterogeneous environments and open source. "It's a multi-cloud world and sadly there are other pockets of infrastructure we must support," Gelsinger said.

It's already got its open source Cloud Foundry Platform-as-a-Service and will use the widgetry it got with its shiny new Nicira networking acquisition to connect non-VMware clouds like OpenStack clouds to private VMware clouds.

Gelsinger called it "the first holistic approach for delivering cloud infrastructure." VMware's DynamicOps acquisition should help it extend its Cloud vDirector and support rival hypervisors as well as Desktops-as-a-Service.

vCloud Suite includes vSphere 5.1, vCloud Director, vCloud Networking and Security 5.1 and vCenter Site Recovery Manager 5.1, in other words, virtualization, cloud infrastructure and management. VMware's new vXLAN is included for virtualizing network switches and moving VMs across server racks and storage systems in a catch-up to Microsoft.

VMware also announced Cloud Ops consulting.

The standard version of the suite will be priced at $5,000 per CPU when it comes out September 11. The advanced version will run $7,500 and enterprise $11,495.

The enterprise data center is now supposed to be 60% virtualized, according to Maritz. It was 25% four years ago, when he joined the company. VMware wants to make it 90+% in the next three-four years with provisioning happening in seconds.

The idea is to get to the "software-defined data center" with all the infrastructure virtualized and delivered as a service and the control automated by software.

As a starting place vCloud Director 5.1 can create a so-called virtual data center consisting of up to 30,000 virtual machines and associated resources.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at) or paperboy(at), and by phone at 516 759-7025. Twitter: @MaureenOGara

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