VMware to overhaul service provider licensing

VMware plans to radically overhaul its service provider licensing in the fourth quarter, introducing memory-based licensing for cloud computing providers and a slew of new products for pay-per-use consumption by end users.

From October, telecommunications carriers, systems integrators and other managed service providers signing new 12-month agreements under VMware's VSSP (service provider program) will be the first to sample an overhauled licensing scheme.

Those offering infrastructure-as-a-service (Iaas) using VMware's vSphere product will be charged according to both the number and size of virtual machines rented by end-user customers - measured in terms of the amount of RAM (random access memory) used.

The vendor will also introduce some 15 new VMware products to its VSSP program to be offered by service providers on a rental model - including Site Recovery Manager (for disaster recovery as a service), View Premier (for hosted desktop services) and Zimbra (for hosted email and collaboration).

Memory-based pricing

Service providers using vSphere to offer cloud computing or other hosting services have traditionally signed up to one of two licensing schemes.

The vendor's first few hosting partners signed up to EULA's (enterprise user licensing agreements) which had been modified slightly to allow for the provision of multi-tenant services. Typically these deals were signed for periods of three years. But today, VMware only sells EULA licenses to end users and stipulates that they cannot be used for the provision of multi-tenant hosting services.

More recently, VMware has been signing up its service providers to a 'per-VM' licensing model under the VSSP program. Under this program, service providers are charged by VMware according to how many virtual machines are rented to end user customers over a given month. Typically these licenses are sold on 12-month terms.

But the program to date has not accounted for how large a given instance (virtual machine) was or for what part of any given month it was used.

"Under the existing model, you could be spinning up a service and offering it to a customer for three days, but you would have been charged for the whole month," explained Geoffrey Waters, director of VMware's service provider program. 

Under the new model, he said, service providers will only pay for what is consumed. They will be charged according to the volume of "Allocated Virtual RAM" consumed by a service provider's end user customers over the course of the month - measured right down to the hour and megabyte.

In this sense, the VSSP overhaul attempts to mirror the more granular models that telecommunications companies use for mobile phone subscribers.

Read on for an explanation of VMware's 'points' system and a discussion on compliance issues...