Understanding VMware Licensing: An IT Professional’s Guide

The VMware vSphere 7.0 licensing operates as follows:

  • Per-Processor Basis: Licenses are sold per processor, each covering up to 32 cores.
  • Core Licensing: For CPUs with more than 32 cores, additional CPU licenses are required for the extra cores.
  • vCenter Server Licensing: vCenter Server, the management platform for vSphere environments, is licensed per instance.
  • ESXi Host Licensing: ESXi, the hypervisor in VMware’s platform, is licensed similarly to vSphere on a per-processor basis.
  • It is important to note that since Dec 13th, 2023, you can no longer purchase licenses and must purchase subscriptions from VMWare.

Introduction to VMWare Licensing

VMware licensing

In today’s rapidly evolving technological landscape, VMware is a pivotal player in virtualization and cloud computing.

Understanding VMware licensing is crucial for IT professionals, businesses, and anyone looking to leverage the full potential of virtual environments.

Our focus in this article is to dissect the complexities of VMware licensing, ensuring you can make informed decisions that align with your organizational goals and budgetary constraints.

  • Why VMware Licensing Matters: VMware, as a leading provider of virtualization solutions, offers a range of products and services that can transform your IT infrastructure. The proper licensing agreement can unlock these benefits while ensuring cost-effectiveness.
  • The Essence of Virtualization: At its core, virtualization allows multiple virtual machines to operate on a single physical machine, leading to better resource utilization, scalability, and agility.
  • Decoding VMware Licensing Models: With different models, like per CPU, per VM, or subscription-based options, choosing the right VMware license is critical for optimal performance and cost-efficiency.

Understanding VMware Licensing Models

VMware’s licensing structure is designed to cater to various use cases, from small businesses to large enterprises.

Navigating this can seem daunting, but a clear understanding will help leverage VMware’s technology effectively.

  • Diverse Licensing Models:
    • Per CPU Licensing: Traditionally, the most common model is based on the number of CPUs in your servers.
    • Per VM Licensing: Ideal for smaller or dynamic environments, this model focuses on the number of virtual machines.
    • Subscription-Based Licensing: Offers ongoing access to VMware services, often preferred for cloud solutions.
  • Structuring and Pricing:
    • Transparent Pricing: VMware’s pricing is structured to be transparent, allowing businesses to predict costs effectively.
    • Flexible Structures: Depending on the licensing model, costs can be based on capacity, usage, or a flat rate, providing flexibility and scalability.

By delving into these models, organizations can align their VMware licensing with their specific needs and usage patterns, ensuring they’re not overpaying while still getting the maximum value from their investment.

VMware vSphere Licensing and Costs

VMware vSphere Licensing

Understanding the licensing and cost structure of VMware vSphere is critical for IT professionals and organizations looking to implement or upgrade their virtualization solutions.

VMware vSphere, one of the leading virtualization platforms, offers various licensing levels, each tailored to different environments and use cases.

VMware vSphere Licensing Levels:

  1. vSphere Standard:
    • Target Audience: Ideal for small businesses or departments requiring basic virtualization features.
    • Key Features: Includes vMotion, Storage vMotion, High Availability, and Data Protection.
    • Limitations: Lacks advanced features such as Distributed Resource Scheduler (DRS) and Fault Tolerance.
  2. vSphere Enterprise Plus:
    • Target Audience: Suited for large enterprises requiring a full range of vSphere features for enhanced efficiency and management.
    • Key Features: Adds Distributed Switch, Host Profiles, Auto Deploy, and advanced DRS.
    • Enhanced Scalability: Offers greater scalability options compared to the Standard edition.
  3. vSphere with Operations Management:
    • Target Audience: Designed for businesses needing integrated operations management.
    • Integrated Tools: Includes vRealize Operations Manager for improved performance monitoring and capacity management.
    • Cost-Benefit: Provides additional value through operational insights and analytics.

Cost of Each License:

  • vSphere Standard:
    • Pricing Range: Typically ranges from $995 to $1,250 per processor.
    • Support Cost: The additional cost for support and subscription services is around $273 per year.
  • vSphere Enterprise Plus:
    • Pricing Range: Generally priced between $3,495 and $4,250 per processor.
    • Support Cost: Support and subscription services can add around $874 annually.
  • vSphere with Operations Management:
    • Pricing Range: The combined package increases the price, typically around $4,245 per processor.
    • Support Cost: Higher due to the inclusion of operations management, with support costing approximately $1,049 per year.

Additional Considerations:

  • Licensing Per Processor: VMware vSphere licenses are sold per processor, with each license covering one CPU.
  • No Core or RAM Limit: There is no limitation on the number of cores per CPU or amount of RAM.
  • Subscription Services: Include access to new releases, patches, and VMware’s support services.

VMware vSAN Licensing Overview:

VMware vSAN Licensing

vSAN licensing is designed to be flexible, catering to various business needs and scales. The licensing is generally based on a per-CPU basis for servers participating in the vSAN cluster or on a per-VM basis.

VMware vSAN Licensing Editions:

  1. vSAN Standard:
    • Target Audience: Ideal for businesses requiring basic hyper-converged capabilities.
    • Key Features: Offers features like deduplication, compression, and RAID-5/6 erasure coding.
    • Use Case: Suitable for hybrid environments that mix HDDs and SSDs.
  2. vSAN Advanced:
    • Target Audience: Aimed at organizations needing higher performance and efficiency.
    • Enhanced Features: Includes all Standard features plus all-flash hardware support, which allows for better performance and more efficient storage utilization.
    • Use Case: Best for full-flash infrastructure for better speed and reliability.
  3. vSAN Enterprise:
    • Target Audience: Large enterprises looking for advanced management and security features.
    • Additional Capabilities: Adds stretched clusters for higher availability, encryption for security, and IOPS management for improved performance tuning.
    • Use Case: Suitable for mission-critical applications requiring maximum uptime and security.
  4. vSAN for Desktop:
    • Specific Use: Tailored for virtual desktop infrastructure (VDI) environments.
    • Licensing Model: Typically licensed on a per-user basis, making it cost-effective for VDI deployments.

Cost of Each License:

  • vSAN Standard:
    • Pricing Range: Approximately $2,500 to $3,000 per CPU.
    • Per-VM Pricing: An option for smaller environments typically ranges based on the number of VMs.
  • vSAN Advanced:
    • Pricing Range: Around $4,000 to $5,000 per CPU.
    • Consideration: Justified by the performance gains in all-flash environments.
  • vSAN Enterprise:
    • Pricing Range: Generally above $5,000 per CPU.
    • Justification: The higher cost aligns with the advanced features offered.
  • vSAN for Desktop:
    • Per-User Cost: The pricing is often tailored based on the number of desktop users and is generally lower than server-based licensing.

Additional Licensing Considerations:

  • Per-Processor Licensing: Each license covers a single CPU in a vSAN cluster.
  • No Core or RAM Limitation: Licenses are not bound by the number of cores or amount of RAM.
  • Bundled Options: vSAN is also available with other VMware products, like vSphere and NSX, in various VMware HCI Kits.

VMware vCenter Server Licensing Overview:

vCenter Server is typically licensed on a per-instance basis, meaning each vCenter Server deployment requires its own license.

The licensing is not based on the number of managed hosts, VMs, or cores.

VMware vCenter Server Editions:

  1. vCenter Server Standard:
    • Target Audience: Suitable for large-scale management of VMware vSphere deployments for enterprises.
    • Key Features: Offers large-scale management of VMware vSphere environments, high availability, backup, and restore features, along with more advanced capabilities.
    • Use Case: Ideal for managing complex and large-scale virtual environments.
  2. vCenter Server Foundation:
    • Target Audience: Aimed at small environments.
    • Key Features: Limited to managing up to four vSphere hosts, typically sufficient for small businesses or branch offices.
    • Use Case: Best for smaller-scale or entry-level virtualization environments.

Cost of Each License:

  • vCenter Server Standard:
    • Pricing Range: The price is typically around $6,000 to $7,000 per instance.
    • Consideration: Given its extensive feature set, it’s a comprehensive solution for large-scale deployments.
  • vCenter Server Foundation:
    • Pricing Range: Approximately $1,500 to $2,000 per instance.
    • Consideration: A cost-effective solution for smaller environments, limited in scale but offering core vCenter functions.

Additional Licensing Considerations:

  • Instance-Based Licensing: Each active vCenter Server instance requires a license, regardless of physical or virtual.
  • No Host, VM, or Core Limit: There’s no limitation on the number of VMs or cores. However, the Foundation edition limits the number of hosts.
  • Scalability: Choosing the right edition based on your current scale and potential growth is crucial.

VMware Licensing Requirements and Limitations

Understanding the requirements and limitations of VMware licensing is crucial to ensure compliance and avoid potential legal and financial penalties.

Here are some key points to consider:

  • License Activation: VMware licenses must be activated within a specified period after purchase. Failure to activate the license within this period may result in the license being deactivated.
  • License Usage: VMware licenses are typically tied to a specific product and version. Using a license for a different product or version may violate the license agreement.
  • License Transfer: VMware licenses are generally non-transferable. However, exceptions, such as business mergers or acquisitions, may sometimes be made.
  • Support and Subscription (SnS) Requirement: VMware requires licenses purchased with SnS to have active SnS for the entire license term.

Understanding the VMware End User License Agreement (EULA)

VMware End User License Agreement

The VMware End User License Agreement (EULA) is a legal contract between VMware and the software’s end user.

The EULA outlines the terms and conditions for using VMware’s software, including the rights and responsibilities of the user.

Understanding the EULA is crucial for several reasons:

  • Compliance: The EULA outlines the rules for using the software. Violating these rules can lead to penalties, including the termination of the license.
  • Cost Management: The EULA may include information about licensing costs, including fees for upgrades, support, and additional features.
  • Dispute Resolution: The EULA often includes provisions for resolving disputes between the user and VMware, including the jurisdiction and venue for legal proceedings.

Top 5 Recommendations for VMware Licensing

Managing VMware licenses effectively can help your organization maximize its investment in VMware products.

Here are the top 5 recommendations for VMware licensing:

  1. Understand Your Licensing Needs: Understand your organization’s needs before purchasing a license. Consider factors such as the number of users, the required features, and the budget.
  2. Stay Up-to-Date with Licensing Changes: VMware regularly updates its licensing models and terms. Stay up-to-date with these changes to ensure your organization remains compliant.
  3. Leverage the MyVMware Portal: Use the MyVMware portal to manage your licenses effectively. The portal provides a centralized location for viewing, managing, and organizing your VMware license keys.
  4. Regularly Review Your License Usage: Review your license usage to ensure you are not over- or under-utilizing your licenses. This can help you avoid unnecessary costs and ensure you have the necessary licenses.
  5. Seek Expert Advice: If unsure about any aspect of VMware licensing, seek advice from a licensing expert or consultant. They can provide guidance tailored to your organization’s specific needs.

Frequently Asked Questions (FAQs)

Can I use the same vSphere license for my ESXi hosts and vCenter Server?

No, ESXi hosts and vCenter Server are licensed separately. ESXi hosts use vSphere licenses, while vCenter Server requires its own vCenter Server license.

How is vSAN licensing different from vSphere licensing?

vSAN licensing is based on the capacity of the storage used by the vSAN datastore, measured in Terabytes. This differs from vSphere licensing, based on your ESXi hosts’ number of CPUs (and memory, starting from vSphere 7.0).

What happens if I don't assign a Tanzu edition license to my Supervisor Cluster within the 60-day evaluation period?

If you don’t assign a Tanzu edition license to your Supervisor Cluster within the 60-day evaluation period, the Tanzu features will stop working. To continue using Tanzu features, you must assign a valid Tanzu edition license.

What is the advantage of vSphere+ and vSAN+ subscriptions?

vSphere+ and vSAN+ subscriptions allow you to shift from license-based management to a pay-as-you-expand subscription model. This provides flexibility and scalability as your needs evolve, potentially making it more cost-effective in the long run.

Can I mix different vSphere versions in the same environment?

Q5: Can I mix different vSphere versions in the same environment?

Yes, you can mix different vSphere versions in the same environment, but there are some considerations. For example, the vCenter Server version must be the same or higher than the ESXi host version. Also, certain features may not be available if the versions of the vCenter Server and ESXi hosts do not match.

VMware vSphere 7.0 Licensing

VMware vSphere 7.0 Licensing

CPU and Core Licensing with vSphere Licenses

From vSphere 7.0, vSphere licenses now cover one CPU with up to 32 cores. If you have a CPU with more than 32 cores, you’ll need additional CPU licenses to cover the additional cores.

The table below shows the number of CPU licenses required based on the number of CPUs and cores per CPU:

Number of CPUsCores per CPUNumber of CPU Licenses

As you can see, the number of CPU licenses required depends on the number of physical CPUs and cores in each CPU.

Assigning vSphere Licenses to ESXi Hosts

When you assign a vSphere license to an ESXi host, the capacity consumed is based on the number of physical CPUs and cores in each CPU.

It’s important to note that vSphere Desktop, intended for VDI environments, is a licensed per-virtual machine.

Before you assign a vSphere license to an ESXi host, there are a few prerequisites that you must meet:

  1. The license must have sufficient capacity to license all physical CPUs on the host.
  2. The license must support all the features that the host uses. For example, if the host is associated with a vSphere Distributed Switch, the license you assign must support the vSphere Distributed Switch feature.

If you attempt to assign a license that has insufficient capacity or does not support the host’s features, the assignment will fail.

Licensing Models with Up to 32 Cores

If you’re using the licensing model with up to 32 cores, then you can assign a vSphere license for ten 32-core CPUs to any of the following combinations of hosts:

  1. Five 2-CPU hosts with 32 cores per CPU
  2. Five 1-CPU hosts with 64 cores per CPU
  3. Two 2-CPU hosts with 48 cores per CPU and two 1-CPU hosts with 20 cores per CPU

Note that dual-core and quad-core CPUs, such as Intel CPUs that combine two or four independent CPUs on a single chip count as one CPU.

Redress Compliance and VMware Licensing Advisory Services

Ensuring compliance with VMware licensing can be complex but is essential for legal and financial reasons.

Our advisory services can guide you through this intricate landscape:

  • Comprehensive Compliance Audits: We assess your VMware environment to ensure full compliance with licensing terms and conditions.
  • Tailored Licensing Strategies: Develop strategies that align with your business objectives while adhering to VMware licensing policies.
  • Cost Optimization: Identify opportunities to optimize licensing costs without compromising on functionality.
  • Continuous Support: Ongoing advisory services to keep your VMware licenses compliant with any updates or changes.

For specialized assistance in navigating VMware licensing compliance, contact us. Our experts are ready to provide bespoke advice and support tailored to your specific needs.


  • Fredrik Filipsson

    Fredrik Filipsson brings two decades of Oracle license management experience, including a nine-year tenure at Oracle and 11 years in Oracle license consulting. His expertise extends across leading IT corporations like IBM, enriching his profile with a broad spectrum of software and cloud projects. Filipsson's proficiency encompasses IBM, SAP, Microsoft, and Salesforce platforms, alongside significant involvement in Microsoft Copilot and AI initiatives, improving organizational efficiency.

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