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October 2015

How is the VSPP / vCAN Usage Calculated?

VSPP(VMware Service Provider Program) or what is now called vCAN (vCloud Air Network) is measured by the amount of vRAM allocated to a VM, multiplied by the percentage of hours in a month the VM is powered on, multiplied by the memory reservation (with a base of 50%). That calculation gets you what is called a Unit. Times that Unit by the points tier that you are using (Tiers are available in 5, 7, 10 and 13 points, tiers are used to get specific features). After multiplying the Units by the tier points, you get a points used number. Depending on the contract level you sign, is a base point usage and overage fee that is measured in cents per point.

Got it? No? Thats fine, I’ve created a nice little graphic to help.

VSPP Licensing

So what does this whole thing mean? Well, technically it means that you are charged for every VM you have powered on, by an amount calculated based on the VM’s vRAM allocation, your points tier and your contract.

So lets break these down.

Powered on VM:
% of total hours available in the month, so if you aren’t using it, power it off.

Memory Reservation:
If you reserve RAM for a VM, you are allocating physical memory to the VM. So, if the VM is allocated 8GB and you set a 4GB reservation, then you reserved 50%. If you reserved 6GB then the reservation is 75%. The thing about this metric is, even if you do no set a reservation, it has a base of 50%. Setting a reservation to 25% or anything lower than 50% does not mean you save money. So unless you set the reservation higher than 50%, you will always be counted at 50%.

Points and Tiers:
This is the confusing part, but it affects what features you get. First and foremost, you have a couple tier amounts in the count of 5, 7 10 and 13 points.
5 Points is essentially Enterprise licensing, but with Distributed Switches thrown in (not normally included in Enterprise Licenses). With this model, you only get 2-vCPU Fault Tolerance.
7 Points is the equivalent of Enterprise Plus Licensing. Host Profiles, Auto Deploy, vCloud Network & Security Advanced, 4-vCPU Fault Tolerance, Storage DRS, and the rest of Enterprise Plus features.
10 Points takes the same features as 7 points, but adds vRealize Operations.

There are actually 2 tiers of 10 points. All the tiers before this did not include NSX. The second 10 point tier and 13 point tier are based on adding NSX.

10 Points with NSX removes vRealize Operations Enterprise and vCloud Network & Security Advanced, and replaced the vCloud Network & Security Advanced portion with NSX licensing.
13 Points with NSX adds vRealize Operations Enterprise back.

So now that we know how to calculate the licensing, why would you? Well, taking into consideration the high cost of perpetual licensing, the Service Provider Program honestly has a much better path for getting your foot in the door.

After the above numbers are collected and a points amount is known for the month (will get to that), the contract comes into play. The numbers you’ve collected are weighed against a contract. Contracts start as low as 360 points base usage per month and go as high as a 100,000 base points per month. One thing to note is that if you have Datacenters around the world and wish to get a Global Contract, you have to get a minimum of 60,000 points. If you talk with your rep and your aggregator, you could potentially see about a 30,000 point global contract (7 points tier likely required).

Base Contract Levels:
So what does that mean? Well, you pick a contract level, say 3,600 points. You guarantee that even if you use less than 3,600 points in a month, you will pay for the base cost of 3,600 points (which is roughly $2,600 in the US). This isn’t bad in the grand scheme of things. Its a lower cost of entry for VMware licensing if you meet the requirements. Which, depending on the contract you get, you are required to have a specific number of VCP’s on staff. This is to make sure that support calls with VMware are efficient because they trust that a certified and knowledgable technician will be on the line.

Other requirements in the program include having 2 people trained on Cloud Support and Sales training offered through the partner portal. Remember that if you are multi-national in Data Centers, you need 2 people in each country trained on those cloud sessions.

One last thing to look for. When you are working on licensing, there are what they call “Break Even Points” in the contract levels. An example of this is when you are on the 3,600 points contract and you are doing 9,989 points (3600 base + 6389 overage), you are break even. At this point you are paying as much as a 10,800 base points contract. Move to the next level (10,800) and after doing so, you will also go down in cents per point overage cost. So what used to cost 72 cents per point after base cost is now 67 cents per point. It doesn’t seem like a lot in that statement, but it makes a difference at scale.

I should have some spreadsheets that cover how much it costs at 3600, 10800 and 18000 contracts at 50 point increments, you can download it by clicking here.

Well, thats enough math for one day.

Thoughts on the VSPP / vCAN Program

One of the interesting things about my career thus far is working for a Service Provider. Working in Telecom settings has its challenges, even more so whiny throw virtualization into the mix. But one of the things that can help or hurt an SP is licensing. Technology companies trying to work with SP’s will usually offer a usage based plan to work their licensing into the companies Operational Expenses.

Why is this so different? Well, everything that the SP produces from their product line, is typically charged on a usage basis. So this helps to figure into the revenue stream, how much of that revenue pays for the licensing that is necessary to host or create the product. The downside is that over time it starts to really add up. If you want a good example, try to even wrap your head around the SPLA licenses from Microsoft. SP Licensing can get very complicated, but in the end, it can be very helpful.

So let’s take VMware into example. On average when you think about VMware and the licensing, it looks and to your wallet, feels very expensive. The initial up front cost hurts, but is followed up with support costs. As you grow, you buy additional up front licenses to cover the additional servers, followed up then by the additional support costs. But when you are a Service Provider, your licensing is based on usage.

You pay in one way or another, per hour. Yup… thats nuts, but really its cents per hour. I’ll explain in a little more detail in another post, but VSPP / vCAN lowers the cost of entry so that Service Providers can worry about what they do best.

So where don’t I like it? Well, the formula for licensing could be easier. But, what really grinds my gears is that for smaller SP’s, it really lack the resources to help then get up and running or improve upon their infrastructure. What I mean is that there isn’t really a lot of Systems Engineers available to SP’s. The account reps are less responsive and those reps cover the whole of the US. After voicing this at Partner Exchange at VMworld, I met a few people with helpful answers.

Yes, Systems Engineer resources for Service Providers needs to be better, but in the mean time you have things like vmLive and other webinars that can introduce you to people within VMware. Those contacts will be very helpful. vmLive does add value because its free! On top of this, VMware has started to release their Validated Designs that are a top down configuration design of SDDC’s. As more of the VVD’s become available, I would imagine that they will cover some area that coincides with how you could deploy SDDC within your constraints.

Another thing that I don’t care for is that there are no Global Contracts for organizations using smaller than 60,000 point contracts. You could talk with the reps to potentially agree on 30,000, but thats still relatively high. You could fit about 1000 VM’s or more depending on their RAM allocation.

Lastly, but most importantly, the program just isn’t flexible enough. For organizations that use it to build IaaS within their company, if you don’t need vCloud Director but maybe something like vRealize Automation, you can’t swap them. You have to end up paying $5+ a VM per month, or do without (Or make custom built GUI’s over Orchestrator). In some cases, depending on usage, that could double your licensing fees. I think there needs to be some flexibility with vCD and vRA. Especially since there is little faith in a product that is not being fully developed any longer (API’s only… not GUI). Not everyone is large enough to build their own frontend for vCloud Director.

All in all, the program in very interesting, and its value show within the savings, but I feel there is room for growth to handle the varying degrees of service providers and companies just starting to deploy new virtualized infrastructures.