Microsoft: New VMware Pricing Makes VMware Cloud Costs 4x Microsoft's

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Microsoft executives made their comments during the Microsoft Worldwide Partner Conference (WPC) being held this week in Los Angeles.

Several of those executives were responding to VMware's new pricing model. Under that model, which VMware unveiled Tuesday, VMware plans a new virtual based licensing entitlement called vRAM based on the amount of physical memory configured to a virtual machine.

Chris Gradwohl, enterprise architect at Microsoft, said shortly after VMware pricing news that VMware new memory-based licensing model was a boon to Microsoft, and that he is concerned that new pricing model might not last.

"That would be a concern of mine," Gradwohl said. "If (VMware) pricing doesn't change, that is good for us."

Mannan Mohammed, director of hosting business at Microsoft, used a couple of slides during a Microsoft WPC presentation comparing Microsoft's and VMware's cloud capabilities to show how Microsoft's Hyper-V-based pricing model compares to VMware's new memory-based pricing model.

Mohammed said the slides comparing the costs are no joke when it comes to customers.

"If your CFO sees that slide, he will question why you use VMware," he said.

Mohammed said that the one-year cost to run a private cloud consisting of 1,000 virtual machines with the VMware Service Provider Program (VSPP) is about four times the cost of running the same size private cloud with the Microsoft Services Provider License Agreement (SPLA).

In the example Mohammed used, Microsoft assumed a ratio of 20 virtual machines per physical hosts, with 4 GBs of RAM per virtual machine running on physical hosts configured with two processors and 96 GBs of RAM.

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With both the Microsoft and VMware private cloud, the $78,000 cost of the Windows Server Datacenter Edition operating system was the same.

With Windows SPLA, customers would have to pay $25,000 for the System Center Server Management Suite Datacenter (SMSD) solution for managing high-density virtual server environments, giving a total cost of $103,000 for the Microsoft private cloud solution.

With VMware's VSSP, however, customers would have to pay about $378,000 for VMware's vCloud Premier Service Provider bundle, giving a total cost of $414,000, Mohammed said.

Mohammed also said a similar ratio between the two competitors' technologies exists when comparing the cost of one year of running a private cloud. More important, he said, the cost-per-virtual machine actually rises as the number of virtual machines used in the cloud increases using VMware's technology, which results in an inversion of Moore's Law.

Using the same assumptions about the underlying technology used to build the cloud, Mohammed said the cost of running the cloud with 1,000 virtual machines, each with 1.5 GBs of memory, is $204,000 using VMware VSSP vs. $103,000 with Microsoft SPLA.

However, as the number of virtual machines increases, the cost of running the cloud for one year increases exponentially with VMware VSSP compared to a linear increase with Microsoft SPLA, Mohammed said.

Using Microsoft SPLA, the cost of running that cloud with 2,000 virtual machines, each with 3 GBs of memory, rises to $205,000. With 4,000 virtual machines, each with 4.5 GBs of memory, the yearly cost is $411,000. With 8,000 virtual machines, each with 6 GBs of memory, the cost is $822,000, he said.

The cost of running the cloud using VMware VSSP at those points is $660,000, $1.824 million, and $4.656 million, he said.

VMware executives were unable to respond to this story in time for publication.