VMware CTO explains vSphere 5 licensing changes

It's been a big week in the cloud: Citrix disclosed this week that it acquired Cloud.com, a small open source cloud platform, while VMware released vSphere 5. VMware's latest boasts new licensing and pricing changes, and the company is has a lot of changes on the horizon with other products. VMware CTO Steve Herrod explains the changes and the future of VMware's cloud offerings on this week's episode of Cloud Cover TV.

We discuss:

  • VMware and its release vSphere 5, with licensing and pricing changes
  • Citrix has acquired Cloud.com, a small Infrastructure as a Service platform software
  • How much impact can Citrix make on VMware's business?
  • VMware CTO Steve Herrod explains the licensing changes for vSphere 5
  • How VMware assures customers that the changes are in their best interests
  • How pricing will improve for VMware users
  • VMware's partnerships to make shared storage with Virtual Storage Appliance
  • New capabilities on vShield to address "noisy neighbor problem" and "nosy neighbor problem"
  • Possible changes in the future for vCloud Express

Read the full transcript from this video below:  

VMware CTO explains vSphere 5 licensing changes

Jo Maitland: Hello. Welcome to Cloud Cover TV, our weekly show on all the
juiciest news in the cloud computing market. I am Jo Maitland here in San
Francisco and this week, the main news is VMware and its release of
vSphere 5. The big change in this product has to do with the licensing and
pricing. There's a lot of interesting features too, and I actually managed
to get to interview the CTO Steve Herod, over at the event. He's up next.

But, more news today. Citrix has acquired Cloud.com, which is a small
company out here in Silicon Valley. It's a platform infrastructure service,
platform software, and Citrix has been upwards of $200 million, we think,
buying this company. They've done their best to upstage VMware again,
today. A similar thing happened when VMware went public, Citrix announced
it was buying Xen and the XenServer, XenSource and the XenServer products,
at the same time. So these companies are kind of neck and neck and
particularly in the data center and cloud computing space, right now. All
bets are off on how much impact Citrix can really make on VMware's business
here but they sure as hell are going for it and Cloud.com has perhaps the
most momentum in this space, around infrastructure and service software.
Eucalyptus is in this market too, ABACO, Nimbula. There's a whole bunch of
companies that have been funded behind Cloud.com to compete in the same
space. So it's an interesting move by Citrix. Meanwhile, VMware is sort of
pushing ahead with new features and functions. And it's the first major
software company to, basically, alter its licensing and pricing model to
reflect the way people will buy servers in a more cloud-like environment,
going forward. So, check out what Steve has to say.

Jo Maitland: So, I'm here with Steve Herrod, the CTO of VMware. We're at the Terra
Gallery in San Francisco where the company has launched vSphere 5. It's a
big launch. Congratulations, Steve.

Steve Herrod: Yes. Thanks. It's Sunday.

Jo Maitland: Yes. So one of the biggest questions I guess flying around on twitter
right now, in the blogosphere, I don't know how much we need to worry about
that, you know, who knows, but the questions are flying around about the
licensing and pricing changes. So, how does VMware assure customers,
potentially already concerned about VMware licensing and pricing, that
these changes are in their best interests?

Steve Herrod: Yes. I think it was a pretty interesting statement today about how
we're thinking about licensing going forward. And the software industry as
a whole has been doing things in the old way for a long time, really tying
the software licensing and pricing to physical hardware. And we decided we
really needed to put our money where our mouth is and recognize the world
is going towards pools of computing resources and clouds and make sure that
people are only paying for the benefit that they're getting from their
software rather than something that doesn't match that. So, through, a
combination of work on how vSphere itself is priced, which is around how
many virtual machines we're using. We're also moving where our management
tools are priced based on the number of things they're managing, rather
than some fixed license. So, we we're just as guilty as everyone else of
pricing things based on a physical entity that might not have been fully
utilized. And we think this matches people up quite nicely with how they're
getting value out of it.

Jo Maitland: So, does this mean it's going to cost more money in certain instances,
for certain kinds?

Steve Herrod: Our early analysis is that more than 90% of our customers are going

to be paying at or less than before, and there'll be some outliers who are
doing something particularly unique that might trigger something different but,
for the most part, this is really preparing us for the future, as
people really have giant machines with massive numbers of cores, huge
amounts of memory and really letting them worry about, again, what they're
trying to actually accomplish, as opposed to this specific type of hardware
that they've bought.

Jo Maitland: So, if you're using the new "Monster VM" as it's been nick named, you're
potentially paying the same or less but if you're using smaller VM's, the
pooled-per-RAM pricing may not be for you.

Steve Herrod: In general, more than 90% of all of our customers are going to pay
the same or less. It doesn't really get triggered by one capability or the

Jo Maitland: OK. So, now, let me ask you about the Virtual Storage Appliance. That's
a really interesting move for smaller customers, that, along with the host
replication capabilities, are an interesting move, in terms of your storage
partners. How do you still go forward with building partnerships in the
industry, when you're now offering very much competitive products here?

Steve Herrod: Yes. They're both interesting products and have two different
impacts on the ecosystem. The real goal of this storage appliance, really
neat technology where you literally plug in some software and it
automatically creates shared storage where there was none. That is
absolutely squarely focused on an area where shared storage doesn't play
today. So, it is expanding markets for shared storage and most of our
partners recognize that once a small company gets started with these
capabilities, that they have a good chance of moving up to a physical array
that's doing that. So, I think all of them are seeing that very clearly as
just expanding the market for shared storage, where there was none before.

On the replication side of things, this is referring to the capability of using the
network to copy virtual machines and data from one data center to the
other. There's going to be very different use cases for this as well. The
challenge we got from our customers was that, "I'd like to do disaster
recovery but I don't have the wiring between two sites,' or, 'I don't have
the exact same array on two sites," or even, "I'd actually like to do
replication to the cloud. I don't even know what type of array they have."
Again, we see that as new use cases where array-based replication wasn't
playing today and, in general, this won't be as high-performance or have
a lot of capabilities that the partners have in theirs, so I'm sure that
they're counting on the fact that people get hooked on connecting data
centers and they might want to move up to something that has better
performance or other characteristics.

Jo Maitland: Good. So, now I'm also intrigued. I think these were capabilities in
the new version of vShield. You talk about the noisy neighbor problem and
the nosy neighbor problem which I think is a big thing in the cloud world.
People worry about being on a shared structure. Can you talk about what
those two problems are and then how the new features in vShield will
address that?

Steve Herrod: Each of those, It's really hard to say too, isn't it?

Jo Maitland: Nosy neighbor and noisy neighbor.

Steve Herrod: Noisy neighbor.

Jo Maitland: Yes.

Steve Herrod: The noisy neighbor problem is around recognizing that in a shared
infrastructure, if someone acts up and starts using too many resources, I
can be worried that it's going to affect my own virtual machine's
performance. And this is classic denial of service type of activities that
people talk about in the network. So, through a slew of capabilities that
are really difficult, we are now able to say a virtual machine in a shared
infrastructure is guaranteed a certain amount of network bandwidth and a
certain amount of storage bandwidth. And even if this other virtual machine
is trying to yap and take up a lot of that, we'll protect it from affecting
the other one. The reason this matters is that people want to be confident
putting high-end workloads that have to have absolutely guaranteed
performance in place. And so these capabilities, like storage DRS and
network I/O control, they're really designed to make you feel more
comfortable sharing infrastructure.

Jo Maitland: Right. Now that's something if you're using an Amazon Cloud that you
would have no control over. Right?

Steve Herrod: Right. And the name itself, "noisy neighbor", I didn't term that.
That came from people who didn't know where they ended up having their
virtual machine placed, and they would find spikes in their performance
that they didn't want to get, too. The nosy neighbor is just kind of a nice
term for people in a shared infrastructure worrying about, could other
things see their data.

Jo Maitland: Right. Which is a big deal. If I'm Pfizer and I'm on the same
infrastructure as Eli Lilly. ?Can they look in and see my intellectual
property or whatever?

Steve Herrod: You know, it's funny. We started by the canonical use case we had if
VMware was Coke and Pepsi. We want a service provider to have them both on
the same infrastructure. What we've actually found is that it matters just
as much to a company where they might have a finance department and HR
department that equally don't want each other seeing what they're up to.
So, it applies whether it's different customers or even different
departments. And, the whole notion of vShield is recognizing that the
virtualization space provides a new platform for doing security
differently. It's a twofold type of opportunity here. One is that you can
actually see everything going on from the virtualization layer, every
network packet and every interrupt, every instruction. So, for a security
product, you can do more, because you see exactly what's happening. The
flipside on why it's needed is that we're also in a world where things are
moving around a lot more, through vMotion and other capabilities. And if
things are moving around. The traditional approach to security, where you
statically placed firewalls at different locations and really count on
something not moving, those don't work. So, it's an opportunity and its a
requirement that we do it differently. So, vShield has a number of
different solutions build upon it that are around, "How do I protect the
contents of a virtual machine? How do I automatically build firewalls
around a couple of virtual machines cooperating?" all the way up to, "How
do I provide really the edge protection that a full customer or a full data center
would need?"

Jo Maitland: Switching gears a little bit more to the service provider side. There's
no news today, so It was really around the infrastructure software, around
vSphere and stuff. There's no news yet on the vCloud Express Data Center stuff.
Maybe there'll be some things at VM World. I did want to ask you though. So
vCloud Express still requires an Oracle backend, physical server. It's a
little old-school, given what we're talking about today. Is that going to
change? What is the plan?

Steve Herrod: We'll have a number of announcements around vCloud at VM World. The
bigger news today has been around this suite of products, absolutely being
targeted at the enterprise and their private cloud. But, as Paul briefly
showed, the same suite of software is being rolled out to our vCloud Data
Center partners. And he had some of the names up there of Verizon and, most
recently, the New York Stock Exchange. You can really expect that number to
grow as well as the type of offerings that they're doing, is really
changing. I bring that up because it's pretty interesting that there's
going to be certainly a number of customers offering virtual machines on
demand but what I really like about some of the more recent announcements
is that it it's for verticals, in some ways. So, the New York Stock
Exchange recognizes that you need virtual machines that are reliable and
high-performance. And they're marrying them with some of the data feeds
that they have on how markets are going, for instance, and providing a nice
value add cloud around this. So, I'll definitely encourage people to check
back at VM world for a number of other announcements around that.

Jo Maitland: OK. Steve, thank you for being on the show.

Steve Herrod:Thank you.

Jo Maitland: This has been Cloud Cover TV. Thanks for watching and tune in next week
for more news on the cloud computing market.



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