Finding VMware Cost Savings in the Post-Broadcom Landscape

Opportunities to reduce or even avoid price increases do exist if you know where to look

The pricing structure changes implemented in the aftermath of the Broadcom acquisition have resulted in higher bills for many VMware customers. A sudden, dramatic product price change can often send customers running to a company’s competitors, but there are very few enterprise-class vendor-supported virtualization platforms left in widespread use.

Open source and open source-based commercial products offer a lower cost alternative, but can come with limited vendor support, product security, operational team skillsets, and functionality. Public cloud is also and option, but the cost benefit is uncertain, and with potential for significant re-training costs to make best use of the platforms, the total cost may be higher than anticipated.  With their high market penetration, product reputation and available skills in the market, VMware is a difficult vendor to leave.

Despite the generalized panic around price increases, they have not been consistent across all VMware customers. The largest increases have been felt among those long-standing customers that have per-socket retail licensing bought 10 or 15 years ago and kept under subscription, because each license may now be able to support up to 50 times the number of Virtual Machines due to processor capability growth (the loophole Broadcom is trying to close.)

Those on more recent contracts, however, especially those with service provider licensing on recent hardware, have the potential to see much smaller increases or even reductions in total cost. For these customers, the VMware Cloud Foundation suite can present an opportunity for future overall cost reductions when examined from a wider perspective beyond just the hypervisor license replacement. When fully utilized, the two additional technologies within the suite, NSX software-defined networking and  vSAN software-defined storage, can result in a lower cost platform compared to a traditional implementation with the three distinct technical towers of network, storage, and compute. Let us examine in more detail these two technical products and the cost-saving opportunities they can bring.

NSX: Driving down costs with simplicity, scalability and agility

NSX, VMware’s software-defined networking product, can significantly reduce the cost and complexity of the underlying physical network as it is only required to pass packets reliably between VMware hosts, with NSX handling most of the key network functions. The distributed routing capability, where routing between subnets, is distributed across all VMware hosts in the platform, removing the need for a lot of traditional routers or firewalls. These traditional devices can cause network bottlenecks and at times may need to be replaced (at great expense) to alleviate performance impacts. NSX can provide upwards of 10Gbps of routing performance per VMware host in the infrastructure, easily scaling as with demand at no additional cost as requirements grow.

Creating network constructs in VMware NSX is a simple single-team activity. In the NSX console, a few clicks will create the segment, router interface and present the network ready for virtual machines to use. In a traditional network this could easily involve two or three separate teams and take many hours or days to complete. NSX is also designed to be fully automatable, so this activity could be easily integrated directly into any service catalog or even into DevOps practices using Infrastructure as Code tools, dramatically reducing operational costs and improving agility. The NSX product also includes an extensive collection of tools to help support troubleshooting of server connectivity issues, again helping to reduce operational costs.

vSAN: Increasing savings through performance and operational efficiencies

Another of the components of the VMware Cloud Foundation Suite, a product called a vSAN, is a software-defined storage system completely integrated into the VMware hosts. Storage devices such as SSDs and hard disks are directly connected into the physical servers and vSAN aggregates those devices into a single pool of storage available for running all Virtual Machines. The system stripes the data across multiple VMware hosts similar to the way traditional storage arrays spread data across physical disks, ensuring that the failure of individual VMware hosts does not impact data availability. The distributed nature of the vSAN platform means there are no bottlenecks to performance, so a vSAN platform can easily outperform a traditional storage array for a virtualized environment.

Another benefit of vSAN is cost, especially within the VMware Cloud Foundation suite licensing model where the license for 1TiB of vSAN per core is already included within the suite license, which covers most if not all general use cases. In a traditional storage array, 20-30% of the cost is for the storage devices (SSDs and hard disks) and the rest covers the software, chassis, controller and profit margin. In vSAN, these costs are already included in the physical server of the VMware host and the VCF license. The only additional incremental cost is that of the storage devices.

With a traditional storage array, the initial unit purchase needs to accommodate for anticipated growth over the lifespan of the storage system, leading to the array tending to be oversized which obviously increases the initial purchase cost, but also increases the ongoing maintenance costs as these are always a percentage of the initial purchase cost.  vSAN system, on the other hand, can scale with the growth in demand. If the storage array is connected to the VMware hosts with Fibre Channel there is the cost of the Host bus adapters (HBAs) in the hosts, cabling, and Fibre Channel switches, all of which contribute to the overall cost. In comparison, vSAN uses the existing Ethernet network for its storage traffic, again reducing capital and operational costs significantly. On several occasions in my career, I’ve had to perform datacenter cost analysis. In every case, the cost of port connectivity and cabling (Ethernet, Fibre Channel, and out-of-band management) has been close to or even exceeded the cost of the server connected to those ports, so these savings should not be ignored.

The final financial benefit of vSAN is that it is nearly administration free, the operation effort being a minor uplift to the general VMware administration overhead which compares to having a dedicated storage team managing the storage arrays, Fibre Channel switches and performing all operational changes.

Multiplying value with add-ons

Outside the core VMware Cloud foundation suite, there are several add-on products that can be optionally used, each providing its own value proposition outside of the core VMware Cloud Foundation suite.

The vDefend Distributed Firewall offering for VMware NSX adds an extremely interesting security capability to NSX, enabling full network micro-segmentation with much more granular security than is possible with traditional firewalls, along with tools to analyze traffic flows and make recommendations for firewall rules, reducing the burden on the network and security teams.

The vDefend Advanced Threat Protection product adds on capabilities normally associated with dedicated “next generation firewalls” such as intrusion detection/intrusion prevention, Network Sandboxing, AI-based anomalous traffic detection and other capabilities. The key difference is that these are available throughout the infrastructure, not just at the perimeter with a traditional next generation firewall or dedicated intrusion detection.

VMware price increases are not a foregone conclusion

Concerns about burdensome price increases have shaken the VMware customer community— but they may not be necessary. By fully embracing the VMware Cloud Foundation product, it is often possible to realize savings across the network, storage and virtualization towers of 20% or more in capital and licensing alone; operational efficiency savings can potentially exceed that. The common problems of skills availability and resourcing can often be mitigated with the help of a trusted partner, and you can continue to enjoy the enormous benefits of this powerful virtualization platform.