VMware Enterprise Licensing: Part 2 – Pro Tips

Rob Wiens, Managing Director, Sequoia Enterprise Services

This is a guest blog post written by Rob Wiens, a former award winning VMware Account Executive and Co-Founder and Managing Director of Sequoia Enterprise Services. Sequoia is a consulting firm specializing in IT investment optimization, IT Financial Management and automation. You can contact Rob at (204) 471-1186 or robw@sequoiaesgroup.com.

In this second part of my series about making the most of your VMware Enterprise Licensing Agreement, I am going to cover some ‘pro tips’ I commonly advise my clients to use prior to signing an agreement. If you haven’t read my previous blog on understanding VMware licensing, I strongly recommend it, and you can find it here.

So, you’ve decided to make the investment in a contract for VMware licensing. Great. But what else should you do to get the most out of it? Your primary goal now is to minimize the amount of support you pay for existing licenses while maximizing your investment in tools that will provide a return on your investment.  It may sound simple, but there’s some housekeeping you need to do first.

Pro tip #1 – Get a current VMware renewal quote (starting on the target date of signing your ELA)

There will be a difference between what licenses you are now using and what VMware sees your organization as actually having bought and which is currently under support. This is a common situation, as many licenses get upgraded, orphaned, or decommissioned. It takes some time to figure out, but it likely will provide you with visibility into what is actually under support and/or what may be billed to you under an ELA.

Pro tip #2 – Drop support and destroy licenses you are no longer using

You will be surprised how much this one impacts your 3-5 year TCO. Quite often, projects such as on-premise Disaster Recovery or Virtual Desktop have shifted to other technologies. But your project specific licenses may still be showing up on your My VMware portal. Also, there may be previous versions, or types of licenses, showing up in your IB that should be retired. VMware has changed licensing metrics a number of times, from per VM to CPU based and back to per VM again, resulting in licenses that may not align to optimum usage.

Pro tip #3 – Consolidate hosts prior to buying

By investing in a consolidation project prior to determining your licensing needs, you can lower your overall requirement for per-CPU licenses. Sequoia provides our clients consolidation engagements that deliver a detailed report with opportunities to reclaim resources and consolidate hosts, and the best part is that it only takes about a week or two to collect the data and produce the report. This is cheap insurance for reducing your upfront and ongoing costs over a 5+ year period.

Pro tip #4 – Engage your contracts or legal team early

A lengthy ELA contract negotiation can delay your project. I have come across numerous situations where a valid redline of the proposed contract can add months to plans before it is signed. For example, there are common terms that get flagged by the buyer’s contract lawyer, which require several revisions before resulting in an agreed term. While you are starting to review your current install base, insist VMware provide a draft template of the terms and conditions and insist your contract team reviews them at least two months in advance of negotiating. Unless you like calling your VP on Christmas Eve, or the day before he leaves for vacation, for a signature to ensure deadlines are met (and this happens often), be sure your legal team is satisfied with all of the language in advance. There are common ‘hot spots’ in ELA’s that are too numerous to mention here, but a quick examination of the document from a professional can cut your legal review time from months to days.

Pro tip #5 – Use the minimum thresholds to enter and stay in agreements

This one might sound odd, but there is a huge benefit to doing this. As long as you are in an ELA agreement, you get the benefit of discounted licenses and maintenance. However, once you exit the agreement, your maintenance costs begin to increase back to list price. So, buy what you need now (but make the minimum thresholds) and stage your additional VMware projects two years apart. Implementing automation, operations management, NSX, or Horizon will likely span 18 months each, so staging your projects and negotiating terms and pricing to match has a huge upside.

I’ve regularly advised clients on how to improve their VMware licensing agreements in a manner that ensures target projects get funded adequately, reduces waste on non-returning investments, and ensures a long-term strategy for getting the most out of the technology. Ultimately, you want to have the opportunity to benefit from as much of VMware’s virtualization stack as possible to drive costs down and innovation up.

In this blog I have shared a few of the tips that can help you get started down the path of maximizing the benefit of your virtualization investments. For my next article, I’m going to discuss strategies for reducing the dreaded “shelfware” syndrome, and methods for ensuring your virtualization projects go as planned. After all, if you’ve paid for licenses and ongoing support, you’d better be using them.

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