Let’s start out with a brief introduction for those who don’t know. The VMware vCloud Air Network program is the way that service providers can take whatever product that VMware has to offer and sell it to their customers in whatever way they see fit. Everything is 100% usage based and there is no commitment up front. Most things are billed on a per entity basis, some are per GB allocated memory, some per GB allocated storage others are per VM. It’s pretty easy to figure out and get started with.
The way they calculate the cost of a product is by saying that this feature set is worth X points per entity (GB memory/GB storage/VM) and then it’s simple math from there on out. So let’s say that you use a product with a certain feature set that is worth 9 points per GB storage and you consume a 100GB on average over the course of a month, you then owe VMware 900 points. Now, depending on how good a customer you are (your size) you pay x-amount of money per point. As a rule of thumb, 1 point = 1 USD. So again, pretty simple and so far so good.
All of this is measured by the worst tool ever invented, the VMware Usage Meter. I could rant about that product for days but that is hardly constructive. Through this tool you can then create a report every month which you send to your aggregator who then sends you an invoice back.
Now, since this blog is about how to improve the program I won’t start sharing my thoughts on the price point of the individual products. That is for a later blog (if ever).
My issue with the program
So, this all sounds nice and flexible for everyone and for the most part of the last few years, it has been. The issue is that now per VM features that brings value to customers (compared to service providers) are starting to get more and more focus. Also, customers are paying less and less while expecting more and more, the whole idea of paying for the option to use something is not going to fly any more. To the point of features that provide value to customers, an example of that could be vm-level encryption. That is a easy sell to any customer who has the requirement. The issue is that that feature is in the enterprise plus version of ESXi. The version is usually only included in the 7 point/GB or higher package. For any service provider that standardizes on anything lower than that, they have an issue. Because the only way to provide that feature is to upgrade an entire cluster to a higher license (thus costing a lot more money) or choose not to provide the feature (thus costing VMware loss in revenue). My point here is that the packages are focused on entities that are far too large, typically cluster level. Compare that with VMware going great lengths to be able to define everything on the per VM, per NIC or per hard-disk and you can quickly see that something is off.
So what can be done?
Again, this requires some work done it should be very doable since they already implemented some of this in the usage meter for NSX. The extremely simple answer is that there should only be a single license and it should include everything. Also, the entry point should be lower.
Before I’ll go into example-mode you should know that the lowest you can go within the VCAN program is a 5 point/GB package. So a VM with 6GB of memory would cost 15 points a month (you can divide the points by 2 if the memory is not reserved). That covers the basics (Storage vMotion, vMotion, HA, DRS and the Distributed Switch).
So, my proposal would be something like this:
1 Point: the vm is on a non-clustered host and powered on.
2 Point: the vm is on a clustered host without HA but with DRS
3 Point: the vm is on a clustered host with HA and DRS
From here on out there a feature usages that can trigger a higher cost for the month if used.
+2 Points: the vm is storage vmotioned to another datastore, the vm is portgroup which is defined on a distributed switch, vm is on a vVol, vm has vFlash Read Cache enabled.
+4 Points: the vm is on a datastore in a datastore cluster with storage drs enabled, the vm has vm level encryption enabled.
Features like tags, MPIO, VADP etc are things that should just be included not matter what. It’s 2017, these things are a given by now and not a differentiator.
This is just me trying to come up with something on the top of my head. But the point remains, having costs defined for all VMs based on the feature set defined by the cluster doesn’t make sense. We are all willing to pay for the features but only if used and the use of the feature should be measured per vm. The days of paying for something because you then have the option to use it are over. The customers aren’t willing to accept those terms, why should the service provider then be subject to it?
Why the lower points than 5?
Well, two things. First of 5 Points is just too much compared to what you are getting. Not all VMs have the requirement for DRS, HA. Most service providers by now have a low end offering which they use to get the customers on board and then grow them from there. If you want to be able to lure in customers that would otherwise buy from the likes of DigitalOcean the base license alone would make it nearly impossible. We have more than 1000 VMs on a KVM-based platform for that reason and there is really no reason other than cost for that. If VMware offered a platform with the same feature set then moving those to ESXi wouldn’t be that far fetched.
After all, with the hypervisors are getting more and more commoditized (maybe not as fast as many expected) but if your customers are going to replace your product with a cheaper one with less features, isn’t it then better just to provide your own products with a lessor feature set and then keep the business?