VMware licensing – the complexity

VMware is one of the biggest virtualisation and cloud vendors within the software market, the size and focus on virtualisation means that VMware often has complex licensing metrics.

VMware is so commonly deployed that global enterprises such as VMware struggle to cover their licenses for their global business entities often leading to over paying.

This breadth of applications leads to a varied array of complex VMware licensing metrics.

Purchasing Programs:

VMware has 4 main purchasing programs :

•'''The Volume Purchasing Program (VPP)''' rewards you for making more frequent, smaller transactional buys.

•'''The Enterprise Purchasing Program (EPP)''' provides incentives for larger strategically planned purchases.

•'''The Subscription Purchasing Program (SPP)''' allows customers to acquire VMware subscription services.

•The Enterprise License Agreement (ELA) is the ideal contractual agreement designed specifically for global customers. It offers financial and operational benefits unavailable to transactional agreements like VPP and EPP.

End User License Agreement

•EULA Agreed upon installation of the software

•Designed for smaller companies

Includes audit rights and additional restrictions including geographic, entity etc

Enterprise License Agreement (ELA)

•Allows discounted prices of up to 20%-30%

•Can remove the EULA restrictions as long as it is included in the contract

•Deploy it or lose it rights

•Report usage to Vmware upon expiry of ELA

•Total Value of ELA should exceed $260k

•2 or 3 year contracts

VMware – The Enterprise Purchasing Agreement (EPP)

•Based on a token model in which you purchase VMware tokens which can be redeemed online for licenses and production support and subscription (SnS).

•Each token represent approximately $100 for example an initial EPP order requires a minimum of 2,500 Tokens, which corresponds to approximately a $250K (USD) spend level or equivalent in local currency. The minimum for each Top-Up order is 500 Tokens.

•It’s important to note that any tokens purchased and not used in the three year term they expire and are not redeemable.

•With the EPP customers can self serve their own license keys.

•Products are price protected for the duration of the 3 year term as well as the SnS allowing for future cost proofing.

VMware – Volume Purchasing Program (VPP)

•Discounted pricing for 2 years based on volume purchase

•4 levels offering 4% to 12% discount

•Points accumulated over a rolling 8 quarter period

•Qualified affiliates can share accumulated VPP points and earn discounts

•Minimum threshold – 250 points

VMware – Territory Restrictions

•Vmware’s EULA states that the licenses purchases are non-exclusive, non-transferable and to solely be using within the territory in which licenses were purchased.

•Vmware defines “territory” to mean the country or countries in which the current license owner has been invoiced. This means that the territory in the purchase order needs to specify “North America” rather than “USA” in order for both America and Canada to be covered.

•However it is important to note that if the current license owner has been invoiced within any of the European Economic Area member states, then “Territory” means the European Economic Area.

•This may be particularly relevant to the UK in the future as they look to leave the European Union.

•Vmware will fulfil license transfer agreements where the transfer was contractually agreed or negotiated by the licensee under a Master Software License Agreement, End User License agreement, Enterprise license agreement or any other negotiated license agreement.

•Software transfers require written consent however Vmware states that transfers will not be unreasonably withheld.

•It is essential to understand territory restrictions when looking to deploy Vmware over large software estates.

VMware – Third Party Agent Exception

•Vmware allows third party agents to access, use and or operate software on your behalf for the sole purpose of delivering services to you although Adecco will be fully responsible for the Third Party Agents compliance.

•However this rule only applies to the outsourcing to a Third Party Agent that has a written contract to provide IT services to the license.

•Vmware defines “Third Party Agent” as a third party delivering information technology services to you pursuant to a written contract with you.

VMware – Hosted Services may be delivered to affiliates 

•“Affiliate” means an entity that is directly or indirectly controlled by or is under common control with such party, where “control” means an ownership, voting or similar interest representing fifty percent (50%) or more of the total interests then outstanding of the relevant entity (but only as long as such a person or entity meets these requirements).

•It is essential to understand territor restrictions when looking to deploy Vmware over large software estates.