Virtualization, Cloud, Infrastructure and all that stuff in-between

I have been involved with VMware’s vCloud programme since it was announced late 2008, I was part of getting involved as one of a handful of partners on the launch-day and I have been doing private cloud work with customers since early 2008.

Whilst I was somewhat disappointed that as a smaller partner we were left out as VMware pressed on with the major partners and availability of information and tools were limited, it did eventually evolve into a set of emerging technology and products that we got access to.

One part of this that has troubled me for some time is licensing of VMware products for cloud/IaaS offerings, as an accredited VMware hosting provider we have access to service provider licensing (SPLA) for VMware products.

The concept of SPLA is simple, it’s a monthly rental of a product – the core VMware products being ESX and vCenter; the hoster pays VMware a monthly fee based on the peak number of virtual machines running in that month regardless of how many ESX installations/sockets/cores there are – this is a simple cost model for a hoster as the general unit of charging for an end-customer is a virtual machine over a period of time (the cost of which is made up of a slice of the supporting hardware/software/service-level).

As a service provider you want to minimise capital expenditure wherever possible, particularly when it comes to a cloud/IaaS model as there is often no long-term contractual  commitment for a customer, if they need 100 VM’s one month and 2 the following it’s your burden as a service provider to provide {via investment} that infrastructure and software; for smaller/niche/private cloud players this is an issue – unless you have a large-scale and diverse customer base this is a risky operation and often breaks the cloud business case for the end-customer as the provider has to build in recovery of investment.

Amazon do well in this space with EC2 because they have massive scale and diversity of customers across all industry sectors so most peaks and troughs of demand average out in the bigger picture (see: commoditization and utility – Nicholas Carr’s book “The big switch” covers this well, as does Cannonical’s Simon Wardley at various Cloudcamps)

In my experience this is a problem right now for service providers looking to build cloud services on vSphere/vCloud as very few of VMware’s ancillary products are available on their hosted/SPLA licensing scheme, last time I enquired it it is limited to ESX, View, vCenter and I believe SRM has recently been added.

Also, companies looking to build internal cloud services can only leverage this SPLA type of licensing when the service is hosted and resold from a service provider’s own data centre & infrastructure, rather than customer hosted equipment – this protects the revenue stream of service providers, but does it harm the longer term private cloud prospect, particularly with customers that have a regulatory or security need that prevents traditional outsourcing/hosting?

There are a number of products that would be ideal for cloud/IaaS providers to better manage and control their services, but these are currently only available on a perpetual basis with traditional per CPU socket licensing – this perpetual model is hard for smaller/niche service providers where the capacity planning cycle continually looks for ways to deliver the required service with less infrastructure or have requirements to re-provision servers between physical and virtual instances, or where kit is leased/rented to cover short-term projects and demands.

The products that I see being ideal for service providers, if they could be offered on a SPLA basis rather than perpetual are;

• AppSense – this is almost a no-brainer; its a great way to manage end-end SLA for application delivery in a cloud platform.
• Cisco NX1000V – most service providers have big, highly skilled network teams and complex multi-customer environments to manage; this is ideal Nexus territory
• Chargeback – although I understand this is being built into the vCloud billing services, this has been available now for a while, and is a workable product to build billing systems.
• Lab Manager – some of the tech seems to be getting merged into the vCloud services at some level, but self-service lab environments in a private-cloud scenario with some control over VM lease/retention is something people have been asking for.
• CapacityIQ – designed for balancing load and capacity, important to a multi-tenant environment
• ConfigControl (licensing not announced) – but you can definitely see the need for this in a large multi-tenant environment

Microsoft, to their credit have this absolutely nailed; their SPLA licensing model is very mature and has all the products from their vast catalogue, even if the Service Provider Usage Rights (SPUR) documents can get a bit complicated to read/digest, VMware have moved to a similar contractual model via resellers for the latest iteration of their hosted license agreement with a more flexible model to add products; but it’s not there yet.

Whilst from a commercial point of view SPLA licensing doesn’t have the “big deal” values in terms of upfront revenues to VMware’s sales force it’s a constant revenue stream, and generally everyone accepts that SPLA will be more expensive than perpetual licensing over a given period; but the increased cost reflects the flexibility/lack of commitment advantage.

Interestingly, it also makes it easier for service providers (and thus customers) to deploy VMware products in their own hosting platforms – easier to build a business case, less upfront sizing/capacity planning & forecasting, costs for growth are incremental and pure op-ex (it’s almost like a cloud within a cloud!).

So, by way of conclusion – whilst a lot of the products I’ve previously desired on SPLA (lifecycle manager, lab manager, Chargeback etc.) are being merged into the vCloud  “product” for service providers VMware should consider offering everything on a SPLA basis to hosters, and maybe even consider such a licensing scheme for customers own internal usage to bolster the private cloud model.