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Hosting provider migrates 10,000 virtual machines to Hyper-V as VMware licences 'too costly'

Matthew Finnegan | Feb. 10, 2014
Microsoft virtualisation tools 'fifty percent cheaper' for Scandinavian firm TeleComputing

Cloud service provider TeleComputing has begun migrating 10,000 virtual machines to Microsoft's Hyper-V, after licensing model changes made it "too costly" to remain with rival VMware.

Scandinavian hosting firm TeleComputing delivers over 2,400 hosted applications to more than 800 small and midsize businesses and 75,000 individual users in Norway and Sweden. Its data centres contain 3,500 servers, 70 percent of which have been virtualised since it became a customer of VMware in 2006, and now supports 10,000 virtual machines.

Two years ago the firm, which is now a Microsoft Cloud OS Network partner, made the decision to migrate its entire virtualised estate from VMware's ESX hypervisor over to Hyper-V.

According to Kjell Tore Espeseth, chief technology officer at TeleComputing, the decision to switch was due to the introduction of the 'vRAM' pricing structure, which increased costs as its hosting business grew and more users were added onto its systems.

"Initially we used perpetual licensing, but then VMware changed the licensing for service providers. That was when we realised that it became just too costly and we couldn't compete in the market based on the usage we had and the terms and conditions for the service provider licensing."

Espeseth said that the changes "made it difficult to be competitive" in its market, as higher charges for licensing would have to be passed on to its own user base.

"We are selling IT as a service where we provide all the IT applications and all the data for our customers 'as a service', and we charge them per user per month," he said.

"The more we have to spend on licensing the less competitive we will be. It was not possible for us, with our business model, to put that additional cost on the customer."

He added: "With the volume we have, and also the expectations that we will actually on average increase the RAM we have for each virtual server, it started to make up a significant cost, so we were looking at ways to reduce that," he said.

vRAM licence costs
VMware introduced its vRAM licensing model in 2012, which involved switching from charging per physical socket to paying for the amount of virtual RAM assigned to a particular system. When the designated memory capacity is reached the user's licence cost is increased, potentially limiting the number of virtual machines that can be run on a physical server.

The new licensing model, dubbed 'vTax' by its detractors, angered many enterprise customers, with claims it unfairly increased costs and inhibited deployment flexibility. Following the criticism, and the threat of customers switching to cheaper open source and proprietary rivals, the vendor reversed the decision and scrapped the payment model. However the vRAM pricing was kept in place for service providers.


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