Navigating VMware licensing changes with SquaredUp: Insights from a Global IT service provider

The recent changes in VMware's licensing model under Broadcom have introduced new complexities for IT teams worldwide. The shift from perpetual to subscription-based licensing has raised concerns about cost management, compliance, and resource optimization. One global IT service provider has leveraged SquaredUp to navigate these challenges, providing a real-world example of how organizations can use SquaredUp to adapt to these changes and maximize efficiency.

The Challenges with VMware’s new licensing model

With the discontinuation of perpetual licenses and the shift to subscription models, many organizations have been forced to reassess their VMware usage. This move often leads to increased operational expenses, as subscriptions typically incur recurring costs rather than a one-time fee. Additionally, the new licensing is based on core usage, adding another layer of complexity in tracking and managing costs, especially in environments with high CPU density. Some organizations have reported that this licensing change would cause their estimated annual VMware costs to skyrocket if the situation is left unmanaged

For this global IT service provider, managing the transition was critical to maintaining service quality for their customers while keeping operational costs in check.

How the IT service provider visualized costs with SquaredUp

Real-time cost tracking and reporting:

In partnership with SquaredUp, the IT service provider used real-time dashboards to monitor VMware costs across its global operations. By pulling data directly from VMware vSphere, vRealize, and other license management APIs, the provider was able to visualize exactly how much they were spending on licenses, core usage, and other resources. This real-time insight allowed the provider to make swift adjustments, ensuring they stayed within budget and avoided unnecessary cost overruns.

Perpetual license utilization:

Though VMware has moved to a subscription model, many businesses, like this IT service provider, still had active perpetual licenses in use by their customers. Using SquaredUp, the provider was able to map out where these licenses were being used, ensuring they maximized the value of their existing investments before migrating to subscriptions. This was especially important for optimizing existing resources and deferring additional costs associated with the new licensing model.

Optimizing core usage and infrastructure:

With VMware now charging based on core usage, it became essential for the IT service provider to monitor how CPU cores were being allocated across their infrastructure. SquaredUp’s dashboards allowed them to track CPU usage in detail, identify underutilized cores, and optimize their configuration to reduce licensing costs. This not only helped save on expenses but also improved overall system performance by eliminating inefficiencies.

Key Focus Areas: Lessons from the IT Service Provider

- Maximizing perpetual licenses: Before transitioning to subscriptions, the IT provider made sure to fully utilize their existing perpetual licenses. This approach saved them considerable costs and delayed the need for further expenditure.

- Core usage efficiency: By using SquaredUp to monitor and optimize CPU core allocation, they were able to reduce licensing costs related to VMware’s per-core pricing model.

- Proactive cost monitoring: Real-time cost tracking through SquaredUp enabled them to stay ahead of potential overruns and make data-driven decisions.

- Planning for the future: Scenario planning gave them the flexibility to adjust their strategy as needed, ensuring they could continue to operate efficiently in the face of future licensing changes.

Adapting to change with SquaredUp

As VMware’s licensing model continues to evolve, organizations must remain agile and well-informed to manage the associated costs effectively. This global IT service provider’s experience shows how SquaredUp can help businesses navigate these changes by providing visibility into resource usage, licensing costs, and potential optimization opportunities.

For organizations facing similar challenges, SquaredUp offers a comprehensive, real-time visualization solution that enables you to monitor costs, optimize resources, and make strategic decisions that align with your financial and operational goals. By leveraging the power of SquaredUp, IT teams can stay ahead of VMware’s licensing shifts and ensure that their investments are fully optimized.