What You Need to Know About Per VM Licensing

As IT continues to virtualize and move towards IT-as-a-Service, software licensing needs to evolve to account for actual product consumption rather than arbitrarily licensing the physical hardware from which consumption is abstracted. With virtual machines now being the new unit of consumption, IT organizations need flexible deployment and licensing options that are more usage-based versus server-based.


Since September 1, 2010, VMware has begun offering some Infrastructure, Management, and Application Platform products using per VM licensing.

Moving to Per VM Licensing

  • vCenter CapacityIQ
  • vCenter Chargeback
  • vCenter Site Recovery Manager
  • vCenter Operations
  • vCloud Director
  • vFabric 5
How Per VM Licensing Works

Per VM licensing is more flexible. Rather than requiring licenses for every server deployed, you only need licenses for the average maximum number of virtual machines that are managed. Let’s look at an example:

Per VM licensing is based on a rolling average of the highest number of VMs over the last 12 months.
  • You want to manage cost reporting effectively and decide to buy VMware vCenter Chargeback.
  • On an average day, you run between 90 and 125 virtual machines.
  • As shown in the chart above, at the end of the year, usage typically spikes to 200 to 250 virtual machines for two months.
  • The daily maximum total virtual machines still averages only about 130 virtual machines.
  • You would only need enough licenses for 130 VMs – the average high watermark over the course of the trailing12 months. In this case, the customer would buy six licenses for a total of 150 VMs (each license contains a pack of 25 VMs).
  • If the average usage over time exceeds 150 VMs, you will receive an alert through VMware vCenter Server, but will be able to continue managing the environment without restrictions.
Determining Licensing Usage

VMware vCenter CapacityIQ, vCenter Chargeback, vCenter Site Recovery Manager, vCenter Operations, vCloud Director, and vFabric 5 are licensed per managed VM. A license will be required for each managed VM – this is based on the number of VMs that the specific product is managing. VMware vCenter Server will provide information on actual license usage for each of the products, and will alert you if average usage has exceeded the number of available licenses.


The table below summarizes how managed VMs are measured for each product.


Product Managed VM Definition
vCenter Site Recovery Manager Any VM that is part of a SRM protection group, regardless of power state (defined as a “Protected VM”)
vCenter CapacityIQ Any powered-on VM managed by CapacityIQ
vCenter Chargeback Any powered-on VM in a Chargeback hierarchy
vCenter Operations Any powered-on VM managed by vCenter Operations
vCloud Director Any powered-on VM deployed in a vCloud Director organizational virtual datacenter
vFabric 5 Any powered-on VM managed by vFabric 5
Using Per VM Licenses

To simplify purchasing of per-vm licenses, licenses are generally sold in packs so that customers don’t need to purchase new licenses for every new VM that is onboarded. License keys are managed through vCenter Server. vCenter Server 4.1 or later is required to support per VM licenses. It will also support per processor licenses for all products. vCenter Server 4.0 and earlier versions will not accept per VM license keys for the products mentioned above.


Additionally, per VM licenses cannot be combined with per processor licenses for the same product on the same vCenter Server instance. You will need to use either per VM or per processor licenses for a given product.

Converting from Per-Processor Licenses to Per-VM Licenses?

If you have previously purchased per processor licenses for any of these products, you can continue to use the per processor licenses you already own. You can continue to renew VMware Support and Subscription (SnS) for the per processor licenses using your regular renewal terms. VMware will also provide a transition plan that allows you to exchange your current per processor licenses for ones that are based on the new per VM licensing model. If you own per processor licenses for the above products as of September 1, 2010 you will be able to exchange them for per VM licenses per the ratios stated below.


Product Number of VMs for each Converted Per Processor License
vCenter Capacity IQ
(per VM pricing available late 2010 / early 2011*)
vCenter Chargeback 20
vCenter Site Recovery Manager 5

For example, if you own 6 per processor licenses for Site Recovery Manager and would like to convert to per VM, you will receive 6 license packs that contain 5 VMs each for a total of 30 VMs.


To initiate a conversion request, you should complete a Licensing Service Request. When you submit your request, please provide:

  • Primary license administrator’s name and e-mail address
  • Products that you would like to convert to per VM
  • The contract or order numbers if known
  • License keys if available
  • Information on whether the existing license keys have been split or combined

Alternatively, or if you have additional questions, call 877-4VMWARE and choose licensing support. (You can also visit the VMware Phone Page to find international phone numbers.)


Have additional questions? Read the FAQ.