vSphere 5 versus Windows Server 2012 Hyper-V: costs

This is my 6th posting in a serie of postings in which I will compare VMware vSphere 5 with Microsoft Windows Server 2012 Hyper-V. This time I do not compare features but  compare costs.

Update August 29:

VMware announced it discontinued the vRAM licensing for vSphere. vSphere 5.0 and 5.1 are now back again on CPU licensing.

This will have a positieve effect for costs. It will adjust this posting soon. Mind pricing in this post is still based on vRAM.

Other blogs in the serie are:
vSphere 5 versus Windows Server 2012 Hyper-V: storage integration
vSphere 5 versus Windows Server 2012 Hyper-V:management
vSphere 5 versus Windows Server 2012 Hyper-V: live migrations
vSphere 5 versus Windows Server 2012 Hyper-V: virtual networking
vSphere 5 versus Windows Server 2012 Hyper-V: high available VMs
vSphere 5 versus Windows Server 2012 Hyper-V: Resource metering for chargeback
vSphere 5 versus Windows Server 2012 Hyper-V: hybride cloud

Costs comparison is a tricky thing. It often comes to a comparison of apples to oranges. For example, to manage Windows Server 2012 Hyper-V you will need System Center Virtual Machine Manager 2012 (SCVMM). This is not a standalone product as it does not have a SKU. When you want to use SCVMM you need to buy the System Center 2012 Suite. For one price you get monitoring (SCOM2012), backup and restore (DPM2012), Orchestrator, charge back (delivered in Service Manager SP1)  and a lot more functionality.

To manage VMware ESXi 5.x hosts you need vCenter Server. With it you get basic functionality for backup , orchestration but these cannot be compared to System Center 2012 functionality. To fully compare the same features for VMware additional tooling needs to be purchased and added to the cost comparison.

Here is where the apples to oranges compare starts.

So lets first try to determine what costs are. Are these easy to compare?
Purchasing a solution costs money, that is simple. Costs are clearly listed in the listprice. Purchase costs are named CAPEX or Capital Expenditures.

All cost comparisons between Hyper-V and VMware vSphere should use list prices. However many customers will get discounts which will be somewhere between 5 to 40% depending the size of the order and customer. When taking discounts in effect the calculation will be different.

Also license costs depends on the industry. Commercial usage  is more expensive than academic.
Last but not least there seems to be a price difference for at least VMware products per currency. For example vCenter Server costs in US Dollars 17 % more than in Euros!

Operational costs or COPEX are costs for using  to solution. Think about a car. The COPEX of a car are fuel costs, road tax, maintenance, car wash etc. More components are involved than just a listprice alone. Operational costs for a software solution are hard to determine let alone compare. How much does it costs to operate an infrastructure based on Hyper-V versus one on vSphere under the same conditions? What are savings in manhours, avoidance of issues when for example a feature like VMware’s Distributed Switch is used? Can VMware vSphere run more VMs on the same host as Hyper-V because of it’s memory techniques. Does it justify the higher purchase price? The answer is ‘it depends’

I like to compare IT to cars. Everyone knows about cars. Lets compare Hyper-V and vSphere to cars. Hyper-V in Windows Server 2012 can be compared to a car which has all the essential features a car must have. Reliable, fast enough, airco, navigation etc for a good price almost everyone can afford. We do not have a clear insight in it’s fuel consumption though. As it is a new type of car  we do not know much about its reliability either. We also know it is difficult to get spare parts. The eco-system is just developing as there are not many cars sold yet.
vSphere is the best car around on features. It has all you want and more. Heated seats, cruise control, remote monitoring by the car dealer etc. Lots of nice accessoires are available and each garage sells spare parts. The purchase costs are  high and the dealer charges more when you want to ride with more than 1 person in the car. Do we need all the features? Are those nice to have or a must have? Do we accept to have increasing costs when more people are seated in the car?

Lets compare costs of Windows Server 2012 Hyper-V and vSphere 5 a bit more.

Hyper-V costs

HyperV Server 2012 is a free download . It has the same features as the paid Windows Server 2012 server editions. The only restrictions are:
-it does not have a graphical user interface (addon of third parties are available). Just like ESXi
-it can only run the Hyper-V role. No other roles can be installed. Just like ESXi
-it does not come with free licensing of Windows guests (virtualization rights). Just like ESXi

This edition like the other Windows Server 2012 Hyper-V can be managed by SCVMM 2012 when SP1 comes out. If you like a GUI addon software like vtUtilities can be helpfull.

Basically this version can be compared to a VMware vSphere ESXi server.

Windows Server 2012 Standard Edition and Windows Server 2012 Enterprise have the same technical features as the free edition. However they offer a choice between the full graphical user interface and the core installation. And can be used to install other apps and roles however very much NOT recommended to do so on a Hyper-V host.
Standard edition entitles two free licenses Windows Server licenses to be run as VM. The datacenter edition entitles  an unlimited number of Windows guests to run on that system. Mind both editions do not have any limitation on the number of VMs to be run.

Windows Server 2012 Standard costs $ 882, ( will allow you to license up to two physical processors on a single server )
Windows Server 2012 Datacenter costs $ 4809,- ( will allow you to license up to two physical processors on a single server )

The decision to use Standard or Datacenter Edition for a Hyper-V hosts is based on the number of VMs and your license agreement with Microsoft. If you running  12 or more VMs on one host, Datacenter will be more cost effective.

For management of Windows Server 2012 Hyper-V,  System Center 2012 SP1 is needed. However Failover Cluster Manager will give a single pane of management as well. SP1 is expected to be released at the end of 2012.
Two editions are available: Standard and Enterprise. Both can be used for 2 physical processors. Enterprise edition can manage an unlimited number of Operating System Environments (either a virtual or phyical workload).
Cost for ‘Open No Level (NL) License and Software Assurance (L&SA) 2-year price’ $ 3607,-
The listprice for SC2012 without Software Assurance is $ 2404,- per 2 CPU’s

So for a 2-CPU host running over 12 VMs managed by SCVMM2012 the cost of purchasing licenses will be $ 4809 + $ 2404 = $7213  . Customers will get all lot of functionality on monitoring, backup, service manager etc etc. And will be able to built a private cloud without additional tooling.

VMware vSphere

vSphere Hypervisor is the free version of ESXi. It is limited in the phyiscal memory usage and cannot be managed by vCenter Server nor does it have API’s for image level backup. For most production environments not usable. VMware does not encourage production usage and states it is meant to have customers explore server virtualization before buying the full vSphere product.

VMware vSphere comes in 5 editions: Essentials and Essential Plus which is a bundle of ESXi and vCenter Server. Limited to max 6 CPU’s. More CPU’s means one of the other editions.

vSphere Standard, Enterprise and Enterprise Plus Editions are unlimited in the number of hosts. License is purchased per physical processor in the host. The higher the edition, the more features it offers.
Per CPU an entitlement is given to use a limited amount of virtual memory. A 1-CPU Enterprise edition license will give the customer the right to use 64 GB internal memory.

Windows Server 2012 Hyper-V feature set is somewhere between vSphere Standard and Enterprise Edition. Closer to Enterprise than Standard I would say.

vSphere 5 Enterprise Edition costs $ 3187 per CPU. For a 2 CPU host the costs are  $ 6374. A total of 128 GB of virtual memory can be assigned to running VMs.

To manage ESXi hosts a license of vCenter Server is needed. vCenter Standard is used to manage an unlimited number of hosts. It costs $ 5558,- . With vCenter Server comes VMware Data Recovery for backup and restore. Fine for a small environment. In features it is not comparable with Microsoft DPM.

Lets say we have 10 hosts with 2 CPUs and 128 GB internal memory each.
Cost for Microsoft Hyper-V are $ 72130,-  An unlimited amount of internal memory can be used.
Cost for VMware vSphere 5 are $ 69298,-. 1280 GB of internal memory can be assigned when managed by the same vCenter Server. That is an average of 128 GB per host.

Support and maintenance costs

Besides costs of license the purchase of at least one year Support and Subscription (S&S) is mandatory for VMware vSphere. Support and Subscription enables unlimited requests for assistance by VMware. It also allows to use the most recent VMware vSphere edition.

1 year S&S for production hours/5 days is 20% of listprice vSphere
1 year S&S 24/7 is 25 % of listprice vSphere

Microsoft charges 25 % for its Software Assurance which gives the right to use the most recent software and 24×7 phone and websupport.

Source of VMware pricing here. 
Source of Software Assurance for Server costs here

What is the best solution depends on a lot of things. Costs is an important factor for many organizations. However reliability, matureness, integration with other components and a rich eco-system are important as well.

Windows Server 2012 with SC2012 SP1 offers a lot of value. It offers more functionality because of the System Center 2012 suite (backup, monitoring, orchestration, IT Service Managment) than vSphere does. Features of the hypervisors are almost equal when Hyper-V is compared to the Enterprise Edition of vSphere 5.0

If the free Hyper-V server is compared to ESXi there is a HUGE difference in price. Both software does not come with virtualization rights so that makes it a fair compare.

With hosts over 128 Gb vSphere becomes more expensive because of the vRAM entitlement of vSphere.

Windows Server 2012 Hyper-V + SC2012  SP1 looks promising  as a Good is Good enough attractive priced solution  for the SMB which enables customers to built a complete private cloud.

I believe enterprise and enterprise Plus organizations running mission critical systems on Windows and non-Windows guests where other aspects than costs are more important will benefit more from VMware vSphere.


About Marcel van den Berg
I am a technical consultant with a strong focus on server virtualization, desktop virtualization, cloud computing and business continuity/disaster recovery.

9 Responses to vSphere 5 versus Windows Server 2012 Hyper-V: costs

  1. vNetWise says:

    The difference, when comparing the 10 host/128GB RAM solution where MS=$72K and VM=$69K, is that many companies will want MS Data Center for unlimited virtualizations rights, and will buy SCCM/SCOM anyways for management. So it is not A vs B, but A vs B+A almost.

    In a situation where instead of 10 dual socket 128GB RAM hosts, you have 5 dual socket 256GB RAM hosts, because most sites run out of RAM long before they run out of CPU. In this case the MS=$36K, and the VM=$69K if you assign all the vRAM to VM’s (let’s assume so to make it apples to apples – everyone would want to have failover capacity reserved, etc) because you now need 4 licences of VMware vSphere Enterprise to licence 256GB vRAM. Plus again, the VMware solution still requires 5 MS Windows Data Center licences (dual socket) to allow for the VM’s to be licenced as well as the host. That’s another $24K in Windows licences, which brings the VMware solution up to $93K vs the MS at $36K.

    To be clear – I’m a VMware guy. I’m VCAP and VCP certified, and I run a home lab on vSphere, and this is my bread and butter. I’m certainly no MS evangelist. But especially when you scale-up vs scale-out, one really has to come up with some good answers as to why Microsoft isn’t ‘good enough’ compared to VMware, even if VMware is ‘slighly better’. Using my 5 host example, it’s really hard to justify a $57K difference. Plus the yearly maintenance costs. That kind of money can buy me a SAN or two. Get me the 10GbE infrastructure we’ve been talking about. If you look at 5x384GB hosts vs 15x128GB hosts, that delta becomes even wider.

    I know this is only one peice of the puzzle. But money is the part everyone in the corporate food chain gets – they don’t know or get VAAI or VXLAN, etc.

  2. anonymous says:

    With VMware to kill vRAM licensing and switch to per CPU in vSphere 5.1, VMware is once again competitive.


  3. Ryan says:

    As mentioned in the first comment (but often seems to go unmentioned in these comparisons), the cost comparison for Hyper-V (10 hosts x 2 CPUs [sockets] = $72,130) includes the licensing for the OS running in the VM (assuming it’s Windows). If you’re going to run Windows VMs on VMware, those costs still have to be added.

  4. Only a doubt : the cost assumed for 10 hosts is true if all VMs have linux ( non windows ) guest operating system. If i wont to run windows VMs in the case of vSphere solution i need to purchase windows liicenses too, While with the solution Hyper-V i’m licensed for unlimited windows guest VMs .
    It’s right ?

    • Paulo: with the purchase of Windows Server Datacenter Edition you get the unlimited virtualization rights for running Windows Server guests. It means you do not have to purchase licenses for the Windows guests.
      vSphere does not come with free licenses for guest.

      • Matthew says:

        @Marcel, so the comparison needs to be amended to add the cost of windows licenses in the VMware section which adds 48k to the VMware solution. Am I missing something here ?

  5. Matthew: there are soo many scenarios to show costs. Current organizations running physical servers going to virtual will have licensed windows servers. If they P2V the current servers there is no cost advantage in vSphere (no virtualization rights) versus Windows Server 2012 Datacenter (unlimited virtualizatin rights). For additional Windows servers there is an advantage, depending of the contract with Microsoft.

    Lets wait and see what the cost structure is after the possible announcements at VMworld. I will adjust the posting if needed.

  6. Marcel: If you P2V existing Servers you can reuse each licence for one host, not the VM. For example if you are using 10 servers as virtualization hosts running 12 VMs each and you replace 120 physical Servers:
    Assume they are licenced with Windows Server 2008 R2 Standard Edition you have 120 licences which you could assign to the virtualization hosts. In this case 12 licences per host allow you to run 12 VMs in parallel on each host. If you try to move one VM to another host you have to shut down a VM there first, because you do not have 13 licences on this host.
    It’s a total different story if the 120 physical server had Windows Server 2008 R2 Enterprise Edition installed. Then you’ll get virtualization rights for 4 VMs per licence bumping your licences per virtualization host up to 48 VMs per host.
    It really depends on your requirements and this makes any comparison non-trivial.
    Best, Daniel

  7. Karam says:

    one part you are missing here.; VMware Provides Suse Linux with vSphere Licenses.

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