Enterprise Cloud Acceleration: Maximizing the Value of your VMware Enterprise License Agreement

In our previous posts, we introduced Enterprise License Agreements (ELAs) generically and subsequently provided insight to Dell EMC Transformational Agreements. We will now turn our attention to VMware’s flavor of ELA and discuss some of the impacts of recently announced changes to consumption options.

The purpose of this post will be less around how to procure the best ELA, but more how to ensure you are deriving the maximum value from your new or existing ELA. The reasons to consider a VMware ELA are very clear – you can obtain new software licenses at significant discounts, and since VMware software support is sold as a percentage of the purchase price, you also get a significant discount on that as well.

The Art of Procuring

VMware’s ELA structure follows very closely with the standard ELA we reviewed in our first post. While each VMware ELA is unique–due to the unique licensing and term requirements of each customer–they will generically consist of some combination of existing licenses, new licenses, maintenance, renewal terms, and Professional Services Organization (PSO) credits.

For those of you considering a new ELA, we always assist our customers with the following steps to ensure that it’s the best vehicle:

  • Analyze your current licenses – Request an install report from VMware and ensure that their records match what you are actually using. Existing licenses and their maintenance, whether in use or not, establish the baseline of the business as usual or ELA cost, so validation of this list is critical.
  • Clean up your environment – This is likely also a good time to do some technical grooming and see if you can decommission old/unused VMs, or perform any host consolidation. A quick utilization assessment or review of vROps reports could result in reduced forecasted need.
  • Look to your roadmap for growth and new technology capabilities – Since there is a minimum new license component to an ELA, you need to understand which technologies you will be adding to your current footprint and when you will be deploying those technologies.
  • Establish your baseline TCO (also known as your business as usual / non-ELA approach) – AHEAD’s financial team assists in this step, providing license and support cost models for multiple years. Only once you understand what your expected costs will be without an ELA can you determine if the ELA will be financially advantageous.
  • Run several models – This is a key step in the AHEAD process. Once we understand the basics, we will run several models for our customers based on varying terms and license volumes. It may be possible to vary the terms slightly and get to a new discount volume level, which can result in potential savings.
  • Compare the ELA models with your baseline TCO, and include your finance team to create the correct payment structure.

By following the steps above, you can ensure that you have the necessary data to make an informed decision and select the right purchase vehicle for your organization. This can be a time-consuming process, but it can pay off in spades. Also remember, your VMware account team and organizations like AHEAD can significantly offload much of this burden for you.

The Opportunity and Challenge of ELA Consumption

Once you have executed a new ELA, you will find yourself with the challenge of having some amount of licensing to which you have the rights, but is not yet deployed. In order to maximize the value of that licensing during your agreement term, it behooves you to deploy those software titles as quickly as possible so that you can leverage them for as long as possible.

This doesn’t necessarily apply to titles such as vSphere. If you don’t have the need for additional hosts until next year, it doesn’t make sense to acquire more hardware just to run the licenses early. For the layered software titles such as vRealize Operations Manager, NSX, new SRM licensing and others, this is very important. The worst possible outcome is to come to the end of an agreement and have software that was never deployed.

Where to Begin

The good news is that, just as you have new licensing you are entitled to, you also have access to those new PSO credits to help deploy the solutions, though there are still some details to work through. A key first step, if you haven’t done so already, is to develop a consumption or deployment roadmap for your VMware environment for at least the duration of your ELA, if not beyond. This multi-year roadmap should include:

  • new software deployments
  • cluster migrations
  • version upgrades
  • environment expansions
  • new capabilities (i.e. Horizon suite)
  • all other project work that will demand the time of your VMware administration and architecture team

If you haven’t done this type of multi-year planning before, AHEAD can help; we develop or refine platform roadmaps with our customers regularly, and they are part of our standard engagement offerings.

Executing your Roadmap, Including a New Services Program

The roadmap will be critical to ensure that your team is not overwhelmed and that you don’t end up forgetting about a new capability due to the ongoing demands of environment administration. Once that roadmap is complete, you can begin scheduling your team, as well as any services resources required to assist. This is where VMware has announced a new program to assist their customers.

As VMware looked at their customers and their existing ELAs, they realized that a number of customers had not fully utilized their PSO credits. In response to this, they recently announced a new program where PSO credits can be utilized by authorized VMware services partners, such as AHEAD, in addition to the traditional VMware services organization. There is no markup in this process, and based on customer desire, the PSO credits are transferred directly to a partner once a statement of work has been approved by the customer. This allows customer organizations a much greater choice of resources, resolves potential resource constraints, and will allow customers to accelerate the adoption of those roadmap items.

What You Should Do

For customers without ELAs, we recommend starting with the license and technical grooming exercises I’ve suggested above. If you have an ELA, we advise you to evaluate any software that was purchased but not yet deployed and to create a timeline or roadmap to leverage that capability. Additionally, if you also have PSO credits, we recommend aligning them to that roadmap as well as speaking to your partner and VMware account team about how to leverage their new program to help you accelerate and maximize those credits. Here at AHEAD, we are ready to assist you and your organization with this journey, whatever step you are on.

If you have any questions about this blog or our ELA series, please let us know in the comments section below, or feel free to contact me directly at john.cole@thinkahead.com



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Author: John Cole
John has been architecting data centers and clouds for over 10 years, and prior to that he worked in application development. These days he helps AHEAD evaluate and roll out new technologies and partners, and spends a lot of time on AWS.

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