May 19, 2017

VMWare Licensing Explained

Understanding the VPP, EPP, and ELA agreements

Changes in technology contribute heavily to the complexity of licensing. Choosing between licensing options can be tricky as we are rarely exposed to the full set of options without investing some time in further research ourselves. With VMWare the options have been significantly simplified for end-user convenience but still present some challenges when making a choice.

VMWare deliver 3 core licensing programmes:
1. Volume Purchasing Programme – VPP
2. Enterprise Purchasing Programme – EPP
3. Enterprise Licensing Agreement – ELA
Next, we’ll ‘dissect’ each licensing option to uncover its thresholds and benefits that would ultimately help you establish the suitability of each to your business.

1. Volume Purchasing Programme – VPP

The accumulative VMware entry-level Volume Purchasing Program* (VPP) provides incremental, tier-based discounts for VMware customers over a rolling two-year period:

– Rolling 8 quarters
– Minimum 250 points
– 4 discount levels ranging from 4%-12%
– A minimum of $25K in eligible VMware products

*Available to all customer types

VPP details:

– For most products, 1 VPP point = ~$100
– The point value of a given product is the same across all geographies
– Points are valid for up to 2 years, after which they roll-off

VPP benefits include:

  1. Budget predictability – VPP offers customers the ability to better plan their budgets since discounts are guaranteed for at least 2 years
  2. No commitments – VPP members have no obligation after making the initial qualifying purchase
  3. Rewards for customer loyalty – VPP rewards customer loyalty by allowing points from purchases to accumulate over time
  4. Account visibility – VPP tools provide visibility through easy-to-use online account management tools
  5. Simplified program rules – VPP offers parity through simplified program rules and common global entry thresholds and discounts
  6. “Family-Friendly” rules – “Family-Friendly” program rules allow related subsidiaries/legal entities to pool purchases and earn higher family discounts

2. Enterprise Purchasing Program – EPP

The Enterprise Purchasing Program (EPP) provides customers with an alternative beyond the Volume Purchasing Program (VPP).

Designed for mid-level customers, offering both better discounts and greater flexibility, without the complexity of more robust agreements. EPP is a token-based licensing program, meaning customers purchase “tokens” to allocate toward usage of a VMware product.

EPP token details include:

– Minimum purchase order of 2,500 tokens ($250K, 1 token = $100)
– Tokens can be redeemed any time for additional License purchases or Services and Support
– Upon token redemption, license keys are immediately delivered to customer
– Customers can add a minimum of $50K in tokens (500 tokens) to an active contract at any time
– Tokens can be distributed to different departments for added flexibility
– Tokens expire after 3 years

EPP benefits include:

  1. Self-serve, on-demand generation and delivery of license keys and support entitlements using the My VMware customer portal
  2. Automatic tracking and reporting of tokens used
  3. Centralised or decentralised management of tokens, allowing you to allocate tokens to different departments, projects and users
  4. Ability to add tokens to an active EPP fund at any time

3. Enterprise Licensing Agreement – ELA

The Enterprise License Agreement (ELA) is the ideal contractual agreement designed specifically for global customers. It offers attractive financial and operational benefits unavailable in the per-product, transactional agreements between VPP and EPP. ELA lets customers obtain VMware product licenses over a fixed period of time with a fixed price through its lifecycle, as well as a fixed renewal fee.

ELA is the best route to mitigating global license compliance issues; VMware uses a dedicated auditing team to research their customer’s license compliance.

Unlike the VPP and EPP, the terms of the ELA are entirely dependent on the needs of the customer. Recently dropped from a minimum of $650K, the minimum enrolment in the ELA now starts at $250K but can be negotiated with a dedicated partner at as low as $150K. Most importantly, ELA is more dependent on a needs-basis rather than a minimum purchase order.

ELA benefits include:

  1. Discounted licenses, support, and training throughout the ELA term
  2. Single volume license keys to simplify deployment
  3. Fixed pricing and renewal fee with pre-defined cost on future maintenance
  4. No true-up due at the end of the term that may impact renewal pricing
  5. Global Deployment Rights
  6. Global Consolidation of Multiple Enterprise Agreements for ease of management

To speak with a licensing expert regarding VMware T&Cs, get in touch at

VMWare Licensing Explained

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