Run Live Demo

VMware or Hyper-V? Part 3: Virtualization Licensing Costs

July 30, 2019 |

The cost difference for hypervisors is primarily based on licensing advanced features – so to determine your licensing costs, you need to determine which advanced features are required in your environment.

Download our vSphere vs Hyper-V comparison matrix both technologies can provide redundancies that will maximize your uptime and that will allow you to squeeze out the most performance. Which is better and how do you decide between them?

If you look at the features available in the free hypervisor versions, Hyper-V provides more functionality than ESXi. For example, Live Migration and Failover Clustering are available with Hyper-V, and the corresponding features in VMware – vMotion and VMware HA – are not available until you purchase a VMware “Essentials Plus” license.

It is possible that all the virtualization features you require are available in the free version of Hyper-V or VMware. However, VMware and Hyper-V implement features differently, and you may find paying for vMotion to be a better fit than free Live Migration. Or that free Failover Clustering works just as well for you as paying for VMware HA. Fortunately, both VMware’s vSphere and Hyper-V’s System Center Virtual Machine Manager (SCVMM) provide trial versions so you can test feature implementation for yourself and decide if free is good enough, or if a licensed feature is worth paying for.

Once you have your trial environments in place, it can still be difficult to compare “advanced” features not only because similar features have different names, but also because functions don’t overlap completely, and it is not possible to do an apples-to-apples comparison.


Hyper-V Licensing

Hyper-V advanced features are available through the Virtual Machine Manager (VMM) component in Microsoft’s System Center (SC). SC uses a Management License model that charges based on the number of cores and managed operating system environments (OSEs). System Center has Standard and Datacenter Management License Editions:

Hyper-V without System Center System Center Standard Edition System Center Datacenter Edition
Cost Free $1,323 $3,607
Maximum # of cores * No core limitations 16 16
OSE Management Licenses No OSE Management licenses required 2 OSE Management licenses Unlimited OSE Management licenses

* Assumes servers have 2 processors with a maximum of 8 cores/processor

In addition to the base licensing above, how you manage the combination of processor/OSE count in System Center Standard/Datacenter Editions can have a significant influence on your licensing costs.

For example, the following comparison shows the cost for System Center to manage 12 OSEs on either 2 or 6 processors, using both Datacenter and Standard licenses:

Managed OSEs Physical Processors** Datacenter Standard
Required licenses Total Cost Required Licenses Total Cost
12 2 1 $3,607 6 $7,938
12 6 3 $10,821 6 $7,938

** Assumes 8 core processor

Datacenter licenses are more cost effective in environments where you are running more than 2 OSEs per physical processor, while Standard licenses become more cost effective at 2 or fewer OSEs per physical processor. As a result, Standard licenses can be less expensive if your VMs require most or all of the virtual processors, while Datacenter licenses will be less expensive for VMs provisioned with fewer processors.


vSphere Licensing

“vSphere” is the name for the overall VMware management environment, including the ESXi hypervisor, the vCenter management server, and any other VMware virtualization components (e.g. vSan storage, or VMware NSX virtual networking).  While ESXi is itself free, vSphere licensing  is required for both the vCenter management server and VMware features.  vSphere licensing is available in the following packages:

  1. Essentials or Essential Plus Kits
    • Targeted to small businesses
    • Maximum 3 ESX hosts with 2 processors each
    • Includes license for vCenter Essentials
    • Bundle of VMware features needed for small business environments, e.g.:
      • vMotion
      • High Availability
      • vSphere Replications
  2. Standard, Enterprise and Platinum Editions for larger environments.
    • Targeted to mid to large sized organizations
    • Licensing is per processor
    • vCenter license is not included. vCenter Standard license is required as an additional purchase
    • Additional VMware features needed to scale up environment are included
  3. Acceleration Kits
    • Targeted to mid-sized organizations
    • Includes a vCenter Standard license which is limited to 6 processors
    • Licenses for Essentials features plus additional features suitable for mid-sized company, such as:
      • Storage vMotion
      • Distributed Resource Scheduler
      • Distributed Power Management
  4. Remote Office Branch Office
    • Targeted to organizations with remote offices
    • Limited to 25 virtual machines
    • Includes features such as:
      • Storage vMotion
      • High Availability
      • Fault Tolerance
vSphere Edition Cost # Physical Processors Basic Support Production Support
Essentials $510 3 servers / 2 processors each $67 $308/incident
Essentials Plus $4,625 3 servers / 2 processors each $971 $1156
Standard (requires vCenter) $995 1 $273 $323
Enterprise Plus (requires vCenter) $3,595 1 $755 $899
Platinum (Enterprise Plus & AppDefense -requires vCenter) $4,595 1 $1,049
Standard – Acceleration Kit $11,350  6 $2,935 $3,482
Enterprise Plus – Acceleration Kit $24,250 6 $5,827 $6,938
vCenter Server Standard $6,175 N/A $1,297 $1,544
vCenter Server Foundation $1,535 N/A $560 $664
Standard -Remote Office $3,085 N/A $648 $771
Advanced -Remote Office $4,635 N/A $973 $1,159
Enterprise – Remote Office $6,545 N/A $1,374 $1,636


Hyper-V and vSphere offer similar capabilities, but their approaches differ

Download the vSphere vs Hyper-V comparison spreadsheet for a detailed analysis of the differences and similarities between the two technologies, including follow-up information with hyperlinks to each vendor’s site.


Comparing Costs

If Hyper-V without SCVMM provides all the virtualization features you need, and works in your environment, it’s hard to argue with a price of “free”. However, if Hyper-V doesn’t work well when you test it in your environment, or if you need features that aren’t available in the free Hyper-V install, then vSphere licensing costs may well be comparable to System Center Virtual Machine Manager costs.

An apples-to-apples comparison is a difficult proposition because both Microsoft SCVVM and VMware vSphere are packaged very differently.  The technologies need to be compared based on required virtualization features and the costs of licensing those features for the host servers in your environment.


System Center 2016 with its Virtual Machine Manager (SCVMM) is required in order to take full advantage of Hyper-V.  On a functionality basis, SCVMM is an all or nothing proposition.  While the different vSphere editions contain different sets of capabilities, SCVMM exposes all of Hyper-V’s capabilities.  An organization with Windows 2016 Datacenter edition and System Center 2016 Datacenter edition could deploy unlimited VMs across the licensed host(s) and leverage any and all Hyper-V capabilities.

System Center 2016, like Windows 2016, is licensed based on the number of active cores in the host. The pricing starts at a minimum of a dual processor configuration with 8 cores per processor:

System Center 2016 License Pricing

Processors per core 8 cores 10 cores 16 cores 20 cores
2 $3,607 $4,508 $7,214 $9,017
4 $7,214 $9,017 $14,428 $18,035
6 $10,821 $13,526 $21,642 $27,052
8 $14,428 $18,035 $28,856 $36,070
10 $18,035 $22,543 $36,070 $45,087
12 $21,642 $27,052 $43,284 $54,105
14 $25,249 $31,561 $50,498 $63,122
16 $28,856 $36,070 $57,712 $72,140
18 $32,463 $40,578 $64,926 $81,157
20 $36,070 $45,087 $72,140 $90,175


The matrix above reflects list pricing. Please note – prices will vary depending on your licensing agreement and reseller.

Core based pricing means costs could scale up as your hardware infrastructure evolves. This pricing model capitalizes on the trend of CPUs being produced with more cores rather than more GHz.  Additional licensing is available in 2 core increments.

In order to optimize IT in a virtualized environment, monitoring must encompass virtual resource utilization from the VM’s perspective, application service levels, and physical resource utilization on the hosts.

Capacity Planning (8:24)

Ensure that your virtual infrastructure performs optimally. Use Capacity Planning to avoid virtual machine sprawl, over-provisioning, and excess use of resources


Try Longitude Live Online Demo!

Access our online demo environment, see how to set up your VMware monitoring, view dashboards, problem events, reports and alerts.  Please log in using the credentials below:

  • Username:   demo
  • Password:    longitude


There are 9 vSphere tiers versus 2 System Center 2016 tiers,  with the differences in capabilities at each level making any sort of one-to-one feature comparison a difficult proposition.  The pricing model also differs, with a flat per processor rate for vSphere 6.7 vs a rate for System Center 2016 that is scaled per core for processors with more than 8 cores.
Processors per core vSphere Standard Edition vSphere Enterprise+ Edition vSphere Platinum Edition
2 $10,355 $16,707 $19,007
4 $12,991 $25,695 $30,295
5 $15,627 $34,683 $41,583
6 $18,263 $43,671 $52,871
10 $20,899 $52,659 $64,159
12 $23,535 $61,647 $75,447
14 $26,171 $70,365 $86,735
16 $28,807 $79,623 $98,023
18 $31,443 $88,611 $109,311
20 $34,079 $97.599 $120,599


vSphere Essentials Kits vSphere Acceleration Kits
Essential Essential + Standard Enterprise+
$577 $5,781 $14,832 $31,188

Note: vSphere Essentials and Acceleration Kits are limited to 6 processors.


The matrices above reflect list pricing. Please note – prices will vary depending on your licensing agreement and reseller.

If you’re a smaller organization or prefer VMware technology, then the vSphere Essentials kit at $577 is quite attractive.  However, if you need maximum application availability and business continuity, it is a significant price jump to $5,781 for Essential Plus for the vMotion and HA features.

The Acceleration kits offer the capabilities of the Enterprise Edition with a 6-processor limitation. If you’re a medium sized organization and are likely to grow, the Acceleration kits also offer an upgrade path to the vSphere Enterprise Editions.

The Standard and Enterprise kits are ideal for larger organizations looking to scale out and take advantage of all that VMware has to offer in terms of performance, scalability, and high availability.>


Microsoft’s pricing model for SCVMM is analogous to an all you can eat buffet: one price and you get it all. IT can take full advantage of all that Hyper-V has to offer, and that is quite substantial.

VMware’s pricing is analogous to an à la carte restaurant menu. VMware’s offerings allow IT to pick and choose based on the capabilities they need today, while providing a growth path to the future.

If you don’t already have a virtualization technology, then you can build out a pricing comparison and determine from a licensing perspective which technology would best fit your organization’s needs.  However, if you’re already using Hyper-V or VMware,  there are quite a few other factors that will definitely come into play, especially if a multi-hypervisors environment is being contemplated. Organizations need to look beyond licensing alone and at the total cost of ownership. For example, what kind of competencies are already in place for vCenter? – for SCVMM?

Lastly, given that Microsoft’s pricing is socket based and VMware’s pricing is processor based it would certainly be prudent to project out what your host processor configurations might look like and how that affects TCO.

Want to learn more?

Download our vSphere vs Hyper-V comparison matrix – both technologies can provide redundancies that will maximize your uptime and that will allow you to squeeze out the most performance. Which is better and how do you decide



Editor’s Note:  This post was originally published in July 2017 and has been updated for freshness accuracy, and comprehensiveness.