Strategic Advisor

Perpetual, Term, or SaaS?

VMware customers will hear Term license and SaaS options from their account team more than ever these days. This blog aims to clarify these terms for customers and the account teams. We are all familiar with the on-prem model. To re-iterate, I am going to classify that too in this blog post:


On-prem or perpetual solutions come with a License Key and SnS or a support option to buy. It is the most renowned model. The “traditional” Support for perpetual licenses (the first S in “SnS”) includes Support via email consulting/phone help. The second ‘S’ in “SnS” is “Subscription,” which is how upgrades upon new version release are entitled. Perpetual license keys never expire but the SnS lapses. This means customers cannot upgrade license keys to a newer version and can’t create support requests. This model works well for CAPEX-friendly organizations. To explain more, if we found a vSphere 4.0 perpetual key, it should still work today in a 4.0 environment even though SnS is expired. I haven’t seen such an old environment, and I have not seen any security patches released for vSphere 4.0 recently, so it must be secure … JOKING… we don’t evaluate end-of-support products for security advisories. VMware releases security patches for newer releases from time to time to fix vulnerabilities. We recommend that customers keep their environment updated with vSphere’s latest releases to enjoy all benefits of newer releases. It’s like buying your own car and paying maintenance on it.

On-Prem is like buying your own car and paying maintenance on it.


The Term is “fixed term,” I call it “duration,” As in no co-term unless you’re in an ELA. If you are in ELA, you can ask to end the term license within the existing ELA. Customers still deciding between On-prem vs. SaaS option can leverage the term option. It’s not cloud-connected, so there is no need for cloud terms and conditions paperwork unless changed by the legal team. Also, the big difference between term and Subscription licenses is – Term doesn’t have overages at all. Term licenses are not tied to the cloud for license metering or billing. These licenses come with a key, which looks/acts/feels like Perpetual, with the exception of an expiry on the License key, unlike perpetual licenses. The SnS is usually included in the price. The customer can choose to renew/drop licenses at the end of the term. It’s like using a leased car for a term.

“Term” is like is like using a leased car for a term.


Software as a service (SaaS) is a software licensing and delivery model. It has both a “term” or “Duration” that is flexible (shorter/longer duration) and expanded (more units) and contracted (fewer units) at renewal time. Subscription is tied to Cloud Console and derives license entitlement from that, whether used on-prem or “in the cloud.” A subscription also has the idea of “overages” that get billed. Customers will be notified of the overage whenever their current subscription usage exceeds their purchased subscription capacity. You can view the current subscription usage of vSphere+ and vSAN+ cores on each vCenter Server and determine whether the use is beyond or within the subscription capacity you purchased. You need to login to the VMware Cloud Console and click “Subscriptions.” It’s like using airways to reach the goal.

SaaS is like leaving your car at the airport and taking a plane to reach the goal.

Ultimately, the customer decides when to move from On-Prem traditional model to a subscription. Customer’s can stay up to date with what’s on horizon by visiting the Product Lifecycle Matrix. I won’t recommend perpetual option just because it doesn’t future-proof our customers against any End of Availability announcements that we are expecting around perpetual. But it is still an option today. We are here to provide choice and optionality, with a path towards SaaS offerings that offers a pay-for-what-you-use model, moving away from the conventional pay-for-all-vicious circle. Long story short, wherever you’re going, we have a way (Perpetual/Term/SaaS) to get you there.


4 comments have been added so far

  1. Crisp and clear .. Best part is – you made it so simple that anyone can understand. Keep blogging Poonam.

Leave a Reply

Your email address will not be published. Required fields are marked *