How Rightsizing vSphere Resources Cuts Licensing Costs
VMware vSphere licenses are expensive. Licensing costs are tied directly to CPU cores, so every additional core or host in your environment increases your annual fees.
By rightsizing your vSphere resources – trimming excess capacity (like idle CPU cores) and consolidating workloads – you can dramatically lower these licensing costs without sacrificing performance.
In this guide, we’ll cover seven steps to optimize your VMware infrastructure for cost efficiency. Each step focuses on eliminating waste like idle cores and zombie VMs, so you only pay for the capacity you truly need.
Read our ultimate guide to VMware License Optimization: Cut Shelfware & Reduce Support Costs.
Why Rightsizing Matters for VMware Licensing
VMware’s licensing model (especially under Broadcom) is based on physical CPU core counts. Idle hardware isn’t just a waste of power – it’s a waste of money.
If you’re licensing 32 cores but only using 16, you’re still paying for all 32. That unused capacity translates into needless cost.
Insight: Every extra core or idle host is a recurring cost — rightsizing is your direct line to savings.
By cutting down the number of active CPU cores and hosts in your vSphere environment, you directly reduce how many licenses you need to buy or renew.
Step 1 – Measure Current Resource Utilization
Start by understanding how your vSphere environment is being used today. Use vCenter performance charts or vRealize Operations reports to measure host CPU, memory, and VM utilization.
Identify clusters and hosts running well below capacity – those are prime candidates for consolidation. Also, pay close attention to peak usage times (not just daily averages) to see true demand during busy periods.
This utilization data forms the baseline for your rightsizing plan.
Pro Tip: Start with clusters running below 40% average utilization — they’re prime candidates for workload consolidation and license reduction.
Recommendation: Review peak CPU usage trends (for example, the 95th percentile) rather than simple daily averages. Sizing for realistic peak loads lets you safely remove excess capacity while still meeting demand.
Step 2 – Consolidate Lightly Used Workloads
Next, target the low-hanging fruit: lightly used hosts. Merge workloads from underutilized servers onto fewer, busier machines.
In practice, this might mean moving VMs from multiple half-full hosts onto a smaller number of hosts running at 70–80% utilization. The impact on licensing is immediate, because you’re using fewer total CPUs overall.
For example, ten hosts at 50% utilization might each require a license, whereas five well-loaded hosts could handle the same workload with only five licenses.
Insight: Ten half-utilized hosts may need ten licenses; five well-utilized hosts might need only five — delivering the same performance at half the cost.
Recommendation: Use VMware’s Distributed Resource Scheduler (DRS) to rebalance workloads automatically. DRS can live-migrate VMs across hosts to maximize usage on each server, making it easier to shut down and retire any unnecessary hosts.
Read about tools for how to manage license, Tools & Automation for VMware License Management.
Step 3 – Identify and Remove Zombie VMs
Zombie VMs are unused or forgotten virtual machines that still consume resources. They might be leftover test servers, old project VMs, or decommissioned systems left powered on.
Even if a zombie VM is powered off, it can still tie up storage and configuration data. These stragglers inflate your resource footprint and can indirectly increase licensing needs by preventing hardware downsizing.
Hunt down these zombie VMs and clean them up to reclaim capacity.
Checklist: To find and eliminate zombie VMs, follow these steps:
- Filter your VM inventory for machines with near-zero CPU and memory usage over the last 30+ days.
- Verify that these VMs aren’t needed anymore – ensure no recent logins or backup/snapshot activity.
- Decommission each identified zombie VM cleanly. Power it down, remove it from vCenter, and delete its virtual disks (after confirming it’s safe to do so).
Pro Tip: Zombie VMs waste licenses silently — every unnecessary VM removed is pure savings. Removing these idle machines frees up host resources and can even let you retire physical servers, reducing the cores you need to license.
Step 4 – Tune CPU and Core Allocation
Oversized VMs – those with far more vCPUs or memory allocated than their workload ever uses – can drive up your licensing costs. Every virtual CPU ultimately ties back to a physical core on the host.
If most VMs are oversized “just in case,” your hosts will look heavily loaded on paper. You might deploy extra hardware (and extra licenses) to accommodate those allocations, even if the VMs aren’t truly using that capacity.
Rightsize each VM’s CPU and RAM to its actual needs to eliminate this waste. Check performance data for each application and adjust VM configurations accordingly.
For example, if a VM rarely exceeds 50% usage of 4 vCPUs, you can safely reduce an 8 vCPU allocation down to 4 without impacting its performance.
Insight: Oversized VMs inflate host demand and the number of cores you must license. Right-size them using real workload data so you’re not paying for phantom usage.
Recommendation: Avoid the “just in case” resource allocation mindset — it only compounds licensing costs. Allocate CPU cores based on current requirements, and scale up later only if performance monitoring shows it’s necessary. This keeps your environment lean and cost-effective.
Step 5 – Leverage New vSphere+ Flexibility
VMware’s vSphere+ subscription model centralizes management of your vSphere environment. It simplifies license administration, but it still charges you for every core and CPU in use.
Switching to a subscription doesn’t mean you get unlimited capacity — you’ll still pay for each core you have running. The good news is vSphere+ offers flexibility: you can add or remove hosts more fluidly as needs change.
Use that flexibility to your advantage by rightsizing on an ongoing basis. Expand your cluster only when needed and consolidate workloads when usage drops, so you never pay for excess idle capacity under the subscription.
Insight: Even under vSphere+, cost optimization depends on controlling your total core count — rightsizing remains your strongest defense against escalating VMware fees.
Recommendation: Track active hosts and core counts each month to catch any “capacity creep.” If you spin up extra hosts temporarily, remember to shut them back down. Regular audits ensure you retire unneeded resources and keep costs in check.
Step 6 – Rebalance for Efficiency, Not Just Performance
Shift your mindset from maximizing headroom to maximizing efficiency. In the past, many admins ran vSphere clusters at only 30–50% utilization to ensure plenty of spare capacity for spikes or failovers.
While a safety buffer is important, excessive headroom means paying for a lot of idle infrastructure. Instead, aim for a normal operating range closer to 70–80% peak utilization on your hosts.
This approach ensures you get value from every licensed core while still leaving a cushion for unexpected surges or maintenance events. It strikes a balance between performance and cost.
Pro Tip: Over-engineering your cluster “just in case” dramatically increases license costs. Aim for ~75% average CPU usage (instead of keeping 50% idle) to balance performance headroom and cost efficiency.
Insight: Remember, you pay for licensed capacity, not for an uptime buffer. Focusing on efficiency will meet performance needs while significantly lowering your VMware costs.
Step 7 – Automate Ongoing Optimization
Keep rightsizing as a continuous practice, not a one-time fix. Your environment will evolve: new VMs get created, workloads shift, and usage patterns change.
To sustain the savings, bake periodic optimization into your operations. Set up automated reports or tools to flag low-utilization VMs, idle hosts, or over-provisioned resources.
Many organizations run a monthly utilization review and a quarterly deep dive to adjust allocations or decommission waste. By making this routine, you catch inefficiencies early before they balloon into major costs.
Recommendation: Establish a regular schedule for rightsizing reviews. For example, generate a monthly performance report and conduct a thorough rightsizing audit each quarter. This way, no resources linger in a wasteful state for long.
Pro Tip: Treat rightsizing like patching or backups – a regular maintenance task. Continuous optimization keeps your environment lean, compliant with licensing, and primed to deliver cost savings year-round.
Summary – Rightsizing Equals Smart Spending
Rightsizing your vSphere environment is one of the smartest strategies for VMware cost control and licensing optimization. By regularly trimming excess and fine-tuning resource allocation, you ensure that every license you pay for is actively delivering value.
The result is a leaner infrastructure that provides the same workload performance at a lower licensing cost. You’re not reducing capability – you’re eliminating waste.
When done correctly, rightsizing has no negative impact on users or applications. The only difference is a smaller VMware bill and a more efficient data center.
Insight: Rightsizing isn’t about doing less — it’s about using exactly what you need, no more and no less. Every idle core you eliminate is money back into your IT budget, making you a performance hero and a cost-saving champion.
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