Incoming VMware CEO Pat Gelsinger at VMworld

SAN FRANCISCO – It didn’t quite get the standing ovation incoming VMware CEO Pat Gelsinger may have hoped for, but his announcement at VMworld 2012 here that his new company is deep-sixing an unpopular licensing plan certainly was warmly received. Making his first major public presentation as a member of the VMware team, Gelsinger announced the company would do away with vRAM, a pricing model introduced just a year ago at VMworld that proved wildly unpopular with the company’s customers.

The vRAM model shifted VMware’s licensing away from per-CPU pricing and towards pricing based on the amount of virtual memory a system addressed. It proved to be a costly approach, and one that seemingly went against the core message of virtualization, effectively making it more pricy to run more virtual machines on a given piece of hardware.

With vRAM, Gelinsinger told attendees, VMware had inadvertently created a “four-letter dirty word.”

“Today I am happy to say that we are striking this word from our vocabulary,” the incoming CEO said of the one v-word the company has produced which customers have not embraced, likening the “v” for VMware relationship to the ubiquitous “i” associated with Apple.

So as of the newly announced vSphere 5.1, it’s out with the new and in with the old, as the company has pledged to license by CPU and socket, and not per virtual machine. The decision was an obvious one, Gelsinger said, after the company did a survey of some 13,000 of its customers, which came up with one clear message to the virtualization giant: “Change your pricing.”

His own show-of-hands poll of the 20,000 or so VMware attendees proved equally decisive. After asking “How many of you liked last year’s pricing changes?” Gelsinger reported being able to see one hand go up – not a good sign when you’re surrounded by your most loyal customers and partners.

In a press conference after the keynote, current and outgoing CEO Paul Maritz offered a more complete “mea culpa” for the failed licensing plan, describing it as unwieldy and hard for customers to understand and predict.

“We made things unnecessarily complex, and we’re fixing that,” he said, while VMware CMO Rick Jackson described vRAM as an attempt to change the virtualization industry which proved unpopular.

“We tried something new to pioneer in the industry, to think about a new way of pricing,” he told press and analysts. But it proved unpopular in practice, “so let’s step back and change that decision.”