"migrating" from perpetual to subscription: confusion

[DDIT]

Hi

We have been a Veeam customer for a few years, by buying perpetual licenses and paying annual maintenance. Our setup is 3 Hyper-V host split across two sites.

Site A, Host 1: 5 VMs
Site A, Host 2: 4 VMs
Site B, Host 3: 3 VMs

It was great to read that Veeam was offering subscription as this is really attractive for our setup; few VMs on many hosts. Maintenance on 6-sockets of Backup Essentials Standard was quoted this year around £515.

I then took a look at https://www.veeam.com/veeam-backup-esse ... icing.html and realised our 12 VMs would be covered by 3 x subscription licenses (5 VMs each). However, when asking my reseller to quote for this, they were told by Veeam that

"According to our rules, customers cannot purchase new subscription licenses replacing perpetual ones. These prices on the website are for new customers who do not have any perpetual contracts.

If the customer would like to move to per VM subscription model, it is required to purchase “migration” SKUs which include 1 or 3 years of subscription for the whole amount of VMs (when moving from 6 sockets Essentials it is 50 VMs). After 1 or 3 years, customer can renew the subscription partially (only for 15 VMs) if needed."

With that, we were quoted £635 to "migrate" to the maxed-out subscription for Backup Essentials Standard, which is 50 VMs. Then the following year, we are allowed to reduce this to just 3 x standard yearly subscriptions.

This makes absolutely no sense. Why are we being penalised for being an existing customer? I just want to convert from perpetual to subscription at maintenance renewal time (6 days away)?

Can someone at Veeam offer a reasonable explanation for this decision?

[DDIT]

Bump. Can someone from Veeam comment please?

[DDIT]

bump again.

[Vitaliy S.]

Michael, unfortunately the team behind these forums is not in charge of SKUs and license migration rules, so we cannot comment on these decisions and rules. I will try to reach out to people who was in charge of this project to clarify this situation, but I would also recommend to contact a Veeam sales rep with this question (this should be a quicker way to get the answer).

[DDIT]

Thanks. I would appreciate any input into this topic.

I asked the question of our Reseller and they said...

"Renewals Director has confirmed that full migration is the only way for your customer to switch to per VM subscription model. All customers who already own the licenses have to follow this approach and there are no exceptions. Next year they can drop the unnecessary licenses and prolong only 15 VMs.”

It is crazy that a customer that wishes to switch to subscription is charged almost double the publicly advertised rate for licenses in the first year as some sort of penalty.

[Gostev]

This does not make much sense to me either. But I know who to ask what was the thinking here, stay tuned.

[Gostev]

Hi, Michael.

I've confirmed that our existing customers are in fact allowed to abandon their existing per-socket perpetual licenses and buy new per-VM subscription licenses at the street price that you're referring to in your first post. And this is exactly what you're trying to do, right? Just want to be absolutely sure we're on the same page here.

If yes, then clearly there's some confusion in Veeam sales organization and/or our channel that we need to fix.

Thanks!

[DDIT]

Hi Gostev,

Thanks for the update. Yes, that is exactly what i am trying to do.

We are working with SoftCat as a reseller in the UK if it helps. It my understanding that SoftCat are getting their information direct from Veeam.

[Gostev]

Sounds good Michael, thanks for confirming. While we're determining the internal source of confusion aka "Renewals Director" you referenced, I'll ask our UK sales team to go ahead and notify SoftCat that it's OK to proceed with your order.

[DDIT]

Hi Gostev,

I asked SoftCat to chase this from their end and I have pasted their reply below. Fine - I'll jump through the hoops to get this moving. But it looks like those at Veeam UK still haven't got your message.

Hi Michael,

I have just heard back from Veeam, please see below:

“I have discussed the case with my manager once again and got confirmation that we can make a one-time exception for <company name removed>. Please note that other customers have to follow our standard procedure and purchase migration instead of new subscription licenses.

The customer should open a case on our Licensing Portal to request the Letter of Destruction for perpetual licenses. He should fill in the document, sign it, scan and send back to us in PDF format when placing the order. Without this document we will not be able to accept the PO.”

[DDIT]

Ha! Guess what? When trying to submit the request for the 'Letter of Descruction' via the portal, it says my support has expired!

Farcical.

[Gostev]

I am sure they have the process for these situations and will tell you where to send the letter.

I have discussed the case with my manager once again and got confirmation that we can make a one-time exception for <company name removed>. Please note that other customers have to follow our standard procedure and purchase migration instead of new subscription licenses.

Just wanted to note for the future readers that this is not a correct statement. It's not a "one-time exception for company X", but rather the rule: our existing customers are allowed to abandon their per-socket perpetual licenses and buy new per-VM subscription licenses at the street price. There's no need to purchase any sort of migration SKUs. We just need some time to clarify this confusion with everyone both internally and in the channel, sorry about that.

However, note that Migrations SKU is not something evil either. It is actually an awesome deal for the existing customers with per-socket perpetual licenses who have industry-standard VM density per CPU socket. For them, using this SKU to switch to subscription licensing will save a lot of money, potentially reducing their subscription bill by up to 50%.

On the other hand, as it was established in the first post of this thread, for customers with less than 4 VMs per socket, it would normally be cheaper to just abandon their per-socket perpetual licenses instead of renewing one, and buy a per-VM subscription instead. And we do allow ALL of our existing customers to take this path.

[DDIT]

Just wanted to update that I finally got the new subscription license after waiting over a week since ordering it. I guess they are busy processing so many queries from confused customers

[DDIT]

eh, so since applying the new license file, all my backups are now failing. Is there something I need to do to 'licesense' each VM?

It's near 10pm in the UK now (I just happened to notice the email alerts for the backups) so don't particularly want to spend time on the phone with support right now. I will call them in the morning if no one has chimed in since then.

[DDIT]

Ok. My bad. This page says you need 9.5 Update 3 to support subscription licensing...https://helpcenter.veeam.com/docs/backu ... tml?ver=95

I installed this update and all working well now. It might have been helpful to have Veeam mention that in the email with the subscription licenses attached.

Regards

[Val]

Hi there, is is still valid? Is it allowed to abandon current perpetual licenses and buy subscription?

[Vitaliy S.]

Yes, it should be possible, please check out our FAQ guide on the licensing topic (search for subscription section). For further assistance, please contact a Veeam sales rep responsible for your region. Hope this helps!

[DDIT]

Yes, it is. Although not as straight forward as you would expect. When I was looking at this there was no way to "convert" licenses from perp to subs. From what I can remember, Veeam will send you a form which you need to sign to confirm the ceasing and destroying of your current perpetual license. You can then just order a subscription from your seller. All of this can be done together, so you won't interrupt your backup process whilst this licensing change is happening. Best to keep Veeam sales and your reseller in loop together so it is as tightly coordinated as possible.

For us it made perfect sense to switch - small number of VM's across 3 sites. The cost of annual subs was going to work out less than annual maintenance, so we bumped up our edition from standard to enterprise (per vm backup, better backup to tape features), which ended up around the cost we were paying for maintenance on standard. However, we only really needed enterprise at one of our 3 sites (the site with the tape drive), so it would have been nice to have that site on enterprise (8 vms) and the two other sites on the cheaper standard subscription (3 vms each) - however it's not possible to mix and match standard/enterprise subs. Hope this will change in future.

[Val]

Thank you for your answers. Here https://www.veeam.com/faq.html Veeam describes that migrating SKUs should be used to change from perpetual licenses to subscription ones. Just need to understand Veeam point of view for migration for existing customers globally. Is it allowed to fill LoD, destroy your perpetual licenses and buy new subscription like for new customers?

[Gostev]

Yes, absolutely.

Moreover, I don't even see the reason why you should be destroying your existing perpetual license in the specific scenario you just described. You bought them and so you can keep them (and use them if you want to) perpetually. You'd only need a separate backup server to make use of them, and you won't get technical support or updates for the given backup server after your maintenance contract expires.