SAN FRANCISCO, CALIFORNIA—Just over a year ago, VMware shocked many of its longtime customers with a new pricing model that charged customers based on the amount of virtual infrastructure they used instead of the amount of physical infrastructure. By charging customers based on use of virtual memory, or VRAM, VMware seemingly penalized customers who succeeded in deploying many virtual machines on few physical servers.

After a customer outcry, VMware raised the VRAM “entitlements” to make the change less punitive. Today, VMware did away with the VRAM pricing model altogether.

At VMworld in San Francisco, newly minted VMware CEO Pat Gelsinger referred to VRAM as a four-letter, dirty word. “Today I am happy to say we are striking this word from the vocabulary,” he said, drawing an extended ovation from the crowd. VMworld is being attended by 20,000 people, and a huge portion of them attended this morning’s keynote.

From now on, pricing will be all per-CPU, and per-socket, Gelsinger said. By moving back to a pricing model based on usage of physical infrastructure, VMware is once again encouraging users to get as many virtual servers as they can out of each physical machine, which is the point of virtualization in the first place.

Gelsinger never mentioned specific pricing, but a press release provided a few details about the new pricing of vSphere, VMware's flagship virtualization software.

“VMware vSphere pricing starts around $83 per processor with no core, vRAM or number of VM limits,” VMware said. “VMware vSphere Essentials is $495, and VMware vSphere Essentials Plus is $4,495. All VMware vSphere Essentials Kits includes licensing for 6 CPUs on up to 3 hosts.”

This new, hardware-based pricing applies both to the forthcoming version 5.1 of vSphere and the existing version 5.0. More details can be found in this VMware pricing document. There is also vCloud, a broader software suite including vSphere and numerous other data center automation tools. Prices for vCloud 5.1 will start at $4,995 per processor.

VMware said version 5.1 of vSphere will become generally available on September 11. It has enhancements including the ability to perform live migrations of virtual machines without the need for shared storage. We’ll have more details from VMworld as the conference goes on.