To cheers from the audience at VMworld 2012 , VMware's incoming CEO Pat Gelsinger has  announced that VMware is eliminating the vRAM entitlement that many customers say drove up prices and reduced flexibility.

Speaking at VMworld 2012 in the Moscone Center in San Francisco, Gelsinger said, "Today we are striking this word from the vocabulary," he told attendees, noting that in the company's recent comprehensive customer survey, vRAM was the one overwhelming complaint.

VMware introduced the vRAM licensing scheme in July 2011 with the release of vSphere 5.0, outraging customers with what they considered a virtualization "tax."

The licensing scheme was based on both the number of physical processors on the host server and the amount of vRAM the virtual machines on each host were allocated and used. Users felt the plan drove prices up while simultaneous limiting the flexibility of their deployments.

"Our customers spoke clearly," VMware Chief Marketing Officer Rick Jackson said at a press conference after Monday's opening keynote. "They don't want to think about things like vRAM. We're changing it back to what our customers want."

The new pricing scheme has no per virtual machine pricing component. Instead, VMware is aiming for simplicity with a per CPU pricing strategy with no limitations on the CPUs.

"Yes, it is an admission that we had made things overly complex, and we are rectifying that mistake," outgoing VMware CEO Paul Maritz says bluntly. "Mea culpa."

vCloud Ties Everything Together

The new pricing model coincides with the release of vSphere 5.1, also announced today. Perhaps more important, Gelsinger also announced VMware vCloud Suite 5.1, which integrates VMware's virtualisation, cloud infrastructure and management portfolio into a single SKU-what Jackson calls the first holistic, integrated suite for cloud computing.

The vCloud Suite is an effort to deliver on VMware's vision of the software-defined data center (SDDC), which is designed to extend the benefits of virtualisation-agility, elasticity, efficiency and reliability-to every domain in the data center, including compute, storage, networking and the associated availability and security services.

The SDDC is intended to abstract all hardware resources and pool them into aggregate capacity that is then automated and provided to applications as needed. The vCloud Suite is intended to help VMware customers implement that vision by bringing together virtualisation, SDDC services, policy-based provisioning, disaster recovery and application and operations management together in a single stack.

"We do all the heavy lifting of keeping all these things synchronised and integrated," Jackson says.

VMware says it expects the vCloud Suite 5.1 to be available on Sept. 11, 2012 in three flavors: Standard, Advanced and Enterprise. It includes vSphere Enterprise Plus, vCloud Director, vCloud Connector, vCloud Networking and Security, vFabric Application Director, vCenter Operations Management Suite and vCenter Site Recovery Manager. Prices will start at $4,995 per processor.

Until the end of the year, VMware is also offering vSphere Enterprise Plus customers a free upgrade to vCloud Suite 5.1 Standard or an upgrade to vCloud Suite 5.1 Enterprise at 35 percent off the list price.