Do I need additional licenses for Nested ESXi?

The topic of licensing is usually something I try to stay far away from because I have no interest in it and it is usually complex, which ends up hurting my brain. Having said that, one question that I receive every so often from customers who run large number of Nested ESXi instances in their environment is whether or not they need an additional license for a Nested ESXi instance?

The answer to that question can be found in a VMware KB 2009916 that was published last year, here is a quick excerpt:

Customers running nested ESXi/ESX will need to obtain additional licenses for the nested ESXi/ESX.  This includes, but is not limited to:

• VMware ESXi/ESX running in VMware Workstation or VMware Fusion
• VMware ESXi/ESX running in VMware ESXi/ESX
• VMware ESXi/ESX running in other third-party hypervisor solutions

I know this might be a bit disappointing to hear, but you should remember that Nested Virtualization and specifically Nested ESXi is not officially supported by VMware. As such, from a EULA point of view, this is just seen as another instance of ESXi being deployed which will require a license. For customers who have an ELA (Enterprise Licensing Agreement) with VMware with an "all you can eat" license agreement, this is not an issue, but for others who do not have such an agreement, here are a couple of tips that may help.

Disclaimer: The information listed below are those of my own personal opinion. For any concerns or clarifications regarding licensing, please reach out to your local VMware account team.

• Run ESXi in evaluation mode - Depending on your use case, you may only need your Nested ESXi instance for a short period of time and you can always re-install using the 60 day evaluation
• Configure Nested ESXi with single vCPU - Since ESXi is licensed on a per socket basis, you can assign a single vCPU with 2-cores to minimize the licensing impact. For customers who are using vCloud Director and is not on the latest VCD 5.5 release, you may want to import your Nested ESXi VM through vCenter Server as VCD does not support per core allocation in previous releases

If you feel that Nested ESXi should be supported or that there should be a specific SKU or licensed feature for Nested ESXi, be sure to provide this feedback to your local account team with your use cases so it can be fed back to product management.