DISCLAIMER - I'm not a reseller nor am I even using VMware yet, just investigating it currently.
Here's the reply I recieved from a reseller when I was asking about licensing and upgrade costs:
So, if you have a current support contract and are upgrading from the same version (i.e. Advance to Advance as the example given above) it won't cost you to upgrade. There is a vSphere media Kit for around £110 but I'm not sure if you can just download it instead. I don't see why not as you can download a trial that seems to be the full version, and just give it your key.All of the license costs are one off, just the support is renewed annually.
With regards to the upgrade to ESX 4.5/vSphere 2 (for example), a like for like upgrade will be FOC, providing they keep their support in order. (by like for like, I mean they could move from, vSphere Advanced to vSphere 2 Advanced etc). Platform upgrades (i.e. moving from vSphere Advanced to vSphere Enterprise), are chargeable regardless of support.
I may be right in thinking you'll need to buy a copy of vCenter to manage vSphere. Not sure about doing the upgrade, but when I tried 3.5 and 4.0 I personally found 4.0 to be an improvement, and I've heard others have done it smoothly.
Chris



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