Microsoft's Licensing Changes Aid Virtualization

Microsoft has made significant licensing changes to address the growing mix of virtual machines and traditional server software running in the data center.

The new policies, which go into effect Dec. 1, give customers flexibility and simplicity when running Windows Server system products in virtual machine environments, Microsoft said.

Under Microsoft’s new terms, customers will be able to run four virtual machines at no additional cost on Microsoft’s forthcoming Windows Server 2003 R2 Enterprise Edition. Currently, customers buy a license for each operating system, regardless of whether it runs as the host or as a guest in a virtual machine. Now, with the introduction of per-virtual-processor licensing for Windows Server system products—which for the first time separates the software license from the hardware—Microsoft ushers in a new usage-based server pricing model for the utility computing era, observers and partners said.

“These steps are the first real signs that Microsoft is taking virtualization seriously, and one should not underestimate the effort to change their licensing conditions,” said David Crosbie, CEO of Leostream, an ISV in Waltham, Mass. “This is a huge step and a huge change in mindset.”

Virtualization software, which was pioneered on the Intel architecture by VMware, is being widely embraced as a method for consolidating servers, cutting management costs and automating resources in a data center. It allows users to run tens or hundreds of guest operating systems and workloads on a single server.