Microsoft revamps licensing for virtual era

Microsoft has announced plans to give virtualisation a lift, partly by easing its licensing demands around virtual servers and workloads running on Windows platforms.

David Allinson, Windows server product manager at Microsoft Australia, told CRN that the vendor would in many cases only force customers to buy licenses for the processors they actually used.

"We're seeing a lot of customers who have got multiple servers, different environments -- still operating on Novell, Linux, Windows NT and other platforms -- and I think there is a lot of potential for midsize and enterprise customers to look at how they might do server consolidation," he said.

A number of partner initiatives yet to be outlined at press-time would be offered around the new infrastructure optimisation regime, he added.

Allinson said Microsoft's Virtual Hard Disk (VHD) format for virtual images on Microsoft's Virtual Server, which targeted the marketshare of Windows-compatible rival VMware. VHD format would be offered to ISVs royalty-free to encourage solution-building.

VHD format would help enable Longhorn server's Hypervisor capability. "Hypervisor is about managing multiple virtual images between machines and that is something that allows you to manage those machines more dynamically," he said.

Running virtual servers in a Windows Server 2003 environment meant enabling virtual machines over an operating system or a guest operating system, if required, he said.

"Windows Server 2003 R2, when it launches at the beginning of December, you can run up to four virtual machines. You are licensed to run four virtual machines for Windows Server in that virtualised environment," Allinson said.

"If customers want to run, for example, development and test environments, all those things on the same machine, you can build all workloads to a single machine if they want and run all those virtual machines on a single platform."

Allinson said the main advantages were reduction of cost and complexity for ISVs and other Microsoft customers. Although the overall effect might be a net reduction in licensing revenue, he conceded, Microsoft felt the move was the best thing for customers.

Also, with Longhorn Server DataCenter Edition, customers would get unlimited licenses for virtual machines. SQL Server and BizTalk would get similar changes, he said.

"SQL Server is going to change, along with other products, along with BizTalk and others, that will be licensed per virtual processor," Allinson said.

"What that means is where you've got a four-processor server that may be running virtual machines but only [using] one of the virtual processors to that machine, you only have to pay licensing for that one virtual processor."

Windows Server 2003 R2 was due to ship by end of the year and the Windows Longhorn server upgrade was slated for a 2007 release.

Microsoft had eliminated a current requirement that forced customers to license every "inactive or stored" virtual machine. The change gives customers the freedom to create and store virtual machines at no cost for testing or other specific purposes, such as backup and recovery.

Allinson said customers in that situation wouldn't have to license the physical processors. "That's something we needed to do for SQL Server users," he said. "It's only those ones actually up and running as servers that you will be licensed for."

Microsoft also altered its portable licensing terms so customers could move virtual machines from one server to another without limitation, provided that the physical server was licensed for the product.

Virtualisation technology, which VMware pioneered on Intel architecture, has been widely embraced as a way to consolidate servers, ease management costs and automate resources in a data centre environment.

"These steps are the first real signs that Microsoft is taking virtualisation seriously, and one should not underestimate the effort it has taken them to change their licensing conditions," said David Crosbie, CEO of Leostream, a US ISV.

"This is a huge step and a huge change in mind-set. A major reason for the price of the [Windows] OS is that it can run a lot of applications. You can have a copy of Windows 2003 that provides Active Directory, Exchange, DNS, DHCP, web services, file and print serving. Microsoft works out [to be] more expensive than Linux once you start to split things up."