Microsoft Rolls Out Virtualized Licensing

Continuing a pattern of kinder, gentler software licensing terms and relationships, Microsoft announced this week its simplified, virtualization-ready Windows Server licensing that allows as many as four virtual instances of the software on one physical server for the same price.

Virtualization involves the use of server software in the abstract, rather than a specific machine, and flows from hardware advances that allow multi-core processing and enhanced capability to run these ‘virtual’ servers simultaneously. Industry analysts — who had mixed reactions to the Microsoft licensing move — have long warned that with dual-core, or other multi-core processors and increased virtualization, companies face higher costs through software licensing.

Microsoft — which has also announced per socket licensing for its software to head off the multi-core processor costs — said the next step in its Dynamic Systems Initiative, announced today, was intended to ease virtualization with more flexible and simplified licensing.

Virtual Trend

The software giant said the new “virtualization use rights” for Windows Server 2003 R2 Enterprise Edition and Windows Server Longhorn Datacenter Edition would enable cost-effective server consolidation, with up to four virtual instances with Server 2003 and an unlimited number of instances with ‘Longhorn’ servers.

While virtual server infrastructure can cut costs by boosting application performance and availability, it can also present problems if all of the servers are subject to constant licensing charges, even if the software is used intermittently or rarely.

Microsoft, which also announced ‘portable licensing’ to move active server instances among licensed physical servers, said the new licensing would be available beginning December 1.

“Customers are on a treadmill of complexity and cost that limits the value IT delivers to the business,” read a statement from Microsoft Vice President of server and tools Andrew Lees. “Virtualization is a key technology to help liberate IT, but must be implemented as part of a broad approach of enabling self-managing dynamic systems.”

Clarity for Customers

Yankee Group senior analyst Laura DiDio told the E-Commerce Times that Microsoft had made a significant change to past software licensing practices — which have typically been extremely complex and confusing.

“If you can’t understand it, you think somebody’s trying to get you,” she said.

DiDio said that, because of its image and past licensing schemes, Microsoft had to take an even more aggressive strategy in terms of adjusting and simplifying its terms and conditions, which are now more “straightforward and simple.”

“They had to be more progressive and actually had to give more,” she said. “No more shell games.”

Improvement, Disappointment

IDC Vice President Dan Kusnetzky said Microsoft — having talked with partners, customers, analysts and consultants — had made a step forward with its new licensing scheme, but fell short of satisfying what the market may view as fair.

“This, in my mind, is not a complete step to something everyone would agree is equitable,” Kusnetzky told the E-Commerce Times. “I’m not sure they’ve gone far enough.”

Kusnetzky said the licensing was limited to certain Windows servers, and still had limitations on the number of server instances, while other vendors offer such unlimited license across their lines without exception.

“The difference between two to four and unlimited is significant,” he said. “We’ll see the reaction and if this initial step is sufficient for now.”