Quoting from the Microsoft official announcement:
As IT solutions become more complex, operational costs often continue to climb. It should come as no surprise then that organizations have been clamoring for ways to scale back the amount of time and money they spend maintaining their IT systems so they can instead ramp up efforts to better run their enterprise and bolster their bottom line.
Through its Dynamic Systems Initiative (DSI), a cross-company effort to address IT customers’ desire to be more cost-efficient, proactive and responsive to business requirements, Microsoft is attempting to address customer needs by making it easier for them to take advantage of the benefits of server virtualization technology. Organizations that virtualize computing environments can increase operational efficiency through server consolidation, application re-hosting, disaster recovery and software test and development.
With the help of customers, partners and industry analysts, Microsoft has developed new licensing and use rights to better enable customers to take advantage of virtualization and accommodate advances in technology. To get a sense of how Microsoft has adapted its Windows Server System licensing to reflect this growing demand, PressPass spoke with Brent Callinicos, Microsoft’s corporate vice president for Worldwide Licensing and Pricing.
PressPass: What changes to Windows Server System Licensing is Microsoft announcing today?
Callinicos: Customers are using virtualization technologies more and more for a variety of reasons – as part of server consolidations, for test and development, to create a more agile infrastructure that allows them to move workloads from machine to machine regardless of hardware, to establish better business continuity and to reduce downtime.
We wanted our licensing to allow customers to embrace virtualization benefits and eliminate any potential barriers. As a result, we have devised licensing policies that we feel best reflects how our customers want to use this virtualization technology.
First, we are licensing by running instance, which is to say the number of images, installations and/or copies of the original software stored on a local or storage network. Instead of licensing every inactive or stored virtual instance of a Windows Server System product, customers can now create and store an unlimited number of instances, including those for back-up and recovery, and only pay for the maximum number of running instances at any given time.
Second, we are providing easier deployment across servers. Customers can now move active instances from one licensed server to another licensed server without limitation, as long as the physical server is licensed for that same product. So, customers will now be able to store a set of instances on a storage network and deploy any instance to a rack server or blade server that has an available license for that server software.
Third, we are providing customers with greater flexibility with Windows Server System products that are currently licensed by processor, such as Microsoft SQL Server, BizTalk Server, Internet Security Accelerator Server and others. Customers can now stack multiple virtual instances on a machine by licensing for the number of virtual processors being used, rather than for all of the physical processors on the server.
Lastly, we recognize customers are using virtualization to consolidate servers. Therefore, we now have a policy for Windows Server 2003 R2 Enterprise Edition that allows customers to run up to four running virtual instances on one server at no additional cost. And we’ll go further with the Datacenter Edition of Windows Server “Longhorn,” the code name for the next version of Windows Server, by allowing customers to run unlimited virtual instances on one server at no additional charge.
PressPass: What role did partners, customers and analysts play in affecting this change in licensing?
Callinicos: Last year we looked at the advancements in hardware, specifically how dual- core and multi-core processors will impact the industry. We reviewed that along with our existing policies and set out to ensure that our policies are flexible enough to allow customers to take advantage of the performance benefits associated with dual-core chips without incurring additional server software costs.
At about the same time, we began to look at other emerging technologies, like virtualization. We sought the advice of several customers that participate on our Licensing Advisory Council and expressed a desire to create licensing policies that reflected how customers wanted to use this technology. The council viewed this as an industry-leading measure. We also talked to partners and industry analysts and asked them to research how customers were using virtualization and what they valued about the benefits associated with using software in virtual environments. We learned that customers want to more dynamically deploy their virtual machines, and we wanted our licensing to reflect that.
From the very beginning, partners, customers and analysts have aided our licensing evolution and have taken a hands-on approach in the process. Response to date has been very favorable.
PressPass: What impact will today’s licensing announcements have on customers and the industry?
Callinicos: There are several benefits to virtual-machine technology. There is a reduction in total cost of ownership by hardware utilization and consolidating workloads on fewer servers. The virtual machine market is a fairly niche market. It’s somewhere in the US$400 million revenue range. We’re very early on in its mainstream adoption on x86 platforms. But hopefully with the technology support and more flexible licensing policies that Microsoft is providing, we’ll be able to make it more mainstream. We strongly believe in the benefits of virtualization, and that’s why we’ve evolved our policies to better reflect how it’s being used presently, and how we expect it to be used in the future, as customers strive to achieve self-managing dynamic systems.
PressPass: How do Microsoft’s licensing policies differ from other enterprise application vendors’ policies for virtualized environments?
Callinicos: Many software companies don’t have clearly stated licensing policies for running server software in virtual environments, so it is difficult to say. However, most are focused on licensing server software by installed copy – whether in a virtual environment or not. Based on feedback from customers and partners, we’re moving away from that to licensing server software by running instance.
Update: Ben Armstrong, Microsoft Virtual Machines Team Program Manager, published on his blog, Virtual PC Guy, a new whitepaper about the Microsoft virtualization licensing terms with all cases and explainations. It’s a must-read for everyone.