Parallels and Microsoft having legal non-issues

Starting today Parallels has begun selling a special version of its desktop virtualization platform for Windows, Desktop for Windows, that addresses Windows XP/Vista users migrating to Windows 7.

Simply, the guest operating system has to be Windows XP or Vista while the host operating system has to be Windows 7. The presence of seamless window technology dubbed Coherence helps the application of the two platforms to coexist in a nice way.

CNet is highlighting how this offers may be not compliant with legal terms of Windows 7 EULA. Actually, it’s a no news.
Since ever, a customer that wants to run one or more guest operating systems on top of a certain host operating system has to own the license of all OSes. This applies to any hardware virtualization platform (both type-2 and type-1) which includes Parallels Workstation and its competitors, like VMware Workstation or Oracle VM VirtualBox.
There’s no reason why it should be different in this specific case.

On server-side things are slightly different, as Microsoft allows to have one, four or unlimited virtual instances of a certain Windows Server edition when it’s binded to a bare-metal hypervisor. And in this case you can use the virtual instances to serve older version of Windows Server.

The Parallels FAQ about this offering even clarifies the point:

Is Windows 7 included in this product?

No. Windows licenses are sold separately.