Licensing creates barriers to server virtualization adoption

Rational licensing and pricing models are required to fuel the continued adoption of server virtualization infrastructure, says Gartner senior research analyst Naveen Mishra.

From an Indian context, can you detail the licensing issues associated with server virtualization solutions?
Software licensing is a big barrier in terms of deployment and deep penetration of server virtualization technologies in India. In fact, this is true even in other parts of the world. Ever since software came into the picture, application and software vendors started charging for the virtual machines. In the virtual world, five physical machines will support 15-20 virtual machines. Now, the issue is that application vendors charge for 15 servers even if they are virtually placed. If that happens, then the cost and expected benefits arrived at from server virtualization do not help. So the overall licensing cost goes up really high.

Currently, software licensing is one of the major issues when it comes to server virtualization. There is absolutely no clarity on the pricing front. Today, the question is about whether licensing should be done as per the number of servers, or the number of CPUs used in the servers, or number of cores in the servers. Discussions are going on, but there is no clear resolution as yet. We are requesting vendors to make the pricing virtualization friendly. Proper pricing models are essential if vendors want server virtualization to gain further market share and move to the next level.

Why should an organization go for server virtualization considering the amount of confusion and pricing issues revolving around it?
Server virtualization promises several benefits. It starts with consolidating your IT infrastructure. Server virtualization also brings hardware cost savings, improves green initiatives and carbon credits. It also reduces the real estate burden. These are the cost-saving options which organizations get out of server virtualization despite the confusion around software licensing. Apart from the cost benefits, server virtualization also helps improve the agility of an organization, as it helps companies to better serve their customers. So you become more flexible and elastic in terms of responding to various kinds of business requirements.

In India, we are observing that small and medium enterprises are looking at cheaper server virtualization options, that don't require significant investments. That's where we see offerings from Microsoft, Citrix and Red Hat really helping the customers.

We urge vendors to brainstorm and implement fundamental pricing changes so that [costs] can be aligned with server virtualization's benefits. These changes should be done from a long-term perspective.
Naveen Mishra
Senior research analystGartner

How can the current licensing issues be sorted out?
We urge vendors to brainstorm and implement fundamental pricing changes so that [costs] can be aligned with server virtualization's benefits since it is here to stay as a technology. These changes should be done from a long-term perspective, which has to be done by vendors. Vendors are now realizing its importance, but I am yet to see a conscious effort which is friendly to the virtual world. Can you give us some tips on aspects to be remembered on the licensing front when devising a server virtualization strategy?
CIOs need to be careful about the pricing changes that happen due to licensing issues. When CIOs try to evaluate the overall ROI on this investment, they should take the additional software licensing costs into consideration. Once they look at the software licensing issues, CIOs should work out a win-win situation which allows them to work more on an operating expense kind of server virtualization model. They should work out a short-term resolution which focuses around the number of cores or CPUs.

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