Microsoft virtualization license plan met with cautious optimism

Unlimited virtualization licenses with Windows Server 2003 Datacenter Edition could save money. But users worry that the new licensing scheme is too good to be true.

Virtualization users are cautiously optimistic about Microsoft's new unlimited virtualization policy for licensees of Windows Server 2003 R2 Datacenter Edition, saying it could save them money and simplify license management.

Until this month, Datacenter Edition was available exclusively through OEMs, and it targeted shops that require highly scalable machines with symmetric multi-processing (SMP) capabilities. Now, Datacenter Edition is also available from Microsoft and its resellers directly under Volume Licensing. List pricing is $2,999 per processor (regardless of the number of cores), with a two-processor minimum. Users with existing Standard or Enterprise Edition licenses can also "step up" their existing licenses to take advantage of unlimited virtualization.

"Considering we currently run 30+ guest systems on a single hardware platform (targeting 50 to 60), I would say we could definitely leverage this in the future," wrote Mike Salins, senior systems engineer with New York City-based The Interpublic Group of Companies, a media and advertising agency holding firm. The firm runs VMware ESX on Hewlett-Packard four-way servers.

"To determine when it's cost effective is easy," Salins wrote. "Just look at our costs for Datacenter [Edition] for our quad-processor boxes, and compare it to our costs for 2003 Standard or Enterprise ... and see where our break-even is. I'm guessing it'll be around 15 or so."

Generally speaking, the Datacenter Edition pricing seems to benefit systems with four or more processors, said Bob Zuber, IBM worldwide product marketing manager for System x, the companies x86 server line. According to Zuber, most four-way systems running VMware ESX can comfortably run about 32 virtual machines (VMs).

Zuber confirmed that IBM will sell a "streamlined" version of the Datacenter Edition license that customers can load themselves, but he doubts it will sell on many two-processor machines. "For two-way systems, it's more likely that Enterprise Edition is more cost-effective," Zuber said.

Matt Jones, network supervisor for the state of Ohio's Winton Woods City Schools, looked at licensing Datacenter Edition for his two-way machines, but the list price is prohibitive. Under academic pricing, the district pays $500 for a Windows 2003 Enterprise Edition license, which currently allows him to run four Enterprise Edition virtual machines. "If we have to pay $3,000 per CPU, that wouldn't be reasonable," Jones wrote.

Simplified license management

Cost aside, Jones said he does like the idea of unlimited virtualization because it would free him from having to keep track of VM licenses.

"I've been managing a spreadsheet with Windows licenses, for both physical and virtual machines," Jones wrote in an email. "We are already out of the Windows Server licenses we purchased for our visualization project (which included room to grow) and I will need to purchase [more licenses] before I can deploy more servers."

Other users agreed. "From a purchasing perspective, I really like the idea that I can tell management that I will never have to buy another license for this box again," said Tom Dugan, director of technical services at Recovery Networks, a disaster recovery services provider in Philadelphia.

Too good to be true?

Despite the potential cost and management benefits he'd reap from unlimited virtualization, Dugan, for one, is waiting for the other shoe to drop.

"The real fear is that you go ahead and [buy Datacenter], and a year from now [Microsoft] says, 'Oh, we've changed our mind!'" Dugan said.

For example, today Datacenter Edition licensing extends unlimited virtualization rights to any and all virtualization platforms, including VMware's ESX. In that case, Datacenter Edition doesn't actually need to run on the system the license is simply applied to the ESX hypervisor, said Patrick O'Rourke, Microsoft senior product manager for the Windows Server division.

But, come Longhorn, "how does that change?" Dugan asked. "It's like Windows Terminal Services. In Windows 2000 Server it was free, but in Windows 2003 they made you pay for [Client Access Licenses]," he said.

Dugan doesn't think he's being particularly paranoid. "Purely from a reputation perspective, Microsoft tends not to give things away -- and good for them. But they're in the business of making money, and they tend to follow that mantra."

Read more on Managing IT and business issues