This question was asked of me at the roadshow this week and I expect this is going to become a far more common situation with the use of tools like Virtual Server Migration Toolkit (VSMT) increasing as organisations consolidate and virtualise environments. I'm no licensing expert, but thankfully there are others in Microsoft who are fully aware of such things. I was directed to the virtual machine licensing document on microsoft.com which pretty much sums up the situation. Quoting from the FAQ:
Q: May I move an OEM license for Windows to a virtual machine? A: You may not transfer original equipment manufacturer (OEM) server licenses from the original computer to a different computer. Any Microsoft Windows Server license acquired preinstalled with a new computer from a computer manufacturer is tied to the computer on which the licensed software is first installed. This applies to the initial copy installed on the computer as well as any subsequent copies licensed to run with virtual machine software. However, if you have acquired Software Assurance for this preinstalled license, you receive the rights associated with the Volume License program, including license reassignment. At this point, you would be able to move that license and Software Assurance from one computer to another, including a VM.
I find this very annoying!
First: We want to move a Server 2003 OS to hyper-v server on our new hardware but because of OEM licencing rules, this is not allowed. We would have to purchase a new retail licence of Server 2003 to do it. We need to keep the 2003 server as it is running a legacy product.
Second: The new server will arrive with a Windows Server 2008 Standard OEM licence. It will be installed on hyper-v 2008 R2 server in a cluster as a guest OS. The moment the server hardware fails and the virtual machine is moved to the next available node, the licence is invalid as it isn’t the original machine we purchased the software for.
As an SME, how are we supposed to afford all these new licences to run legitimately?