“Should I virtualize everything?” This is a question I am frequently asked by customers who are in the earlier phases of virtualization. There are a number of things to consider, including both technology and other factors. A couple of years ago, even some virtualization industry players encouraged customers to attempt to virtualize everything right now. However, the reality is that server virtualization imposes some I/O constraints on the virtual instances that don’t work well with high-throughput applications. Even though the performance of the virtualization software has improved over the last few years, CPU and I/O intensive applications, such as heavy transaction processing, high-throughput web front-ends, storage management servers and the like don’t typically work well with virtualization software that is available today. There is also the question of internal skills and readiness. Virtualization, like any other technology, has it’s own set of technical and operational knowledge required to implement effectively. Thirdly, there is the question of management tools. Microsoft began updating it’s platform management tools, Systems Management Server (SMS) and Microsoft Operations Manager (MOM) in 2004 to work well across physical and virtual instances. Additionally, there are some point solutions and virtualization layer specific management tools available today. However, many of these virtualization specific management tools come at a high cost. Customers need to evaluate the cost/benefit of utilizing a solution-specific management tool. Finally, many customers that I talk to about server virtualization are concerned about licensing issues. In fact, several customers have told me that one of the reasons why they haven’t deployed server virtualization more broadly is because of concerns around licensing. Even on mature platforms, such as the mainframe, where virtualization has been available for some time, I can’t say that licensing terms are clear to the system administrators.

While Microsoft is making large investments in virtualization technology, we recognize that it is only part of the solution. Getting your IT investments to do more, whether it’s a router or a server or even a virtual OS, is top of mind for everyone these days. Microsoft has also been working on helping customers do more with a single installation of the OS, as well. We started with some of the less complicated workloads to consolidate, such as file and print and web workloads. Starting with Windows Server 2003, especially, we provide the server consolidation technology and guidance which enables customers to reduce the number of moving parts they support, to lower costs and increase agility. For new application development, Microsoft’s .NET provides application isolation for security and reliability within the same OS instance.

As announced last October, Microsoft has begun rolling out updates to it’s licensing terms to allow customers to further benefit from server virtualization technology, while reducing risk. These changes affect all new server products and fall into 4 main categories:

Windows Server 2003 R2 Enterprise Edition – Enhanced Virtualization Support
   Windows Server 2003 R2 Enterprise Edition includes the use right for customers to run up to 4 additional virtual instances of Windows Server with one server license. This means that for roughly the same cost as 5 licenses of Standard Edition, customers gain the advantages of an enterprise-class platform. This includes increased headroom up to 8 processors (single or  dual-core chips) and up to 64 GB of memory for the 32-bit version and 1 TB for the x64 edition, as well as the server clustering in Enterprise Edition.

Server Products Licensed by Running Instance
   While a server software license is still tied to a particular piece of physical hardware, a server, the installation or instance of that software has been clearly defined in the licensing terms including this new thought of a ‘running instance’. This means that customers can create and store a catalog of offline instances, which is a common virtualization scenario, but only pay for 'running instances' of software in use for a virtual machine.

Portable Software Instances
   Again, along the lines of defining the software and how it’s used the new licensing terms allow customers to move a software installation, or instance, among licensed servers at will. This really allows customers to start taking advantage of the flexibility of virtualization.

Granular Per Processor Licensing
   Windows Server System products that are licensed per processor, such Biztalk Server, SQL Server and ISA, now license by the number of CPUs assigned to the virtual instance running the software, instead of the number of physical processors in the system. This allows customers to create mutli-workload virtual servers to balance out I/O requirements while still paying only for what you use.

So, we've talked about the technology direction and the licensing updates that Microsoft has introduced. In the final part of this blog, I'll be talking about the compelling new scenarios that are possible when you start putting all this together.