Virtualization and Licensing

As a technically-focused guy, I always said to myself that the less I know about licensing, the happier I'll be (and perhaps you all feel the same way :) )...but the reality is that, in my current role, I get a lot of questions about licensing.  And, I've determined that it's better to know the answers than to shrug and pass it off to someone else.  The hot topic in the last year or so has been Microsoft licensing with respect to virtualization technologies.  Because of the significant changes this represents with respect to the traditional view of computing and software licensing, it is worth taking a few minutes to understand all of the implications.  It is my understanding that we are consistently evaluating virtualization scenarios to provide the maximum flexibility to our customers, and there are definitely some specific pieces of information of which to be aware - everyone loves ways to cut costs!

First, a disclaimer - this post is intended to provide some handy reference material in one place.  If you have any questions about the proper way to license your given scenario, always talk to your reseller and\or ask to speak with a Microsoft Licensing Specialist.

Foundationally, Windows Server licensing as of 2003 R2 made some allowances with respect to how we handled OS licensing in a virtual environment.  We released the Windows Server Virtualization Calculator to assist customers in determining the best and cheapest way to license their environment.  It can be found here: http://www.microsoft.com/windowsserver2003/howtobuy/licensing/calculator.mspx 

I also want to highlight some links found on that same page (as well as some others), to ensure they are brought to your attention:

All of the dirty details can be found in those links.  But here are the highlights:

• Microsoft per-processor licensing is per physical socket., not core.  As such, a single quad-core processor system would require only a single per-processor license (say, of SQL Server 2005).
• Windows Server Datacenter Edition was formerly only available as part of a specific High Availability Program run in conjunction with our OEM partners.  However, it is now available 'off the shelf'.  It's licensed differently from the other Server editions, in that it requires a per-processor license as well as CALs.  But in a virtualization scenario, licensing a virtualization host system with Datacenter (this can be a Windows host or otherwise) provides 'unlimited virtualization' rights - i.e. you can run as many Windows VM guests on that host as you like, without having to license each of those VM's.
• A Windows Server Enterprise Edition license for a VM host provides the rights to run up to 4 Windows VM's (again, without having to license each of those VM's separately). 
• For SQL Server Enterprise per-processor licensing, "if all processors in a machine have been licensed, then the customer may run unlimited instances of SQL server 2005 on an unlimited number of virtual operating environments on that same machine."
• If you use System Center products (or would like to) in a virtual environment, the System Center Management Suite Enterprise is a great way to go - unlimited guest virtualization licensing per licensed host for Data Protection Manager, Configuration Manager, Operations Manager, and Virtual Machine Manager
• I get a lot of questions about virtualization licensing when using non-Microsoft VM technology.  In that case, you can 'assign' a Datacenter or Enterprise license to the non-Microsoft host and still take advantage of the virtualization licensing benefits bequeathed by those paper licenses.
• Server licenses are assigned to specific hardware (host and guests). 

  ·        "You may reassign software licenses for server products, but not on a short-term basis (i.e., not within 90 days of the last assignment). They may be reassigned sooner if you retire the licensed server due to permanent hardware failure."

 Hopefully this is helpful and you can use this as a reference in the future when you have any questions.  If we make any significant changes to our licensing model, I will be sure to post those updates as well.