Windows Server 2008 and VMs: Is a licensing change in the air?

September 07, 2007 1:42 PM EDT
During a briefing on Microsoft’s announcement of its new Virtual Machine Manager product and its overall plans with regard to virtualization, Larry Orecklin made an interesting comment about how virtualization may change licensing models going forward. Orecklin is general manager of System Center and Virtualization at Microsoft.

First the announcement: The primary advantages of Virtual Machine Manager lie in its pricing, which is lower than VMware’s, its ability as part of the System Center suite to manage both physical and virtual machines, and Microsoft’s promise to allow VMM to manage both Xen and VMware virtual machines in the future (a full CW story about the product appears here).

Orecklin reaffirmed Microsoft’s intention to ship Windows Server 2008, which will include a virtualization hypervisor layer, by end of year – but with a beta of the Windows Server virualization. The final product will be available as an update by mid-2008, he says, and VMM will ship with that release.

If the hypervisor is so tightly integrated into the OS, why is Microsoft shipping Server 2008 with a beta component installed? “It’s a separate role that’s part of the OS. It’s architected in such a way that you don’t need a full release,” he says.

Now to the licensing. Microsoft offers two types of licenses for Windows running in VMs today. The $999 Windows Standard Edition requires an additional license for every additional VM you add to a physical server. The $4,000 Enterprise Edition allows up to 4 Windows instances per physical server. The $3,000 Data Center Edition allows an unlimited number of VMs per box. “That’s where [Windows licensing] is heading,” Orecklin said.

So what will Microsoft’s product lineup and pricing look like if licenses that allow unlimited Windows VMs per box were to percolate down the food chain to Enterprise Edition and Standard Edition? Orecklin wouldn’t comment further.

The licensing for VMM and System Center is more straighforward: $860 per physical server for the suite or $499 for a standalone copy of VMM that supports up to five physical machines. It will be interesting to see how VMware responds to that.