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Licensing the Virtual Future

Microsoft did some serious signaling of its licensing intentions today at its Worldwide Partner Conference in Boston.

For one thing, the company announced that Software Assurance customers using the virtualization capabilities embedded in Windows Vista Enterprise will be allowed to run up to four copies of the OS in virtual machines on a single device for a single user. The reasons Microsoft will allow users to pay for one copy of the OS and run four (including Windows 2000, Windows XP and others) are for application compatibility, training, helpdesk functions and software testing. Microsoft describes allowing four virtual machines as generous, and it is for client systems. At the same time, the company is using this generous virtualization as a carrot to protect its Software Assurance revenues.

Also this week, Microsoft announced that Virtual PC 2004 Service Pack 1 will be available to all customers as a free download. Previously, the product cost about $100. Users will need a licensed copy of Windows for each virtual version of the OS run under this product, and its free follow-on, Virtual PC 2007, which will be optimized for Windows Vista and is scheduled for release in the first quarter of 2007.

Microsoft also unveiled a virtualization licensing move on the server side, where virtualization has the potential to change the way customers run data centers. At the RTM of Windows Server 2003 R2 Enterprise Edition in December, the company unveiled a new licensing arrangement to allow users to run up to four virtual copies of Windows Server on the Enterprise Edition at no additional cost. At the time, Microsoft announced plans to allow users of Windows Datacenter Server "Longhorn" to run an unlimited number of virtualized Windows Server instances. With Longhorn being a late 2007 product, even without building the usual Microsoft delays into the schedule, that was pretty far off. Now, Microsoft is going to allow unlimited virtual machines on Windows Server 2003 R2 Datacenter Edition. Going into effect Oct. 1, the company will also allow customers to buy Datacenter through Volume Licensing and on systems as small as two processors from OEMs.

Like everyone else, Microsoft is feeling around in the dark on virtualization -- trying not to get left behind while protecting its traditional license revenues. But today's announcements go a long way toward allowing partners and customers to make some plans.

Posted by Scott Bekker on July 12, 2006