One of the most talked about and often most confused areas of Virtualization is licensing. Some of this is primarily caused due to the lack of one industry standard way of dealing with licensing and the other cause is that virtualization is a disruptive technology in how companies operate and hence not clear to customers on what the various policies mean in this new world.

Microsoft licensing goals are to provide customers and partners cost-effective, flexible and simplified licensing for our products that will be applicable across all server virtualization products, regardless of vendor. To this effect, several changes were put in place in late 2005 to help accelerate virtualization deployments across vendors:

·         Windows Server Licensing was changed from installation-based licensing to instance-based licensing for server products.

·         Microsoft changed licensing to allow customers to run up to 1 physical and 4 virtual instances with a single license of windows server k2003 Enterprise Edition and licensed device; and 1 physical and unlimited virtual instances with windows server datacenter Edition on the licensed device.

·         With the release of SQL Server 2005 SP2, Microsoft announced expanded virtualization use rights to allow unlimited virtual instances on servers that are fully licensed for SQL Server 2005 Enterprise Edition

With all these changes, you can now easily acquire and license Windows Server and other technologies in a much more efficient process. Virtualization also adds another level of complexity for licensing with the ability to easily move the images or instances around between machines. This is where licensing from old era makes it tricky. The simple way to remember and ensure that one is fully licensed is to look at the host systems as the primary license holders with the instances being the deployment front. So if you want to move a workload to system that has Windows Server Enterprise Edition running and already has 4 instances running, you will need an additional license; if it is lower than 4, you won’t need an additional license to make the move happen.

Do not that the licensing policies for these apply across virtualization products in the same manner across all server virtualization platforms.