Microsoft: Why we changed our virtualization licensing policy

It was kind of like the three month probationary period you give to a new employee, except in Microsoft’s case it applied to servers.

Until today, Microsoft prohibited customers to move a virtual machine from one physical box to another, which it called a “licence transfer” within 90 days of the last time it was moved. Not a great way to encourage the kind of free-flowing intelligent allocation of compute resources promised by virtualization software such as VMware, Citrix and, most recently, Microsoft.

The company has now announced it will waive the licensing restriction on 41 of its server applications. If you browse the full list and don’t see the recently-released Windows Server 2008 don’t worry: its licensing agreement was drafted from the get-go to take virtualization into account. The only applications that might not apply, according to Microsoft, are older or outdated products, probably dating before 2005.

I chatted for a few minutes with Microsoft Canada’s Bruce Cowper, who told me the changes reflect the way virtualization is being used across corporate enterprises. In the early days, he explained, customers were mostly using virtual instances of a server in test and development environments. Not now.

“We’re starting to see disaster recovery scenarios have come to the fore where if I get an issue on the host server, I have to move machines across to other boxes, or (I have to move instances) in the interest of dong restoration and load balancing across my organization,” he says. “We needed some controls in place prior that.”

The timing of the announcement is interesting, however. Although Cowper notes that VMware signed up to Microsoft’s Virtual Validation Program just yesterday – thereby making life easier for Microsoft customers who also use its VMotion product – the relaxed licensing terms come fast on the heels of Microsoft’s own Hyper-V virtualization technology. Now that it has a real virtualization offering for users, perhaps, Microsoft is prepared to appease early adopters.

“As our customers are deploying virtualized technologies, they’re really starting to place demands on their suppliers and as part of their selection criteria, they’re asking, ‘Are you virtualization-friendly?’” he says. “I’ve had a number of conversations with customers in the last six months who say they’re asking, ‘how does this apply with our licensing in a virtual world,’ or ‘how does this apply to our support in a virtual world?’”

That’s another possible reason for the timing. Microsoft also announced expanded support services for 31 of its server applications. Not the complete list, but enough to get some time-to-market advantage over rivals with similar consulting capabilities.

“If you were running a system and you were losing transactions, that often reflected hardware problems,” he says. “Adding the virtualization layer into the equation gave another question mark.” The support services are intended to remove those question marks, but as the licensing changes show, there are plenty more questions about virtualization where those came from.