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Software licensing models need to get with the times

Our advisory board has a message for application vendors: Your software licensing models aren’t good for virtualization, and they need to change.

Today's software licensing models came about at a time when IT infrastructure was all physical. Applications and...

operating systems were tied to physical servers and didn't move around very often, so software licensing models reflected this reality.

But server and desktop virtualization have changed these dynamics. Administrators can now move applications and OSes from one machine to another with just the click of a mouse. And users can access their desktops from any PC, tablet or even mobile phone.

Despite these changes, many software licensing models still reflect the old way of doing things. Members of our Server Virtualization Advisory Board discuss this issue as they answer this question:

Are traditional software licensing models sufficient for virtual environments?

Jack Kaiser, GreenPages Technology Solutions

Most of the major vendors' software licensing models are several steps behind the technology. Microsoft, for example, has a licensing model where an OS comes with a machine and lives and dies with that particular machine, which caused initial confusion around virtual desktops. From a desktop virtualization perspective, an end user should have the flexibility to access his or her workspace from their home computer, work laptop or mobile device. This provides a truly flexible computing model with no requirements to purchase multiple licenses.

Although Microsoft has made some changes in the past few years, they need to create a streamlined model that allows clients to easily understand the monetary impact of moving to cloud. Today, too much time is spent reviewing different models and scenarios, only to have them change six months later.

As the major vendors reposition their solutions for virtual and cloud environments, clients and partners will demand that their license models quickly follow. Many believe that vendors create multiple, confusing licensing models to maximize revenue, but the market must move to allow for easier-to-understand and cheaper models for virtualization and cloud adoption.

Maish Saidel-Keesing, NDS Group

Virtualization is a game changer, in more ways than one. Licensing is no exception.

Gone are the days when you purchased a license for every server or every workstation. If software vendors continue with their traditional models, both customers and vendors will lose out. Customers will lose out because they will be paying for licenses they will not be using -- or at least not be constantly using. And vendors might lose out on licenses for applications used in short-term projects, which often aren't accounted for during regular head counts.

Cloud solution providers should push software vendors to make these changes. Otherwise licensing will become too much of a headache for them to manage, and they will look to offload those tasks to the vendors themselves. 

VMware has already realized this trend and changed its licensing models for almost all of its management products, except for vCenter Server. I foresee that this will expand in the not-too-distant future, and ESX/ESXi hosts will move over to a per-VM licensing model as well.

Greg Shields, Concentrated Technology

No, traditional models aren't sufficient. That said, Microsoft's Virtual Desktop Access (VDA) licensing update last year was a step in the right direction.  With VDA, Windows licensing for virtual desktop infrastructure (VDI) environments essentially becomes a subscription model: either pay for Software Assurance, or pay an annual per-device cost.

The fundamental disconnect with VDI licensing is within Microsoft itself. There, an organizational apprehension to per-user licensing prevents the company from making what is really the right decision. In a recent article I wrote, “Microsoft has never been a company that looks kindly on per-user licensing. Operating systems being what they are, this historical aversion makes sense.”

Even so, that glorious future of per-user licensing smells close at hand. Microsoft's VDA language has a per-user feel, even as it's basically a per-device license. The future may hold big changes in this space, just as soon as Microsoft can wrap their arms around its monetization.

Eric Siebert, Boston Market

Absolutely not. Some application vendors have gotten the memo that virtualization is popular and here to stay, and they have adjusted their licensing models accordingly. But there are many that have not yet done so. Licensing models based on traditional physical server environments just don't work well in virtual environments.

Virtual machine (VM) hardware is not the same as physical host hardware. A VM only can use the resources assigned to it, regardless of the resource capacity that the host has. As a result, licensing by the physical hardware configuration punishes customers for using virtualization. A VM should only have to be licensed for the resources assigned to it.

VMs are dynamic in nature and can move from host to host and from datastore to datastore. Since a VM is encapsulated, the underlying host hardware is largely irrelevant and will frequently change. What's important is what is inside the VM and not what's outside of it.

Vendors that are slow to change their licensing models to be virtualization-friendly risk losing customers, who may switch to a competitor that gets the whole virtualization thing.

Next Steps

The future of software licenses in a virtual world

Software license agreements aren't made to be broken

Software licensing challenges

This was last published in April 2011

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