Microsoft drops virtualization licensing fees for Datacenter Edition

You can now buy a Microsoft Windows Server 2003 license that will allow you to run an unlimited number of virtualized guests for free.

A Datacenter Edition bulletin on Microsoft's Web site states that as of last Sunday, Oct. 1, 2006, new servers licensed with Microsoft Windows Server 2003 R2 Data Center Edition will be able to run an unlimited number of virtualized Windows Server instances.

To date, IT shops running virtualization software on their systems – be it Microsoft's Virtual Server 2005 R2 or VMware's ESX – have had to license individual "guest" operating systems running on top of the virtualization layer, at the cost of thousands of dollars per license.

This is good news for VMware users – they don't have to pay for or track usage of per-VM OS licenses.
Ilya Baimetov
Product ManagerSWsoft Inc

With Windows Server 2003 R2 Datacenter Edition's new unlimited virtualization feature, users no longer have to pay a licensing fee for individual virtualized guests.

"This is good news for VMware users – they don't have to pay for or track usage of per-VM OS licenses," blogged Ilya Baimetov, a product manager at SWsoft Inc., which makes the Virtuozzo virtualization platform. He added that this announcement was also "very good news for Virtuozzo users" as it would inspire users to explore Virtuozzo as a way to take advantage of the unlimited W2K3 licenses.

Also as part of the announcement, Microsoft announced that it will sell Datacenter Edition directly or through its resellers, for a per-processor fee of $2,999, plus Windows Server Client Access Licenses (CALs).

Traditionally, Datacenter Edition has only been available from OEMs as part of a system bundle targeted at extremely high-performance environments. Unlike Windows Server 2003 Standard and Enterprise Editions, Datacenter Edition supports symmetric multi-processing (SMP) from two-way on up to 64-way and up to 2 TB of RAM if running in 64-bit mode. Some of the vendors that have sold Datacenter Edition systems are Bull, Hewlett-Packard, NEC and Unisys.

But Datacenter Edition doesn't have to run on such a hefty system, said Al Gillen, research vice president for systems software at IDC in Framingham, Mass. "Conceivably, you could purchase Datacenter Edition and run it on a PC at home," Gillen said. "If you have enough virtual images running on it, it becomes cost-viable to buy this product."

Furthermore, virtualized guests running on the system need not run Datacenter Edition themselves – they can be running Standard or Enterprise Edition of Windows Server 2003.

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IDC's Gillen also confirmed that this licensing arrangement is not limited to shops running Microsoft Virtual Server as their underlying virtualization platform. They can apply it to VMware, Xen or Virtuozzo shops as well.

Microsoft had promised last year that it would remove licensing limitations on its forthcoming Longhorn server, but this announcement makes the move effective immediately, on a currently shipping server platform.

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