VMware criticizes Microsoft virtualization licensing

VMware contends that Microsoft is stalling the spread of virtualization with its licenses, but analysts said Microsoft isn't the only vendor whose licenses need to be overhauled.

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Microsoft is retarding the spread of virtualization with unfair, outmoded licensing practices for Windows Server 2003 and Vista operating systems, especially more sophisticated deployments that rely on VMware VMotion. At least, that's what VMware Inc. charged in a white paper posted on its Web site last week.

VMware further charges that these practices are not only unfair, but designed to discourage IT shops from using virtualization software that goes beyond Microsoft's own Virtual Server and Virtual PC.

Entitled "Microsoft Virtualization Licensing and Distribution Terms," the white paper lists several key grievances:

  • Support for running Windows in a VMware virtual machine (VM) is limited to "Premier customers"
  • Prohibitions against running or translating VMs are based on Microsoft's proprietary VHD (virtual hard disk) format to other virtualization platforms.
  • Licensing language restricts the use of VMware VMotion to move Windows Server VMs between physical hosts more than once every 90 days;
  • Restrictions against virtualizing Windows desktop operating systems, especially Vista, are achieved using a variety of techniques
  • Access to APIs that manage communication between Windows and the Longhorn hypervisor is prohibited for everyone except Microsoft's partner Novell.

"Microsoft does not have key virtual infrastructure capabilities (like VMotion), and they are making those either illegal or expensive for customers; Microsoft doesn't have virtual desktop offerings, so they are denying it to customers; and Microsoft is moving to control this new layer that sits on the hardware by forcing their specifications and APIs on the industry," VMware wrote.

VMotion non grata?

Arguably, VMware's most significant gripe may be what it called "Licensing Restrictions on Server Virtual Machine Mobility," in which Microsoft prohibits reassigning software licenses between hosts more frequently than every 90 days. How often a VM gets moved with VMotion and Distributed Resource Scheduler (DRS) depends on the customer environment, of course, "but it stands to reason that it would get moved more often than once every 90 days," said Srinivas Krishnamurti, VMware director of product management.

If true, this restriction may put a real damper on virtualization deployments, said Andi Mann, senior analyst at Enterprise Management Associates in Boulder, Colo. "The end game with virtualization is an incredibly dynamic IT infrastructure, and if there's something that is going to limit mobility and agility, then yes, that is going to be a problem," he said.

In the short term, VMware said this obscure license restriction will move "customers to pay Microsoft for additional Windows Server licenses or acquire new Windows Server Datacenter Edition licenses even if the customer is not increasing the net number of Windows Server instances that are being run." Windows Server Datacenter Edition allows unlimited licenses, sidestepping the need to reassign licenses, but it's only cost effective if you're running many virtual machines per host.

VMware's Krishnamurti said he was not aware of any specific incidents where Microsoft had taken customers to task for violating their volume license agreements, but he did say that several customers have expressed these concerns to VMware. "At the end of the day, enterprise customers are saying to us, 'We don't want to be in breach of our licensing terms," Krishnamurti said.

But analysts were quick to point out that Microsoft isn't the only software vendor whose licenses are guilty of this supposed sin.

"You could say the same thing about Oracle or Siebel," said John Enck, reseach vice president at Gartner Inc. in Stamford, Conn. "Virtually all software is licensed based on a physical host."

Gordon Haff, principal IT advisor with Illuminata Inc. in Nashua, N.H., believes it's just a matter of time before Microsoft is forced to adjust its licensing policies. "Unless everyone wakes up one day and decides that virtualization was a really bad idea, software licenses are going to have to change," Haff said.

But for now, "what we're seeing is that Microsoft hasn't adjusted its licensing terms for scenarios that Microsoft doesn't care about today," Haff said. "Microsoft doesn't care about virtual desktops; Microsoft doesn't care about moving virtual machines between different servers because it can't do that today." Just like other vendors, "they made a lot of money using the old license models, and they're not thrilled about having to change because they don't know the impact it will have, and they suspect it will be negative."

VHD, VDI arguments on target

Some of VMware's other points are well taken, said Chris Wolf, senior analyst with the Burton Group and co-author of Virtualization: From the Desktop to the Enterprise.

When it comes to virtual machine formats, for example, "VMware's stance is completely valid," Wolf said. "In theory, Microsoft's VHD format is open, but if you're not allowing other vendors to use it, it's not open. You're just sharing a proprietary format."

Wolf said he understands why Microsoft restricts VHDs to its own virtualization platform – "because if it runs on another platform, they have no way to control the licensing of that application." Ultimately, though, he thought the move would backfire.

"If I'm a developer, I'm going to want my development dollars to stretch as far as possible," Wolf said. Restricting VHDs to Microsoft Virtual Server will prompt developers to build appliances based on the unrestricted VMware-based .vmdk format. That's already happening, he said, pointing to the 400+ appliances available on VMware's site, compared with "the handful of VHD appliances on Microsoft's site, mostly from Microsoft itself."

Likewise, putting in place obstacles for IT managers to virtualize desktop operating systems "may slow down Vista adoption – at least among users that are more progressive," Wolf predicted.

With desktop virtualization, Microsoft does allows Vista Enterprise and Vista Ultimate to run in a VM, but the license only allows moving Vista between physical machines once, effectively eliminating the possibility of using VMotion to move VMs between hosts. Windows XP licensing has no such restrictions and may thus remain the OS of choice among desktop virtualization practitioners.

The never-ending story

How all this will end is an open question, but there's no doubt that the virtualization landscape is changing rapidly. In a response to a New York Times article, Software maker goes up against Microsoft, Microsoft's GM for virtualization Mike Neil blogged about how much Microsoft's licensing (among other things) has changed in the past couple of years.

Already, the company has moved from "installation" to "instance-based" licensing and has developed licenses for Windows Server 2003 and SQL Server 2005 that allow for unlimited virtualization. Going forward, "I'm sure licensing for virtualized environments will continue to evolve for us and the industry," Neil wrote.

VMware's paper may move things along even further, said Burton Group's Wolf. "It's an important paper that spells out exactly what Microsoft is doing." And while some of the accusations launched at Microsoft could be equally directed at other companies, "VMware is seeing if it can put some pressure on Microsoft to loosen some of those restrictions," he said.

Let us know what you think about the story; email: Alex Barrett, News Director

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