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Virtualization technology licensing: Everything you need to know

Virtualization technology licensing is a convoluted process, even for IT veterans. This guide explains hypervisor pricing structures and how to obtain flexible contract terms.


I. Overview of virtualization technology licensing
II. Virtualization technology licensing for VMware
III. Virtualization technology licensing for Hyper-V
IV. Virtualization technology licensing for XenServer



Countless IT budgets have been slashed because of the economic downturn. In 2010, however, shops' investment in virtualization technologies remained strong because of the technology's high returns, according to TechTarget's annual Data Center Decisions Purchasing Intentions survey. This year nearly 60% of data centers expanded virtualization deployments.

When deploying virtual infrastructures, IT shops have to weigh the numerous virtualization technology licensing structures against their needs. The process can be difficult because of the flexibility and fluidity that virtualization brings to data centers. Unlike stagnant physical infrastructures, virtual environments allow servers, operating systems and applications to instantaneously migrate to different physical machines -- all of which complicates virtualization licensing.

Making matters worse, each vendor has a different licensing approach. Some offer free hypervisors but charge for management tools, while others charge by the physical processor or number of virtual machines (VMs). The resources in this virtualization technology licensing and pricing guide can simplify the virtualization-licensing process by explaining the following:

  • how to negotiate the most favorable virtualization contract terms; and
  • licensing guidelines for the top three virtualization vendors.

This section provides an overview of the various pricing models for hypervisors, pointers on licensing negotiations and advice on contending with troublesome software audits.

Virtualization comparison: Licensing and pricing guide
This virtualization comparison guide outlines the licensing and pricing models of the top hypervisor vendors, according to market share: VMware, Microsoft and Citrix Systems Inc. These vendors provide not only different features and management capabilities but also licensing and support approaches. Your first priority in choosing a virtualization vendor is to find the combination of features and pricing that fits your company's needs.

10 tips for renegotiating your virtualization licensing contracts
In times of economic turmoil, companies must find new ways to save money. But most don't consider renegotiating virtualization technology licensing contracts, according to a recent survey. Renegotiating a virtualization contract can help you solidify better pricing.

Five ways to negotiate software virtualization licensing terms
More software vendors have included virtualization-friendly licensing options in their products. The challenge for IT departments, however, is finding a licensing tier that enables virtual environment mobility and is within budget. Monitoring support contracts and retrofitting existing licensing agreement are just two ways to gain more favorable virtualization licensing terms from software vendors.

Virtualization creates hurdles for software license audits
As virtualization technology and data centers mature, maintaining licensing compliance becomes more complicated. Increasingly, vendors now conduct software licensing audits to protect customers' intellectual property. This process can be painful for users, but there are tactics to alleviate the problems of a licensing audit.

Microsoft licensing still impedes VM mobility
Microsoft licensing policies for the Windows operating system have posed obstacles for VMware and XenServer shops. Microsoft ties software licenses to physical servers, which impedes the live migration features in most virtual environments. While Microsoft has options that allow for VM mobility, some want the company to update its licensing agreements.



VMware has raised user ire over licensing policies. After the release of vSphere 4, for example, VMware planned to eliminate the Enterprise Edition pricing option. But customers resisted being forced to upgrade to higher pricing tiers to maintain the same features and functionality. Ultimately, VMware relented, and Enterprise Edition is still available.

Currently, VMware offers four vSphere licensing options for small businesses and six pricing tiers for medium-sized and enterprise companies.

With the launch of vSphere 4.1, VMware overhauled the pricing structure for most of its management products. Now customers are charged on a per-VM basis instead of per number of processors on their hosts.

VMware adopts per-VM licensing, pricing
With the release of vSphere 4.1, VMware unveiled a new per-VM licensing and pricing model for most of its management tools. The shift from per-processor licensing and pricing affects vCenter Capacity IQ, vCenter AppSpeed, vCenter Site Recovery Manager and the Ionix management line. VMware says that this pricing structure offers users greater flexibility and reduce costs, but users are skeptical about the change.

VMware users debate per-VM licensing
Some users appreciate VMware's shift to per-VM licensing. Under this model, customers won't pay for usage spikes that occur throughout a year. But users who have migrated to virtualization for server consolidation reasons are less than enthused about VMware's new pricing plan.

No silver bullet for VMware licensing procurement
Most medium-sized and large enterprises buy licenses directly from VMware, but it's also possible to do some from original equipment manufacturers and resellers. Each VMware licensing procurement option has strengths and weaknesses.

Per-processor licensing holds up VMware virtualization push
Licensing costs prevent many IT shops from achieving 100% virtualization. Unfortunately, numerous application vendors haven't amended their licensing agreements to account for virtual environments. As a result, it's not feasible to migrate certain resource-intensive workloads that are ideal for virtualization because of cost concerns.

VMware volume purchasing program a boon to SMBs
With the release of vSphere 4.1, VMware revamped its Volume Purchasing Program. The new rewards program provides users with cumulative volume discounts. Additionally, customers can now view their accounts through a Web portal, which allows them to see information that was once privy to channel partners.

VMware reverses course on vSphere Enterprise Edition
Originally, VMware planned to phase out vSphere Enterprise Edition in 2009. This decision would have forced countless Enterprise Edition customers to pay for the pricier Enterprise Plus Edition. But at the behest of its user base, VMware kept the Enterprise Edition licensing tier.

How to upgrade to vSphere -- and save money in the process
A comprehensive purchasing plan for VMware licenses is critical, because miscalculations can lead to expensive penalties. Before upgrading to vSphere, you need to consider several factors to achieve the most favorable virtualization technology licensing plan.



Microsoft tackles virtualization licensing differently than VMware. The Microsoft Hyper-V R2 hypervisor is technically free with the purchase of Windows Server 2008 R2. But to take full advantage of advanced features, such as Live Migration, users must purchase the System Center Virtual Machine Manager and System Center Operations Manager management tools.

This section of the virtualization technology licensing guide provides a detailed look at Hyper-V licensing and pricing and how to select the proper Microsoft licensing plan for your environment.

Microsoft Hyper-V pricing, licensing explained
The Microsoft Hyper-V pricing and licensing policies are more complicated than they first appear. Technically, the Hyper-V hypervisor is bundled with the Windows Server 2008 R2 at no extra cost. But to experience the true benefits of Hyper-V, you need to purchase additional software and licenses from Microsoft.

How Microsoft Windows Server licensing works in Hyper-V environments
There are nuances to Windows Server licensing that will help you save money. In certain configurations, for example, you can eliminate the need for Client Access Licenses. This trick is knowing how to take advantage of Microsoft's licensing and provisioning policies

How to make Hyper-V server virtualization licensing work for you
In certain cases, Microsoft offers attractive Hyper-V server virtualization licensing options for customers. These customers can benefit from virtualization and reduce the number of company-wide Windows licenses. The goal is to find the Hyper-V edition that best suits your environment.

Licensing virtual machines: Windows Server 2008 Standard, Enterprise or Datacenter edition?
Microsoft's licensing policies for Windows Server 2008 already confound some users, and virtualization adds a layer of complexity to an already convoluted licensing strategy. Luckily, this tip provides real-world examples of how to properly license Windows Server 2008 in virtual environments that use live migration and VMware's Fault Tolerance.



Recently, XenServer underwent a transformation. First, Citrix open-sourced its hypervisor code. Next, XenServer 5.6 added new features and pricing options. In the end, Citrix provides an attractive virtualization product that rivals VMware and Hyper-V, despite XenServer's smaller adoption base.

Citrix XenServer licensing, pricing explained
Even though XenServer is technically free, you need to pay for advanced features and management tools. At its core, though, XenServer's hypervisor and integrated management console can offer a solid virtualization experience to most data centers.

XenServer 5.6: Which edition is right for you?
The latest incarnation of XenServer, version 5.6, has four editions: free, advanced, enterprise and platinum. It also comes preconfigured with advanced features that were previously available only with the purchase of Citrix Essentials for XenServer. The new XenServer 5.6 editions provide users more options and flexibility, but the various configurations can be difficult to sift through.

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