Can You Cash In with Virtualization Licensing?
The virtualization locomotive just keeps on coming, and Microsoft has laid new tracks for its licensing.
Interested in jumping onto the virtualization bandwagon but still have concerns
about the licensing implications? You're not alone. Microsoft's policies on
licensing in virtualization environments are complex, to say the least -- but
times are changing.
Over the last year, the Redmond, Wash., giant has worked to provide much more
clarity around virtualization in general, and unveiled a set of licensing policy
revisions that, in the end, could be a big boon to your organization's pocketbook.
Microsoft's new rules should help companies deal with the unintended -- and
somewhat ironic -- consequences of going virtual: the immediate explosion of
new server systems and the associated increase in total license costs.
Herein lies the problem. In the old way of managing a network, startup barriers
for adding servers were relatively high: purchasing hardware, OSes and software;
waiting for delivery, racking-and-stacking; and finally conducting a lengthy
and sometimes manual OS and application installation.
Fast-forward to the virtual way and things are much easier. Need a new server?
How about a copy, paste and rename? So you add them in droves and then wonder
where all these additional licenses came from. No fun.
Taming the Growing Beast
To combat this problem and other uncertainties associated with licensing and
virtual systems, Microsoft has released a policy update titled, "Licensing
Microsoft Server Products with Microsoft Virtual Server R2 and Other Virtual
Machine Technologies." This document was released to clarify Microsoft's
definition of a virtual machine and announce additional support for licensing
in virtualized environments. The policy revision revealed a number of changes
to how running physical and virtual instances are counted against a business'
In the end, it's
the return on investment that will drive the conversion to
a virtualized infrastructure. In a simplistic example, let's
assume a company needs to roll out 100 Windows Server 2003
R2 Standard Edition systems, all of which are candidates for
virtualization. List price for R2 Standard Edition approximates
$725 per server with no included CALs. The total price for
the additional deployment will reach $72,500 for the operating
system licenses alone.
But because there's not always a 4:1 compression of virtual
machines to physical machines, and because virtual instances
are not the same as physical instances, the licensing math
can get a little complicated. From a conservative performance
standpoint, it is realistic to assume an 8:1 or better compression
of virtual machines onto physical machines. In the 8:1 case,
a purchase of 25 Enterprise Edition licenses will be required
to obtain the 100 necessary virtual licenses. In your network
environment, you may only deploy 13 servers to host the 100
virtual machines, but an excess of 12 physical licenses remain
for other purposes. See Table 1 below for how physical and
virtual licenses stack up.
List price for Enterprise Edition approximates $2,300 per
server with no included CALs. Looking from a financial perspective
-- even if our sample deployment only requires the functionality
of Standard Edition -- an all-virtual rollout on Enterprise
Edition will cost $57,500, minus the sunk cost of the 12 excess
licenses that can be used for other purposes, for a total
savings of $15,000. Additional savings on power, cooling and
deployment costs also factor into the savings.
Bottom line? How you implement virtualization will dictate how much you save.
Plenty of savings are available if the correct distribution of resources is
engineered for per-processor applications. However, for those who haven't adopted
the most recent versions of Microsoft software, many businesses are looking
at potentially costly upgrades before they can enjoy those benefits.
For versions of Windows prior to Microsoft Windows Server 2003 R2, any running
physical or virtual instance of the operating system would count against available
software licensing limits. If you have 10 licenses for Windows Server 2003,
you can run 10 copies of it either on a physical machine or virtually using
Table 1. Buy one get four free. That's one physical and four
virtual and no more.
Though this is essentially no change to the established practice for OS licensing,
one useful change now grants the ability to store copies of running virtual
machines on a file server for backup and disaster recovery purposes. This new
benefit makes fully legal the process of creating full OS snapshots of production
systems and storing them on tape or on file servers for emergency purposes.
The game changes, however, with Windows Server 2003 R2 Enterprise and Datacenter
Edition. In what appears aimed at enticing customers to upgrade from R2 Standard
Edition to R2 Enterprise Edition, Microsoft grants users of the most recent
server operating system version four additional virtual OS instances for every
licensed physical instance. The text of these "Expanded Use Rights"
for R2 reads, "Each software license allows you to run, at any one time,
one instance of the server software in a physical OS environment and up to four
instances of the server software in virtual OS environments on a particular
server." If you're one of the few who run Datacenter Edition, you're bumped
to an unlimited number of virtual servers on a single physical server.
It's important to note that by leveraging Microsoft's "downgrade rights"
clause, an organization is allowed to run a previous version of the software
in place of the R2 version.
Is that All?
The changes don't stop with the operating system. Licensing for some of the
more expensive per-processor Microsoft servers like SQL Server 2005, ISA Server
2004 and BizTalk Server 2004 is also updated to include virtualization verbiage.
For the most recent versions of these servers, software inside a virtual environment
is licensed based on the number of virtual processors rather than the number
of physical processors on the server. This limitation holds true no matter if
the number of virtual processors is greater or fewer than the number of physical
processors on that server. This can have a substantial impact in one of two
ways on how these servers are deployed in a virtual environment.
For the first, remember that system virtualization tools allow for the concatenation
of multiple physical machines onto the same server. As an example, imagine four
two-processor servers are virtualized onto a single four-processor host. If
each virtual server is configured to use two processors, then the total number
of virtual processors on that physical host is eight.
According to Microsoft's updated policies, eight per-processor licenses would
need to be purchased for the Microsoft servers hosted on those virtual systems.
Therefore, although a savings in Windows licenses is realized by aggregating
physical servers onto virtual ones, no economies are gained for the licenses
associated with SQL, ISA and other servers that may be installed on top of that
Secondly, for some Windows servers, virtualization's improved rollout and resource
assignment capabilities may help. As was discussed before, in the old paradigm
(one service per physical server) barriers to change were difficult. Because
purchasing additional hardware for existing servers is time-consuming and costly,
new servers added to the environment are typically purchased with the greatest
number of processors and RAM available for the chassis type.
Once virtualized, server resource use can be more granularly defined. If you
find out after deployment that two-processors are overkill on your SQL server,
then you can reconfigure the virtual machine to run on only one. Don't need
six gigabytes of RAM? Reconfigure for two and reboot.
This benefit of virtualization means that Windows servers previously over-spec'ed
at the time of purchase can now be right-sized for greater efficiency of available
hardware resources. If businesses convert their four-processor instances to
two-processor and/or two-processor to one-processor, they stand to realize a
halving of their licensing costs. Your mileage may vary.
DR on the Cheap
Inactive instances of Microsoft products, like those running on a failover server
at a disaster recovery site, do not require extra licensing. For Paul Hicks,
IT director for Eskanos and Adler, a commercial law firm headquartered in Concord,
Calif., this perk played a role in his decision to migrate to virtual infrastructure.
"While the primary drivers for our enterprise virtualization project were
certainly the enhanced high availability and DR capabilities," Hicks explains,
"the ability to have virtual machines running at our DR site without requiring
additional Microsoft licensing was economically attractive."
Calling All CALs
Client Access Licenses (CALs) are also affected by virtualization. According
to the new rules, each CAL allows any number of OS environments on a particular
client device -- virtual or physical -- to access the server software. Separate
CALs for physical and virtual machines on the same physical device are not necessary.
This change holds true for Windows servers like Exchange Server 2003, SQL Server
2005 and Windows Server 2003, as well as the associated TSCALs for connecting
to Terminal Services.
Fewer gets you more with the five-for-one Enterprise Edition deal.
Users of VMware Workstation, VMware ACE and Microsoft Virtual PC -- virtualization
applications that operate at the desktop level -- enjoy the greatest benefit
from this change.
For example, should a company wish to provide multiple desktop environments
to its user base via one of these tools, they are not required to purchase additional
CALs for those OSes' connections to file servers, mail servers and terminal
servers. This clarification can mean a significant reduction in rollout costs
to support multiple desktop environments.
This ability to expand systems into the virtual space is great, but only if
it's supported by the manufacturer. In tandem with the clarification on licensing,
Microsoft has updated its support policy for Microsoft software running in non-Microsoft
hardware virtualization software like VMware's ESX Server. This Knowledge
Base article discusses how Microsoft support will handle issues when the
operating system in question lies in a virtualization environment.
According to the document, businesses with a Microsoft Premier-level support
agreement get special dispensation when calling in support cases. "Microsoft
will use commercially reasonable efforts to investigate potential issues with
Microsoft software running in conjunction with non-Microsoft hardware virtualization
software," reads the article. A problem called in to Microsoft support
may need to be replicated outside the virtualization environment, but for Premier
customers it will not necessarily be required.
Non-premier customers beware: You don't qualify for the same level of virtualization
support. "For Microsoft customers who do not have a Premier-level support
agreement, Microsoft will require the issue to be reproduced independently from
the non-Microsoft hardware virtualization software."
With either support level, Microsoft relates the obvious disclaimer that they
do not provide any warranty associated with running their product on top of
that of another company.