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Microsoft Debuts Virtualization License Plan

Under new terms, customers can pay license fees for the number of processors the software will run on in virtual mode.

Microsoft is altering its licensing terms for Windows Server System software running on "virtual machine" servers. The company says the change will spur the adoption of virtualization practices by reducing its cost.

Virtualization improves server hardware utilization by allowing multiple processes to run on one server at the same time, effectively turning one underused server into multiple virtual machines. But Microsoft licenses its server software based on the number of processors in a hardware server, even if the software isn't always running on all processors, as often happens within virtual computing environments. And Microsoft execs acknowledge that some customers end up paying license fees for software that's often inactive.

Starting Dec.1, Microsoft will offer the option of licensing its server-based software, such as the SQL Server database, BizTalk Server, and Internet Security & Acceleration Server, based on the number of virtual processors on which the customer intends to run the software.

Under current licensing conditions, for example, a company purchasing SQL Server to run on an eight-processor server would have to buy an eight-processor license. Under the new scheme, if the customer planned to run SQL Server in virtual mode using only four processors and another Microsoft product on the other four processors, the customer would only need to buy a four-processor license for each product.

"The world wants to move to more self-managing, dynamic systems," says Andrew Lees, corporate VP of Microsoft's server and tools business. When asked how Microsoft can enforce the licensing plan and ensure that a customer with a four-processor license for a product doesn't run it on an eight-processor system, Lee says: "The same way we do today. We trust customers to do it."

While Lee would wouldn't speculate about whether the new licensing plan would decrease revenue for Microsoft, he said it would give customers more flexibility with their IT spending and believed that would ultimately boost Microsoft sales.

Microsoft also plans to allow customers to run four instances of Windows Server 2003 Release 2 Enterprise Edition, due out later this year, for every single-license of the operating system they buy. And users of the Longhorn version of Windows Server Datacenter, slated for release in 2007, will be able to run an unlimited number of instances of the software.

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