Microsoft and virtualization licensing

For a couple of months now, we’ve been trying to sort through the mess that is Microsoft’s licensing for the virtual world.  Our research culminated today with a meeting with several Microsoft employees about the status of licensing and the product portfolio that Microsoft is offering.  The biggest issue we’ve had is getting straight answers concerning licensing applied towards a competitor’s virtualization product.  This is a complex issue to try and explain, so bear with me…

I should preface that we have a Microsoft Enterprise Agreement (EA) for our licensing.  This came about several years ago to mitigate auditing and the necessity to keep up with licenses at a granular level within our company.   For a company of our size, this could be one person’s full time job – just to handle license compliance on an ongoing basis.  The EA allows us the ability to add both desktops and servers throughout the year while not needing to purchase anything.  At the end of the year, we perform a true up and pay for the number of new servers or desktops deployed.   It also gives us access to volume license keys which keeps things nice and tidy on the deployment side.  For auditing, we have SMS and other tools to help us know how many devices we’ve added.  

Please note, the information presented here may be slanted for EA customers.  

The take away (as presented to us – your answers may vary by Microsoft rep) was that there are three ways to license for virtual machines in Windows.  With a Windows Server Standard license, you are allowed 1 physical plus 1 VM in Windows 2008.  In Windows 2003, you are allowed on physical server license.  With a Windows Server Enterprise license, you are allowed 1 physical plus 4 VMs in Windows 2008 and 2003.  Microsoft more recently introduced the Datacenter edition of Windows, which is more taylored for virtual environments.  The Windows Server Datacenter edition is licensed on a per-processor model (a la VMware) and allows for an unlimited number of virtual machines to be run on the hardware.  For our existing EA, we can step-up from Standard and Enterprise copies to Datacenter edition.  One copy of Standard or Enterprise equates to a single processor of Datacenter edition in the conversion process.  

Datacenter edition doesn’t have a restriction on how long an instance of Windows must run on the hardware before it can be legally moved.  Microsoft had imposed a restriction on the Enterprise version that an instance of Windows must run on a particular set of hardware for 120 or 180 days before it may be moved, however, we were informed that they have now removed that restriction, also.  

The licensing outlined above is agnostic to the hypervisor, so this information should apply for EA customers using any hypervisor – VMware, Hyper-V or Xenserver.  For our needs, we’re currently planning to continue with Enterprise for some of our VMware clusters and add Datacenter for the servers in at least one of our clusters.  We utilize VMware as a redundancy tool in our burbs and a couple of those clusters are lightly loaded with VMs – less than 4 per host.  So in those locations, Enterprise licenses to account for the virtual machines makes economic sense.  At our price point, the Enterprise license is roughly the same cost as a Datacenter edition one-processor license.  We’d have to purchase two processors for each of our hosts.  

In addition to our ESX licensing, we have been exploring deploying thin clients for our users and moving to virtualized desktops.  Microsoft has created the Vista Enterprise Centralized Desktop (VECD) program to accommodate virtualized desktops.  The VECD is available as part of the Microsoft Desktop Optimization Pack (MDOP) and also directly as VECD licensing for non-qualified desktop products (thin clients, etc. that aren’t capable of running full versions of  Windows XP or Vista).  In the add-on package, VECD allows users to attach to virtual desktops for applications that may not run in their current OS – for instance, applications that won’t run in Vista can be run in an XP virtual desktop that the user connects to.  

One offering that we were introduced to was Kidaro, which is a Microsoft aquistion.  It basically allows a virtual desktop (Virtual PC only, I think) to be packaged for applications that won’t run in the host OS.  It strips away the task bar, start menu and makes it look like a desktop application, even though it runs in a virtual machine.  Basically, the same thing Citrix Presentation Server does for Terminal Services, this does for Virtual PC.  That is compelling, particually if Microsoft can leverage this towards a centralized desktop farm in the datacenter.  

The MDOP includes App-V, which is the rebranding of the Softricity aquisition.  It allows for applications to be packaged and streamed from a centralized server and run on a virtual layer.  This eliminates DLL conflicts and allows otherwise incompatible softwares to run simultaneously on the same desktop.  MDOP packages several other features along with it at a relatively low per-user, per-year price.

VECD in its stand-alone offering allows for what we need in our enterprise.  It allows for non-qualified desktop devices to connect to virtualized desktops run from a datacenter.  The VECD is licensed based on the number of end-point devices.  You may run an unlimited number of virtual desktops for different needs and user groups on the backend infrastructure.  The price point for VECD is lower than purchasing a license of Vista/XP for a qualified desktop device.  VECD seems to provide us with the most flexiblity for running virtual desktops.

One thing not covered during the meeting, but relayed in an earlier call with our sales partner, was the ability to run Vista/XP desktop licenses on virtual desktops – and that’s a no-no.  The Vista/XP license does not allow for things like VMotion and moving virtual machines between physical hosts.  This licensing still has the restrictions that the OS must be tied to particular piece of hardware for 120 or 180 days (can’t remember which).   So, that restriction in play, VECD seems to be the only sanctioned way to run virtualized Windows desktops. 

All in all, the meeting was extemely interesting.  While it was called to answer our licensing issues, the reps took the opportunity to instead make a sales pitch for the entire virtualization product line.  It was a little over the top and it was hard to be thrashed with the same information both at VMworld and again in my own conference room.