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April 21, 2006 4:00 AM PDT

Perspective: Microsoft and the looming storm over virtualization

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The gathering consensus among the tech cognoscenti is that virtualization, a technology born on mainframes, is inevitably going to sweep the IT world. But they also assume that Microsoft will be content to watch this trend unfold with arms akimbo.

I'm not ready to take that bet just yet.

Virtualization allows multiple operating systems to run virtually on a single machine. I hate the term, but it gets to the meat of the matter. So it is that you can have several "virtual machines" carrying out separate tasks on a single computer, thus reducing the amount of space a business needs to run its daily computing jobs.

VMware is by far the No. 1 virtualization software seller. Meanwhile, an open-source virtualization project called Xen, which began at England's Cambridge University, has picked up several big-name endorsements. (And Microsoft offers its own Virtual Server and Virtual PC products as well.)

Grudgingly or not, Microsoft has accounted for this nascent change in IT tastes by modifying its licensing agreements.

Grudgingly or not, Microsoft has accounted for this nascent change in IT tastes by modifying its licensing agreements. Windows Server 2003 Enterprise Edition lets users pay for one license to run four copies of Windows. Also, the Longhorn (now Vista) Server Datacenter Edition will allow users to run as many as they want--and Microsoft might well debut that pricing option sooner with Windows Server 2003.

Good as far as that goes, but IT managers have enough on their plates without also needing to count how many copies of Windows run on each server. Also, there's the price issue. Unless you opt for one of the enterprise packages, Microsoft still requires a license for each copy of Windows. And tracking Windows licenses summons up an even uglier prospect when you imagine new virtual machines popping in and out of existence as administrators (or even computers themselves!) respond to changing demands.

My libertarian friends out there will argue that software companies can do anything they want with their licensing and pricing policies. As long as customers see the licensing rules as logical, fair, not arbitrary, what's there to complain about? But we're not talking about just any software company. A key difference here is that Microsoft has been found by a court to be a predatory monopolist. Does its insistence on charging for each and every virtual window constitute a violation of the antitrust laws?

As far as I know this has never been challenged in a court. But could it?

The last time Silicon Valley went down this road, it came away with nothing to show. Sure, David Boies, the government's lead prosecutor, made mincemeat of every Microsoft big shot dumb enough to testify. But the most serious charges in the antitrust case got overturned on appeal.

Zip it. Now, pay me
Microsoft wants to get paid by VMware (or other virtualization software product) users for each copy of Windows that runs on each Virtual VMware machine. Fair enough--since that's written in black and white on the company's end user license agreement (though details of Microsoft licensing in these scenarios reportedly vary).

But customers will argue that one license per computer is enough--or at least it was before we entered the virtual age. Chafing under the current restrictions, the virtualization crowd naturally believes they should be able to pay for one copy of Windows, thus freeing customers to subdivide it into as many partitions as they like. One industry executive believes Microsoft would immeasurably help its own self-interest by reversing course.

"It would open new usage scenarios and actually increase license revenues to Microsoft, while decreasing cost per used/useful computing unit for the customers," said the executive, who asked to remain unidentified. "If they try to charge for each (virtual environment), customers will resist and push more strongly to the Red Hat and Suse platforms, which will be far less expensive."

Maybe but it sounds like wishful thinking. Last time I checked Microsoft was not in the philanthropy racket. Any company that tries to get out of paying for the full costs of virtualization will find itself on the receiving end of a sweet lawsuit, courtesy of Bill Gates & Co.

Biography
Charles Cooper is CNET News.com's executive editor of commentary.

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virtualization, licensing agreement, copy, virtual machine, VMware

Add a Comment (Log in or register) 5 comments
You're talking about licensing consolidation
by MattLPMP April 21, 2006 6:33 AM PDT
Although the argument has some merit regarding computing units, you're blithely ignoring that virtualization is a hardware consolidation strategy, not a license consolidation strategy. If I can migrate six boxes into a single server running five VMs, why shouldn't I have to pay for the accessibility of six servers? I have already reaped my dual-core benefit (which you failed to mention), and taken tens of thousands of dollars worth of hardware (and future upgrades, and warranties) off the books.
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What About Single OS Virtualization
by kod10 April 22, 2006 10:16 AM PDT
SWSoft's Virtuozo Windows (or Containers on Sun systems) only virtualizes or partitions one Windows copy per server - licensing for this technology seems to be much less complex and much less expensive
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I'm a Windows guy, but...
by abogey April 23, 2006 7:04 PM PDT
If Microsoft is not 'fair' in how it handles licenses for virtual machines I believe they will drive many users to alternatives like Linux.
Reply to this comment
I'm a Windows guy, but...
by abogey April 23, 2006 7:04 PM PDT
If Microsoft is not 'fair' in how it handles licenses for virtual machines I believe they will drive many users to alternatives like Linux.
Reply to this comment
Why multiple instances of Windows?
by vladwiel April 26, 2006 6:29 AM PDT
I'm sorry if this is a dumb question, but why would one want to run multiple copies of Windows on a single machine?? I understand the benefits of virtualization as it applies to running different OS's on a single box, or an OS that doesn't run natively on this type of hardware - but if why multiple instances of the same OS?
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