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Microsoft Acts Quickly on License Reform – but only when it is in the Best Interest of the Customer… and Microsoft

The CALs Licensing Saga from Last Month

About a month ago, we blogged about a burdensome expense Microsoft imposed on its customers running a non Windows Server 2008 VM on Hyper-V. Excerpt from our blog:

Here’s the scenario: Say someone’s got existing Windows Server 2003 licenses (non-OEM versions) and CALs. He wants to use these licenses and CALs to run a Windows Server 2003 virtual machine. Seems pretty straight forward – as a 2003 CAL is being used to access a Windows Server 2003 environment – and a good way to save money since he’s already paid for the Windows Server 2003 licenses and CALs – right?

[Microsoft licensing doc] seems to say is that, if I want this Windows Server 2003 virtual machine to run on the Hyper-V version that comes with one of the Windows Server 2008 editions, then I must upgrade all of my Windows Server 2003 CALs to Windows Server 2008 CALs. List price for a Windows Server 2008 Client CAL works out to be about $40 a CAL.

Note: An astute reader pointed out that this issue applied not just to Windows Server 2003 VMs, but also to Linux VMs running on Hyper-V – basically to any non Windows Server 2008 VM.

Well Done Microsoft on Making a Customer-friendly Change

Well, last week, less than a month after our post, Microsoft changed this customer-unfriendly CALs policy. IDC also reported on this change – click here to read IDC’s summary (requires a free IDC account registration).

Here’s the key update straight from Microsoft’s documentation: Microsoft Volume Licensing Brief “Licensing Windows Server 2008 to Run with Virtualization Technologies, January 2009” – Page 7 (highlights added):


This is good news for Microsoft customers (and proof that customers can influence Microsoft policies)! Why should they have to pay for Windows Server 2008 CALs when their application is running in a Windows Server 2003 VM and the customer already paid for Windows Server 2003 CALs? Or why should they buy Windows Server 2008 CALs for a Linux web server running on Hyper-V? From this regard, we applaud this move by Microsoft because it does the right thing for the customer.

But There’s Much More to Be Done

But we do continue to see another disturbing trend… (you knew this was coming), namely that Microsoft is quick to make changes when the change benefits Microsoft, but it seems to delay addressing its licensing and support policies that obstruct a organization’s full use of virtualization solutions when a change to that policy doesn’t help Microsoft’s own cause.

IDC sums this up nicely in its own brief – click here to read (requires a free IDC account registration)

Of course, [Microsoft] is more motivated to flex its policies when it benefits Microsoft products as much as, or more than, competitive products, which is increasingly the case as Microsoft’s presence in the virtualization software space continues to ramp up.

You see, Microsoft had to make the change to its CALs policy to remove a Hyper-V disadvantage compared to other virtualization vendors like VMware, Citrix, Novell, etc. On all of these other platforms, a customer could take an existing (paid for) Windows Server 2003 license and CAL and run it on VMware / Citrix / Novell / others without having to pay for a new Windows Server 2008 CAL. If Microsoft had not made this change, Hyper-V would have been left at a distinct cost disadvantage to every other virtualization platform.

But on other customer unfriendly licensing issues, like linking all operating system licenses to the physical server, Microsoft has been slow to act even though customers continue to ask for it – see Chris Wolf’s recent blog on how his clients (especially service providers) continue to ask for this. Based on feedback from VMware customers running Windows applications, here are three Microsoft licensing and support changes that would greatly help customers get the full benefits of virtualization:

  • Provide customers an option for all Microsoft OS and application licenses to be assigned to the virtual instance (instead of physical hosts) so customers can take full advantage of VM mobility.
  • Allow third parties (ex. ISVs) to have an ability to distribute demo and production VMDK-based Windows virtual appliances so customers can deploy them in their virtual datacenters.
  • Lift restrictions in VECD where customers must pay a significant premium for virtualized desktops in exchange for “expanded license grants” that they do not necessarily need (or want). Currently, VECD works for a limited number of sophisticated customers, but makes the use of Microsoft products in virtual desktops very expensive for customers seeking simple, uniform deployment of consistent desktop environments.

We’ll continue to work with Microsoft on these issues, but it also helps when Microsoft hears directly from you. Microsoft’s change in application licensing to allow greater benefit in a virtual environment was a direct result of customers providing direct feedback to Microsoft – it does work! Please write in and comment on licensing and/or support issue that you’d like to see Microsoft improve – at least within the context of virtualization. Let’s continue this dialog with Microsoft – tell them what you’d like to see happen.

One thought on “Microsoft Acts Quickly on License Reform – but only when it is in the Best Interest of the Customer… and Microsoft

  1. Joannah

    I recently came across your blog and have been reading along. I thought I would leave my first comment. I don’t know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

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