Microsoft licensing in a virtual environment is a totally different ballgame than it is in a physical server environment. Many organizations do not fully understand the requirements to keep things legal in Microsoft’s eyes.
To understand Microsoft licensing in a virtual environment we must first start with knowing how it is licensed in a physical environment first. Before we start I should also state that we are talking only about licensing under the Open Licensing programs, NOT OEM. Microsoft’s EULA is written in such a way that a license has a direct relationship with a piece of hardware. Meaning that when you buy a shiny new server and put Windows on it you must buy a license for that server, and when that server dies you can then replace it with a new server and transfer that licenses to the new server. When you transfer the license it is then “stuck” to that piece of hardware for at least 90 days before it can be moved again. As you can see back in the day when virtualization was not heard of licensing was not a huge deal because if a server died chances are that it ran for more then 90 days before dieing, and its replacement server probably lasted at least another 90.
Where that comes back to bite us is with virtualization, specifically vMotion, DRS, and HA in the VMware world. Virtualization has made it very easy to move a Windows instance from one physical server to another, so now if you have any of the above mentioned features there is no way to guarantee that you have only moved your Windows instances once every 90 days. (I guess you could track your event logs and figure it out… but that would just be a pain)
The key point so far is that a Windows license if for an instance of Windows to run on a piece of hardware, and that license is locked to a piece of hardware for no less then 90 days before being transferred. So because of this we can safely say that each instance of Windows requires a Windows license on each physical server that it *could* run on. So even if its not right now, or wasn’t before, but could be in the future…. then it needs a licenses.
Right about now is probably where your thinking that there is no way in heck that this could be managed. And you are thinking correctly, at least if your still thinking about Windows Standard licenses. However we haven’t talked about Windows Enterprise or Datacenter editions yet.
Before virtualization you really only needed to buy Windows Enterprise or Datacenter for very special use cases, because 95% of the time Windows Standard would get you by just fine. But because of additional instance entitlements that come with these licenses they are a great fit for virtualization. Let me explain a little more, Windows Standard allows us to run one instance of Windows per license; Windows Enterprise allows us to run 4 instances per license (as long as they are on the same piece of hardware); and Windows Datacenter allows us to run an UNLIMITED NUMBER of instances on a piece of hardware.
So when your looking over a quote for a new virtualization project and you see a few Windows Datacenter licenses on there don’t be alarmed, because down the road it will save you money, time, and lots of headaches. Microsoft also has an Excel spreadsheet that you can get that will show you the most cost effective options for licensing your virtual environment and encourage you to check that out (Google: Microsoft virtualization calculator).
The most important take away from this post is this: if you have standard licenses now, and your new virtualization cluster has the ability to migrate VM’s between hardware nodes (no matter what vendor of hypervisor it is) you WILL need additional Microsoft Windows licensing. To make sure you stay legal I would encourage you to work with a local VAR that has done virtualization migration projects in the past.