Microsoft Licensing in a Virtual World

I have thought about touching this topic several times, and each time I start to write the post I find myself stopping. I think it’s mostly because this debate is hard for some people to get their hands around, and even when they do they are just pissed off about it. I must say I agree a little bit, because the way Microsoft products are licensed it really does make you want to tell them to stick it… but the downside is that most companies are not willing to go 100% open source with their software (or even just non-Microsoft) so until that changes I figured I better write the article.

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.



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4 Responses to "Microsoft Licensing in a Virtual World"

  1. What about Office 2010 in VDI projects, do you still need to purchase additional licenses if you already own your regular perpetual ones?

    Thanks for the great blog!

  2. In order to do Office in a VDI environment you will need open licenses… they cannot be OEM. And for best results you will need a KMS server installed on the network somewhere so that Office instances can be activated on the fly as new desktop images are created

  3. Your best bet is going to be to call Microsoft or your software reseller, but here is what I found:

    These answers are from: This Microsoft SBS licensing PDF

    Q. What are the licensing rights for the Windows Server in SBS 2011 Premium Add-on? Do you
    allow running instances in a virtual operating system environment?
    A. Yes. You may run one instance of the operating system in a physical or virtual machine operating
    system environment. If you run the instance in a virtual machine, you may run an additional instance of
    the operating system on a physical machine in order to run hardware virtualization software; provide
    hardware virtualization services; or run software to manage and service operating system environments
    on the licensed server.
    Q. What if I have SBS 2011 OEM Licensing, can I run this in a Virtual OSE?
    A. Yes. For SBS 2011 Standard and SBS 2011 Essentials, you may run one instance of the server software in
    a virtual operating system environment but only on the OEM server which the SBS license is assigned. For
    SBS 2011 Premium Add-on, you may run one instance of the operating system in a physical or virtual
    machine operating system environment but only on the OEM server which the SBS license is assigned.

    My conclusion is that if you want to run SBS on a two node cluster (legally) then you are probably going to want to purchase a second license of SBS, because it is hooked to the physical hardware. Because it looks like there are provisions to run a second instance of SBS, but only on a physical server to provide Hyper-V capabilities.

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