Microsoft Simplifies Windows Server Licensing

By Peter Galli  |  Posted 2005-10-10 Print this article Print

In its drive to reduce the cost of managing and securing enterprise systems, the software company is shifting away from charging Windows Server System users licensing fees at installation and is instead moving to a model where users pay at the time of con

Microsoft Corp. is simplifying the licensing for Windows Server System products that are used in virtual machine environments as it continues to try to drive customers toward self-managing dynamic systems. The Redmond, Wash., software giant will announce on Monday that it has decided to shift away from charging Windows Server System users licensing fees at installation and is instead moving to a model where users pay at the time of consumption. This change will be reflected in its volume licensing program effective Dec. 1.
Microsoft sees this licensing simplification and the addition of new user rights as critical to driving forward its Dynamic Systems Initiative (DSI), its vision and technology road map for reducing the cost of managing and securing enterprise systems.
"This is an end-to-end strategy and not a point strategy. Microsoft believes that customers are looking for ways to adopt virtualization on the route to dynamic systems, and so our strategy is the Dynamic Systems Initiative, with dynamic systems the end game. And the way customers get there is very important," Bob Kelly, general manager of infrastructure server marketing at Microsoft, told eWEEK. Click here to read more on Microsofts DSI vision. "Today, if a customer has seven physical servers and a thousand images on a SAN, they would pay for 1,007 Windows licenses at install," he said. "With the new rights and model, the customer would just pay for seven licenses, and the thousand images sitting on the SAN would only require a license when they started running." This means that customers will no longer have to license every inactive or stored instance of a Windows Server System product and can now create and store unlimited numbers of instances, including those for backup and recovery, and pay only for the maximum number of running instances at any given time, Kelly said. Users will also now be able to move active instances from one licensed server box to another without limitation, as long as the physical server is licensed for the Windows Server System product. Microsoft has its own Virtual Server product in the market and recently decided to christen Virtual Server 2005 Service Pack 1 as Virtual Server 2005 R2. The renamed product is still due to ship in the fourth quarter of this year. But the follow-on release isnt due out until the latter half of 2006. Licenses for the upcoming Windows Server 2003 R2 Enterprise Edition, expected to ship later this year, will allow customers to run as many as four virtual instances on one physical server at no additional cost, extending the savings customers can realize through server consolidation on the Windows Server platform. The licensing changes will be offered through Microsofts volume licensing plans, starting Dec. 1, while updated retail and OEM licensing will be available with new product versions, also effective Dec. 1. In addition, when Microsoft ships the Datacenter Edition of Windows "Longhorn" server, expected in 2007, the license will give users the right to run an unlimited number of virtual instances on one physical server. Customers currently have to pay for these virtual machines as they are charged per install. Click here to read about Microsofts next-generation plans for Windows Server. One of the challenges around virtualization has been how to adopt it in a way that is easily consumable for customers, Kelly said, adding that licensing alone is not enough. Microsoft firmly believes that an end-to-end management strategy is critical as customers adopt virtualization techniques. "You need management techniques that think through the physical and the virtual, and that is where we are investing," he said. "What this means is that Windows becomes the platform for virtualization. Customers will consolidate existing systems to Windows using virtual technology. This is very compelling to our customer base," Kelly said. Next Page: Changes will have a "profound impact."

Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at


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