Microsoft to shelve per processor prices for users willing to get virtual

Microsoft continues to surprise by being one of the most aggressive large software vendors on the virtualized software licensing front. The giant this week revealed a new licensing scheme that should save some customers money, if they use VMware or Microsoft's own Virtual Server partitioning products.

In the past, Microsoft would charge users of its server software for a four processor license if they ran the software on a four-processor box. The policy makes sense for most customers, but some who were divvying up their processor power via partitioning software found the terms unacceptable. After all, they were running BizTalk Server on a two-way virtual machine and not the whole four-processor box, so the argument goes.

As of December, Microsoft plans to charge customers on a per instance instead of per processor model. This scheme will cover products such as SQL Server, BizTalk Server, Internet Security Accelerator Server and other server software. Most impressively, it will apply whether you run Virtual Server or rival VMware virtual machine software, which is much more popular than Microsoft's code.

The sharp cookies out there will have noticed that there's a catch here. If you're a virtual machine god and have, say, six instances of SQL Server running on a four-processor box, then you're actually going to pay more under the new system. You're paying for all six instances. You're also, however, running pretty puny databases and certainly in the minority.

Microsoft will also only charge customers for the instances of a product running at a given time. This means customers can set up clusters or other virtualized mechanisms and not pay for redundant copies of the server software. Now that's forward thinking.

Microsoft's VP of pricing Brent Callinicos elaborates,

"First, we are licensing by running instance, which is to say the number of images, installations and/or copies of the original software stored on a local or storage network. Instead of licensing every inactive or stored virtual instance of a Windows Server System product, customers can now create and store an unlimited number of instances, including those for back-up and recovery, and only pay for the maximum number of running instances at any given time.

"Second, we are providing easier deployment across servers. Customers can now move active instances from one licensed server to another licensed server without limitation, as long as the physical server is licensed for that same product. So, customers will now be able to store a set of instances on a storage network and deploy any instance to a rack server or blade server that has an available license for that server software."

But wait! There's more!

Microsoft has also kicked off a new policy for Windows Server 2003 R2 Enterprise Edition that will let customers buy a single license and run up to four virtual instances at no extra cost. When the Datacenter Edition of Longhorn Server ships, that policy will extend to cover an unlimited number of virtual instances.

Close Microsoft watchers will recall that the company was one of the first big software makers to say that it would treat new dual-core processors as a single chip in per processor licensing schemes. At the time, this move put Microsoft in select company. Most of the enterprise software makers preferred to charge on a per-core model and keep bringing in the big bucks.

Since then, the likes of BEA, IBM and Oracle have made some licensing concessions as well.

Now, Microsoft has taken a near leadership position with regard to virtualized server software. Why?

Well, for one, it helps the company compete against members of the Unix and Linux world. Sun Microsystems, for example, lets customers run tons of Solaris 10 instances on a server at no extra charge today. In addition, Sun has thrown out the per processor licensing model for server software all together, picking a per employee scheme instead.

Linux makers too have tended to let customers use as many copies of their OSes as they like on a given system. Open source software makers generally have smaller franchises to protect than the likes of Oracle or BEA and could use a licensing edge to win business.

Lastly, you'll notice that Microsoft's plan helps promote some of its underachieving products such as Virtual Server, code that goes up against an Oracle or BEA and its high-end versions of Windows Server. Maybe being nice on the licensing front instead of a Beast will win new business. Has Microsoft actually learned from past mistakes?

Microsoft has a fancy feature on its new policies ready for you here. ®