CyberTech Rambler

May 28, 2008

Licensing in virtualization world

Filed under: Uncategorized — ctrambler @ 11:43 am

I understand where Jon Brodkin comes from when he argues that virtualization of Windows does not means necessarily means reduced licensing fee. If any, I am on the receiving end. Recently, I wanted to run Windows in a virtual machine on my Mac at work. A year ago, I would had have to fork out for Windows Business edition which is a bombshell for an operating system I would rarely use. But I now have the choice of Windows Home Edition now. As I was in the European Union, the “N” Edition would had suited me better. The reason why I am still without a Window Virtual Machine? I cannot find an “N” edition that is cheaper than the non-“N” edition.

Why didn’t Microsoft allow virtualization of Windows Home Edition earlier? According to them, no demand from consumers. Not true, I wanted one and I am not alone. The truth is it is a business decision. Microsoft felt it had no need to compete in the market segment for which  Windows Home Edition is targeted at and has set the price to target maximum profit for itself. Nothing wrong here as it is simple economics at work.

However, where Windows face competition, i.e., in the Business world, Microsoft allowed virtualisation from day one. In fact, the virtualisation deal is fairly good: 4 virtual machines per license.

Moreover, compared to other companies, Microsoft’s licensing deals are normally better than its competition when there are competition. Before virtualization licensing, it is multicores licensing that is the problem. A lot of establish companies had chosen to license their software per-core, but Microsoft is one of the first few major companies to have licensing deal that has the same price for a reason number of cores (normally 4 or less).

If you ask me, as far as business is concern, Microsoft’s deal for virtualization is reasonable from day one. If you are going to use proprietary programs, you do expect to pay more if you have more machines, no matter what type of machine (virtual or physical) you use. From a software business viewpoint the fact that the software on virtual or a physical machine does not really make a different. After all, hardwares are customers’ problem. Having said that, I understand the fact that it is easier to create a lot of virtual machines on one piece of hardware and this will quickly escalate the cost of licensing and software vendors must take that into account in pricing.

Hence my advice to people needing virtualization: Shop around, keep the pressure up by fostering competition. With that, you will get a better price from ALL your suppliers

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