Smarter Microsoft licensing can reduce VMware environment costs

If you consolidated physical servers with virtualization, you probably did so to reduce the costs of maintaining many physical servers — namely power and cooling, rack space, support contracts, physical hardware and so on.As a consultant, I often work with clients who have embarked on large server consolidation projects, migrated many physical hosts to virtual machines (VMs), and have almost all their former physical servers running as VMs.

Many companies think the cost savings associated with virtualization stops here. Those projects could, however, save more money if IT managers reviewed Microsoft licensing for their Windows servers and took advantage of virtualization-focused products and licensing. If a company uses Microsoft systems monitoring products, the same rule applies.

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9 thoughts on “Smarter Microsoft licensing can reduce VMware environment costs

  1. My understanding is that the licensing for SMSE will be changing in Microsoft’s next FY – from July onwards. You may need to review your figures at that point! Other than that, good post!

  2. Hi,

    Great info. I’d totally forgotten about the downgrade scenarios too. Do you have any idea how Microsoft provides (or even if they do) product keys for any downgraded instances you install? It creates a few headaches when you use the same ones from your existing media unless you’re doing volume licenses.

  3. Something to note is that licences do not move with VMs, and HA/DRS are not covered either, so every VM host server needs to have enough licences to cover the maximum guests that will ever be moved onto it. Your calculations also ignored that most systems use Standard edition, and Enterprise is 4x more expensive. This leads to the scenario of 8 std windows servers consolidated to 2 hosts. Previously 8 std licences required, now 16 std or 8 Ent licenses in order to fully comply so be very careful on this one as it could actually cost more money to be legal rather than less.

    There is a savings calculator at which tells you what you need and how much you can save, this can be set with your select prices too.

    @Melvin, you simply call MS and ask for the licence keys, this took me 5 minutes last time using a 2008 Datacenter licence and downgrading to 2003, they treat you like a VIP when you have Datacenter!

  4. @Dave: That limitation that you had to license a Windows VM for every host is could possibly land on due to VMotion (HA, DRS) has been removed.

    Concerning the standard edition compared to enterprise edition: If you have 8 std editions and want them consolidated on two hosts (which is very low), you can buy 2 Enterprise licenses and drop the standard licenses. You are allowed to keep them running on standard under the enterprise free VM. In this case you wouldnot save any money but it wouldnt cost you more either.

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