Virtualization technologies can lead to significant cost savings, but virtualization licensing contracts can lessen those savings if not done right. Understanding the complexities of virtualization licensing terms and pricing models is a crucial step to finding the right match for your organization -- and avoiding any costly gotchas.
From server virtualization to desktop virtualization,
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What are fair licensing terms? How have vendors such as Microsoft recently changed their licensing terms? How do you know which vendor is the best fit for your organization? Learn more about some of the virtualization licensing terms and pricing models from a variety of experts -- and get contract negotiation tips -- so you can better navigate the murky waters of virtualization licensing.
Good (or bad?) news: Vendors are still figuring it out, too
Oracle Corp. is still not on par with competitors, according to some experts, lagging behind when it comes to friendly virtualization licensing terms. And Oracle's pricing can be prohibitive since the vendor licenses its applications on a per-physical-processor basis, experts said.
Microsoft virtualization licensing can impede virtual machine mobility for nonvolume license holders. This mobility restriction poses a problem for VMware Inc. and Citrix Systems Inc. XenServer users utilizing live migration capabilities. But recently, Microsoft said it was going to modify its licensing program to amend restrictions on product use rights that have kept some organizations from using the vendor's virtualization technology.
Understanding virtualization licensing models
Pricing and licensing models vary based on the vendor and the virtualization technology of choice. In the server virtualization space, there are big differences among VMware vSphere, Microsoft Hyper-V and Citrix XenServer. And even within a given vendor's licensing program, understanding licensing option differences can help save you money, as is the case with Hyper-V server virtualization licensing, said Rob McShinsky, a senior systems engineer at Dartmouth Hitchcock Medical Center in Lebanon, N.H. Learn more about VMware, Citrix and Microsoft virtualization licensing policies in this side-by-side comparison that also touches on support, contract and subscription fees.
For your desktop virtualization needs, choosing between presentation virtualization and desktop virtualization can be tricky -- they have similar pricing models, but different setups and functionality. Comparing the different virtualization licensing models for each approach can aid in your technology choice.
Virtualization licensing contract negotiation tips
The biggest cost of server, application, desktop and storage virtualization deployments are the up-front licensing fees. These will vary by vendor, but midmarket organizations shouldn't feel stuck -- there are several ways CIOs can cut corners and save money on existing virtualization licensing contracts, such as by:
- Grading your virtualization vendors on performance and using this as leverage during contract negotiations.
- Scoping out competitor prices and getting quotes -- show your vendor what you could get elsewhere.
- Negotiating price protection and setting price caps.
When negotiating software virtualization licensing terms, it's important to understand the intricacies within a given vendor's licensing program and to remember that existing software licensing contracts can be amended to suit a virtual environment. Some tips include:
This was first published in March 2010