Server application licensing rules will soon be loosened to reduce costs for Microsoft customers who want to use partitioning technology to consolidate servers or gain spare capacity. The new licensing model should help customers make effective use of the more powerful Intel-architecture servers on the way, and could boost Microsoft's efforts to move customers to its newest server operating system, Windows Server 2003. However, it's not clear what versions of that system will support the new model or how it will be enforced.

Licensing Made Partitioning Expensive

The new rules will affect all server applications that can be licensed per-processor, such as SQL Server, Internet Security and Acceleration Server, and BizTalk Server, and take effect April 1, 2003. The rules concern applications running on "partitioned" servers. Partitioning is a hardware and software technology that divides a server's processors and other hardware resources into logically separate sections, each with its own operating system and applications. Partitioning is possible today with Windows 2000 Advanced Server and Datacenter Server on specialized server hardware from vendors such as Stratus and Unisys. It's also possible on conventional server hardware with software products such as the Connectix VM technology recently acquired by Microsoft. (See "Connectix VM Technology Acquired".)

Partitioning is attractive because it simplifies server consolidation—moving applications running on multiple servers to fewer, more powerful servers. In particular, partitioning enables an organization to run multiple possibly incompatible applications and operating system images on a single server, which can substantially simplify management and enhance scalability.

However, up to now Microsoft's server application licensing model made server consolidation expensive. For applications licensed per-processor, organizations have had to buy one license per physical processor on the machine—even if that processor were in a different partition from the application. For example, under the old licensing model, running SQL Server Enterprise and BizTalk Server on a 16-processor server, each in a separate eight-processor partition, would cost US$425,568, assuming per-processor license costs of US$19,999 for SQL Server Enterprise and US$6,599 for BizTalk Server. In contrast, running the same applications on two separate eight-processor servers would cost US$212,784.

New Rules Support Partitioning, "On Demand" Plans

Under the new rules, applications that can be licensed per-processor only need to be licensed for processors that are actually accessible to the operating system image on which the application runs. This means an application running in a partition need only be licensed for the processors in that partition. This can lead to substantial savings. For example, under the new rules, running SQL Server Enterprise and BizTalk Server on a 16-processor machine, with eight processors devoted to each, would cost US$212,784—exactly the same as the cost of running them on two eight-way servers.

In addition, the new rules enable Windows server hardware vendors to offer "capacity on demand" plans, in which customers install more server capacity than they actually use and pay for additional capacity when they bring it online. A vendor might, for instance, install a 16-way server at a customer site but prorate charges based on the number of processors the customer actually uses. Under the old rules, the customer would have had to pay for 16 processor licenses upfront; under the new rules, the customer can buy them as processors come on-line.

Microsoft has not yet released information about how the new per-processor licensing rules will be enforced, or whether they will be supported on all Windows servers. The rules will likely be restricted to the Enterprise and Datacenter Editions of Windows Server 2003 (which support partitioning) and to hardware and software combinations which can technically restrict processors to particular partitions.