It may have finally dawned on Microsoft that its current software licensing restrictions kill one of the major benefits of virtualization — the ability to move a virtual machine freely about physical servers.

According to InfoWorld,, Microsoft may change its licensing policy from one where virtual machines are tied to hardware only to a model that complements the mobility of virtual machines. And a Microsoft spokesman reportedly said to expect the change as early as next Tuesday.

Currently a customer must reassign the license for software such as Windows Server 2003, SQL Server 2005, and Exchange Server 2007 if they want to move the code to a different physical server. Furthermore, Microsoft doesn't allow a transfer between physical hosts more than once every 90 days.

This policy has drawn its fair share of critics, including whitepaper grieving from VMware, which sells VMotion to shift its virtual machines around without downtime. Citrix also sells a similar solution with XenMotion.

Clearly, now that Microsoft is in the virtualization game itself, it needs to rethink the licensing model a bit. Microsoft currently lacks management software of its own for VM transfer magic — but says it's working on it.

Late to the party as usual, but if the report is true, it's a good sign progress is being made. ®

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