Weird but true! Microsoft’s licensing helps VMware to reduce the TCO.
The fact, when you buy a Windows Server 2008 Enterprise license, you can run four virtual Windows Server instances for free (NT4, Windows 2000 Server, Windows Server 2003, Windows Server 2003 R2, Windows Server 2008 Standard, Windows Server 2008 Enterprise). But these four instances must run on the same host (for more information, see Windows Server 2008 Licensing FAQs).
So when buying Windows 2008 Server Enterprise you get one license for the hardware that will act as the host server and four licenses for the guest OSes. It doesn’t matter whether your hardware host runs VMware ESX, XenServer or Hyper-V. This means that, for example, running eight VMs on one VMware ESX host requires two Windows 2008 Server Enterprise licenses; running 10 VMs requires three Windows 2008 Server Enterprise licenses; and so on.
An example, if you were to organize your virtual environment to take advantage of the four free Windows 2008 licenses per physical host, the cost savings could be significant. A Windows 2008 Server Enterprise license costs $3,999 (list price). If you were to consolidate 200 physical hosts into virtual machines, those free virtual Enterprise licenses could save you up to 75% of your license cost.
More savings: Windows 2008 Datacenter Edition
Even more savings can be obtained with Windows 2008 Datacenter edition. The Datacenter Edition is licensed per CPU, per host and independent of the number of VMs running on a host. When calculating with a virtualization ratio of four VMs per core and dual quad-core CPUs per host, it is possible to run 32 VMs per host.
To virtualize 200 VMs, you would need seven hosts with dual quad-core CPUs. In this scenario, you would need a total of 14 Datacenter CPU licenses. At $2,999 each, you’d spend $41,986, which is significantly less — $157,964 less, to be exact – than if you virtualized with Windows 2008 Server Enterprise, including the four free virtual licenses per host.