IT News Archives | Site Search | Advertise on IT Direction | Contact | Home

Virtualization technology growing rapidly in the IT sector

January 19, 2007

In the Canadian IT sector, adoption of virtualization software could be hampered by questions and uncertainties on application licensing, according to one Canadian research analyst. In recent years, Virtualization technology has become increasingly popular in businesses of all sizes. Its advantage lies in its ability to allow MIS directors and IT managers to make more efficient use of their available processing resources.

In the old days, IT environments would normally run on a ratio of one application per physical server, which often left processors largely underutilized. Virtualization software allows one physical server to run multiple applications by creating many virtual operating systems within that physical computer.

Matt Brudzynski, senior analyst at Info-Tech Research in London, Ontario says issues became evident when various software vendors would license certain server applications on a per-CPU basis. Database software developer Oracle’s licensing agreement for certain applications is a very good example, said Brudzynski.

“Oracle will ask you bluntly what hardware you are running the application on. “In the case of virtual machines, that hardware may be running thirty virtual servers and you may only be taking up one-thirtieth of the processing power to run that particular application, but Oracle dosen't care." added Brudzynski.

He also said "all the company will tell you is what hardware you’re running it on and that is what they license.” Oracle did not respond to interview requests.

Brudzynski said software licensing practices that are based on the number of processors may be unfair for customers that have virtualized their IT environment. A customer using a four-processor server, for instance, running a server application that is licensed per processor, would have to pay its vendor four licences.

It would not matter, therefore, that the customer is only using one processor out of the four-processor server to run that particular licensed application.

Application licensing with enterprise virtualization can also be a double-edged sword. The Info-Tech analyst explained that as much as it may become a hindrance to virtualization, adoption of certain applications can also be negatively affected.

“As you can readily observe, a lot of the market is already moving to virtual servers, not because of any software issue but because of simple hardware consolidation and of what boils down to good economic sense."

"Software vendors can also run into issues where customers will now demand that licensing accommodate virtual machines,” Brudzynski said.

"Software developers and application integrators that fail to acknowledge this software pricing issue for virtualization technology can also lead to customer resentment toward companies with licensing policies that aren’t conducive to virtualization environments," added Brudzynski. “And then you are going to see some creative ways in which customers will try to get around those licensing agreements.”

But some software vendors have started recognizing the trend towards virtualization and have already taken steps to make their pricing models virtualization-friendly. One such vendor is Microsoft. “They have made licensing cost for classic products such as SQL Server and other server-based applications based on the virtual processors that they reside on, rather than the physical CPUs,” said Brian Byun, v.p. for products and alliances at VM-Ware in Palo Alto, Ca.

A similar trend is seen on middleware and Java application servers, where fractional licensing and other cost-effective licensing policies are adopted for virtualized environments, Byun said.

But the whole issue of virtualization technology licensing only comes up when the cost is based on the number of processors. In most cases, licensing does not pose any concerns because software vendors have implemented either user-based or value-based pricing structures, Byun noted.

As an example, German company SAP enforces a "named user model with add-on options that are priced by metrics" and claims virtualization software does not have any impact on the company’s pricing structure.

"SAP customers pay per user and not per CPU. Hence, it doesn’t matter if the servers at the customer site run multi-core processors or just a single CPU. In this regard, it doesn’t matter what technology runs underneath our applications,” said John Nugent, executive v.p. for SAP Americas Inc.

VM-Ware’s Byun stressed that many software vendors already have “proactive support policies” with regard to application licensing for virtualized IT environments.

Byun said those that run into licensing issues with virtualization are in the “low minority.” In some cases, licensing issues can be resolved through the enterprise agreement between the vendor and the customer.

Byun advised customers to sit down with their software developers or vendors to clarify any confusion or uncertainty with regards to application licensing with any virtualization technology.

Source: C-Net News