Who Flipped and Who Flopped on Microsoft's Vista Virtualization Licensing?

Last February, a Microsoft Windows Vista client team product manager was quoted by the Associated Press as having said that his company actively considered canceling virtualization support in Vista after a Black Hat security demonstrator showed a tool that could leverage virtualization capabilities to make the operating system blindly run within a malware hypervisor. That claim has since been denied by Microsoft representatives who work more closely with, or who lead, its virtualization projects.
This morning, sources cited the same team product manager, Scott Woodgate, as having indicated his company would be announcing a licensing change to Windows Vista with respect to virtualization, perhaps today. Consumers were to expect Vista licenses adjustments to enable Vista Home Basic and Vista Home Premium editions to run in virtualized environments, perhaps supported by Mac OS X or VMware. When such an announcement did not come, and when the company issued a brief statement to reporters indicating it would not come, it was reported that Microsoft "flip-flopped" on virtualization.
However, key Microsoft sources have repeatedly indicated, both to BetaNews and publicly, that its licensing choices for Vista virtualization were already set in stone, for both technical and legal reasons. Only Vista Business and Vista Ultimate editions would feature licenses enabling virtualization. For Microsoft to have made changes to enable consumers to run consumer-oriented Vista versions in virtualized environments, it would have had to radically reconstruct its licensing terms for all the consumer applications that may run within those environments, as it has already done for business applications.
The man who speaks for the technical side of Microsoft's virtualization efforts is Mike Neil. At WinHEC in Los Angeles last month, Neil repeated the company's stance on Vista licensing, which since then, many in the company maintain never changed.
"For virtual software vendors...we want to make sure we're applying licensing that makes [room] for customers in the virtualized environments," stated Neil. "So one of the big changes that we made is a move to instance-based licensing. In particular...we allow you to create as many virtual machines as you want, and store them wherever you want...it doesn't matter for us. It's when you run them, when you instantiate that instance, is when the licensing should be there. So we expanded our licensing for Enterprise and Data Center [editions] to be able to have four paths associated with Enterprise, so for that single license you buy, you can run it under four paths; and for Data Center, we have a lot of customers who are asking us for a product where they don't want to worry about the hassle associated with that...the Data Center customers can instantiate as many virtual machines as they want on a given physical system."
Those changes are what mandated the subsequent changes to business licensing of applications, as Neil explained: "The other thing that didn't make a lot of sense [was that] all of our application licensing was associated with physical processors in the system. So we moved that to a virtual processor-based license." SQL Server, BizTalk, and other enterprise applications are now licensed per virtual product, he stated.
At that point, he reiterated what the company has been saying is its unchanging stance: "We have specified the licensing for our client products as well. In Windows Vista, we allow virtualization of the Business and Ultimate SKUs, and in the Enterprise SKU, we provide the ability to have four desktop instances of Vista as well."
On the same day the AP story about Woodgate's initial claims was published, VMware published a white paper taking Microsoft to task for many of its virtualization licensing terms, including clauses in licenses that restrict some software to running on Microsoft-brand virtualized environments. VMware used that opportunity to take a shot at its stand toward extending virtualization licenses to consumers.
"Microsoft seems to be moving to block desktop virtualization on multiple fronts - including mobility, OEM distribution, and Vista licensing," VMware's white paper reads. "Customers will be prohibited from getting the substantial benefits of virtualization on the desktop without making onerous and redundant payments to Microsoft as most standard licensing paths for Windows have been blocked with respect to desktop virtualization."
That implication that Microsoft may not think consumers are really ready for virtualization, or that it may have some reason to want consumers not to be ready, was echoed in the company's own statement to BetaNews on the evening of the white paper's release: "For production machines and everyday usage, virtualization is a fairly new technology, and one that we think is not yet mature enough from a security perspective for broad consumer adoption," the spokesperson told BetaNews in February. "Today, customers using virtualization technology with Windows are primarily business customers addressing application compatibility needs or technology enthusiasts."
Woodgate's comments to various sources may be an indication that not everyone at Microsoft feels the same way about the company's official stance. But the fact that this is the second time this year that it has had to distance itself from his comments, may perhaps lead to discussion as to the extent to which he speaks for the company.
Microsoft's spokespersons have indicated to BetaNews that a complete statement on this issue may be forthcoming later this afternoon.
2:21 PM June 20, 2007 - An official statement did indeed come, but whether it's actually "complete" may be best left up to your own judgment.
"Microsoft has reassessed the Windows virtualization policy and decided that we will maintain the original policy announced last Fall," states the company's response, in its entirety. It implies that perhaps discussion did take place, as Scott Woodgate indicated to other sources, regarding whether virtualization licensing should extend to all Vista platforms. It also indicates the company's stance on the subject never actually changed.