The ITAM Review

News, reviews and resources for worldwide ITAM, SAM and Licensing professionals.

Diffusing the software license virtualisation time bomb

License management company License Dashboard is warning companies of the risks it says exist when working with software licensing under virtualised environments, in particular with dynamic provisioning or VMware’s ‘Distributed Resources Scheduler’ (DRS).

The firm says that while the majority of its customers say that they have virtualized their servers, 58% of those that have are using DRS-type technologies on “some or all” of these virtual servers. This suggests (so says License Dashboard) that organisations “may have” a significant shortfall in their software licensing compliance.

The forward argument here then is that if this “may have” factor does result in a significant compliance shortfall that firms will be particularly vulnerable in a software audit.

The firm contents that most companies are unaware of the licensing implications of the dynamic provisioning of resources in virtualised environments (DRS), which can increase licensing requirements by 500%.

License Dashboard goes further and wants to suggest (from survey results in its own straw poll) that 87% of firms claim virtualisation is factored into their software asset management (SAM) strategy, yet only 42% use a dedicated licensing solution for the task (19% don’t do anything and 39% use an IT asset management (ITAM) or procurement system to track licenses.

NOTE: the “problem” identified here is the suggestion that a traditional ITAM system is often too simplistic in its licensing analysis to factor in the implications of virtualised environments.

“Under virtualisation, organisations can operate many instances of a software program on a single physical machine. With the traditional device-centric software licenses that are the mainstay of most organisations today, such as Microsoft Office and Windows licenses, the organisation is required to license each virtual machine separately,” said Matt Fisher, director at License Dashboard.

Virtualisation licensing, a grey area

Fisher points out that many vendors, including Microsoft, have added user-centric elements to their licensing terms, since the license remains at its core a device one, but that still … licensing under virtualisation remains a grey area. As a result, licensing each virtual machine separately is often the safest approach to avoid the risk by being non-compliant.

“The issue becomes much more complicated once technologies such as VMware’s Distributed Resources Scheduler (DRS) are factored in. DRS, which dynamically allocates IT resources to the highest priority applications, has proved popular for the significant operational efficiencies it brings (67% of our customers use it). However, DRS can also lead to a significant shortfall in an organisation’s licensing compliance, since an application has the potential to be used on every virtual machine if the need arises,” said Fisher.

“With current device-centric licenses this will often require the organisation to license every application on every virtual machine based on the potential that the application could run on it during peak times, unless significant rules are put in place governing the use and deployment of licenses in virtual environments. Based on our own analysis of customer’s virtualised environments, DRS has the potential to increase an organisation’s server licensing requirements by up to 500% at the flick of a switch,” he added.

This is not only a significant additional licensing cost for the organisation to bear, but if left unchecked, exposes the organisation to a hefty fine for non-compliance when it is next audited. With two thirds of our customers saying they were audited last year and recent IDC research showing that Microsoft is currently the most prolific auditor, this is a very real risk indeed that every organisation running a virtualised IT estate should be aware of.

“DRS has the potential to be a ticking time bomb for many organisations, so we urge them to review how their software is deployed in virtualised environments or risk facing significant fines in 2013,” concludes Fisher.

About Adrian Bridgwater

Adrian Bridgwater is a freelance journalist specialising in cross platform software application development and data analytics as well as all related aspects of software engineering and project management.


  1. Paul DeGroot says:

    Without arguing with the general premise here, I would argue strenuously with one example, the notion that with Windows and Office ” the organisation is required to license each virtual machine separately.”

    T’ain’t true. You can install as many copies of Office on network devices as you like, without ever assigning a license to the network device (including a remotely accessed virtual machine). But only user devices that have the appropriate Office license can access them. Similarly, you can install the desktop Windows OS in as many VMs as you like. But only user devices with Software Assurance on Windows (or subscriptions such as VDA, Windows Intune per device, or Companion Subscription licenses) can access them.

    The asset management challenge here is not that you need to account for an unpredictable number of Windows and Office instances on your network–you shouldn’t count them at all, which may be a challenge in itself. The real compliance challenge is ensuring that the user devices that are connecting to those remote instances are properly licensed. Since you cannot discover the presence of Software Assurance et al on the user device, you need to license all user devices or cast some kind of wizard’s spell on non-compliant user devices to prevent them from accessing the unlicensed network instances.

    Still a huge (impossible?) challenge, but not on the network or the virtual host.

  2. itsmreview says:

    Follow up article on CRN here, beware the misleading headline

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