Windows Server 2008’s unlimited virtualization rights feature is a great idea in theory: purchase each underlying processor at datacenter and load up Windows Server installations as much as you can with no additional costs. The issue is that Windows datacenter processors are expensive. So how many virtualized Windows Servers does it take for it to make financial sense for organizations to take advantage of this feature?

Note: Your prices will vary based on your Microsoft agreement; mileage will vary, and these configurations do not address client access licenses (CALs). Also, this situation uses off-the-shelf retail prices. It is important to consult your Microsoft licensing professional for confirmation of any configuration.

Looking at street prices for retail installations of Windows Server, a Windows Server 2008 Standard (up to four processors — and five 5 CALs are included) installation is approximately $790 according to software vendor Softmart. Windows Server 2008 Datacenter for four processors (no CALs included) is around $7,600 on the same site. This means that 10 virtual machines are required for this to make sense on four processors. The 11th virtual machine that would utilize the unlimited virtualization rights would start the cost savings, but unless you are consolidating at 10:1 or higher, datacenter costs more. For one virtualization integrator, Erik Scholten, his price model put it at 7:1 to make sense. You should also consider that unlimited virtualization rights is not just for Windows Server 2008 but all Server editions.

The real sticking point here is that the model above makes sense for new installations. When it comes to existing server installations and a Microsoft Enterprise Agreement, the annual software assurance (SA) cost for an already purchased server won’t work in the pricing example I describe above.

I know a number of administrators who have made the jump to datacenter licensing and have been very happy with the simplicity. How have you used datacenter licensing to provision your Windows Servers?

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