Primer on Licensing System Center Products (SideBar)

Microsoft currently has four major products in its System Center line targeted at large enterprise customers:

• Configuration Manager (CM), to automate software deployment, inventory hardware and software assets, and report on OS and application compliance with configuration policies set by administrators
• Data Protection Manager (DPM), to capture frequent backups of application and system data to disk, tape, or Internet storage
• Operations Manager (OM), to monitor hardware, OS, and applications; detect symptoms of poor health; and automatically take corrective action or help identify the root cause of a problem
• Virtual Machine Manager (VMM), to provision and manage virtual machines (VMs), store VM images in a library, and patch these images (with the assistance of CM or Windows Server Update Services, a free product)

All four major System Center products consist of an agent that executes on each managed device and a central management infrastructure. Typically run as a dedicated server or servers, this infrastructure communicates and coordinates with the agents; stores backup, performance, configuration, and other management data; and provides an administrative console. All four products require managed devices to be licensed, and all except VMM require customers to purchase additional server licenses for the central management infrastructure.

Licensing CM, DPM, and OM Individually

CM, DPM, and OM require management licenses (MLs) for each managed device. MLs are simply a set of legal rights with no digital footprint—they are not installed as software or recorded in the Windows Registry or Active Directory—so it is up to customers to set up their own compliance monitoring or enforcement system.

All three products offer three types of MLs: a Client ML for monitoring Windows desktop environments (users' PCs or virtualized desktops) and two types of MLs for servers—a Standard Server ML for basic server management functions or workloads and a more expensive Enterprise Server ML to address more advanced needs. For example, an OM Standard ML permits monitoring system hardware and core server OS components, such as file and print services, Dynamic Host Configuration Protocol (DHCP), and Distributed Naming Service (DNS). An OM Enterprise ML expands this list to include directory and identity management services (such as Active Directory), as well as server applications (such as SAP Enterprise Resource Planning or SQL Server). In all cases an Enterprise ML is a superset of the corresponding Standard ML, so a customer would always license with one or the other, but not both.

Either a Standard ML or an Enterprise ML must be assigned to each managed operating system environment (OSE), which refers to either a physical or virtual OS instance. For example, in the case of CM or OM, two Standard or Enterprise MLs are required to manage or monitor two Windows Server virtual machines (VMs) running on a physical server, and a third Standard or Enterprise ML is required to manage or monitor the physical server's own OS. When using DPM to protect multiple VMs hosted on a server, customers have a choice. Purchasing a DPM ML for each VM provides granular backup and restore capabilities of data or software within each VM, whereas buying a single DPM ML for the physical server limits customers to backing up and restoring the Virtual Hard Disk (VHD) file that contains a VM in its entirety.

Client MLs can be assigned per-OSE or per-user, the former less expensive if multiple users share a PC and the latter more cost effective if a user has more than one PC or runs multiple desktop VMs.

The prices of MLs are similar across all three products: For example, the Open Volume price, which reflects the maximum price a business customer would pay through volume licensing, is US$154 for each of the Standard MLs, US$423 for each product's Enterprise ML, and between US$32 and US$41 for each product's Client ML.

Licensing CM, DPM, and OM also require purchase of a server license for each OSE used in the management infrastructure. Unlike most other Microsoft server applications, which come in two or more editions (typically Standard and Enterprise), CM, DPM, and OM server software has only one edition. The server license for each product ranges in price between US$570 and US$1,300, depending on the product and whether a limited use license for SQL Server is included (all three products depend on SQL Server).

Licensing VMM

VMM has one level of ML for customers with more than five physical servers to manage, the VMM Enterprise ML. The Open Volume price for a VMM Enterprise ML is US$852, twice the price of the Enterprise MLs for CM, DPM, or OM. However, in contrast with the MLs for the other System Center products, each VMM Enterprise ML license is assigned to a physical server rather than to just one OSE, which means a single VMM Enterprise ML entitles a customer to manage any number of VMs running on the licensed device. Furthermore, purchasing a VMM Enterprise ML for each managed physical server is all that is required to license the product: The VMM Enterprise ML includes the right to run the VMM infrastructure software on any number of servers. (Customers with five or fewer servers to manage can buy VMM Workgroup Edition for US$495, which includes management licenses to manage five physical servers as well as the right to run VMM infrastructure software.)

To license clients managed by VMM, Microsoft offers a VMM Client ML for US$40 that can be assigned per user or per OSE.

Management License Bundles

Since Oct. 2007, Microsoft has offered a bundle called the System Center Server Management Suite Enterprise (SMSE) containing Enterprise MLs for CM, DPM, OM, and VMM. (As is the case when CM, DPM, and OM MLs are acquired outside the bundle, server licenses to run the CM, DPM, and OM management infrastructures must be acquired separately.)

SMSE is purchased per managed device rather than per OSE, which is how a stand-alone VMM Enterprise ML is licensed but different from Enterprise MLs for CM, DPM, and OM (which are licensed per OSE). Furthermore, unlike all four individual Enterprise MLs, SMSE requires ordering Software Assurance (SA) at the time of purchase, which commits customers to annual payments of 25% of the original license cost for the term of their current volume licensing agreement (and can, at the customer's discretion, be renewed thereafter).

The SMSE license—which started out at US$856 (Open Volume), rose to US$980 in Nov. 2008, and then was cut to US$783 in July 2009—constitutes a substantial discount to the cost of acquiring the component licenses separately. This was especially true considering that up until packaging changes were made in July 2009, SMSE provided rights to use all four System Center products to manage an unlimited number of OSEs running on the licensed device. Starting July 2009, a new Server Management Suite Datacenter license—priced at US$490 per processor—provides management of an unlimited number of OSEs, whereas SMSE is limited to a maximum of five (four VMs plus the physical OS).