By Rob Horwitz [bio]
Posted: Jan. 21, 2008

• Chart: Windows Server 2008 Edition Comparison

The following is the full text of an article published by Directions on Microsoft, an independent research firm focused exclusively on Microsoft strategy & technology. More samples of our content, as well as a list of upcoming articles and reports are also available.

The most commonly sold packages of Windows Server 2008 will include Microsoft's new Hyper-V virtualization technology, and a new virtualization product will also make the technology available stand-alone. While Windows Server 2008 will be segmented into the same editions as its predecessor, with similar feature distinctions between editions and comparable prices, modifications to licensing rules for lower-end editions make the products more competitive as virtualization and Web application platforms. The fact that other licensing details remain consistent with the past will be a welcome relief to customers who have struggled to understand recent major changes for other server products.

(For an overview of the different editions, see the chart "Windows Server 2008 Edition Comparison".)

Hyper-V in Windows Server 2008

The Standard, Enterprise, and Datacenter Editions of Windows Server 2008 will include Hyper-V (previously code-named Viridian), Microsoft's new virtualization software layer. Often referred to as a hypervisor, Hyper-V sits directly on top of the hardware and is responsible for creating, removing, and managing virtual machines (VMs), each running its own OS instance and applications. Hyper-V promises to deliver better performance and reliability than Virtual Server, Microsoft's current virtualization technology, making the company's offerings more viable in production systems and more competitive with hypervisors from VMware and Citrix (XenSource).

Three Main Editions Include Hyper-V

Hyper-V will be available in the Standard, Enterprise, and Datacenter Editions of Windows Server 2008, which are priced almost exactly the same as their Windows Server 2003 R2 counterparts. Windows Server 2008 editions include both 32-bit and 64-bit code; purchasers choose which to install. As part of their upgrade rights, customers with active Software Assurance (SA) on existing Windows Server licenses receive corresponding Windows Server 2008 editions that contain the Hyper-V feature.

Customers should note that use of Windows Server 2008 Hyper-V virtualization capability triggers the need for Windows Server 2008 Client Access Licenses (CALs) for each device or user accessing any of the VMs hosted on the server, even if the VM is running Windows Server 2003 or earlier, or a non-Microsoft OS, such as a Linux distribution. Consequently, a customer who adopts Windows Server 2008 Hyper-V will need to upgrade their Windows Server CALs, potentially a substantial expense. However, this won't matter to Microsoft shops that plan to migrate their server infrastructure to Windows Server 2008, because they will need to upgrade their CALs for reasons other than virtualization.

Hyper-V won't be ready in its final form when Windows Server 2008 is released to manufacturing, expected in Feb. 2008. The production version of Hyper-V will be made available through Windows Update some time in the second half of 2008. Customers who buy Windows Server 2008 before then will have to retrofit the production Hyper-V technology onto their servers, a process that Microsoft claims will be seamless. Hyper-V runs only on Windows Server builds for x64 processors with hardware virtualization support, such as AMD-V (code-named Pacifica) or Intel VT processors.

Stand-alone Hyper-V Server Planned for US$28

Microsoft will also offer Hyper-V on its own as Hyper-V Server, a decision that appears to be motivated, at least in part, by antitrust concerns. Hyper-V Server, priced at US$28 (retail), is a stand-alone product that installs directly on the hardware ("bare metal") and does not provide any functionality other than virtualization. Any Microsoft OS hosted in a VM on Hyper-V Server must be licensed separately.

Microsoft's Hyper-V technology requires a "parent OS" to run device drivers and perform various management tasks needed to host virtual machines. Besides the hypervisor, Hyper-V Server will include, under the covers, what appears to be a special, scaled-down version of Windows Server 2008 to serve as this parent OS.

Hyper-V Server has similar scalability and availability limitations as Windows Server 2008 Standard Edition—support for systems with a maximum of 4 CPUs and 32GB of physical RAM, and no support for server clustering. However, Hyper-V Server will offer significant licensing advantages. Unlike the regular Windows Server 2008 editions that include Hyper-V, Hyper-V Server won't automatically trigger the need for clients or users that access VMs to have Windows Server 2008 CALs. They will only need the CALs that correspond to whatever OS runs within the VM. For example, users accessing a VM running Windows Server 2003 R2 will only need Windows Server 2003 CALs. This may make Hyper-V Server the preferred choice for customers who want to host VMs running Linux or a legacy version of Windows Server.

New OS Also Available Without Hyper-V

Microsoft will also offer Standard, Enterprise, and Datacenter Editions of Windows Server 2008 without Hyper-V for US$20 to US$30 less than their counterparts. These awkwardly named editions (e.g., "Windows Server 2008 Enterprise without Hyper-V") have exactly the same license terms; the only difference is the absence of Hyper-V, rendering them incapable of hosting VMs without the inclusion of some other virtualization technology, such as Virtual Server 2005 R2 SP1.

While Microsoft plays down regulatory issues as a driving force behind the "without Hyper-V" editions, these reduced functionality editions are most likely designed to help shield the company from allegations that a new technology is being unfairly tied to sales of Microsoft's popular server OS, an issue of particular concern to European antitrust regulators.

The editions without Hyper-V will almost certainly prove as unpopular as the reduced functionality Windows XP "N" edition in Europe and "K" edition in Korea, both borne out of government lawsuits in those two respective geographies. Given the nominal price differential—between 1% and 4% of the purchase price, depending on edition—most customers will likely opt for the editions that include Hyper-V. Furthermore, the only way to move from a Windows Server 2008 edition without Hyper-V to the comparable edition containing Hyper-V is to purchase the new package with Hyper-V. Customers can't simply install the inexpensive Hyper-V Server product on top of a Windows Server 2008 edition without Hyper-V.

Standard Edition Improves Virtualization Rights

Customers who use Windows Server 2008 Standard Edition to host virtual machines, with Hyper-V or another technology, may have to purchase fewer copies of the OS under new licensing rules.

With Windows Server 2003 R2 Standard Edition, each running OS instance requires its own OS license, so using it to host two Standard Edition VMs requires three server licenses—one for the physical ("host") OS instance and two for the VMs ("guests"). In the same scenario, Windows Server 2008 Standard Edition requires only two server licenses. The first license covers the host and the first guest, and the second license covers the second guest. The only caveat is that the host can run no workload beyond managing and servicing the guests.

With the introduction of Windows Server 2008 Standard Edition, Microsoft also tweaked the connection limits in an effort to differentiate Standard Edition from Enterprise Edition. Customers with more than 250 users will need to pay the closest attention, because the limits could affect which edition they purchase. First, the number of simultaneous virtual private network (VPN) connections that can be handled by Standard Edition's Routing and Remote Access Service (RRAS) has been reduced from 1,000 to 250. Second, the Terminal Services Gateway feature, new to Windows Server 2008, is capped at 250 connections in Standard Edition. The Terminal Services Gateway provides a more secure way for users to connect to terminal servers from over the Internet than is possible with Windows Server 2003 R2.

Customers who need to support more than 250 RRAS or Terminal Services Gateway connects will need to purchase Windows Server 2008 Enterprise or Datacenter Editions.

Web Edition More Competitive with LAMP

First introduced with Windows Server 2003, the Web Edition of the server OS is a less expensive alternative to Standard Edition for deploying Web pages, Web sites, Web applications, and Web services built on Internet Information Services (IIS) and ASP.NET. Of particular note, it does not require CALs, even for authenticated users, making it cost effective for large-scale Web sites and hosters.

The most significant improvement: Windows Server 2008 Web Edition is allowed to run any database software, as long as the database is used only to support Web applications running on the same Web Edition instance. Windows Server 2003 Web Edition, in contrast, was restricted to "non-enterprise database engine software"—defined as software limited to supporting no more than 25 users at one time. While this allowed the free Microsoft SQL Server Desktop Engine (MSDE), it excluded MySQL, as well as Microsoft's own full SQL Server product

The lifting of the database restriction will make Windows Server 2008 Web Edition far more cost-effective for running Web sites that dynamically generate content and track users with databases. In the past, customers impacted by the database usage rules needed to purchase Windows Server 2003 Standard Edition rather than Web Edition (at an extra cost of about US$300), and also needed to purchase a special license called an External Connector, for close to US$2,000. The change thus makes Web Edition much more price-competitive with open source LAMP (Linux, Apache, MySQL, PHP/Perl/Python) technologies.

Windows Server 2008 Web Edition is available in both 32-bit and 64-bit x64 builds, in contrast to the Windows Server 2003 version which was 32-bit only. With Windows Server 2008, Web Edition is licensed for up to four CPUs (versus two for Windows Server 2003) and up to 32GB RAM (versus 2GB for Windows Server 2003).

Itanium Enterprise Edition Eliminated

Windows Server 2008 will be available in only one edition for the IA-64 (Itanium) 64-bit architecture. With Windows Server 2003, Microsoft offered both an Enterprise Edition and a Datacenter Edition that ran on Itanium-based systems. With Windows Server 2008, the Enterprise Edition is not being carried forward on Itanium, and Datacenter Edition is renamed Windows Server 2008 for Itanium-Based Systems.

It would appear that Microsoft's major concern with respect to Itanium is to provide an upgrade path for large customers that purchased Itanium editions of SQL Server (along with Itanium editions of Windows Server 2003) while limiting the expense of product development, testing, and break-fix support for the Itanium platform. The new Itanium edition is focused on database workloads; OS services not required to perform these roles—such as domain name system, Dynamic Host Configuration Protocol, and Print Services—have been removed or disabled. Furthermore, the new Itanium edition does not contain Hyper-V, but there is no restriction on use of some third-party hypervisor technology.

Resources

Changes to licensing due to increased use of virtualization are detailed in "Virtualization Licensing Adapts to New Challenges" on page 46 of the June 2007 Update and "Licensing Retooled for Server Software on Virtual Systems" on page 34 of the Nov. 2005 Update.

Technical details of Windows Server Virtualization hypervisor are available at www.microsoft.com/whdc/system/platform/virtual/default.mspx.

Feature-level comparisons of the various Windows Server 2008 editions are available via links at the bottom of www.microsoft.com/windowsserver2008/editions/overview.mspx.

Windows Server 2003 licensing and pricing are covered in the Dec. 2003 Research Report, "Understanding Microsoft Licensing," and "Windows Server 2003 Pricing" on page 17 of the Apr. 2003 Update.