As always, it is good to take an inventory of the customers environment and see what operating systems they are trying to virtualize. As it stands now, Linux-based operating systems offer the most flexibility for those customers wishing to use advanced virtualization features such as "live migration" technology.
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An example of this flexibility can be found in Novell's virtualization licensing strategy for Suse Linux Enterprise Server 10 (SLES). Novell only requires a subscription for each physical machine that will be running SLES 10, regardless of the number of virtual machines. More information can be found on Novell's virtualization licensing for SLES 10 at the Novell website.
In contrast, Microsoft's licensing strategy for its server products running under virtualization is a bit more complicated. Customers can only run an unlimited number of virtual machines (VMs) on a single physical machine if they have Datacenter licenses applied to that physical machine. Even more restricting is the fact that Microsoft Server VMs cannot be moved between physical hosts any more than once every 90 days. It is interesting to note that this restriction does not affect Microsoft's virtualization offering because it does not yet have "live migration" capability. However, this restriction severely cripples any other vendor's "live migration" technology.
If a customer is a Linux shop anyway, then virtualization licensing is very flexible for them. However, if they plan to stick with Microsoft, then there are some restrictions when considering third-party virtualization technology. Microsoft does offer some Windows Server Virtualization Calculators to help calculate the licensing costs associated with server virtualization. The link to these calculators will also give you more information on Microsoft's virtualization licensing terms near the bottom of the page.
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