Vista virtualization: The bigger picture

Vista virtualization: The bigger picture

Summary: Microsoft has belatedly gotten around to relaxing its licensing rules so that customers can install any edition of Windows Vista in a virtual machines, including the less expensive Home Basic and Home Premium editions. I haven't seen anyone document exactly how this change works yet, so I thought it would be worthwhile to run through the changes in detail. If you're thinking of adding a virtual copy of Vista on Apple hardware, the savings can be substantial.

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As Mary Jo Foley noted earlier this week, Microsoft has belatedly gotten around to relaxing its licensing rules so that customers can install any edition of Windows Vista in a virtual machine, including the less expensive Home Basic and Home Premium flavors.

I haven't seen anyone document exactly how this change works yet, so I thought it would be worthwhile to share the full text of relevant sections of the old and new license agreements.

Today, when you install Windows Vista Home Basic, Home Premium, or Ultimate editions, the only mention of virtualization is in an Additional License Terms supplement at the end of the agreement. For Home Basic and Home Premium, this additional condition reads:

4. USE WITH VIRTUALIZATION TECHNOLOGIES. You may not use the software installed on the licensed device within a virtual (or otherwise emulated) hardware system.

That's pretty clear.

Now, here's the entire text of the SP1 supplement:

MICROSOFT SOFTWARE SUPPLEMENTAL LICENSE TERMS

WINDOWS VISTA HOME BASIC, HOME PREMIUM, BUSINESS, ULTIMATE, AND THEIR SERVICE PACK 1 VERSIONS

If you are licensed to use Microsoft Windows Vista Home Basic, Home Premium, Business, or Ultimate, or Service Pack 1 of any of these Windows Vista editions (the “software”), you have the following license right. If there is a conflict with any past or future license terms for the software, this supplemental license term applies.

Use with Virtualization Technologies. Instead of using the software directly on the licensed device, you may install and use the software within only one virtual (or otherwise emulated) hardware system on the licensed device. When used in a virtualized environment, content protected by digital rights management technology, BitLocker or any full volume disk drive encryption technology may not be as secure as protected content not in a virtualized environment. You should comply with all domestic and international laws that apply to such protected content.

A couple things are worth noting here.

First, there is no distinction among any retail or OEM Vista editions (Enterprise edition, sold only via volume licensing agreements, has separate terms). All retail and OEM editions now have exactly the same installation rights: You can install and use the software on a physical machine or in a virtual machine, but you must choose one or the other. Each Windows installation, whether it's on a physical or virtual machine, requires one Windows license.

Second, the wording in the SP1 supplement that pertains to the "licensed device" is clearer than in the previous license text. To understand its meaning, you have to look at the first appearance of the term in Section 2 of the license agreement, which reads:

Before you use the software under a license, you must assign that license to one device (physical hardware system). That device is the “licensed device.” A hardware partition or blade is considered to be a separate device.

Other Microsoft documents make clear that a "physical hardware system" at a bare minimum consists of a specific motherboard. Under Microsoft's interpretation of the license terms, you can replace every other component in a system and still be entitled to use the original copy of Windows. As soon as you replace the motherboard, however, that original assignment goes away.

The supplemental license agreement makes it clearer that the connection between physical hardware and an installed copy of Windows applies regardless of whether a virtual machine layer is interposed between the hardware and Windows. When you install Windows on a virtual machine, the license is tied to the VM on that physical machine (the licensed device).

How do the new license terms compare to the old one? If you install the RTM version of Windows Vista Business or Ultimate, you see this text in section 3f of the license agreement (Business) or section 6 of the Additional License Terms (Ultimate). The only difference is the phrase I've italiciuzed at the end of the first sentence, which is in the Ultimate license but missing from the Business license.

Use with Virtualization Technologies. You may use the software installed on the licensed device within a virtual (or otherwise emulated) hardware system on the licensed device. [emphasis added] If you do so, you may not play or access content or use applications protected by any Microsoft digital, information or enterprise rights management technology or other Microsoft rights management services or use BitLocker. We advise against playing or accessing content or using applications protected by other digital, information or enterprise rights management technology or other rights management services or using full volume disk drive encryption.

This emphasis on the "licensed device" has special meaning if you try to save a few bucks by buying an OEM copy of Windows Vista instead of a full retail copy. The price break can be substantial, as I've noted before (the prices for Vista are roughly the same as their XP equivalents: $90 or so for an OEM copy of Vista Home Basic, $199 for a full retail copy; $110 and $20 for the Home Premium equivalents. But here's the rub: OEM licenses are locked to the machine on which they're first installed and can't be transferred to another machine. A retail license can be transfered to another PC (a "licensed device" as long as you completely uninstall it from the original edition.

So if you put an OEM version of Vista in a VM on your Macbook, that Windows license is locked to the underlying hardware. (Technically, at least.) If you get a new Macbook Pro and sell your old Macbook, you have to transfer the Windows license as well. You can't uninstall that OEM copy and reinstall on your new machine. So for two Macbooks,each with Windows Vista Home Premium in a VM, you can pay for two OEM licenses at $262, or you can pay $299 upfront (yes, math wizards, that's $37 more than the cost of two licenses) for the right to choose one of the Macbooks to run Windows on.

In fact, the high price of a full retail version doesn't make much economic sense until you move the original license to a third or fourth machine, physical or virtual.

And what's with the odd language about DRM? The old license says "you may not play or access content or use applications protected by any Microsoft digital, information or enterprise rights management technology or other Microsoft rights management services or use BitLocker." The SP1 supplement says "When used in a virtualized environment, content protected by digital rights management technology, BitLocker or any full volume disk drive encryption technology may not be as secure as protected content not in a virtualized environment. You should comply with all domestic and international laws that apply to such protected content." That first sentence isn't really a restriction or condition, it's just a recommendation. So what's it doing in a license agreement? And does this clause remove the prohibition on use of Microsoft DRM in a VM? It's not at all clear.

So why is Microsoft making this change now? I think they just realized how much money they're leaving on the table by not making Home Basic legal to run in a VM. As I found when I looked through Dell's outlet a few weeks ago, roughly 30% of business buyers are choosing XP Home or Vista Home Basic. Why? Because it runs just fine in a VM; I'm not aware of a single third-party Windows application that won't run on Home Basic. As for the absence of the Aero visual effects, no virtualization software that I'm aware of even supports Aero yet, so visually there's no penalty for choosing the cheapest Vista of them all.

Meanwhile, if you're wondering what Apple is going to do about all this, my prediction is they'll do absolutely nothing. Although Apple could probably do a roaring business by preinstalling Windows Vista in virtual machines on its own hardware, there's one downside: As an OEM, Apple would be contractually obliged to support Windows as fully as it supports other operating systems. The exact terms require "end-user support on terms at least as favorable as the terms under which the system builder provides end-user support for any fully assembled computer system."

Can you imagine Apple requiring its Geniuses to support Windows Vista? Neither can I.

Topics: Operating Systems, Hardware, Legal, Microsoft, Mobility, Software, Virtualization, Windows

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23 comments
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  • Vista SP1 — all the more reason to use GNU/Linux?

    Wow, it took almost 1400 words to discern the pyrotechnic and gymnastic legalese of Vista's EULA, and the Vista jokes just keep coming. Hell forbid that MS "leave a dollar on the table." This <i>might</i> sell a few more copies, I doubt it. It appears MS is desperate to fill one the Vista many potholes.

    Anyone on another platform who is virtualizing Vista will just steal it, especially Apple users, although of the dozen I know, none would ever run Vista. I can't think of a single viable reason anyone would <i>need</i> to virtualize Vista. No business would buy Home or Premium just for this purpose when XP does the trick &#8212; as you say &#8212; and with far fewer resources.
    zaine_ridling
    • You know as poor as Microsoft is they cant ....

      afford to leave a penny on the table :)




      NOTE: This is a JOKE
      mrOSX
      • I don't think so.

        "NOTE: This is a JOKE"
        High Sierra
    • I can see a reason

      We have an application that only runs on Windows and it's critical to our corporate function. We are a Linux/Unix shop and to accomodate this single application we run windows on a virtual machine with this application installed. It works well and we only have to support the single instance of Windows which is isolated and not used for web surfing or email or any other purpose but this single application.
      maldain
  • Interesting, it does open up some possibilities.

    Interesting - it does open up some possibilities, such as being able to do some tasks in a virtualized environment.

    As a web developer, however, what I really want to do is to be able to virtualize XP so I can test web pages for IE6. They do have virtual machines for that, but they're time limited.
    CobraA1
  • Security Impact

    I think the bigger picture is a security impact. I'm not
    sure if Vista had a technical lock out on running in, on or
    with virtual technology (hypervisors) or if it was just a
    legal requirement. If it was a technical unlocking, then
    it's taken a step backwards in security if you believe that
    future malware will make extensive use of the ever
    elusive hypervisor (I for one buy that argument. Many
    people more smarter than I are seemingly convinced).
    jhammerschmidt@...
    • Legal, not technical

      I don't believe there's been any technical change; I have always been able to install any version of Vista in a VM and SP1 doesn't make a difference.

      I am confused, however, when you write "(I for one buy that argument. Many people more smarter than I are seemingly convinced)."

      I think there might be a word or two missing. Can you try again?
      Ed Bott
  • careful with the OEM loads

    Ed,

    You might clarify that OEM editions of Windows are _only_ to be sold as pre-installed software on new machines. The intent and language of the OEM licensing rules is to prohibit customers from buying "aftermarket" OEM software and loading to their own, existing Mac's for example.

    Yes, there are plenty of gray market dealers that will sell you OEM software, but a close read of the terms ( and a quick check with MSFT) will show that you can't install it legally as an end customer.

    Thanks for the research,
    Scott Braden
    Scott Braden
    • Wrong

      "a close read of the terms ( and a quick check with MSFT) will show that you can't install it legally as an end customer."

      Sorry, that's not true. Microsoft specifically says an end user building a new machine or refurbishing an existing one can use an OEM license to do so. I have researched this for years and am 100% confident about this.

      From the Microsoft OEM System Builder Licensing FAQ:

      "OEM system builder software is designed for OEM system builders for preinstallation on new PCs. [...] An exception to this is when the end-user is actually assembling their own PC, in which case that end user is considered a system builder as well under the definition in the OEM system builder license agreement."
      Ed Bott
  • To Summarize...

    Let's say I have a MacBook Pro which has Parallels or VMware Fusion. I want to use Windows in a virtual machine. I go to Staples, buy a copy of Windows Vista Home Edition, install it in my VM.
    First, is it legal to do that, and second, can I legally access the Internet from IE within my VM'd Windows Vista?
    Thanks.
    Eleutherios
    • Yes and yes

      That's the purpose of the SP1 license change.
      Ed Bott
  • RE: Vista virtualization: The bigger picture

    Seeing virtualisation from another angle ....

    I hope MS can consider allowing their virtual PC product to run on the vista home premium or even Vista basic editions. Some of my old applications just can't run on vista & I don't want to dual boot my machine either. I cannot use virtual PC on the vista home premium edition (host OS).


    Fortuantely, there is still VMware that I can turn to if I want to use WINXP as the guest operating system on Vista Home premium OS.
    anthonyng
    • Really?

      I just checked the system requirements and you're right. I prefer VMWare or Virtual Server 2005 anyway...
      Ed Bott
  • Need different rules for business use and personal use. NT

    nt
    High Sierra
    • Completely agree

      I've been meaning to write a post with exactly that thesis. Let me see if I can find my notes.
      Ed Bott
  • What about a vista Home Upgrade?

    I upgraded XP Home to Vista Home Basic, and am wondering if this means I can now run this upgrade copy of Home Basic in a VM, as long as I keep it on the same hardware that the upgrade was originally installed on.
    Why_Not_Me
    • Nope

      Not legally, anyway. You can install on the physical hardware or in the licensed machine, but not both.
      Ed Bott
      • What if . . .

        What if I uninstall the Vista Home upgrade from the hardware and replace it with Linux, and then install the Vista Home upgrade in a VM as the guest with Linux as the host. Wouldn't that meet the requirements of the new license as long as the underlying hardware is not changed and, of course, the original XP Home is not re-installed?
        Why_Not_Me
        • Feel hog-tied by Microsoft?

          Ask your attorney. He may be able to
          decipher your EULA. Then again, he may not.
          He may not be paid as much as Microsoft's
          attorneys (seeing as how you're the one
          paying him).

          There are alternatives......... where users
          (formerly known as customers, to Microsoft)
          are free to use their software any way they
          choose, and software is designed to work
          instead of prevent the user from working.
          Heck, even Microsoft uses Open Source. Use
          it and curse it at the same time.
          Ole Man
        • For a retail upgrade copy, yes

          As long as you remove the first installation you can then reinstall on the same or a different physical or virtual machine.
          Ed Bott