This post continues the discussion in my “The Cloud Mystery Machine” post.
Cloud computing and hardware infrastructure as a service (HIaaS), in theory, should allow organizations to move workloads to the cloud and manage licensing just as they always have with managed hosting services in the physical world. However, the problem with current licensing models such as Microsoft’s Service Provider Licensing Agreement (SPLA) is that they require licenses to be bound to physical hardware. Physical hardware bindings removes the capability of IT organizations to manage licenses when they have no idea of the hardware on which their applications reside (it may change from day-to-day). So far, service providers have dealt with the licensing issue by building licensing costs into their service fees. In other words, you need to tell the service provider your application needs and the provider must manage licensing compliance on your behalf. If you want to take your already-purchased Microsoft licenses to the cloud, you’ll need to lease dedicated physical hardware from the service provider.
Asking service providers to take on license management for thousands of applications is impractical and is one more barrier to public cloud infrastructure adoption. Some service providers may support a few dozen applications today, but many organizations have thousands of applications. 2010 marks a year where Microsoft can show industry leadership and change licensing so that application license management is transferred from the service provider to the end user organization. The SP provides the virtual infrastructure, the organization uses it. Application licensing based on concurrency or user seats has always been infrastructure agnostic. Heck, Microsoft already has a similar model with its Client Access License (CAL). All that’s needed is to remove the physical binding requirement for application server licenses. As I’ve said before, we are moving away from device-centric computing. We’re shifting away from hardware as the definition for a user’s working environment, and that includes both client and server applications. It’s time the major players in the enterprise application market evolve their licensing policies to meet the agility requirements of today’s enterprise.