Mystery surrounds Microsoft's virtualization flip-flop

For months, the industry has been calling on Microsoft to ease restrictions forcing customers to use only the priciest versions of Windows Vista for desktop virtualization.

It was not surprising, then, when Microsoft started telling reporters and analysts that it was going to change the policy and allow lower-priced home versions to also be used. What was surprising to journalists, bloggers and analysts alike was a terse statement e-mailed Tuesday night from Microsoft stating that the company was reversing its plans and sticking with the old restrictions.

"Microsoft has reassessed the Windows virtualization policy and decided that we will maintain the original policy announced last fall," the company said in its e-mail. A company representative declined to comment further or say what prompted the move.

Once the domain of true geeks, virtualization is creeping into the mainstream. The technology, which allows multiple operating systems to run simultaneously on one computer, has become particularly important for Mac users who want to run Windows programs side-by-side with the Mac OS.

All along, Microsoft has been saying there are security risks associated with the latest generation of virtualization technology. Indeed, a researcher showed a program at last year's Black Hat security conference that showed how virtualization could allow malicious code to operate invisibly, similar to a rootkit. And, in discussing its plans to ease the restrictions, Microsoft said it still had security concerns, but had concluded it was better to let users decide whether to take on those risks.

But analysts have questioned the tie between the security issue and the licensing restriction. The security risks apply to all versions of Vista. Similar risks might even be present if someone were running another operating system in a virtual machine, whether that is Linux or Windows XP, properly licensed in all its major versions to run inside a virtual machine.

Paul DeGroot, an analyst with Directions on Microsoft, said the licensing agreement, which few people read, is the wrong place to set security policy. "If you want to make your product more secure, then make your product more secure," he said.

"We haven't received any more information either. It's a little odd."

--Parallels spokesman Benjamin Rudolph

As it stands now, only the full versions of Vista Business and Vista Ultimate are properly licensed to run as a "guest OS"; that is, inside a virtual machine. Vista Business sells for $299, while a full copy of Ultimate fetches $399.

DeGroot said he had welcomed Microsoft's plans to allow the Home Premium and Home Basic versions to act as guest operating systems. "I thought they were good changes," he said, adding that Microsoft's licensing terms seem arbitrary to him.

They have also been irksome to many others, including companies like VMware and Parallels, which sell virtualization software. When Vista debuted in January, Parallels posted a blog highlighting the licensing restrictions and what they meant for its customers. In February, VMware issued a white paper highly critical of Microsoft's policies.

Given all the feedback Microsoft had been getting, and apparently was keen to accommodate, it's not clear what prompted the last minute flip-flop.

"It just sounds like somebody put the brakes on hearing about this, (someone) who had not been part of the initial decision," DeGroot said. This is pretty curious, though, since changes to the Windows licensing agreement are not made lightly and typically get thorough scrutiny, including a review for antitrust issues by Microsoft's legal team.

Even Microsoft's partners have gotten little explanation. As part of its planned announcement, Microsoft had talked with Parallels, securing a quote from one of its executives praising the deal. Like the rest of the industry, Parallels was left scratching its head over the about-face.

"We haven't received any more information either," said Parallels director of corporate communications Benjamin Rudolph. "It's a little odd."

VMware founder and chief scientist Mendel Rosenblum said he doesn't comprehend Microsoft's security arguments.

"I have been perplexed by this supposed security risk," he said in an interview Wednesday. While he said the idea of malware being able to evade detection "sounds really scary," there are ways to detect whether such code is running. "As a rootkit, it's a bust," he said.

"I understand Microsoft has a right to put anything they want in the licensing agreement," Rosenblum said. "When they try and justify it with something in the technology, it doesn't make any sense to me."

It's not the first time Microsoft has changed its mind. Microsoft has already made one change to the Vista licensing terms in response to concern from enthusiasts. When it first announced its policies, Microsoft was planning to limit the number of times a boxed copy of Vista could be moved from one machine to another. The company quickly backtracked, saying as long as it was never used on more than one machine at a time, users could transfer boxed copies of Vista as often as they wanted.

Usually, though, when Microsoft changes its mind, it is to respond to customer feedback. In this case, Microsoft said it wanted to give users the choice, only to then reverse course. Analysts speculated that business concerns, in addition to security worries, were behind Microsoft's initial decision, as well as its last minute change of heart.

Indeed, virtualization poses an interesting set of business issues for Microsoft, particularly in that it involves Microsoft's crown jewel--its Windows desktop franchise.

On the one hand, Microsoft stands to gain some additional revenue, either from Mac users who historically weren't paying for Windows at all, or from Windows users who want to run more than one copy of the operating system at a time.

"Virtualization has the opportunity to dramatically increase Microsoft's revenue on the desktop," DeGroot said. "Regardless of what (version of the) OS people put on, it is additional sales of Microsoft's most profitable product."

But Microsoft also may see hidden dangers to its business model from virtualization, which allows one computer to act as many. "I think what we are seeing is a company having a great deal of difficulty deciding what they are going to do with virtualization on the desktop," DeGroot said, adding that while other software makers are also facing this challenge, it is of paramount importance to Microsoft. "It's where they make all their profits."

[befuddledms]

I think they choked

I think they choked on their own FUD.

[anarchyreigns]

Nobody cares, Microsoft. You're becoming more irrelevent every day!

http://www.ubuntu.com

[clpdan]

Microsoft - seriously - we do not care any more

Sick of MS and their lame products. Maybe MS is worried that more
people will use XP/Vista in a virtualized environment for the
purpose of migrating off of their OS over time. Yee-haw!! Buh-
bye Microsoft.

[open-mind]

It's All About Security

That is, the security of Microsoft's flow of income.

[krushyou]

Linux...

Yeah, Linux users have been saying this for years now that anyday now Linux is going to take over, its not happening, sorry.

The average consumer could care less whether or not they can run guest operating systems.

[Terrence Koonce]

Microsoft worried one license could used on mulitple "Virtual Machines"?

Apple has addressed this with Boot Camp. Simply restart any
Intel Mac running Boot Camp and then run Vista. No virtual
machine needed. This will not stop anyone from buying a Mac.
It?ll just put Parallels out of business.

Microsoft's real reason for not wanting users to run Vista in a
?virtual machine? is they are worried that someone dishonest will
buy one copy of Vista and install it on multiple Macs via ?virtual
machine? software.

If it's a "virtual machine" there is no way for Microsoft's "Genuine
Advantage" System to tell if a license is running on "multiple"
pieces of hardware, probably because the "Windows OS" would
think multiple "virtual machines" are the same piece of
hardware.

Maybe Microsoft is seeing a Windows license getting ?the same?
updates downloaded multiple times. This would not be possible
if Windows XP/Vista were running on actual hardware.

But to me that's not the consumer?s problem, just because some
are dishonest. Microsoft should just come up with another
solution for updating for those who are running Windows Vista
on a virtual machine.

It?ll be interesting to see what happens in Vista?s next Service
Pack.

[WJeansonne]

Those poor conflicted Mac Users

Will they ever get over MS Windows? I just have to laugh.

[technewsjunkie]

They don't want a side by side OS comparison

Because that would mean people would learn about better operatings sytems.

Competition.

I'm not conflicted at all. By the way, I use both Windows and Mac OS everyday. I bet WJeansonne doesn't.

[mariusthull]

That's fine.

If MS wants only their top of the line versions of vista to run as guest os'es that's fine by me. However if I go out and buy Vista business I better be able to make as many vm's of it as I want on my computer. I don't begrudge Microsoft making money. But if they want me to pay for every virtual machine that runs on the same computer that's BS. That would be like the cable company wanting you to have an account for every vcr or tv you own in addition to your regular account.

If I buy of copy of Vista the number of vm's is irrelevant. I should be able to make as many vm's of vista as I want. No matter how you slice it it's one person using one pc with one cpu one video card. And before you ask I'll tell you why I'd want to run more than one vm. I'm trying to study for my MCSE. Running vmware on linux with a copy of windows 2003 and two or three vm's is a much cheaper alternative to buying three pc's one of which would have to have enough power to run server 2003.

[MegaJustice]

Goodbye Microsoft, It's been a good run.

Virtualization is a critical component of our software and website development strategy. The Vista license approach is dated and Oracle proved that you can't match license to processor (they flopped back). Ironically, I recently "forced" myself into the Mac platform. This isn't a "switch to Mac" commercial, just a frustrated Windows user who's had enough with this outdated approach to software licensing.

[Xenu7]

Macs getting too popular

This has nothing to do with security, and everything to do with playing second fiddle to OS X on a Mac.

I'm so glad I switched. After 15 years of GPFs, blue screens of death, and weeks of wasted time performing upgrades, I have never looked back. My wife has to use XP for work, and it crashes EVERY time she uses it-- and that's with a full-time corporate IT department supporting her.

Windows is yesterday. OS X is tomorrow. You choose.

[Xenu7]

Microsoft blinks

In the OS war between Microsoft and Apple, Microsoft finally blinked. Copying OS X features is one thing, but blatantly punishing OS X users by forcing them to pay for premium versions of Vista is a sign of desperation. I guess they're really starting to feel the heat up in Redmond.

Do you think they'll ever be a "Vista Phone?" Five versions of the same phone, security problems, and a lovely brown plastic case?

[Mister Winky]

Bash MS Virtualization Licensing? Apple is MORE RESTRICTIVE in Every Way

So, let's see. You can buy any version of Vista and run it on any hardware you like, but MS won't allow virtualization of the two lower level versions. I don't like it, and I think it's a bad decision, but there it is. For all you Mac fans who are frothing at the mouth, keep in mind that these licensing rules apply to all Vista virtualization (including Vista on Windows), not just Vista on OS X via Parallels.

By contrast, Apple will ONLY allow you to run OS X on Apple hardware. No alternate hardware allowed. Worse yet, Apple allows NO VIRTUALIZATION of any kind, not even OS X on OS X.

So why the fuss about MS' decision, really? When Apple limits choice, the Apple fanboys say "because of stability" but when MS does something less restrictive, "it's profiteering." Do you really think Apple's restrictions have NOTHING to do with profitability?

I'd rather run a virtual OS X machine on Windows and a Dell that I can configure to my liking than virtual Windows on a Mac. Of course, Apple won;t allow it because they don't want the competition. Why is nobody complaining about this?

-Mister Winky

[Ted Miller]

Linux! Linux! Linux! Linux! Linux! Linux!

Vista Business sells for $299, while a full copy of Ultimate fetches $399. Home Editions $100 and up. Macs overly pricey.

Now here is Linux

1. It is great to use NOW and is always improving.
2. It is FREE!
3. Wide choice of distros.
4. Faster then Windows and I mean FASTER.
5. Various office suites to choose from.
7. For gamers there a thousands to choose from!
8. Endless productivity software.
9. Better security and freedom of choice.
10 Better browsers and freedom of choice.
11 Better search and freedom of choice.
12 Better mail and freedom of choice.
13. Ect. Ect. Ect.

Big stupid corporate BOZO's need not change and remove your Microsoft blinders.

All people who make 50,000 yrly and under THIS IS FOR YOU! Use Linux and take over the corporate world and send Bill Gates to selling pencils on the street. His reply? "I was a contender"

[edgedesign]

Need vs. Desire

I think the perception that many people have is that Windows
virtualization is more for necessity and not desire. OS X and
Linux users want access to less expensive, basic functionality
Vista to test development and/or run a few apps not available to
OS X or Linux users. OS X and Linux users are passionate about
their respective OSs and really don't have much desire or
passion for Windows OSs. Consequently, they don't want to pay
a premium when other options can be made available.

Apple does not license OS X so they may retain a better user
experience. The Apple experience includes both software and
hardware which makes it easier to deliver a fluid user experience
- absent of viruses, spyware and tons of bugs. Of course this
path has kept their market share low, but their users are willing
to pay a premium for it. They're more focused on quality than
quantity. It's too late for Microsoft, so why restrict usage?

[Kingsley-BellSouth]

Security Issues

I would think that Vista Basic would have the least security issues. They start with Basic add more code for Premium add more code for Business and then add more code for Ultimate.

I would think the more code the more security issues.

No??

KB

[Jeremiah256]

Big Mistake Microsoft

I think Microsoft is making a big mistake. Every impartial report I've read on Vista says that it's going to be their PS3 - the previous version is more popular than the new version. WIN XP SP2 is stable. Most issues people had were resolved and those they continue to have are at least partially due to IT Departments having to do more with less and not having the resources to fully vet new apps before implementation. I use WIN XP on my Mac for the occaisional Windows only app needed for work. My apps from work do not get updated that frequently. It will be incredibly easy for me to skip Vista and wait for the next version of Windows. The only reason I had planned on buying Vista was to use with 10.5's Boot Camp for any Vista only game that caught my interest.

[tfosorcim]

Deja vu, Microsoft's stock-in-trade.

Does this ring a bell?:
'Way back in the stone ages, Microsoft came out with their last revision/update/service-pack/bug-fix
/[euphism-de-jour-meaning-we-didn't-do-it-right
-the-first-time] for win95.
Only hitch was that they claimed that this fix was too technical for the great unwashed masses (read 'you and me') to install, and could only be obtained by BUYING a NEW MACHINE with the win95 update.
(For you folks who'd like a possible lead on tracking down this Microsoft absurdity--but I repeat myself--, I seem to remember this was called 'Windows 95 Service Pack 5, Revision 4', or simply SP5R4, for short.)
Then MS came out shortly thereafter with Win98 for sale in a box. Guess what? Win95SP5R4, with just enough frivolities added so MS could answer anyone who screamed "foul".
Microsoft doesn't like you to remember.