Windows is still a long way away from shipping with virtualization as a default component of the operating system. However, Microsoft has made consistent advancing in terms of embracing virtualization with both its server and client operating systems. In the end, whether a copy of Windows runs on physical hardware or as a guest operating system inside a virtual machine taking advantage of emulated resources, its usage is still bound to the end user license agreement provided by the Redmond giant. Windows Vista was the most affected operating system in this regard, since initially the EULA failed to offer end users the rights to virtualize the Home Basic and Home Premium SKUs. Microsoft changed this aspect only in January 2008, when it offered virtualization rights for all Vista editions including the two home versions.

As far as Vista SP1 is concerned, the usage with virtualization technologies has been updated to read "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".

This is valid for all editions of Windows Vista. Exception to this rule makes the Enterprise SKU whose users are privileged because Microsoft allows them to run up to four virtualized copies under a single license. Of course, the Enterprise edition of Vista is only available to volume customers, and no to the general public.

When it comes down to the server operating systems, things are a tad more complicated. Virtualization rights for Windows Server 2003 R2 and Windows Server 2008 SP1/RTM are offered in accordance with the various editions of each platform. Microsoft's Juergen Thomas explained that Windows Server 2003 R2 Standard Edition can be run either as a physical or a virtual instance. The Enterprise SKU confers users the right to virtualize four copies of the operating system in addition to the physical instance, while with the Datacenter version, the sky is the limit for virtual instances.

Unlimited instances of virtualized platforms are also valid for the Datacenter SKU of Windows Server 2008. Thomas added that just as Windows Server 2003 R2, the Enterprise edition of Windows Server 2008 also permits one physical and four virtual instances. The only difference is with the Standard edition where users are now able to both install a copy of Windows Server 2008 on a server but also run a virtual copy under the same license.

"Note the difference in the Standard Edition between Windows Server 2003 R2 and Windows Server 2008. Please also note that only 'running' or active instances are counted. Please also note for the case of running VMWare ESX where no physical Windows instance is run, the limit of 4 Virtual Instances is binding. No exchange of the one Physical instance to a 5th Virtual instance is possible. Also be aware of the fact that Windows Datacenter Editions are licensed per processor. In order to have the benefit of unlimited Virtual instances, one needs to have licenses for ALL processors of the underlying hardware," Thomas explained.