Executive Summary (This is a document excerpt)

Software license agreements that vendors created and buyers accepted years ago fail to make clear how definitions of hardware-based metrics such as per-processor apply to today's virtualized data centers. Enterprises, hoping to cut costs by improving utilization, may instead face unexpected liabilities for extra license capacity if their software vendors enforce current agreements to the letter. There is no industry-standard way to apply physical metrics to virtual scenarios — some software companies try to ignore the issue, while others devise conversion models of varying simplicity and fairness. IT sourcing and vendor managers can prevent problems by finding out their vendors' policies on server virtualization and by ensuring that their IT operations colleagues understand the policies as well. The rules may limit enterprises' freedom to make full use of virtualization technology's potential, but it's better to work within those limits than to ignore them.

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