Microsoft dumps Vista virtualisation limits

Mac users benefit, say analysts, from change to Vista Home Basic, Premium EULAs

Microsoft has dropped its prohibition on running the least expensive versions of Windows Vista in virtual machines, doubling the choices for Mac owners who run the rival operating system in VMware's Fusion or Parallels' Parallels.

Beginning immediately, Vista Home Basic and Vista Home Premium can be run in a virtualised environment, Microsoft said Monday. The pair are the cheapest editions of the OS available at retail, selling in full versions for $US199 and $239, respectively. Previously, Microsoft only allowed Vista Business ($299) and Vista Ultimate ($399) to be installed in a virtual machine (VM).

In June 2007, Microsoft nearly pulled the same trigger - it actually briefed reporters before backtracking - but did not say why it had changed its mind. At the time, it only issued a terse statement through its public relations company: "Microsoft has reassessed the Windows virtualisation policy and decided that we will maintain the original policy announcedl." Seven months ago, however, some analysts pegged problems with Vista's digital rights management (DRM) software for the hesitation.

The only change Microsoft needed to make was to the End User Licensing Agreements (EULA) of Vista Home Basic and Vista Home Premium; there has never been a technical barrier to virtualising either version on the Mac or any other platform.

Analysts applauded the decision on several levels.

It was practical, for one thing, argued NPD Group's Chris Swenson. "It's harder and harder to find a copy of Windows XP at retail, so for those Mac users who are buying Fusion or Parallels, they really have to buy Vista." And when it comes to Vista, Home Premium, Swenson added, is the "sweet spot."

In fact, he's convinced that the success of Apple's Mac and the virtual machine applications from Parallels and VMware, played a part in Microsoft's decision. "If you're Microsoft and seeing a move to another platform, you should make it easier for people to use Windows, not harder. You want to keep customers engaged with Windows, with Vista in particular. You don't want to lose customers forever [when they buy a Mac]."

JupiterResearch's Michael Gartenberg echoed Swenson's take. "While virtualisation at the desktop for consumers isn't a big issue at the moment, it will likely become more important over time, especially as Mac OS X gains consumer momentum," Gartenberg said. "Seems like Microsoft wants to make sure that if there is a consumer desire to run Windows, Microsoft wants to allow it no matter the platform used to host it."

An analyst with Directions on Microsoft, Paul DeGroot, however, saw a slightly different motivation for the move. "It appears that Microsoft has recognised that their restrictions on VMs are likely to have little impact on the competition, and probably hurt it and its market share more than anyone else," DeGroot said in an email. "They're really trying to make the case that they have the most complete virtualisation story, and it's difficult to do that if you keep imposing restrictions and making up lame excuses, such as 'no one wants to do this, so we're prohibiting it,' to explain the restrictions."

In the past, Microsoft has cited both a lack of interest in virtualising Vista and potential security problems as reasons for not allowing Home Basic and Home Premium to run in a VM.

According to Ben Rudolph, Parallels' director of communications, the change is a win for Microsoft, his company and Mac users. "This is a good move for Microsoft because it gives their current customers a way to move to Vista. Kicking the virtual tires is pretty attractive. But for non-Microsoft customers it's even bigger. It's an excellent way for them to reach that other six percent of the desktop market, and gives users some incentive to stick with Windows."

The decision to allow Vista Home Premium in a VM is especially welcome, he added, claiming that Parallels users asked about running that version of Vista more than any other. "They wanted to use Home Premium because it was the sweet spot operating system. It had what they needed, and it didn't cost $400 [like Vista Ultimate]."

While representatives from Microsoft were not available to explain why the company had a change of heart, Rudolph had his suspicions. "Last year, they told us the decision [not to allow virtualisation] was not final," said Rudolph, "and I think they got an overwhelming response from customers and partners that they should rethink."

Microsoft has posted a EULA supplement that applies to the four retail versions of Vista, which spells out the change. "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."

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