Restrictions: Vista in a VM

You may have heard that the Windows Vista license states that you may not run Windows Vista Home or Home Premium within a virtual machine. If you have tried, you’ll find that you are not prevented from doing so.

The topic of virtual licensing got people pretty spun up when the EULA was first released because it is not very clear. Specifically, the Vista Business/Ultimate EULA states:

“You may use the software installed on the licensed device within a virtual (or otherwise emulated) hardware system on the licensed device. If you do so, you may not play or access content or use applications protected by any Microsoft digital, information or enterprise rights management technology or other Microsoft rights management services or use BitLocker. We advise against playing or accessing content or using applications protected by other digital, information or enterprise rights management technology or other rights management services or using full volume disk drive encryption.”

And the Home Basic and Home Premium Licenses simply state:

“You may not use the software installed on the licensed device within a virtual (or otherwise emulated) hardware system.”

Still, Microsoft has been quoted as saying, "Developers with MSDN subscriptions are able to run ALL versions of Windows Vista (including Home Basic and Home Premium) in virtual machines for development purposes. In addition, they are also able to make as many copies of those virtual machines as they wish for development purposes."

Many have argued that the difference here is that Vista Business and Ultimate include additional licenses so that you can also use the same copy of Vista on your physical workstation legally within a virtualization environment on that same system, but not for the Home Editions. However, there is nothing I have seen that supports this. The only edition of Windows Vista which states that you may “install up to four copies of the operating system in virtual machines on top of Windows Vista Enterprise with a single license”

Enterprise Edition is not in MSDN and is limited to those subscribed to Microsoft’s Software Assurance program.

http://www.microsoft.com/licensing/sa/benefits/vista.mspx

Taking this further, you may recall that one of the features of Vista Enterprise Edition is “Virtual PC Express”. Virtual PC Express is a release of (the now free) Virtual PC software which allows for a single VM running Windows XP Professional, Windows XP Tablet PC Edition, or Windows 2000 Professional on a Vista Enterprise Edition system. The intention is to help ease migration problems that may be faced when dealing with some legacy applications.

The bottom line: If you are at work dealing with Enterprise, licensing should not be an obstacle, but if you don't have Enterprise you need a license for any virtual machines just as though they were physical systems.