Enterprises are holding back on virtualisation projects because users are faced with too high a price for the technology. Vendors are penalising companies for running applications on virtual machines rather than physical ones, according to a new report from the The Burton Group.

"There is an abundance of user angst and uncertainty surrounding the licensing and support of applications running on x86 virtualised environments," writes Burton analyst Chris Wolf. Some vendors simply won't support their applications when they run inside VMs, states the report, titled Virtualisation Licensing and Support Lethargy: Curing the Disease that Stalls Virtualisation Adoption.

But software providers can make life difficult and more expensive for customers even without such an all-or-nothing approach. Vendors sometimes will support applications on virtual servers only if they run on certain platforms, typically VMware ESX Server, Wolf writes.

Sometimes they tie licences to hardware components that may change as VMs relocate from one physical host to another, or penalise customers for maintaining offline copies of virtual machines for disaster-recovery purposes.

Frustrated customers "often deal with software vendor support by either 'accidentally' failing to disclose that an application is running in a virtual machine (VM) or by cloning the VM to a physical server before calling support," Wolf writes.

The Burton Group recommends that vendors develop common licence management standards, and remove all restrictions on VM mobility in product licensing. The analyst firm gives high marks to some vendors, such as SAP, which has employed virtualisation architects to help write policies "fully compatible with modern virtualisation architectures."

The 51-page report reviews vendor policies in three categories: server operating systems, management applications, and client-server applications or middleware.

Server operating system licensing policies are "generally virtualisation-friendly" with a few exceptions, while there are more problems on the application front, with independent software vendors often binding application licenses to physical server hardware.

CA, IBM and Novell offer less-than-ideal licensing for management applications, said the Burton Group. "All three vendors license their applications based on physical server resources," the report states. "CA, IBM, and Novell should consider instance-based licensing as an alternative to their physical server-based licensing models in order to provide organisations with ... options and to remain competitive with vendors that already do so."

The Burton Group applauded five management application vendors for providing virtualisation-friendly licensing: HP, Microsoft, Opsware, Sun and Symantec.

In the client-server and middleware licensing realm, Burton Group identified three vendors that fall short: IBM, Microsoft and Oracle.

With IBM's Lotus Domino Server, customers have to pay extra licensing fees when a virtual machine is moved to a different physical server. Microsoft customers who use Exchange Server 2007 and SQL Server 2005 are allowed to move VMs between physical servers only once per 90 days. Oracle, meanwhile, has not defined a licensing and support policy for leading x86 server virtualisation platforms, the report says.

Six client-server and middleware vendors that offer virtualisation-friendly licensing terms, according to the Burton Group, are BEA Systems, Citrix, Novell, Red Hat, SAP and Sun.

Among operating systems, Burton Group gave the best marks to Novell SuSE Linux Enterprise Server, while detailing some shortcomings in Microsoft Windows Server 2003, Red Hat Enterprise Linux (RHEL) 5 and Sun Solaris 10.

Microsoft is generally good, but customers need a licence transfer to move a VM from one physical server to another, the report states.

The Burton Group criticised Red Hat and Sun for only supporting certain virtualisation products. "Red Hat does not offer [operating system] subscriptions per physical server when RHEL is run inside a [virtual machine] on a platform other than Red Hat," the report states. "Sun officially supports VMware ESX Server 2.5/3.x and Solar Containers for virtualising the Solaris 10 OS."