Microsoft's changes introduced to end-user license agreement (EULA) in Windows Vista have spawned a wave of controversy. Consequently, Paul Thurrott from SuperSite for Windows has posted a blog entry, clarifying the Vista license changes. Microsoft is not limiting Windows transfer rights from one machine to another or upgrades of the operating system, but Microsoft has debuted virtualization licensing rights.
Microsoft will permit reassigning of Windows Vista to another device a single time. This was also the case with Windows XP - Microsoft has only intervened in the textual formulation of the EULA for Vista and not in the actual transfer rights. “You may move [Windows XP] to a different Workstation Computer. After the transfer, you must completely remove [Windows XP] from the former Workstation Computer” was the XP variant that left a little too much room for interpretation for Microsoft's taste. As Vista and XP are tied to a single workstation and not to a person, the user may reassign the OS a single time to another device, in such a case as a hardware failure. Therefore you can “reassign the Windows Vista license to another device one time.”
Microsoft actually revamped the EULA to deliver a greater level of flexibility with hardware upgrades, especially with upgrades of the motherboard and HDD. Changing these two components simultaneously will cause the operating system to conclude that it's running on a new machine and require reactivation.
“In the case of a Windows XP and Vista-based PC, there is an algorithm that examines hardware changes and, based on an internal score, determines whether a reactivation is required. When that happens, Windows will attempt to reactivate electronically. If that fails, the user will need to call and reactivate manually. This is the same under Vista as it was under XP, though again the algorithm has been updated to be less strict,” stated Thurrott.
Only Windows Vista Business and Ultimate are licensed for use as a guest OS in a Virtual Machine, but installing them on a VM is a different thing altogether. Because in doing so, you lose the right to install the operating system on a physical machine and reactivate it, due to the fact that a single license of Vista is synonym with a single installation.
“Windows Vista Enterprise is a special case. With that version of Vista, which will be made available only to volume license customers, users will be able to install a single licensed copy of Vista on one physical PC and up to four VMs, simultaneously. Those four VMs, however, must all be installed on the same Vista Enterprise-based PC, and they must be used by the same user,” reveals Thurrott.