Virtualization is the process of creating one or more software-based servers on a single physical host. The benefits of Virtualization (increased IT agility, flexibility and scalability) have made it very popular.
Software companies like Oracle, IBM as well as Microsoft have specific rules for licensing their products on virtualized systems. Though extremely complex, the following gives a basic understanding of the policies of these software vendors:
Oracle calls virtualization as ‘partitioning of a server’. They have a document giving details of how to license Oracle products on different virtualization technologies. Oracle has a set of recognized technologies that it calls ‘Oracle-approved hard partitioning technologies‘. Apart from these specified virtualization technologies Oracle does not allow sub-capacity licensing. You will need to license all the processors on the physical host.
All physical cores of the host have to be licensed. Unlimited instances of SQL Server can be deployed on the physical servers and the hosted VMs.
IBM allows sub-capacity licensing if you are using IBM License Metric Tool (ILMT). You will not get the benefits of sub-capacity if you are not using ILMT.