During a briefing on Microsoft’s announcement of its new Virtual Machine Manager product and its overall plans with regard to virtualization, Larry Orecklin made an interesting comment about how virtualization may change licensing models going forward. Orecklin is general manager of System Center and Virtualization at Microsoft.

Microsoft offers two types of licenses for Windows running in VMs today. The $999 Windows Standard Edition requires an additional license for every additional VM you add to a physical server. The $4,000 Enterprise Edition allows up to 4 Windows instances per physical server. The $3,000 Data Center Edition allows an unlimited number of VMs per box. “That’s where [Windows licensing] is heading,” Orecklin said.

So what will Microsoft’s product lineup and pricing look like if licenses that allow unlimited Windows VMs per box were to percolate down the food chain to Enterprise Edition and Standard Edition? Orecklin wouldn’t comment further.

The licensing for VMM and System Center is more straighforward: $860 per physical server for the suite or $499 for a standalone copy of VMM that supports up to five physical machines. It will be interesting to see how VMware responds to that.