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Since Windows Vista has been released to the public, there has been a lot of confusion and hype surrounding some of the licensing decisions and restrictions with which Microsoft Corp. saddled the operating system and its many versions. Additionally, there’s a new type of product key and a volume key management system that you might not know about. In this article, I’ll take a look at five distinct points about Vista licensing and key management and give you the most current answers to what I’ve found are the most common questions about those topics.

There are two types of product keys that are issued for Windows Vista

You’re probably familiar with the first type, which is the individual, one-machine license keys that are issued with new computers, retail copies of Windows Vista and so on. (There are minor differences in those keys, such as the OEM-type keys that don’t technically require user-initiated activation, but that’s outside the scope of this article).

The second type of keys is meant to unlock software licensed under corporate agreements. Unlike Volume Activation 1.0, which produced keys that bypassed product activation, Volume Activation 2.0 still gives keys for bulk-licensed copies, but it doesn’t disable activation. Instead, these keys have multiple allowed activations associated with them — hence their name, multiple activation keys, or MAKs. According to Microsoft, “Computers can be activated on an individual basis or by a central computer [see the next point] which can activate multiple computers at a time.”

You can manage activations and product keys over the network

There is software, called the Key Management Service (KMS), that can run on Windows Server 2003 machines with Service Pack 1 or later. Machines running KMS can handle activations of internal machines that run Windows Vista Business or Windows Vista Enterprise without having to route requests to activate each of those computers to Microsoft’s public activation service.

While this might seem like a great loophole to get around activation, it’s not quite set-and-forget. Copies of the operating system activated through a company’s KMS will be required to reactivate by connecting to a machine running KMS at least once every 180 days. Additionally, you must have 25 or more Windows Vista machines on the same network for KMS to function. The machine running KMS will, of course, need to activate itself using a KMS-specific key, which, once validated, authorizes that machine to activate its subordinates. (Note that KMS will be a supported service on Windows Server 2008.)
There are five license “states” in any installation of Windows Vista

They are as follows:

• Licensed. This state refers to an activated genuine copy of Windows Vista.
• Initial grace, or out-of-the-box grace. This is the period before the initial activation of a machine and lasts 30 days at first. You can restart this by issuing the command slmgr.vbs /rearm; this resets the counter to 30 days, but you can only re-arm this timer three times before activation becomes required.
• Nongenuine grace. This state is used when the Windows Genuine Advantage tool is installed and run on a machine and it fails the test. This grace period lasts 30 days.
• Out-of-tolerance grace. This state occurs when hardware changes exceed the activation threshold or if a KMS-managed computer has not reactivated itself via the KMS host in more than 180 days. This grace period lasts 30 days.
• Unlicensed. This is the state Windows Vista enters when any grace period ends. When a machine enters the unlicensed state, it runs in reduced functionality mode, or RFM, which limits users to one-hour sessions and disables some features and functions of Vista.

You’re limited in what you can legally use and do when it comes to deploying some Windows Vista editions virtually

Per the Windows Vista end-user license agreement, you aren’t permitted to install the Home Basic or Home Premium editions of Windows Vista as the “guest” operating system in a virtual machine (VM). You may host other virtual machines on any edition of Windows Vista.

Additionally, one license of Windows Vista is exactly that — one license. You can install a valid edition of Vista into a VM as a guest, but that counts as the installed machine; you can’t later install Vista onto a physical machine, at least without first completely destroying the virtual instance. For the sake of completeness, I’ll note that there is no technical restriction that enforces the kybosh on Home Basic and Home Premium as a guest VM operating system.

Windows Vista Enterprise has some tangible licensing advantages if virtualization is part of your strategy

This edition is only available to volume-licensing customers, and I’m sure this exception in its license is meant to be the carrot to the above point’s stick.

According to Microsoft, you may install Windows Vista Enterprise in a virtual machine as the guest operating system. Not only that, but you can install — under a single license — one copy of Enterprise on a physical machine, and then up to four other copies of Enterprise running as guest operating systems within virtual machines that are hosted on that one physical machine. They all must be used by the same person, however. This exception only applies to the Enterprise edition, however, and the physical PC and all four (or less) virtual machines all must be running the Enterprise edition to stay in compliance with the license.

Jonathan Hassell is an author, consultant and speaker on a variety of IT topics. His published works include RADIUS, Hardening Windows, Using Windows Small Business Server 2003 and Learning Windows Server 2003. His work appears regularly in such periodicals as Windows IT Pro magazine, PC Pro and TechNet Magazine. He also speaks worldwide on topics ranging from networking and security to Windows administration. He is currently an editor at Apress LLC, a publishing company specializing in books for programmers and IT professionals.

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