Company officials discussed Microsoft"s positions at the SoftSummit conference in Santa Clara, California, on Tuesday. In the area of virtualization, in which multiple, virtual machines might be running on the same system, the company is considering strategies, according to Andrew Lees, corporate vice president for server and tools marketing at Microsoft.

Right now, Microsoft charges based on hardware capabilities irrespective of software partitioning or virtualization. A user site might have 1,000 virtual machines running 1,000 instances of the same application, deployed on a four-processor computer, he said. Under current policy, the user would be charged for four processors, not for running the application 1,000 times.

"We"re currently looking at that now, and the whole virtualization scenarios that are enabled are really mind-blowing," Lees said.

The company is seeking feedback on how to proceed, he said. "We ideally want it to be simple," Lees said. Whether or not Microsoft would generate more or less revenue based on a virtualization licensing scheme is not now known, said Lees.

In the area of utility computing, Microsoft officials said the definition of the term fluctuates. "We all agree, I don"t think anybody in here can have a consistent definition of what utility computing actually is," said Cori Hartje, director of worldwide licensing and pricing at Microsoft. She added she hears it described as usage-based or feature computing.

"We don"t really have a utility model today. We don"t see ourselves building one," Hartje said.

While utility computing might be a good model for some applications, Microsoft applications such as Office and Exchange do not lend themselves to that kind of model and customers do not have the infrastructure to support it, Hartje said.

"(Utility computing) is not really something that we"re rally working on," said Hartje.

A SoftSummit attendee from Hitachi Data Systems Corp. said he could understand why Microsoft would not want to use utility computing, but that the concept is being studied by his company for possible use in selling storage systems.

"We"re seeing customer demand for a utility model," said Steve Eckersley, an official with pricing and reseller operations at Hitachi.

Microsoft does offer Exchange on a per-email box pricing plan, for example, but charging per email would provide a disincentive to use the application, Lees said.

Lees also hailed Microsoft"s announcement Tuesday that multi-core processors would be treated as a single processor for purposes of software licensing.

"A processor is a processor, whether is has one core, two cores, eight cores. We"re going to make sure that Moore"s law does not mean more cost," Lees said.