Any solution for data center license management must find the virtual machines, read the capacity dedicated to the virtual machine for capacity-based license calculations, and map virtual machines to their physical hosts.

Say, for example, software that uses a per-processor license is installed on a virtual machine that has two processors assigned to it while the physical host has 32 processors. Typical inventory tools would report 32 processors on each virtual machine, greatly increasing the license requirements for per-processor based licenses. An optimized solution will accurately count the licenses required in the virtual environment, minimizing license consumption and reducing costs accordingly.

Publishers often have specific product use rights associated with virtual machine installations. For example, one license can cover installations on one physical machine and up to four virtual machines on the same physical host. The installation of Windows Server 2008 on a fifth machine on the same host would consume another license.

Similarly, running on Windows Server uses the Symantec Tiered OS license model, which has the same rights and restrictions on the number of VMs as the Windows OS edition in use (e.g. four VMs for Enterprise Edition, unlimited VMs for Datacenter Edition). An optimized license management solution must have this licensing knowledge built-in. This allows organizations to find machines with "free" license slots to save licensing costs. Most important, it allows enterprises to accurately count the number of licenses required, taking into account virtual use rights.

Other virtual and thin-app solutions, such as , may also be deployed, and the license management tools should provide comprehensive license reconciliation across multiple virtualization technologies.