One of the biggest benefit to Hyper-V over VMWare is Virtualization Rights. Basically Microsoft has provided you with a discount in the form of the ability to run Windows Server 2008 in Virtual Machines for free (this is based on which edition you are running - read on for more details).

This is a big win especially for a branch office scenario. When deploying branch offices normally you are constrained for space yet have requirements that would normally require multiple machines. The most common is the need to have a local DC (in order to define a replication strategy that makes sense - especially when using DFS). In most cases if a second machine did not make sense then most companies would not bother with virtualization because of the additional OS cost. Your options are no longer (1) spend more money on hardware and software or (2) spend more money on software. Now we have a third option. I personally like to call it (3) don't spend more money on hardware or software. Frankly I pick 3.

Now for the details. Please keep in mind that there are 4 editions of Hyper-V, and each has different capabilities.

• Hyper-V Server
  • Bare-Metal Hypervisor
  • Free Download here (available by Oct 8, 2008)
  • No Virtualization Rights (pay for Operating Systems as you go)
• Windows Server 2008 Standard
  • Virtualization Rights for 1 VM (1 physical + 1 virtual)
• Windows Server 2008 Enterprise
  • Clustering Available 
  • Virtualization Rights for 4 VMs (1 physical + 4 virtual)
• Windows Server 2008 Datacenter
  • Clustering Available
  • Virtualization Rights for Unlimited VMs (1 physical + unlimited virtual)

In its current form your virtualization rights only allow you to run instances of Server 2008.  They do not support any previous operating systems.

As you can see this changes the way that we can approach cost-effectiveness of a remote office and many other implementations.  For example for a remote office situation where I would need a domain controller onsite and a file server I would probably choose Server 2008 Standard and install my file services as well as the Hyper-V role.  Then on a VM install the domain controller utilizing my + 1 virtual license.  However if I needed to have 6 machines running Server 2003 in the branch office.  I would most likely choose to deploy Hyper-V Server and then purchase the licenses additionally (since virtualization rights are only extended to Server 2008).

UPDATE – I am not sure if I misread in my previous research however my previous statements were not correct in regards to previous versions of Windows Server.  Virtualization Use Rights do apply to any previous version of Windows Server Standard, Enterprise or Datacenter.

Please keep in mind this does NOT allow client operating systems.  These will still need to be licensed on a individual basis, so for VDI this will not be a cost saver.  However if you are in an organization that currently uses OEM licensing and are looking to move towards virtual machines this will be a definite benefit assuming that your data center licenses cost less than the total of relicensing all OS’s (since your OEM licenses are invalidated when moving off of the machine that they were purchased with.