Anna Cook gives a heads up on the potential of virtualization software to have a very real effect on software agreements.
Computing power is said to double every 18 months or so (as per Moore's law). For most businesses, this can mean that servers that are dedicated to a particular application will have excess capacity.
Virtualisation technology is being heavily promoted as a way for businesses to maximize the use of existing hardware resources and to save money. This is because virtualisation software can be used to simulate the availability of hardware that does not physically exist.
Virtualisation software takes advantage of excess capacity in an existing server by allowing it to host a number of virtual environments. Software applications can then be used "within" a virtual environment, instead of having dedicated physical hardware resources. However, this means that any applications that are "within" a virtual environment will be required to interoperate properly with the virtualisation software. If there should be problems with the applications, there is a risk that these could be blamed on the supplier of the virtualisation software (and vice versa), without any supplier taking responsibility.
Most software agreements are structured so that warranties or support are conditional on the software being used in a standard, familiar environment. Software vendors rarely commit to fixing problems that are outside their control or in circumstances where fault may lie with a third party. For this reason, unless virtualisation has already been contemplated by the parties, it is unlikely that applications used "within" a virtual environment will protected by warranties or full support. There may also be difficult licensing issues: for example, does a virtual "operating system" require its own licence?
This problem will not be resolved until virtualisation software is more widely accepted as a standard platform. The major outsourcing service providers have much to gain from virtualisation and they are probably the only entities that have the power to force a change of approach amongst software vendors regarding warranties and support. In the meantime, businesses contemplating virtualisation need to be aware of the risks.
Anna Cook is a partner specialising in IT and dispute resolution at Wedlake Bell
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