Steven Martin blog post answers the questions about licensing model for cloud technology - specifically Windows Azure – especially as it relates to Windows Server and the licensing of both products. There were a few real nuggets:

1. Windows Azure is an extension to the Windows Server code base
2. Windows Azure innovations are shared with Windows Server code base. Down the road, many features that drive cloud fabric in Windows Azure will land in premises technology, including Windows Server and System Center
3. We don’t envision something on our price list called “Windows Azure” that is sold for on-premises deployment.
4. As the Windows Azure innovations go back in to Windows Server, they’ll be available outside of a Microsoft datacenter for customers to host on their own premises or with Microsoft partners under the SPLA licensing model.

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Source:→ Steve