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It's official: Microsoft overhauls VDI licensing strategy

Bridget Botelho

It could be the one event that kick-starts desktop virtualization to the masses -- more affordable license pricing from Microsoft.

Microsoft Windows and desktop virtualization users have been asking the

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company to simplify its virtual desktop licensing for years, and Microsoft finally responded this week with some significant changes.

Beginning July 1, 2010, Windows Client Software Assurance customers will no longer have to buy a separate license to access their Windows operating system in a virtual desktop infrastructure (VDI) environment. Virtual desktop access rights will be included as a Software Assurance (SA) benefit.

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In addition, Windows Client Software Assurance and new Virtual Desktop Access License (VDAL) customers will have the right to access their virtual Windows desktops and Microsoft Office applications hosted on VDI technology on secondary, noncorporate network devices, such as home PCs and kiosks, the company reported.

Prior to these changes, Microsoft maintained a per-device licensing model, and its Virtual Enterprise Centralized Desktop (VECD) made it expensive to license Windows for virtual desktops.

Dan Powers, an IT manager at Atlanta-based Cox Communications, uses VDI and said Microsoft had been fleecing customers by making them pay for OS licenses for both client devices and virtual machines.

"It should be one or the other. If we are buying bulk licenses and putting them on physical hardware, and I virtualized it, I should not be paying for the OS again," Powers said. The licensing change, he said, "will allow me to not worry about what I am connecting from and still make sure I am covered on licensing."

The licensing changes essentially remove that extra license requirement and add a roaming allowance, filling a major gap in virtual desktop licensing.

 The big hole in VDI licensing was that there was no way to legally access virtual desktops from a kiosk or other device. No one could stay in compliance.
Rob Horwitz
AnalystDirections on Microsoft

"The big hole in VDI licensing was that there was no way to legally access virtual desktops from a kiosk or other device. No one could stay in compliance," said Rob Horwitz, an analyst at Kirkland, Wash.-based Directions on Microsoft. "Now, there is total clarity."

While the licensing change is good for Software Assurance customers, non-SA customers are still beholden to Microsoft's pay-twice VDI licensing. One non-SA customer said he thinks Microsoft "punishes" customers for not paying for the expensive SA plan.

"If I'm an SA customer, this means I no longer have to pay for an extra license, but if I don't have it, it raises the issue of how do I get on the SA train?" Horwitz said.

Software Assurance makes sense for companies buying licenses in bulk, but it is expensive. By the book, customers can only get SA if they have bought their software within the past 90 days. Otherwise, customers have to buy an upgrade license and buy Software Assurance.

"This means customers have to rebuy their OS licenses, which makes it quite expensive to onboard SA," Horwitz said. "Unless Microsoft changes the rules to help people get SA, that is the big red flag here."

Customers using thin clients also have to buy the extra OS license to access VDI. Microsoft made this distinction because thin clients don't require a client OS. With the VDAL, such customers are getting more than they would with a traditional OS license, because they also have virtual machine (VM) access and mobility freedom, according to Microsoft.

But thin-client vendors and users won't be happy, said Michel Roth, a virtualization expert and author of Thincomputing.net.

"Before the announcement, VDI was about equally expensive for rich clients as for thin clients. That is not true anymore."

Still, industry experts say these licensing improvements will lower the cost of VDI for enough customers to really kick-start VDI adoption, since licensing is no longer a stumbling block for deployments.

Industry experts predicted that Microsoft would only lower its VDI license prices when it had a competitive product that would benefit. Now that it has some VDI technologies and an even stronger partnership with XenDesktop provider Citrix, the company has done just that.

In addition, Microsoft and Citrix launched promo deals that undermine VMware, including a program that lets VMware customers trade unused licenses for Microsoft and Citrix VDI licenses -- for free. The company also launched a VDI kick-start deal for new users: $28 per user for the first 250 users for one year for XenDesktop VDI Edition and Microsoft VDI Suite Standard Edition.

Let us know what you think about the story; email Bridget Botelho, News Writer, or follow @BridgetBotelho on Twitter.


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