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Licensing DaaS desktops is a thorn in IT's side

SA, VDA and SPLA licensing terms make it difficult to understand how to deploy DaaS desktops and comply with Microsoft's rules. Even when you get the details sorted out, you might face a big bill for licenses.

One of the surprises with DaaS is that almost none of today's offerings actually deliver a desktop operating system....

This fact has serious ramifications on licensing and pricing.

There are no technical reasons prohibiting desktop as a service (DaaS) providers from delivering Windows 7 or Windows 8 desktops, just like in an on-premises VDI deployment. The restriction has to do with licensing.

Microsoft does not offer a service provider license for desktop operating systems. As a result, almost every DaaS offering delivers Windows Server as a desktop.

Understanding Microsoft desktop licensing

Cloud providers rent out virtual machines (VMs) by the hour. The most familiar Windows license model is the perpetual license, where an organization pays once and gets to use the OS forever.

There is a big disconnect here, so Microsoft has a special license for cloud providers: the Service Provider License Agreement (SPLA), which has been around for many years. SPLA allows cloud providers to pay Microsoft based on the number of hours each Windows VM runs for, rather than paying a fixed price for perpetual licenses for the maximum number of VMs. This way, the license cost is tied to the service provider's revenue and ultimately to customer value.

There are some restrictions on how providers can use SPLA. Notably, providers cannot use it to run software on customers' hardware, only their own hardware. SPLA essentially covers most Windows Server components, including SQL Server, Exchange and Remote Desktop Session Host, and there is SPLA licensing for Microsoft Office. But SPLA does not include any desktop OS like Windows 7, which is its biggest gap.

The lack of SPLA for desktop OSes reflects a wider issue with Microsoft's approach to licensing Windows desktops. When Windows 7 or 8 is installed on a PC, the license may come from one of a few sources. Sometimes it comes preinstalled from the PC manufacturer; this is called Original Equipment Manufacturer (OEM) licensing. Sometimes the license is bought separately from a retail supplier; this is called Full Packaged Product (FPP) licensing.

OEM and FPP licensing typically suits small organizations or home users. Larger organizations usually have a wider scoped volume license agreement with Microsoft. These license agreements cover server software, desktop operating systems and applications such as Office.

What does DaaS cost?

One of the factors that drives interest in DaaS is the sticker price of a desktop. Who could resist a desktop for as little as $25 per month? Multiply your total desktop count by $25 per month. The result should look cheap compared to the cost of running your own desktops in house or implementing VDI.

As is often the case, the sticker price may not reflect your total cost of ownership. The uplift to deliver the application set and performance that your users expect can easily triple the sticker price. You also need to account for the cost of the device(s) your users will access the desktop from and the network they will access it over. Remember that the DaaS desktop is not maintenance free; it will still need patching and upgrading, and your users will still want someone to call when they have problems.

The good news is that once you determine the true cost per user month, it will be the same -- a nice, regular operating cost. There will be no massive bill to replace every desktop every three or four years. Best of all, when a group of users don't need their desktops, that part of bill goes away.

Software Assurance and VDA

The only way to get a license to use Windows for VDI is through one of these volume licenses.

Resellers that sell a lot of Microsoft software employ specialists just to understand the complexity of Microsoft's licensing. To keep things simple, though, Microsoft's licensing for VDI is based around the devices from which users will access virtual desktops. Each device is deemed to have a primary user who is allowed to access a virtual desktop. That bit can get complicated, because it mixes device- and user-based licensing -- particularly if you have a hot desking policy and users sit in front of different devices each day. The next complicating factor is that the type of license the device requires depends on the device's operating system.

If a corporate PC with Windows installed under the Volume Licensing Agreement will access a virtual desktop, the PC must have Software Assurance (SA). SA is an annual subscription that an organization must pay for each PC, and it provides product support, access to upgrades and other benefits for subscribers. The good news is that the primary user of a PC with SA can also access his virtual desktop from non-corporate devices, such as a home PC. In addition, SA covers licensing for the corporate PC and the virtual desktop; both can run the professional editions of Windows. SA costs 29% of the Windows desktop license price each year.

If the user's primary device is not a corporate PC with SA, it needs a Virtual Desktop Access (VDA) license. VDA is intended to cover devices such as thin clients, smartphones and tablets that cannot have SA because they don't run a Windows desktop OS. Unlike SA, VDA only covers the virtual desktop -- not the device it runs on.

VDA is required for every primary device from which users access their virtual desktops. VDA does, however, allow a user to access the same desktop from a home PC or other device for some of the time without that device needing another license. VDA costs around $100 per device per year, which is higher than SA's price tag. The difference in price between SA and VDA is how Microsoft recovers the money you didn't spend with them when you didn't use a Windows machine as a VDI client.

SPLA and volume licensing don't mix. Volume licensing is only for devices owned by or dedicated to the customer. SPLA licensing is only for devices owned by the service provider. Having SA or VDA for a device that accesses a VDI desktop licenses that VDI desktop. Having SA or VDA for a device that accesses a DaaS desktop does not license that DaaS desktop. It doesn't seem fair, but those are the rules.

Next Steps

Windows licensing making it difficult to adopt cloud-based virtual desktops

Did Microsoft sort out desktop virtualization licensing difficulties in Windows 10?

Finding ways around costly Windows licensing rules for DaaS and VDI

This was last published in May 2015

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