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Convoluted Microsoft licensing hinders desktop virtualization market

Licensing for desktop virtualization is still a problem for IT shops, especially when Microsoft products are involved.

Microsoft Corp.'s licensing policies are notoriously complicated, especially when it comes to technologies like desktop virtualization. Unfortunately, the company's licensing structure isn't going to get simpler anytime soon.

"There is a lot of confusion surrounding Microsoft's policies, and people end up asking themselves, 'Am I stupid?' 'Should I know what this means?'" said Directions on Microsoft licensing analyst Paul DeGroot , who co-wrote a list of reasons why Microsoft licensing is so hard to promote the Kirkland, Wash.-based firm's Licensing Boot Camp workshops.

Microsoft's licensing policies for desktop virtualization are particularly problematic. For virtual desktop infrastructure (VDI) deployments, the Windows Virtual Enterprise Centralized Desktop (VECD) license is an addition to the Vista Enterprise license that is available only to Software Assurance (SA) license holders, increasing the high cost of desktop virtualization.

For example, a company running 10 thin clients and 10 laptops that aren't covered by SA requires a total of 20 Windows VECD licenses at $110 each, totaling $2,200 every year. If that same company has 10 thin clients and 10 laptops that are covered under SA, it needs 10 VECD licenses (10 x $110/year) and 10 VECD for SA licenses (10 x $23/year), totaling $1,330 per year, according to Microsoft's website.

"For a long time, Microsoft did not have a clear-cut explanation of how to license for VDI, and even now, the whole VECD is new and not all the issues have been ironed out," said Christian Metz, IT director at Orange County United Way. "I have heard of shops that adopted VDI early on and literally purchased 100 retail copies of Win XP and just keep them, unopened, in a closet in case someone questions the licensing of their VDI thin clients."

Microsoft's licensing policies for desktop virtualization are also a stumbling block for companies delivering the technology.

Chelmsford, Mass.-based Desktone Inc. provides VDI through service providers, which the company calls Desktop-as-a-Service (DaaS), but Microsoft's policy doesn't allow service providers to deliver VDI to customers, said Jeff Fisher, Desktone's senior director of strategic direction.

Since service providers can't "rent" out Windows, enterprises that want to use DaaS need to supply their own Windows client OS licenses and have to buy VECD licensing.

Burton Group analyst Chris Wolf, who hosted sessions on virtualization licensing at VMware Inc.'s VMworld 2009 conference earlier this month, said Microsoft has received a lot of feedback that OEM licensing should be applicable to VDI, and the company is considering making that change.

Why Microsoft's licensing is complicated
It's easy to see why Microsoft's licensing policies are more convoluted than those of other companies. The company offers more products than any other software vendor, and it sells its broad range of products in almost every country to companies of all sizes and types. So, one-size-fits-all product packaging, licensing and pricing couldn't possibly work, DeGroot noted.

Microsoft does have a central licensing division, but licensing policies are also crafted by disparate product groups throughout the company that decide, independently, how to deploy and price licenses.

Add to that the changes in technology that require licensing updates, and the problem worsens.

License tracking, compliance pose challenge
Most Microsoft products don't include tools to help customers track license compliance, so customers are responsible for keeping track of licensing changes by developing their own compliance policies and policing themselves. As a result, users either buy more licenses than they need or sign up for more expensive "all you can eat" licensing programs, DeGroot reported.

Even the most law-abiding IT shops can end up out of compliance because of license-tracking snafus, DeGroot said. "Some enterprise customers run a scan every week of their licenses, but there are so many Microsoft licensing rules that are not discoverable ... you might be making a rigorous effort to be legal, and new licenses just show up with no way of knowing where they came from," he said. "Then, tracking down end users to figure out where new licenses came from is very time-consuming. And when it comes to virtualization, you basically have to keep external records, which is also time-consuming."

Unfortunately for Microsoft customers, licensing isn't going to get simpler any time soon, especially since executives at the company don't consider their licensing policies problematic, according to DeGroot.

"Customers may not like the licensing policies, but they still write the checks," DeGroot said. "The end result is that customers who have a vision of building an optimal data center have to pay Microsoft top dollar for enterprise editions of their products."

Let us know what you think about the story; email Bridget Botelho, News Writer.

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