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Microsoft to revise virtual desktop licensing in 2010

Microsoft's Software Assurance licensing program makes desktop virtualization too expensive for many IT shops. But the company said it will make changes in the per-device model.

Microsoft plans to modify its software licensing program to be more amenable to Windows shops that are interested in virtualization but that hold off because Microsoft's per-device licensing makes it too expensive.

One executive responsible for Windows licensing, the Software Assurance (SA) maintenance agreement and Virtual Enterprise Centralized Desktop (VECD) said Microsoft will revitalize its licensing program later this year to lift some of the restrictions of today's per-device model.

"We will see incremental changes on product use rights, on product use types and on requirements customers can meet to enable more types of users," said Amilcar Alfaro, senior product manager of worldwide licensing and pricing at Microsoft.

More on Microsoft's VECD

Microsoft's VECD is mandatory for Windows virtualization
Changes to any aspect of Microsoft licensing will be welcome. Many enterprise customers say they don't understand Microsoft's licensing terms, and they are also not confident that the company's Software Assurance SA maintenance agreement offers true value. IT shops and experts still argue about the relative merits of SA, which requires each enterprise to conduct heavy-duty analysis to ascertain its value.

Today, some of the biggest licensing controversies involve virtual desktop technology. IT pros say they believe Microsoft uses its maintenance agreements to curtail adoption of desktop virtualization because users must have SA to access the company's own virtual desktop tools. They also argue that VECD, which is mandatory for anyone who wants to virtualize a Windows client, makes desktop virtualization too expensive.

Virtual desktop tools kept behind the SA wall
Companies with SA on for the client operating system can -- at extra cost -- have access to some of the virtual desktop tools in Microsoft's Desktop Optimization Pack (MDOP). App-V (formerly SoftGrid) and Med-V (Kidaro) can only be purchased this way. Both will continue to be part of MDOP, however App-V can be obtained through Remote Desktop Services (formerly Terminal Services).

Paul DeGroot -- an analyst at Directions on Microsoft, a Kirkland, Wash.-based consulting firm -- estimated that while about half of enterprise customers don't have SA for their clients, they might have it as part of a server or Office suite.

Software Assurance: Windows licensing everyone loves to hate

Customers have been unhappy with Microsoft's licensing since the company started selling its software via an annuity model. Software Assurance can be problematic for enterprises on tight budgets because it requires companies to prepay a percentage of their license price for upgrade rights to a future software release. Read more about SA here.

This is because many organizations typically get the latest OS when buying new PCs, he said. According to DeGroot, roughly three-quarters of the enterprise managers who attend his company's licensing seminars say they plan to introduce a new OS only when they buy new computers.

Instead of going through the hassle of upgrading entire desktops, IT shops might like to run applications on an OS that lives in a virtual machine. But Microsoft wants them to move to Windows 7, so it offered an option in Windows 7 called XP mode -- which lets applications that need to run on XP do so on Windows 7.

Whatever IT shops choose to do, the end-user desktop must have an OS to put in the VM or on the desktop, so someone has to get a copy of the OS someplace -- quite possibly through a retail outlet if not through SA.

"Microsoft will get its money one way or the other, but what they are trying to make sure of is that people are still running the desktop OS," DeGroot said.

Revitalizing VECD
If you want to virtualize a Windows desktop, you need to have VECD. And though having SA isn't essential to buying VECD, it does make it a lot cheaper. If you have SA and VECD, it will cost $23 per device per year; Without SA, it will cost $110 per device per year.

Microsoft's Alfaro explained that the company breaks virtual desktop licensing into two parts --the license for the Windows client and the license of the Windows infrastructure. VECD only covers the Windows client.

He rejected the assertion that Microsoft's licensing holds back desktop virtualization by making it too expensive. Alfaro said, for example, the rise in cost and complexity depends on the customer's investment in its own infrastructure, such as storage. For many large enterprises, the Windows license is only a small part of the equation, he said.

Although Microsoft will update its per-use device model, the company continues to license per device because right now it's the only way to provide an accurate count of licenses per access point.

"Per user creates more complexity, and a wholesale shift to per-use licensing would be too costly," Alfaro said. "Most customer agreements are constructed around devices."

Therefore, it's likely some kind of hybrid model will come first.

"Some of the changes around the relaxation of use rights to support more flexible rights to allow roaming, and to other devices, will come in this calendar year," he said.

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