Volume 4, Number 13 -- April 4, 2007

Microsoft Loosens the Licensing Screws for Vista Virtualization

Published: April 4, 2007

by Alex Woodie

Microsoft announced two new Windows Vista licensing options last week that could have big implications for how customers buy, deploy, and manage the Windows client operating system. By enabling its largest customers to run Windows Vista centrally on servers and stream Vista images, applications, and data down to thin clients and PCs, the company hopes to simplify its customers' IT architectures, eliminate configuration and security headaches, and start the ball rolling toward a subscription-based Windows revenue model.

Microsoft quietly introduced two new licensing options last week at the Microsoft Management Summit 2007 conference in San Diego, California. The first option gives users the right to run Windows Vista Enterprise Edition on "diskless PCs," or thin clients. The second option, called Windows Vista Enterprise Centralized Desktops, or VECD, gives customers the option to run Windows, applications, and data in virtual machines running on centralized servers. Both new licensing options are available only to Software Assurance customers, which tend to be the largest IT shops. Previously, there was no clear way to license Windows when parts of the operating system reside on different machines.

With the diskless PC licensing model, Microsoft is enabling customers to store Windows, Windows applications, and users' data on a centralized storage area network (SAN) device. In this case, the Windows operating system (but not the applications) run on the thin client while it's turned on, providing the quicker response time and "user experience" characteristics that people have grown accustomed to with full desktop PCs. Microsoft says customers will be provided with the option of either storing their users' hard drives virtually on the SAN, or allowing groups of users to access shared hard drive images stored on the SAN.

The second new licensing option uses virtualization and application streaming more aggressively. Under VECD, all three elements of a Vista implementation--the operating system, the applications, and the data--are stored and run from a server equipped with virtualization software, such as Microsoft's Virtual Server 2005 R2. The Vista images--replete with applications and data--are then streamed to individual users, using technology such as Microsoft's Terminal Services software and Remote Desktop Protocol (RDP). This technique gives administrators the most bang for their buck in terms of locking down their users' desktop machines, deploying patches and other updates, and isolating OS images and minimizing the configuration problems that result when programs conflict with each other.

Under VECD, Microsoft is giving customers the option of using either full desktop PCs or diskless thin clients. Full desktop PCs give users greater mobility and the capability to access Windows, applications, and data while disconnected from the network. "Of the two options, we think using VECD with PCs is often a better choice for most customers because it still allows local and offline use of productivity applications, such as Microsoft Office, while providing centralization for line of business applications," says Scott Woodgate, director of Microsoft's Windows business group, in a PressPass Q&A.

The VECD and thin client licensing options are available now. The license to use diskless PCs is available at no charge for Windows Vista Enterprise customers, while VECD is available for an annual, per-device subscription fee, which Microsoft did not disclose.

Woodgate admits Microsoft is experimenting somewhat with VECD and the new thin client licensing schemes, and that it expects to hear from its customers. "These are still nascent technologies and new architectures, and we think that only a select few customers are planning to broadly implement these centralized desktop models today," he says. "The customers that are exploring these new deployment scenarios are early adopters, and they will help prove out the usefulness of centralization over the next few years."

Microsoft already has a mature remote desktop model with its Terminal Services product and its RDP protocol, and says most customers would be better off sticking with it, as opposed to making the jump to VECD. "For most businesses, the most cost-effective option for centrally managing their desktop environments continues to be Terminal Services," Woodgate says. "VECD likely has a lower price-performance ratio than Terminal Services--due to the hardware requirements of virtual machines--but it does have the benefit of the same application compatibility and isolation boundaries as Windows Vista."

While Terminal Services provide some of the same benefits that Microsoft is trying to accomplish with VECD--namely, making systems administrators lives easier by centralizing the entire architecture on servers--the days of emulation products, like Terminal Services and Citrix and its ICA model, are numbered. The virtualization genie has been let out of the bottle, and there's no way to put it back in. In many ways, the future enabled by virtualization will look much like the past, when mainframes were king, all applications were centralized, and user access was tightly controlled through dumb terminals--the equivalent of today's diskless thin client. In other ways, virtualization is the last real hope for reigning in the escalating costs of administering increasingly complex PC architectures.

But there are still a number of unanswered questions surrounding Microsoft's new thin client and VECD virtualization licensing options. For example, will Microsoft allow--or can it even prevent--competing virtualization technologies, including the ESX Server software from EMC's VMware subsidiary or XenSource's Xen hypervisor, to run VECD versions of Vista? What role will the new "Viridian" hypervisor planned for Windows Server "Longhorn" play in hosting Vista images? And how will Microsoft handle the periodic re-installation of the operating system when customers opt for the diskless Vista licensing model?

Also unclear is what role Microsoft's new Desktop Optimization Pack--particularly the SoftGrid desktop virtualization and application streaming technology--will play in the thin client and VECD licensing schemes, and whether the bundle is a prerequisite for the new licensing models. Microsoft announced the bundle last fall and had planned to start rolling it out to Software Assurance customers in the February-through-June timeframe.

Microsoft has a lot of irons in the virtualization fire these days, but the company has not yet clearly stated how it will all work together--or even if it will work together. Woodgate stated that VECD currently requires customers to cobble together their own solution using tools from Microsoft and third-party vendors.

Microsoft is forging ahead in the server virtualization space, as the planned releases of Windows Server "Longhorn's" new Viridian hypervisor and System Center Virtual Machine Manager, (formerly known by the codename "Carmine") show.

But right behind the server utilization trend is desktop virtualization and its paternal twin, Web-based software as a service (SaaS). While SaaS is gaining popularity, particularly in SMBs that don't have the time or money to build a data center, the trend toward desktop virtualization is not as well defined. But the need is there, and third-party vendors like AppStream, Sentillion, and others are moving aggressively into the area.

With increasingly faster network connections and sophisticated streaming technologies, the actual location where software resides becomes less important by the day. Moves like Microsoft's to loosen up licensing restrictions will help spur the adoption of new virtual architectures. The challenge for Microsoft will be to package it together to make it easy for customers to use while resisting the urge to lock customers into its stack, or to step out of the way so other vendors can develop the next generation of desktop virtualization architectures.


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