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Analysis: Why Microsoft is killing desktop virtualisation

Desktop virtualisation is hurting the company's profits

Microsoft's software licence restrictions and one of the key hostilities to the virtual desktop infrastructure. We look at how Microsoft is killing virtualisation.

Microsoft's licensing rules for VDI cost you more

Microsoft's benign neglect of its anti-VDI licencing provision changed about two years ago with the release of the Vista Enterprise Centralised Desktop (VECD) licencing scheme.

The original release of this new licensing scheme hit the market with a combination of profound confusion and outcry. So much so that the terms and pricing were slightly modified about six months ago. The current licensing scheme can be boiled down to two different options:

  1. If you're connecting to your VDI environment from a Vista-licensed PC already covered by Microsoft's annual Software Assurance plan, you must purchase a Windows VECD for Software Assurance licence.
  2. If you're connecting to your VDI environment from a thin client or a workstation that is not covered under Software Assurance, you purchase a Windows VECD licence.

Both licences give a user sitting at the licenced client device the right to run and/or connect to up to four virtualised instances of Microsoft Vista (or XP/2000 if you exercise your 'downgrade' rights).

Those virtualised instances can run on the client device or be centrally hosted - it doesn't matter where they are stored or how the virtualisation itself is accomplished. The important thing is that you're licensing the client device in whatever form that might take, not the VMs themselves.

But here's the rub: VECD licensing is only available as a subscription through Microsoft's Open Value and Select licensing programs. And it's not cheap. Presumably, most VDI implementations will use some form of diskless thin client.

The current pricing for this option is about $110 (£66) per year (marginally less if you have a level B/C/D Select agreement). Compare that against the roughly $125 (£75) you might pay for a perpetual OEM licence of Vista Business included in a new PC from Dell or HP.

Granted, that OEM licence is significantly less flexible than a VECD licence; OEM licences are non-transferrable and don't include Software Assurance, so you'll have to pay to upgrade to Windows 7 or buy a new Windows licence if you change out the PC.

Most enterprise desktop workstations seem to remain in service for about three years before they're replaced. If you purchase a desktop PC with an OEM licence for Vista Business, you'll pay up to $125 (£75) for the privilege.

It's hard to tell exactly how much because the amount Microsoft charges large business PC OEMs through its System Builder channel isn't public, but I suspect it's somewhere around there. If you decide to implement VDI and use a thin client to access it, you'll spend about $330 (£200) for the same three years.

There's no other way to cut this: it's simply way more expensive to licence a Windows desktop OS for a VDI environment than it is to licence one for a physical environment.

Even if you upgrade to a new major OS revision during those three years by taking advantage of the Software Assurance plan included in VECD, you're still paying more than you would if you did the same thing with a desktop client.

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NEXT PAGE: VDI is good for enterprises, but not for Microsoft

  1. Desktop virtualisation is hurting the company's profits
  2. Microsoft's licensing rules for VDI cost you more
  3. VDI is good for enterprises, but not for Microsoft

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