Microsoft

Microsoft's VDA licensing is a strategic gambit

Scott Lowe discusses some strategic reasons why Microsoft has held onto VDA licensing for so long, despite its high cost.

 

Microsoft cash cow
 

Even while storage and other infrastructure vendors struggle to reduce the per-unit costs of virtual desktop infrastructure initiatives, there's one aspect of these solutions that hasn’t changed much in recent years: Microsoft’s licensing associated with these kinds of initiatives. Licensing remains a somewhat confusing mess, but I see multiple reasons why Microsoft has yet to correct the issue.

VDA, CDL, SA

Microsoft has a wide variety of licensing programs under which virtual desktops may fit. The most common is Microsoft’s Software Assurance (SA) program. For customers who participate in this program, some desktop virtualization rights are included. For example, you can use a full Windows PC as a Virtual Desktop Infrastructure (VDI) endpoint without having to purchase separate Virtual Desktop Access (VDA) licensing. Bear in mind, though, that this doesn't cover thin clients that don’t already run Windows. For those clients, you'll still need to procure a VDA license. I’ll explain the VDA license shortly.

For Windows 8 users, Microsoft also makes available the Companion Desktop License (CDL), but at an additional charge. This license allows a user to access a virtual desktop from up to four devices, such as an iPad, Android tablet, or other such device. It also requires the procurement of VDA. So, in essence, you need Windows 8 + SA or VDA + CDL in order to use your iPad to connect to a virtual desktop instance at work.

VDA and how it's a strategic move for Microsoft

So, exactly what is this VDA license?  Simply put, it’s Microsoft’s way to continue to collect per endpoint revenue for each device that's used in the corporate world. Microsoft charges $100 per year for each device under this license. If you have a device under VDA, and you’re planning out five years, you can spend $500 over the course of that time just for the privilege of connecting that device to a Windows-based virtual machine for VDI purposes. Suddenly, that inexpensive thin client has been burdened with a cost that exceeds a full-fledged Windows PC.

This licensing program has negated many of the economic benefits of VDI for many organizations. Were it not for this program, I suspect that the industry would be much more VDI uptake. Microsoft, however, would see a net loss in market share and revenue, since the company would be giving up endpoint revenue.

That’s strategic move #1 for Microsoft in favor of VDA. With this license, regardless of the kind of device a customer intends to connect to the VDI environment (whether that device is running Windows Embedded or some Linux variant), Microsoft will continue to receive a payment for that device. I’m sure that, when VDI started gaining steam and non-Widows thin clients became popular, Microsoft was concerned about the erosion of the desktop-based profit stream. As such, VDA was born.

What about the long term?

Frankly, I’m surprised that something hasn’t come along to replace VDA. The licensing program is expensive, and it's often cited as the reason that some VDI projects fail to meet economic goals. As such, organizations have found other business reasons to consider VDI, including being in support of BYOD initiatives. Of course, there are ways to make the justification, but the fact remains that VDA licensing is a hindrance.

To be fair, there may be more to the program than meets the eye. Microsoft is reportedly working on a Desktop as a Service (DaaS) offering with the codename Mohoro. It’s rumored that this service will sit alongside Office 365 and Azure -- or ride on those platforms -- and that it will become available in the second half of 2014. Mohoro is intended to provide RemoteApp-like functionality. If that's the case, then it seems as if users would be able to run Windows programs from the cloud on pretty much any device of their choosing.

I fully expect that there will be licensing costs for Mohoro in the form of some kind of subscription. It’s possible that this cost will be less than VDA pricing, too, which might make Microsoft’s own DaaS offering more compelling from a cost standpoint. That's strategic reason #2 that I see for Microsoft to have maintained VDA for so long. If they can hold the status quo until their own offering is ready, then they avoid seeing people make a jump to other platforms, at least on the business side.

Summary

VDA certainly isn’t an accident -- it’s an intentional imposition that's intended to help Microsoft maintain its dominance on the desktop. Do you agree? What do you think of the rumors of Microsoft’s DaaS efforts? Share your thoughts in the discussion thread below.

 

 

About

Since 1994, Scott Lowe has been providing technology solutions to a variety of organizations. After spending 10 years in multiple CIO roles, Scott is now an independent consultant, blogger, author, owner of The 1610 Group, and a Senior IT Executive w...

2 comments
SHCA
SHCA

I don't really care about the cost of Volume Licensing and Software Assurance.  I do mind that MS is so darned opaque about it all.  I think I've taken 3 webinars and 2 online courses on it, and I still don't understand what they're getting at..  I'm sure the only people who get it are Enterprise IT managers who buy it all the time.  I talked to a sales rep last week who didn't understand what it is and why I'd buy it, but he sure knew in what situation I HAD to buy it and had to pay double for Windows. 


Why can't they just offer 2 choices, one-time purchase or subscription?  With subscription you get upgrades, with one-time you don't.  Even my luddite Small Business owner customers could grasp that and make a decision.  As it is, I can't even raise the issue because it all sounds like double-speak. 

rograham1
rograham1

The most cost-effective method of remote access for most corporations is to simply enable remote control into dedicated Windows 7 PCs (no VDA license is required). It looks like MS may be closing that opportunity via CDL. Another TCO killer for VDI is the requirement to have a pre-provisioned disaster recovery capability in the event of the loss of the user's primary data center. In order for VDI to be cost beneficial, there has to be an EXCEPTIONAL/DISTORTED benefit line item that sways the balance. Those cases DO exist, but typically for a limited population of end users.