Citrix announced the details of XenDesktop 4 earlier this week, and so far no one is talking at all about new features. Why? Because Citrix also announced that licensing would change from the current “concurrent user” (CCU) basis to a “per named user” (PNU) basis.
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In other words, if you have 200 users in your company who use XenDesktop at some point, you used to only have to buy enough licenses to cover the number of users who would be using XenDesktop at any single point in time. Moving forward you’ll have to buy a license for every user, regardless of how many people use the system simultaneously.
Citrix’s justification for this (via an email from them): XenDesktop 4 licensing is aligned with an enterprise-wide desktop usage model. Users need their desktops available 24x7, and XenDesktop 4 user-based licensing provides customers a simple user-based licensing model where customers can purchase a dedicated license for each user. As such, any other shared licensing model does not effectively meet the needs.
When I originally wrote about the XenDesktop 4 announcement the other day, I acknowledged that this model made sense. I felt that the concurrency-based approach was really a carry-over from XenApp, and that moving forward it did make sense to license XenDesktop on a per-user basis.
Ultimately I felt that the issue wouldn’t affect too many people (and in fact that’s what Citrix told the CTPs on the conference call we had where we were briefed on the changes).
But after reading the comments on my original blog post, and after reading the reactions of other CTPs on the CTP mailing list, and after receiving many (many!) emails from readers about their own situations, I think I’m going to reverse my position and say that the licensing change will screw a lot more customers than I originally thought.
Blinded by the XenApp-to-XenDesktop 2-for-1 trade up
Even in last week’s article I think I was focusing too much on the deal that Citrix is offering to existing XenApp customers where they can trade all of their existing XenApp licenses in a 2-for-1 deal for XenDesktop licenses. I didn’t really appreciate that this license change is a big deal for current XenDesktop customers too.
The problem is that while Citrix is making the assumption that XenDesktop is a desktop replacement (and therefore in use with a high-level of concurrency), the reality is that many (or even most?) current XenDesktop customers aren’t really there yet. The overwhelming majority of XenDesktop customers are legacy XenApp customers who have a long history of thinking about Citrix in a concurrent user way. You end up having a lot of scenarios where a customer has something like 200 XenDesktop licenses for 700 users. At roughly $250 per user, that customer would have to pony up an extra $125k for the 500 additional licenses they’ll need. (In other words, their total XenDesktop investment grows from $50k to $175k. And that's not even including the maintenance they have to pay on all these extra users!)
Will Citrix drive people away from desktop virtualization in general?
At the end of the day, there’s a risk that all of these people who are just dabbling in desktop virtualization will be turned-off by the concept all together.
While some people have suggested that Citrix will drive people towards the competition--because hey, there’s actual competition now!--Others suggest that Citrix will actually drive people away from desktop virtualization in general. The feeling is that a lot of today's XenDesktop customers aren’t really sold on the whole XenDesktop replacement concept, so they’re just trying it for certain use cases. But if their costs increase substantially they might just say “screw it” and skip desktop virtualization altogether for now.
One current customer wrote (via email), “The market and technology isn’t mature enough to support this change.” It reminds me of when Elaine on Seinfeld said, “It’s like trying to coax a little bird into your hand. You need to take gentle steps. You can’t do any BIG CRAZY MOVEMENTS or you’ll scare it away!”
That said, VMware View and Quest vWorkspace are both licensed on a concurrent user basis. Maybe current XenDesktop customers with a low concurrency ratio will take another look at these products? Then again, Citrix’s long-term vision of licensing for named users really is the future, so it’s most likely only a matter of time before the others move to a named user approach too. After all, how can VMware deal with the concept of concurrent users once view supports offline client hypervisors?
Right idea! Wrong price?
It's becoming clear that most people are aligning around the concept of per-named user licensing (except for a few specific verticals like Education that Citrix promises to address). “Per named-user is not the problem,” said one customer I talked to today. “What I don’t agree with is the pricing.” That same customer went on to list several examples of how other vendors charge much less for per named user licenses than they do for concurrent licenses. Citrix’s pricing is essentially the same from XenDesktop 3 to XenDesktop 4. XenDesktop Standard stays at $75. Enterprise drops from $295 to $225, and Platinum drops from $395 to $350.
There are several ways that Citrix could address this. Instead of dropping the price on XenDesktop 4, Citrix could instead offer current XenDesktop customers multiple per named user licenses for each concurrent user license they have. But this is not Citrix's plan, according to this email conversation that was forwarded to my by a current customer:
Customer’s Question: I currently have 155 "concurrent" XenDesktop 'Platinum' licenses. What is the conversion rate to per user on those?
Citrix’s Answer: Conversion for XD licenses for current XD customers is 1:1.
Customer’s response: It is essentially a major price increase for the XenDesktop product regardless of improvements to the technology or added features. What would have cost $800k to $1m will now cost $3.5 to $5m to procure. No matter how they spin it, this dramatically changes the playing field”
At this point Citrix likes to point out that the new XenDesktop includes all XenApp features, so in actuality the price is a lot lower than it was previously. While that could be true (it depends on the level of concurrency a customer was getting before), the XenApp value-add only truly matters to customers who who are moving to XenDesktop across the board and who can move their XenApp licenses to XenDesktop.
But wait. What about the cost savings from no more XenApp?
Getting the full version of the XenApp suite built-in to your XenDesktop Enterprise or Platinum products is a big deal. (A really big deal!) At first glance you'd think that the fact that you don't have to pay for XenApp itself anymore should more than justify the increased XenDesktop costs. Unfortunately the only way you get the XenApp for free is by going to XenDesktop 4, which essentially means that you're going to convert your XenApp licenses from CCU to PNU. That change in-and-of itself could be a potential deal killer. (Again, it depends on the level of concurrency you're getting, even with the 2-for-1 XenApp-to-XenDesktop trade up.)
The killer is the maintenance (Subscription Advantage). The problem with the 2-for-1 is that even though you get double the licenses for your one-time fee, remember that now you’ve doubled the number of licenses you need to pay Subscription Advantage on. So the annual Subscription Advantage fees you were paying on 3,000 users just jumped to 6,000 users. Sure, you get more value in that you now have access to XenDesktop, but at the end of the day you have a more expensive annual cost.
This is really hard for people who think they will ultimately migrate to XenDesktop at some point in the future but who aren’t ready to fully commit today. The 2-for-1 trade up deal is only valid through June 30, 2010. So if you think you might use XenDesktop in the future, what do you do? Do you move to the named use approach now to get the 2-for-1 but pay more maintenance in the meantime, or do you wait a few years until you’re really ready and hopefully get a good deal then?
(You know I’ve always been bullish on Terminal Server and XenApp. Now with Citrix’s stated goal that XenApp will remain a standalone product, I wonder if this concurrency issue will be enough of a reason to drive people back in that direction? Or maybe Citrix will migrate XenApp to PNU too?)
Footnote: How exactly does Citrix define a “user” for XenDesktop 4
Part of the discussion about the new XenDesktop licensing over the past few days has been about how exactly Citrix defines a “user” for XenDesktop 4. Is it really “per named user,” or is it “per user?” (Or is there even a difference?”) Here’s the real story:
The XenDesktop EULA defines a licensed user as “an individual authorized by a customer to use any device(s) to access instances of the product through the assignment of a single unique user ID, regardless of whether or not the individual is using the product at any given time.”
Citrix goes on to clarify (via email): If multiple users are sharing the same user ID, they each require a XenDesktop 4 user license. If multiple users use the system at different times, as is the case with the concurrent desktop model, they will also each require a XenDesktop 4 license. If a user connects to their desktop(s) and/or apps with multiple devices (e.g. desktop PC, laptop, netbook, smartphone and/or thin client) they need just one XenDesktop 4 license.
Moving to a per-named user model creates a plethora of other complexities. For example, one asked whether the licenses can be moved from one named user to another? And if so, how often?
Again, Citrix’s response: Licenses can be moved between users in two different scenarios:
- If a user is absent for a protracted period of time, the customer has the right to reassign the absent licensed user’s license to another temporary user for the period of absence only.
- If a user leaves an organization, then the customer has the right to permanently reassign the departing user’s license to another user in their company. Citrix will provide a process for “retracting” licenses under these scenarios with the technical enforcement implementation. The license assignment period is 90 days. This is not configurable.
For what it’s worth, technical enforcement will not be built into XenDesktop 4. That’s something that will be part of a future release. This circumstantially suggests that this licensing change was sort of a last minute decision by Citrix.
So now what? Do we just swallow hard and take it? Do we move to another vendor? Do we pressure Citrix to offer a 3-for-1 or 4-for-1 CCU to named user exchange for current XenDesktop customers? Time will tell.
What will you do?
[UPDATE: Citrix has just launched a survey asking for your feedback about the licensing change in XenDesktop, specifically with questions about PER USER licensing versus PER DEVICE licensing. I highly encourage everyone to take the survey, regardless of your thoughts. Hopefully Citrix will share the results publicly. If not, we'll just make our own survey. ;)]
[MONDAY MORNING UPDATE: We've confirmed that Citrix will NOT be sharing the results of their survey publicly, so we've created our own identical copy whose results we will publish. Our survey is here.]