No SPLA license for Win 7 means DaaS providers can't provide desktops to small companies.

We briefly touched on the subject of "very small business" VDI during Brian & Gabe Live this past Tuesday with guest Cláudio Rodrigues. The topic came about based on an email that Cláudio sent my way that outlined a recent VDI deployment he did for a friend.

We briefly touched on the subject of "very small business" VDI during Brian & Gabe Live this past Tuesday with guest Cláudio Rodrigues. The topic came about based on an email that Cláudio sent my way that outlined a recent VDI deployment he did for a friend. This deployment was for three virtual machines, done on a single server with mirrored drives, with the VM's executing on an iSCSI NAS. The hypervisor is ESXi, and the VDI platform is XenDesktop Express, so the entire thing was done for less than $6,000, which may be Canadian dollars, but what's the difference anymore?

The first question we asked Cláudio was why didn't he use RDSH as opposed to VDI, and his answer made a lot of sense. With VDI, the users didn't have to worry about a server OS that is shared between them all, where one mistake could screw up the system for everyone. They're not IT people, they just want to access Windows from their iPads and remotely, and it made more sense to give them access to an OS that they were familiar with.

The next question we asked was why he didn't just point them to DaaS providers like tuCloud or Desktone or something. He responded with a few points, like that this way the customer owns the solution (which was important to them) and that the expense incurred wasn't that much greater than if they would've rolled any of their own IT otherwise (since XenDesktop and ESXi didn't add to the licensing costs). One reason that really stuck with me, though, was that the DaaS providers wouldn't touch them with less than 50 desktops. At first I thought, "Wow, too bad for them, they're missing out on business," but then I realized that this isn't their fault, really.

It's Microsoft's.

See, the DaaS providers are just as hamstrung by Microsoft licensing as we are, probably more. The reason for this is the lack of a Service Provider Licensing Agreement (SPLA) program for Windows 7. No SPLA license means that DaaS providers are governed by the same rules that regular people and organizations are. It means, in a nutshell, that each instance of Windows 7 must be dedicated to a specific company, and that the hardware the OS runs on must also be dedicated to a specific company. For most of us, this is no problem, but for DaaS solutions that require streamlining and optimization to make their business models work, this is a nightmare!

So what do DaaS providers do to work with, or around, the limitations? A few things, actually. The first thing they do is simply not use Windows 7 or VDI. Windows Server 2008 R2 is available under a SPLA license, which means that DaaS providers can use RDSH to provide their customers access to desktops with no restrictions about which company can use which hardware or OS instance. Now, the DaaS providers impose their own limitations for their own efficiencies, but Microsoft licensing stays out of the way.

But what about when RDSH won't cut it? When organizations need full-on VDI desktops, DaaS providers are left with no other recourse than to buy hardware that is dedicated to that organization and either purchase separate batches of Windows 7 licenses or require the customer to acquire the licenses with proper SA entitlements themselves. It's this ridiculousness, I believe, that causes DaaS providers using VDI to assign a minimum threshold for the amount of desktops they'll deliver.

The reason for this is all about numbers. If a provider's cost model is set at, say, 50 VMs per host, then they base their monthly price on that number. Say a system that supports those 50 users costs $10,000 (that's without Windows Licenses, I guess. Also, I'm making that number up for the sake of easy math), it's easy to divide that out and learn that, at $30/user/month, they'll make their money back in 6 months. Everything after that is gravy, for the most part. But what about the situation Cláudio outlined? Those crazy ass licensing restrictions are still in place, so to support three VMs, a DaaS provider would still have to buy dedicated hardware. So even if they spent $5,000 on a server to support just three desktops (again, making these numbers up), the per user cost is over $1,600! Three users at $30/month, it would take almost five years before the DaaS provider made any money.

So now there's a compelling reason for very small businesses to roll their own VDI solution: nobody else will do it for them. 

Think of how many very small businesses are out there. Thousands upon thousands, I'm sure. And the smaller the company is, the less IT experience the have. They'd love to be able to outsource this stuff, and I think that the DaaS providers would love to be able to provide them the service, but because Microsoft won't open a SPLA program, the business and the DaaS providers are left to fend for themselves. 

This is why we're trying so hard to learn how OnLive is working, because OnLive appears to be getting away with something that dozens of DaaS companies wish they could do. And it's even more frustrating that Microsoft won't explain or do anything to help.

DaaS providers are waiting (well, not OnLive, but something fishy is going on there) for this, and the day they get the green light to share hardware and OS images across their infrastructure, they'll begin offering faster, cheaper, and better DaaS solutions. It's just up to Microsoft to make that happen. In the meantime, it'll just be the same, confusing bullshit that we've been dealing with for years.

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