My goal here is to get feedback from other experts regarding Microsoft's current policy on Licensing Windows 7 as a virtual guest under SPLA licensing. I am a consultant who encourages my small/medium business clients to seek out hosted remote office providers. In many cases, their core business applications do not work in Terminal server, Citrix, and PCoIP. There is a school of thought that virtually all of these problems can be overcome by modifications and workarounds, there are still some softwares that simply won't work. Also, sometimes the issue is not technical but rather licensing. In summary, many software vendors simply won't provide support or allow for their software inside these environments. This is indisputable. Nevertheless, many businesses that use "terminal unfriendly software" would still benefit immensely from a hosted virtual office solution. One obvious option is to create virtual machines running an OS and configuration supported by the software vendor. This is less elegant, and less efficient (resource wise) than a simple terminal server configuration, however it would be supported which is critical. It also carries several other advantages. The bottom line is that Microsoft currently allows for this with windows licensing if the company does it in house. However, it specifically forbids that such a solution be hosted by a third party, as third party hosts are restricted specifically to the SPLA terms for virtualization hosting which is documented here. http://download.microsoft.com/download/F/5/8/F58E786D-529D-438A-8625-4948205D8BA5/Windows_Hyper_V_Licensing_Whitepaper_v2_0.docx <quote> Scenario 5: Running Desktop Systems as Hyper-V Guests This scenario is currently not allowed under SPLA. </quote> Questions: Does anyone else see the value in the virtual desktop model? Does anyone else see the value in having it hosted by a third party? Can anyone think of a reason why they would outright deny this functionality like this only for SPLA? Can anyone suggest a method for making a request to Microsoft to have this policy revisited? I understand that maybe it seems like a waste of time, and I do respect Microsoft's right to permit/deny the use of their software as they see fit. I just think they've specifically cut out a good idea and business model here, and basically said "If terminal server or citrix won't do it, then it won't be hosted in remote office (by a third party)". I'd at least like to make my point and be heard. Thanks for anyone who provides their opinion: -Jerry

Hello Everyone, It seems that Microsoft recognized the problem with the ambiguity in the statement quoted above. After my original post, they replaced the text in scenario 5 completely. Here is the new text (which is still vague): Scenario 5: Running Desktop Systems as Hyper-V Guests "In this scenario, Hosting Providers can offer access to desktop-based applications such as Microsoft Office programs or other worker productivity tools. From a technical perspective, hosting a guest desktop environment running the Windows Vista® or Windows XP operating system is currently supported in certain configurations. See the Supported Operating Systems link in this document for the latest list of supported guests. However, this scenario is currently not allowed in the SPLA." Source: http://download.microsoft.com/download/F/5/8/F58E786D-529D-438A-8625-4948205D8BA5/Windows_Hyper_V_Licensing_Whitepaper_v2_0.docx Please also consider the policy below: "The SPLA offerings are the only Microsoft licensing program that gives you the rights to license specific Microsoft software for hosting to your customers." Source: http://www.microsoft.com/licensing/licensing-options/spla-program.aspx Based on these two statements, the intent of the policies appear to be: 1. Service providers MUST use SPLA to provide access to Microsoft software for use by another party 2. Vista, XP, and 7, cannot be SPLA'd if it is running in a Hyper-V Guest 3. Conclusion: Service providers cannot provide Virtual Machines running the "Desktop OS's" (Vista/XP/7) My Goal with this thread is four fold: 1. Establish conclusively that my interpretation is correct: "Microsoft is denying the hosting of virtual desktop operating systems by Service Providers" 2. Try to determine what their motivation is for this 3. Try to determine the proper channel for requesting a change to this policy 4. Obtain peer support for the goal of changing of this policy By the way everyone, 256 views and no replies. Does anyone have any insight, or even an opinion to offer. Obviously referenced sources are preferred, but any feedback would be great.

I read the agreement the same way :( I have a need to host desktops in a virtual private workstation as well. -Maule

Below are copies of two emails l I sent in October 2010 to an individual at Microsoft who works directly with the Director of U.S. Licensing, who in turn reports to the VP of Operations that manages Volume Licensing for North America. The ONLY response I've received to this and subsequent messages is that they're talking about it internally: <!-- [if gte mso 10]> <mce:style> <!-- [if gte mso 10]> <mce:style> October 2011: At the joint Microsoft/Citrix Virtualization Licensing webinar back on September 14, 2010, I asked about SPLA licensing for virtual Windows desktops hosted in an ITaaS model, and you said Microsoft has no plan on their licensing roadmap to provide for this. You indicated in your brief response that you were unclear as to why this would be an issue. It is, in fact, a critical and serious issue for ITaaS (HaaS/SaaS) providers – a business model that we are intent on implementing. Please allow me to explain: At present, Microsoft SPLA licensing enables provider-hosted licensing for EVERY component of a Microsoft-centric SMB network environment EXCEPT the Windows desktop licenses . VDA licensing (or Software Assurance added to Windows OEM, Retail or Open licenses) provides for CLIENT-OWNED VDI licensing, but makes no provision for provider-owned VDI licensing, and in fact, FORBIDS such licensing in a SPLA environment. SPLA licensing forbids mixing with non-SPLA licensing, and yet no SPLA license EXISTS for virtual desktops. Surely, you see how that leaves us stymied. This is an impossible licensing disparity for ITaaS providers that leaves us, effectively “dead in the water.” We can’t successfully implement a fully-hosted hardware/software environment WITHOUT virtual desktop licenses, yet Microsoft provides no way for us to implement such an environment WITH virtual desktop licenses! If I’m missing something here, please let me know. I understand that SPLA is the fastest-growing license category at Microsoft. I can assure you that it would grow even faster if you make the rules consistent across your product line so that ITaaS providers aren’t having to figure out how to do magic in order to arrive at compliance with Microsoft’s arcane, self-contradictory licensing approach. I and every other Microsoft Partner I’ve talked with about this (which is a sizeable number of Partners) are completely baffled by this situation , and we need some kind of intelligible response from Microsoft so we’ll know how to proceed . This is now a pervasive topic of discussion among your Partners, so I hope you see it as important for Microsoft to address with something more than the “Here’s what you CAN’T do” responses we’ve gotten thus far. Here’s my question to you in a nutshell , and I would earnestly appreciate it if you would help me to get an answer from someone at Microsoft: Does Microsoft have ANY license model or combination of license models that allows an ITaaS provider to do the following: 1. Host the Microsoft server-side products on equipment owned by the ITaaS provider (which is already straightforward to do with SPLA); 2. AND AT THE SAME TIME, Host Windows Virtual Desktops and Microsoft Office running on equipment owned by the ITaaS provider. If not, is there any plan at Microsoft to make this possible. And finally, if not, why not. **************** I’m sending this follow-up to our emails from last week in an effort to further pin down some of the detail regarding the Microsoft licensing hurdles we’re encountering for fully-hosted ITaaS in Virtual Desktop environments. If you can forward this internally in either HTML or Rich Text format, it’ll ensure that my colored highlighting is preserved (but I’m sure you already knew that!). I have no confidence that I’m reading and interpreting all the licensing requirements and restrictions exactly correctly, so I wanted to try to explain my own feeble understanding of those requirements and restrictions as they apply to the ITaaS scenario, and to let you and your team correct whatever I’m misunderstanding. But first, let me describe our objectives with regard to ITaaS – how this would work in a perfect world – so your team will understand as clearly as possible what we (and MANY other longstanding Microsoft Partners) are hoping to arrive at: 1. We, the ITaaS provider, will own the server hardware infrastructure (a high-performance, highly-available server environment) and will locate the physical server-side equipment either at the client site (what we call Local Cloud Computing) or at an offsite data center . 2. We will “own” (be the license-holder for) all licensing for the Microsoft server operating systems and Microsoft server-side applications used by our customer’s end-users (e.g. Windows Server, SBS, Exchange, SQL, SharePoint, etc.) and we will charge a predictable monthly fee to our customer for the use of this licensing . [I realize that software licensing isn’t technically “owned” by anyone other than the software creator, but allow me to use the term “own” for purposes of this discussion, so we’ll be clear about who holds the licenses.] 3. We will own all licensing for the Microsoft Desktop operating systems (e.g. Windows 7 Pro) and Microsoft client-side applications (e.g. Microsoft Office, etc.) and will charge a predictable monthly fee to the client for the use of these licenses. 4. We will host, and run on our server infrastructure, all the Desktop VMs accessed by our customer’s end-users . 5. The end-users will access the Desktop VMs hosted by us EITHER from existing PCs/laptops owned by the customer , OR from dedicated thin clients, PCs or laptops owned by us . THIS IS WHERE IT GETS REALLY STICKY WITH MICROSOFT’S CURRENT LICENSING RESTRICTIONS, particularly SPLA restrictions about mixing license types in a given network environment. Over time, we expect that all existing PCs/laptops owned by the client will be replaced by thin clients, PCs and laptops owned by us , since the ultimate goal here is to convert everything to a hosted model. But in the beginning, we expect that many of the desktop endpoints accessing hosted Desktop VMs will be PCs or laptops that are already in place and are owned by the end customer . We can conceivably buy these existing devices from the client to arrive at a 100% provider-owned equipment model, but that will have some real challenges, especially where a given user’s primary device for accessing a VM is a handheld device (iPhone, iPAD, etc.) rather than a PC or laptop. And it also creates an additional capital cost for us that will make it tougher to get an ITaaS approach in place. As I see it, a straightforward solution to the existing Microsoft Desktop VM licensing restrictions that would resolve all the issues above would be to create a true SPLA license for Desktop VMs, and to tie the SPLA VM license to the Desktop Virtual Machine itself rather than to a primary physical endpoint. To my mind, what is making this whole thing so excessively complicated is Microsoft’s intransigent insistence on tying Desktop operating system licenses to PHYSICAL devices. Isn’t it time to truly open the door to a licensing approach that matches the reality of Virtualized operating systems by tying the OS licenses to the VMs? Let the physical OSes (including embedded Windows for thin client terminals) be tied to the physical devices, and let the virtual OSes be tied to the VMs. 6. We will provide comprehensive (all-in) managed services for our clients under this model, including troubleshooting and remediation, Help Desk, patch management, malware protection, and consulting. ALL of the above deliverables will be included as a predictable monthly fee to our customers . Since Microsoft SPLA licensing includes constant eligibility for the latest versions of the Microsoft products (as well as downgrade rights for users that aren’t yet ready to move to latest versions), one of the huge business benefits to this ITaaS model will be “latest and greatest” versions of Microsoft product. Because SPLA licensing and server/desktop virtualization make it so much easier to do software upgrades/migrations, we plan to also include labor for major version upgrades of Microsoft products within the monthly ITaaS fees paid to us by the customer. We will also include scheduled hardware refreshes as part of the monthly fee paid to us by the customer under this model. That’s our vision – now we have to figure out how to make it work with Microsoft licensing, if at all possible. IF Microsoft allowed us to use SPLA for Windows 7 VMs accessed by desktop endpoints that WE OWN , that gives us one possible solution. It would mean that if we want to let the end-users continue to use the PCs/laptops they currently have in place for accessing the Desktop VMs we’re hosting on our servers, we would have to BUY all of those end-customer’s user endpoints (PCs and laptops) in order to be able to be covered by SPLA for the VMs accessed by those machines. That creates a financial hurdle in terms of our capital costs to implement ITaaS, but it’s not necessarily insurmountable. However, the problem with that scenario is that SPLA licensing presently includes specific prohibitions against MIXING SPLA licensing with other licensing models in the same environment . So even if we DO BUY ALL the customer’s endpoint equipment AND we provide and own all the server equipment, we STILL can’t use SPLA licensing if there’s any other license type installed on any equipment in the environment. This appears to be what the SPLA licensing says at this point, to the extent that I can understand it. I’m anxious to be told that I have this wrong! Again, it seems to me that ONE MODIFICATION would solve a multitude of different complications : In effect, TIE THE DESKTOP WINDOWS VM LICENSE TO THE VM ITSELF, not to the endpoint device . Since existing VDA licensing ALREADY allows for unlimited secondary endpoints (e.g. PDAs, traveling laptops, kiosks, etc.) to access a given VM, I don’t see where it materially changes the “spirit” of the licensing if you create a SPLA VM license and tie that license to the hosted VM itself rather than to the primary physical endpoint. As things stand right now, this much is clear: Microsoft currently considers the Desktop VM license to be tied to the primary physical ENDPOINT (Desktop device), NOT to the VM running on the server . So the only way we can possibly use SPLA for Windows Desktop VMs is if WE OWN the actual Desktop devices along with all other Microsoft endpoints that run any version of Windows, Office, or any other MS software. Again, I’m more than willing to be proven wrong about my assessment of the hurdles involved with Microsoft’s existing licensing options for hosted Desktop VMs! I remain hopeful that you’ll be able to get the right people involved at MS to identify one or more workable approaches for implementing a comprehensive ITaaS model, and if necessary, to modify SPLA licensing as it applies to hosted Desktop VMs so that it is simpler and more viable for ITaaS providers to cover all the bases. Please keep me posted on what you hear from your team. And thanks again so much for your assistance!

Below are copies of two emails l I sent in October 2010 to an individual at Microsoft who works directly with the Director of U.S. Licensing, who in turn reports to the VP of Operations that manages Volume Licensing for North America. The ONLY response I've received to this and subsequent messages is that they're talking about it internally: ...snip Jerry/Thomas, I have been searching for some of the very same answers myself. I think Thomas' letter really gets down to the real issues. As an ITaaS provider, I would like the ability to host & offer to customers virtualized Windows desktops alongside other virtualized infrastructure. Without the desktop OS, it's not really a whole ITaaS offering at all. It's quite clear the push is "towards the cloud" and this will be a crucial component in the full package. If nothing else, please "sign me up" as one of the people who would like to know how I can make this a reality and legally license this model. If either of you hear any more on this, please update me. Dan Murray

I am also unfortunately stuck in this world of licensing limbo. The difficulty also lies with the server present in the datacenter. Within Microsofts very own VDI and VDA licensing FAQ document they clearly state the following - "I am a hoster who wants to provide Windows based desktops as a hosted service. Do my customers need to pay for Windows VDA? OR Is there a Service Provider Licensing Agreement (SPLA) for Windows VDA so that hosters can provide Windows based desktops as a service to third parties? Currently there is no SPLA model for Windows VDA. Hence, customers who subscribe to desktops from a third party hoster will need to pay Microsoft for a Windows VDA license for each device accessing Windows client virtual machines in the datacenter. Additionally, hosters need to ensure they isolate the hardware and other resources for each company (i.e. no two customers can share the same set of resources, such as hardware, storage, etc) What a complete and utter farcical situation. I have to provide physical servers and possibly SAN's to each and every customer i wish to deploy VDI to. This significantly reduces my economies of scale, not to mention my profitibality. I'd have to own my own datacenter to provide my customers with enough space! Why are Microsoft treating the service provider like an outcast? All we want is for Microsoft to allow desktop operating systems, such as Windows 7, under the SPLA. They still get their VDA license for the endpoint access device and all servers are properly licensed also. Are we not supposed to all be collaborating with one another to drive this push towards the cloud? It certainly feels like Microsoft is poking the service provider with a big stick, while simultaneously giving the thumbs up to the private cloud to function as one. Humbug!

What is your thought on this solution http://www.desktone.com/ ? as far as I think they host Windows 7 Desktops as a service provider?

This is a great thread, it needs to get some real attention from the folks @ MS. We have opportunities we turn down every day for hosted desktops that we simply cannot provide under the current licensing model. We talked with a few 'hosted desktop' providers and it appears they are buying their own VDAs and assigning them to customers (clearly violating the VDA license agreement). Bottom line, this can't be a 'we won't do it at any cost' for Microsoft, there _must_ be a solution, whether purchased or SPLA'd to host and aggregate these licenses on provider-owned hardware (I completely agree, the thought of purchasing separate servers and storage for every client is insane). Microsoft is LOSING LICENSING REVENUE AND MONTHLY INCOME by not supporting this model, we need some solution and we need it now, or we will be forced to continue recommending solutions that do WITHOUT microsoft licensing/recurring revenue. Crazy.

I concur with all of the above. I’ve been wanting to start a desktop hosting service for a couple of years now, and it always hangs up at the licensing stage. I could offer Linux without issues, but MS just doesn’t have their head in the game. Hopefully they’ll get their act together soon.

Thanks so much for the feedback guys. Current Status: Still unresolved. More Community Feedback, Echoing this threads sentiment One of the early bloggers: http://blog.sneeden.com/?p=225 A VERY Recent Rumbling with 7000+ views already. This bodes well for the movement. http://www.brianmadden.com/blogs/brianmadden/archive/2011/03/02/why-microsoft-hates-vdi.aspx I feel really good that a heavy hitter like Brian is being very vocal about his discontentment with the policies. If you've posted here, I suggest you sign up and post on Brian's forum as well. This one's going to come down to community outcry versus their internal licensing guru's pushing for what strategy will continue to give them the "most profitable competitive angle in the VDI". Jerry

Bryan thank you for taken the lead on this, we too are facing the same problem and during a VAR event hosted at Microsoft (Waltham MA)I posted the same questions you raised and as you already know we got the same answer. We have lost a lot of deals due to the fact that we have not been able to provide a true ITaaS due to the complicity of licensing from Microsoft. Microsoft really needs to address their licensing structure because even MS employees don't understand how licensing works and we (the consultants) are left without valid answer and at times we lose deals because of the license becomes too expensive for the clients to afford. What I don't get is that, non-profit businesses can get license for pennies from techsoup and other agencies out there and the businesses that move the economic are left to pay the high prices. I understand the need to help non-profit organizations, but it will make more sense to me, to incentivize the customers that got MS where they are at today. Microsoft, Droid is out and it will become the factor desktop OS.... it will not be long for Droid to make its way into the Business sector, replacing Windows, then What? Libis Bueno. Domitek, LLC LBueno

Ok everyone, we may have an angle which we can exploit to create the leverage to get the policy changed. There is a very visible company out there offering Windows 7 hosted virtual desktops (I don't know how I didn't find them sooner). Since we all know their entire business model is in violation of Microsoft licensing, they've simply been operating under the radar. I'm happy to give them the benefit of the doubt and say they were simply unaware of the problem. The idea here is that they are operating a good business, and we want them to succeed. However, we also want to be able to compete with them but the barrier is that none of us are willing to start a business that is in clear violation of Microsoft licensing. The angle: Help the people there understand that they are clearly in violation. Contact them, try to reach someone of authority, and explain your concern. Show them scenario 5 if they're willing to read 4 sentences. Here's the company... http://www.desktone.com/products/desktop_cloud/ I've already taken a step by trying to reach out to their chief architect, we just need to hope they do the right thing: http://www.desktone.com/blog/19-thoughts_on_virtualization_bostons_deep_dive_day/ More accurately, we need to hope they can convince Microsoft to do the right thing. We're almost there people, don't give up hope. Thanks for your support. -Jerry

Further development everyone, thanks to the desktone Architect for responding... I still believe that our conclusion about SPLA is correct based on the SPLA documentation. However, as you might expect, there are plenty of Microsoft policies that conflict with other Microsoft policies. That is the case here. Despite the following claim made by the SPLA program: "The SPLA offerings are the only Microsoft licensing program that gives you the rights to license specific Microsoft software for hosting to your customers." This comment in the Microsoft VDA program document offers a second avenue to do this: "I am a hoster who wants to provide Windows-based desktops as a hosted service. Do my customers need to pay for Windows VDA? OR, Is there a SPLA for Windows VDA so that hosters can provide Windows-based desktops as a service to third parties? Currently, there is no SPLA model for Windows VDA. Hence, customers who subscribe to desktops from a third-party hoster will need to pay Microsoft for a Windows VDA license for each device accessing Windows client virtual machines in the datacenter. Additionally, hosters need to ensure that they isolate the hardware and other resources for each company. (i.e. no two customers can share the same set of resources, such as hardware, storage, etc)." My conclusion about this VDA license is that it doesn't solve the problem either. Microsoft's intention is just as clear here as it is in the SPLA document. They DO NOT WANT service providers to build a public cloud, and offer remote-desktop hosting service to multiple customers using this single public cloud. The VDA program would be fine if they removed the last sentence. "no two customers can share the same set of resources such as hardware, storage, etc". So now we have two programs to choose from. If we can get Microsoft to fix either of them, we can all start to operate really great virtual desktop hosting platforms. I suggest we focus on SPLA. The reason is that most of my customers want me to host servers and desktops for them, and I believe they should all be licensed under the same program. It makes no sense to say... ok, pay for the virtual servers with SPLA and the virtual desktops with VDA. However, I'll accept either at this point. Your thoughts everyone? Regards, Jerry Source: http://download.microsoft.com/download/5/0/5/5059CBF7-F736-4D1E-BF90-C28DADA181C5/Microsoft%20VDI%20and%20Windows%20VDA%20FAQ%20v2%200.pdf

All, Great thread and I agree with the need for a true hosted VDI licensing model. As it stands today, there is no SPLA VDI licensing option. You can host virtual desktops but it requires you to carve out the entire hardware environment to the customer AND the customer still has to purchase all of the required licenses. I had an opportunity to ask Emma Healey, Microsoft's Licensing Escalation Manager, about the SPLA/VDI question at the last Microsoft Worldwide Partner Conference in July. As it was explained to me, the issue lies in the desktop OS use rights. The terms and versions of the Windows desktop OS are different per geographical region internationally. Until there are standard terms across the globe, there won't be a SPLA VDI license. I suppose it's all stuck in negotiations between Microsoft and governing bodies in many countries. Hope this helps! Jason

I just signed up for a trial with desktone. This was under the signature in their email back to me with my login information: Software Licensing You are responsible for taking the necessary actions to obtain and maintain licensing for the following throughout the term of the Service: Microsoft operating system for the Desktop Virtual Machines (Windows XP, Windows Vista, or Windows 7); Microsoft Virtualized Desktop Access (VDA), as required for Desktop Virtual Machines; all applications in the Desktop Image; and utilities in the Desktop Image, such as anti-virus and desktop firewall software. So it would seem this is how they're getting around the licensing issue. The provide the service without a license. The end user is expected to provide their own license. ...interesting

I don't think that an email disclaimer exhonorates Desktone from breaching Microsoft's licensing agreement. After all, they are facilitating this process and installing the software. We have already lost business to Desktone and I am very upset they are being allowed such a lenghty head start in the virtual desktop business.

I agree. We could sell a lot of these, but won't because we won't violate the licensing agreement. Hopefully Microsoft changes things soon.

UPDATE: Another round of phone conversation with Desktone revealed the answer to the mystery. There is a 20 desktop minimum to use their service. Thus, when you actually become a customer, you're hosts are all placed on a single hardware infrastructure. So, based on this, their abiding by the "separate hardware" clause. The instant trial it's definitely misleading because you can turn on a single host and start to work. There is no indication of the 20 host minimum anywhere on the website. Thus, all the confusion. So, the problem with Microsoft stands. They don't want virtualized datacenters providing on-demand desktops as a service. I think the notion that complexities of dealing with other governments would prevent them from making a license change to allow this in the united states to begin with seems like a plausible excuse from Microsoft, but after further consideration, it's nonsensicle. If they wanted to do it, it would get done quickly. They don't want to do it, so it's not getting done.

Hi, Just spoken to our SPLA provider and apparently Microsoft have no current plans to release Windows 7 properly under SPLA. Surley this has to change for Hosted / Rented VDI to go mainstream. So I signed up for a trial of Desktone and then queried the licensing (see below): My Email: I was under the impression that Windows 7 wasn't available under Microsoft SPLA. Then when I looked at the bottom of your email it says: Software Licensing You are responsible for taking the necessary actions to obtain and maintain licensing for the following throughout the term of the Service: 1. Microsoft operating system for the Desktop Virtual Machines (Windows XP, Windows Vista, or Windows 7); 2. Microsoft Virtualized Desktop Access (VDA), as required for Desktop Virtual Machines; 3. all applications in the Desktop Image; and 4. utilities in the Desktop Image, such as anti-virus and desktop firewall software. Surely it can't be the customers responsibility to get the licenses?... That's like me selling PC's with unlicensed copies of Windows, Office, etc on and telling the customer it's their responsibility to be licensed. Their reponse: Yes the licensing for both desktops and any applications falls on the customer. Microsoft licensing can be purchased through Desktone or provided from the customer. We run and support the hosting infrastructure. These desktops are hosted but not managed through Desktone.

Hi, Microsoft has just started a new fiscal year and provided a new Service Provider use right. Still for hosted VDI the situation has not changed: http://www.microsoftvolumelicensing.com/userights/Downloader.aspx?DocumentId=4126 Page 72: "Rental on Service Devices and/or Rental Devices. Windows 7 Professional (and all other versions noted) may only be available for rental on service devices and/or rental devices. Windows 7 Professional is not available for streaming and/or hosting virtualized desktops when installed on a service device." Does anyone have other information by now?