Analysis: Microsoft Moves To End iPad's Free Ride On Windows

Microsoft believes the iPads and Android tablets its customers are using to access Windows desktops using virtual desktop infrastructure are under-licensed, and its new Windows 8 Companion Device License aims to plug this loophole.

"When you look at the number of iPad devices in the enterprise that are basically accessing and running Windows 7, using and getting the value of the software, there wasn’t a monetization of that for us that was associated with those things," Ross Brown, vice president of solution partners and independent software vendors in Microsoft’s Worldwide Partner Group, told CRN earlier this week.

Microsoft's unveiling of the CDL did not go over well, as some partners and customers interpreted it as a naked attempt to slow the iPad's march into the enterprise -- understandable since Microsoft isn't requiring it for Windows RT tablets -- while others predicted it would put a damper on VDI business.

Most surprising, though, was that some people interpreted the CDL as some sort of new, hardball tactic on Microsoft's part. Truth be told, Microsoft has always had a skittish view toward VDI, and has always been unapologetic about its Windows licensing terms.

For example, Microsoft does not offer its hosting partners a Service Provider License Agreement (SPLA) for Windows 7, but partners can offer desktops-as-a-service using Windows Server and Remote Desktop Services.

Microsoft partners can sell hosted Windows 7 desktop-as-a-service through VDI as long as the end customer has an existing licensing agreement with Microsoft. However, partners must also have dedicated physical hosts for each customer, and this extra hurdle negates multi-tenancy and essentially renders this option moot.

What's ironic about the hubbub over the CDL is that it actually represents a sort of compromise on Microsoft's part. And that's unusual, because the words "compromise" and "Windows" usually don't occur in any conversation about Microsoft licensing.

Here's the situation Microsoft faces: Under its current VDI licensing terms, customers who use devices not covered by Software Assurance -- like iPads, thin clients, and contractor or employee-owned PCs -- must buy the Virtual Desktop Access license subscription, which costs $100 per device annually.

But according to virtualization experts, many Microsoft customers are not adhering to the VDA requirement -- some willingly, others because they simply don't realize it is required.

"The complexity of licensing with respect to VDI is now such that Microsoft has effectively made it impossible for any enterprise IT manager to ensure compliance," said Simon Bramfitt, founder and research director at Entelechy Associates, a Concord, Calif.-based virtualization consultancy.

NEXT: Can Microsoft Track Customers' VDI Licensing Compliance?

Microsoft has no mechanism in place to remotely track whether or not they are in compliance, but some customers could be looking at much higher licensing costs if they were to face an audit.

"There are many organizations out there that have deployed VDI and do not understand the licensing, and they are all out of compliance," said Mike Strohl, president of Entisys, a Concord, Calif.-based solution provider. "They're not thinking about iPads and smartphones and all the extra endpoints."

The CDL could clear things up, partners say, as it gives customers the right to access corporate desktops through VDI on up to four personally owned devices. Microsoft has not said how much the CDL will cost, but customers with large numbers of VDI-equipped iPads are obviously going to be fine with the CDL if it costs less than the VDA.

The alternative for Microsoft would be to stage mass audits of customers that use VDI with tablets to ensure compliance with the VDA. Such a move would likely be a PR disaster for Microsoft, though -- one that would make the recent uproar over the CDL look tame by comparison.

Jon Roskill, Microsoft's vice president of worldwide partner sales and marketing, told CRN earlier this week that the company will rely on customers to do the right thing. "Our whole software licensing methodology is based on trust and will continue to be," he said.

There is no doubt that Microsoft is favoring Windows RT tablets by not requiring the CDL, but this isn't part of a strategy to keep Apple out of the enterprise: Microsoft just wants to get paid. Partners want Microsoft to get paid, too, and no one is advocating that Microsoft give Windows away for free.

According to one solution provider with nationwide reach, the issue is not whether Microsoft has a right to monetize Windows VDI more aggressively; it is the impact on the channel of having to learn yet another licensing option.

"What is getting to organizations is the layers and layers of licensing: The Remote Desktop Services CAL, the VDI Suite, and the Microsoft Desktop Optimization Pack. All of these are on top of VDA and CDL licensing," said the source, who requested anonymity.