Mirrosoft is about ready to release restrictions on their Windows Desktop OS (4th post in a series of 4)

Bottom Line: With the release of Windows 2012, Hyper-v 3.0 and System Center 2012 SP1, Microsoft will have the final pieces in position to support desktop in the cloud and will be changing the licensing of Windows desktops to allow them to be hosted on shared equipment.   

This final post, in a series of four posts, will examine why Microsoft will be changing their licensing to make Desktop as a Service (DaaS) a more practical solution for businesses.  Microsoft will be making this licensing change at the end of this year or the beginning of next year to coincide with their upcoming product releases.  The capabilities with the product releases will provide, what Microsoft believes, are the four basic attributes of a cloud solution:

· Shared Services

· Usage-based Chargeback

· Scalable and Elastic Services

· Self-Service

As examined in the third post of this series, Microsoft, like many software companies, utilize licensing restrictions to control the market while they are building products that can compete with competitors’ solutions.  The existing Windows desktop licensing restricts the placement of the Windows desktop OS from tenant-shared equipment at hosting facilities.  This licensing restriction is in place because Microsoft does not have the software developed to fully manage this service.  Microsoft is under pressure to provide a cloud desktop solution and release the related licensing restrictions.  If they do not act quickly, they will risk losing the market advantage to competitors that are currently providing an alternative to a centralized desktop through their offering of applications in the cloud.  One such example of cloud based application service is through Google’s “App for Business”.  The remainder of this post will examine each of the four attributes of the cloud and the related product enhancements that Microsoft will be introducing to enable these capabilities.

Share Services

Shared service is a primary attribute that provides the efficiencies needed to make a DaaS solution the desired option for implementing a VDI solution.  The sharing of services provides the tenants of a DaaS solution with reduced start-up and ongoing costs in the following the areas:

· hardware

· software

· human resources

A prerequisite to a shared hardware DaaS solution is the host must be able to provide a secured isolated environment for each tenant.  This is a capability that Microsoft is making available with Hyper-v 3.0 which is slated to be introduced with Windows Server 2012.  With the release of Hyper-v 3.0, Microsoft has introduced the capability to support Private Virtual Local Area Network (PVLAN).  A PVLAN provides the capability to isolate Virtual Machines (VM) that exist on the same Virtual Local Area Network.  This allows the capability to place VMs of multiple tenants on the same Virtual Network in a secure manner while keeping them isolated as if they were on their own network.  Hyper-v 3.0 also provides the capability to control levels of network bandwidth to a VM or a group of VMs.  This provides the service provider with the capability to provide tenant with minimum levels of service on a shared network.

The ability to create a multi-tenant environment, such as the one provided by Hyper-v 3.0, also requires the tools to manage the multi-tenant environment.  Microsoft has announced the next release of System Center 2012 SP1, which primary objective is to provide the management of the new features provided with the Hyper-v 3.0 release.  The prerequisites of having the ability to offer a managed, secured, isolated, multi-tenant virtual environment to provide an efficient cloud service will be met by both the future releases of Hype-v 3.0 and System Center 2012 SP1.

Usage-Based Chargeback

In addition to providing a shared network, Hyper-V 3.0 will also provide the capability to meter resources being utilized on a shared network. Metering will provide the capability of charging tenants a fee based on the amount of resources they utilize. It is anticipated that with Hyper-v 3.0 hosting facilities will be able to monitor resource utilization based on each VM’s: CPU utilization, memory utilization, network utilization, and disk storage utilization.  System Center 2012 SP1 is expected to provide enhanced reporting based on the metering from Hyper-v 3.0 in order to show resource usage by each tenant.  This will provide the DaaS hosting facilities with the capability of charging each tenant for resource utilization down to the individual VM, desktop. 

Scalable and Elastic Services 

In order provide a scalable and elastic services, Microsoft will need to provide ample capacity to run a virtually unlimited number of desktops.  This will be done with both their data facilities, through their “Azure” offering, and through hosting service providers. With the release of System Center 2012 SP1, the management of a DaaS solution would be possible through both the Microsoft hosting solution, Azure, and also the non-Microsoft hosting service providers.  Through the System Center 2012 SP1 add-on, Service Provider Foundation, Microsoft is delivering to service providers the capability to offer and manage DaaS offerings using Microsoft’s management tools.  This allows for a scalable and elastic supply of DaaS in the cloud through both Microsoft’s Azure and third-party hosting facilities.

Self-Service

Microsoft is providing self-service management tools to enable the management of desktop from a remote location.  This is being done with a new offering within their System Center 2012 Suite, App Controller, which takes a VM (desktop application) created locally and distributes it remotely to a hosting facility.  System Center 2012 SP1 provides the capability to create a “template” locally with all the application and configuration needed and then App Controller can install the desktop remotely.  When System Center 2012 SP1 is released this capability will support virtual desktops at either a Microsoft Azure facility or at a third-party hosting facility that supports System Center 2012 SP1.  This approach will complement the pending release of Windows 8 which will come with a copy of Hyper-v 3.0.  The existence of Hyper-v 3.0 in both the local and remote locations will provide consistent environments where the virtual desktop may be both developed and deployed.   Meaning, an organization could create a desktop VM locally on Hyper-v 3.0 included with the Windows 8 OS and the move the desktop to a similar hypervisor in the cloud.  

In addition to installing virtual desktops, there exists the need to monitor and manage the desktop on an ongoing basis.  App Controller, along with other System Center 2012 SP1 products provide for both the capability to monitor and manage the cloud based desktop.  Additionally, cloud based desktop management has been made available to customers through Intune, which was released by Microsoft last year.  Intune provides the owners of desktops with remote desktop management capability of both physical and virtual desktops.  The Intune product provides the owners of a desktop with the ability to complete the following basic management tasks; update software, patch software, protect desktops with anti-virus, basic policy changes, and asset management.  Two weeks ago, on June 11, 2012, Microsoft released Version 3 of Intune which allows user access to an application self-service portal so that they apply application to their own remote desktop.  Intune and the tools provided with the future release of System Center 2012 SP1 will provide tools needed for customer self-service in a cloud environment.

Conclusion

With all of the capabilities explained in this post, one could argue that Microsoft is making the changes to Hyper-v and System Center to provide cloud services for their server systems only.  If that is all that Microsoft intended, they would be walking away from a large potential revenue stream from companies that may not have the resources to implement an on-premise VDI solution.  It would also be ignoring the fact that Microsoft’s competitors that are providing cloud-based applications are endangering the future of Microsoft’s Desktop as it has exists today.  The licensing changes to make Microsoft’s desktop OS more accessible in the cloud is not a luxury for Microsoft, but rather a necessity in order to extend the life of their desktop given the competition from cloud-base application providers.  Making changes to the licensing to make DaaS a practical solution for companies are a benefit to Microsoft, but only if they have the tools in place to either provide the service themselves, or provide the management software to other hosting providers.  Much like the restrictions Microsoft placed on license mobility before they had a virtualization tools in place, Microsoft has placed restriction on shared desktops at hosting facilities.  With the release of Windows 2012, Hyper-v 3.0 and System Center 2012 SP1, Microsoft will have the final pieces in position to support desktop in the cloud and will be changing the licensing of Windows desktops to allow them to be hosted on shared equipment.        





   

Microsoft becomes competitive in the virtualization market (3rd post in a series of 4)

Bottom Line

Over the last seven years Microsoft has been working toward providing a competitive virtualization offering.  During that time, until they had a solution in place, Microsoft restricted mobilization rights but then subsequently released the restriction once they had a competitive product.  Similar to how Microsoft utilized licensing to restrict server license movement not having a virtualization solution, they are making Desktop as a Service (DaaS) less appealing through licensing restriction.  Once Microsoft has the components needed to provide Desktop as a Service at a hosting facility on shared hardware, they will be releasing the related licensing. 

Overview

Many times software companies such as Microsoft utilize software licensing to not only dictate how their software may be used by customers, but also use licensing to limit their competitors in areas that they are not ready to compete.  One such example of this is how Microsoft has made it impractical for organizations to move their virtual desktops to an 3^rd party hosting service by prohibiting the use of the Windows Desktops Operating Systems on equipment shared between hosted tenants.  This restriction reduces the likelihood that their competitors cannot provide the Windows Desktop in the cloud before Microsoft is ready to market a solution.  Before Microsoft is able to provide this solution, Desktop as a Service (DaaS), they need to provide two major components:

·         An industry-competitive virtualization solution

·         An infrastructure to host and manage desktops

Over the last seven years, Microsoft has gone from having no competitive virtualization solution, to having developed a viable virtualization offering.  To protect their revenue stream during this time, Microsoft placed a licensing restriction on their software in order to diminish the negative impact of competitors’ virtualization solution.  These restrictions have provided Microsoft time to create the software needed to develop a virtualization solution of their own.  Once Microsoft was able to provide the virtualization software, they released the virtualization restriction and marketed the solution in such a way that would improve their future revenue stream.  One could argue that Microsoft is utilizing the similar licensing restriction approach until they have a suitable DaaS solution in place.  The specific DaaS licensing restrictions will be the subject of the next posting, this posting will instead offer insight to where Microsoft put licensing restrictions until they had developed a market-competitive hypervisor that could provide a suitable virtualization solution.  Please use the timeline at the bottom of the post for reference while reading the following.

Microsoft Restricts Movement of Server Licenses

As shown in the timeline below, there are two timeframes during which Microsoft changed the licensing while they developed a virtualization solution.  The first is represented by the box on the left side of the timeline which is labeled “Microsoft Restricts Movement of Server Licenses”.  During 2003 Microsoft entered the virtualization race with the purchase of Connectix, which provided Microsoft with the virtualization technology in which they could further build their own technologies.  Though this purchase provided Microsoft with a PC based virtualization solution immediately, it did not provide them with a competitive server based hypervisor.  Later in November of 2003, VMware, who had been marketing a server hypervisor for two years, released VCenter with VMotion which delivered the capability to move Virtual Machines (VM) from one physical server to another.  With the existing hypervisor, VMware had granted their customers the capability of running a data center more efficiently by allowing multiple operating systems on one server.  Additionally, once VMWare introduced VCenter with VMotion, they reduced the Microsoft’s ability to provide data centers management tools by providing their customers with a way to manage the data center through the movement of VMs.  As a result, in December of 2005, Microsoft, who was still over two years away from releasing a server based hypervisor, invoked licensing restrictions against moving server licenses any more often than once every 90 days.  With this move, Microsoft protected their revenue stream by requiring that the original and destination server both be licensed in the event that a VM was moved more often than once every 90 days. This restriction ensured that the owner of a VMWare solution could not freely move a VM with Microsoft server software as they once could before the licensing restriction.   One could argue that Microsoft had this restriction in place to dampen customer benefits that could be experienced with VMotion until Microsoft was closer to introduce a competing product.

Microsoft Releases Movement of Server Licenses

During the second timeframe denoted in the timeline below by the box on the right labeled “Microsoft Releases Movement of Server Licenses”, Microsoft removed the server license mobility restrictions after the introduction of a virtualization solution.  In March of 2008, Microsoft introduced their first industry standard server virtualization tool, Hyper-v, which was a hypervisor, bundled in the Windows Server 2008 product.  This version of Hyper-v had a feature called Quick Migration which could move virtual machines from host server to host server, but with a noticeable interruption in service during the move.  In 2009, with the release of Windows Server 2008 R2, the Live Migration function became available, which enhanced the capability of moving a virtual machine from one host to another without a noticeable interruption, similar to the capability provided by VMotion.  Between the release of these two versions of the Windows Server, Microsoft released the restriction against moving many of their server licenses more often than once every 90 days.  This was extended through a right called “License Mobility within Server Farm”.  At that time, License Mobility within Server Farms provided the license owner, who purchased under a volume license agreement, the right to move an assigned license from one server in a server farm to another in the same server farm without restriction.  This right was only extended to “enterprise” grade servers which excluded some server editions such as SQL Server Standard edition.  Upon the release of SQL Server 2012, Microsoft extended the License Mobility within Server Farm right based on whether the license is covered by Software Assurance.  It has yet to be seen whether or not Microsoft will continue to remove license mobility restrictions on all servers covered by Software Assurance, but they seem to be continuing the trend toward releasing the restrictions that have been in place since 2005.

Conclusion

 Over the last seven years Microsoft has been working toward providing a competitive virtualization offering.  During that time, until they had a solution in place, Microsoft restricted mobilization rights but then subsequently released the restriction once they had a competitive product.  Similar to how Microsoft utilized licensing to restrict server license movement not having a virtualization solution, they are making Desktop as a Service (DaaS) less appealing through licensing restriction.  Once Microsoft has the components needed to provide Desktop as a Service at a hosting facility on shared hardware, they will be releasing the related licensing.