Some say they've spotted it in the wild and others have said they’ve seen it face to face, but I’m here to tell you that it’s a tough mystery to solve. I know because I’ve been investigating it for the past five years and I’ve gone straight to the heart of Microsoft to solve this puzzle.
My day doesn’t go by without my phone ringing with an excited OEM customer on the other end with big dreams of launching his software appliance on a virtual machine, and some OEMs can't wait to offer their virtual machine solution up on the Microsoft store or on their own e-commerce marketplaces.
Being the bearer of bad news is just not something I enjoy. For that reason, I’ve worked personally and directly with Microsoft with hopes of bringing this conundrum to light. It’s my job to put customers on the right track by helping them understand the different licensing programs that Microsoft offers. I attempt to provide my best advice on getting them as close to the mysterious Microsoft virtual appliance as possible.
The Microsoft Virtual Appliance Defined
Let’s start off with the definition of a Microsoft virtual appliance. This would be a 100% virtual, no hardware dedicated, software-only appliance. In other words, this is a virtual machine that contains a Microsoft operating system followed by a third-party software application running on top of it. The whole package is sealed up in a VHD (virtual hard disk). This allows an OEM reseller or ISV reseller to sell a software-only solution to an end customer in hopes of only shipping an electronic downloadable VHD file, which customers could then load into their existing hypervisor environments.
In theory, this sounds like a slam dunk and most of the customers that I speak with feel the same way, so it is not an easy job when it comes to the first major hurdle—hardware! You see, Microsoft licenses ALL of its operating systems to the hardware they run upon. Throw in the fact that the desktop O/S’s from Microsoft are generally only available pre-installed upon new hardware, and you have the setting for a disappointing discussion.
“Can we can get someone from Microsoft on the phone?” As a distributor of Microsoft products and having 30 years of experience with all Microsoft products, this is tough for me to hear but I know it isn’t personal. Customers simply want to hear the answer directly from Microsoft, especially on such a brain-teaser like this one.
“My competitors are already doing it so I know it is possible.” It’s like hearing the stories of a haunted house and talking with a person that swears he’s seen a ghost but has no proof. However, my job is to keep companies on the straight and narrow. They have to stand by the rules that Microsoft has placed before them, and as badly as I want my customers to have a virtual appliance, they have to know the rules and stay 100% legal.
Desktop or Server O/S is where we begin. Why, you ask? Well, because the virtualization licensing rules are quite different between Microsoft Desktop and Server operating systems. Let’s start with the desktop operating system. No, not allowed. “Wait, so with desktop operating systems you are saying we can’t do a virtual appliance?” That’s right, you can’t. “I don’t believe you. Can we talk with Microsoft?”
Desktop Operating System Licensing from Microsoft
Let’s first talk about how Microsoft licenses its desktop operating systems. Microsoft ties its operating systems to physical systems. In a physical environment when you load an O/S onto a system, it requires an O/S license and today there is only one way to purchase a full desktop O/S—OEM System Builder, licensing which requires you resell it with new hardware. What about a virtual environment? Virtual environments also require a full O/S license tied to a physical system thus the reason a true, 100% virtual appliance doesn’t truly exist. It always has to be tied back to a physical system. Think about a virtual machine that moves between physical hosts; it is very common for customers to have two, three, even 10 physical hosts that they run their virtual environment on top of and then they use live migration to move the VMs. In the case of load balancing these, VMs are moved constantly, which means that every physical host the VM touches would require a full Windows license.
Here’s an example: A customer has three physical servers that need to run 30 virtual desktop machines. In theory, this customer could purchase 30 full desktop O/S licenses and assign them to one of the physical servers; however, what happens when 10 of those VMs are moved to the second server? They would be out of compliance, as that second server would require 10 more licenses. It gets worse if the customer wants 10 machines to move over to the third host. In reality you would need to buy 90 full O/S licenses and assign 30 to each host. For this very reason, Microsoft decided to move the actual physical license to the client device that is used to access the VM, which resulted in a new licensing method called VDA subscription, known as Virtual Desktop Access.
Virtual Desktop Access
Microsoft licenses the virtual desktop operating system based on how you physically access the VM. That means for you to sell your desktop VM to a customer, you’ll have to know how they are going to physically access it. There are two methods with the first being thin clients or PCs not running a Windows O/S, i.e. an iPad or a Linux PC. The customer must purchase a VDA subscription for each physical device. This annual subscription retails for $108 per year and is non-perpetual , so you never own the license. The second method is via a PC with a full Windows O/S installed on it. For customers who are going to use Windows PCs to physically access the VM, they need to add Microsoft Software Assurance to their PCs, which provides all the same benefits of the VDA subscription including the rights to access a VM.
Personal Use License
With the release of Windows 8 in October 2012, Microsoft made some changes with its OEM System Builder program and added what’s called the Personal Use License, which opened the door for those people that want to build their own whitebox computers. This modification to the OEM System Builder terms enables the virtual appliance situation, but only in specific scenarios in which the VM would be accessed on the system in which it is directly installed upon. That means if you wanted to offer a 100% virtual appliance that runs Windows 8, you could use this program but you would have to be clear to those buying it and make sure they understand that it has to be installed on the machine that they plan on using it upon—not in a server environment which would require the VDA subscription or Software Assurance.
Server O/S Virtual Appliance
Let’s now jump and talk about the server O/S virtual appliance, as this option is far more obtainable if you follow the strict guidelines. With the server operating systems, they too are also tied to physical servers, so a 100% virtual server appliance again does not exist but we can certainly work toward a solution that can almost get you there.
For server operating systems, there are a number of license programs that provide a full server O/S. Let’s start with the OEM System Builder and OEM Embedded programs. These two programs are designed with hardware in mind, and for that reason they use COA stickers (Certificate of Authenticity). These tiny stickers are the licenses and they must be applied to a server before you can resell the licenses, thus it is impossible for a 100% OEM virtual appliance to exist. To use these programs, you will need to sell hardware—plain and simple. The next program is Retail licensing, which is of course the most expensive and has the least choices to offer. The actual retail package is the license, so you would have to sell a retail package with your virtual machine and even then the end customer would have to assign that license to their existing server. Lastly, we have Open Volume which is ironically a virtual license delivered via an email to the end customer. The catch with this program is you must know the end-user information at the time of the sale. This can be a hurdle for some but for others it can work just fine. If you know the end-user company information you can sell them an Open license for the server O/S and you then explain to the customer that you are selling them a single license tied to a single physical host. You can then build your VHD using Open Volume media so that the customer can then use their own Open Volume key code.
Microsoft VHD Test Drive Program
There is one other avenue that fits those wanting to package up their solution in a VHD and offer it out to customers on a trial basis. It’s called the Microsoft VHD Test Drive program and although it seems to be a program that hasn’t taken off, it now seems to be gaining some attention. But also know that this is an eval program and if the customer wants to buy the VHD, they will have to deal with the same hurdles I previously covered.
Each program that I’ve discussed has more hurdles involving key codes, media, languages and region-specific purchasing restrictions. Depending on your exact scenario, there might be a glimmer of hope and you just might be able to offer the elusive mysterious virtual appliance, but you’ll need some help getting over the hurdles and understanding the legal terms of each program. If you would like more details including the Microsoft legal references and a deeper discussion on exactly how to make these programs work to your advantage, please contact me for more information.
Based in Phoenix, Ariz., Ken Marlin is a Microsoft Champion and Technical Consultant at Avnet Embedded. He has over 30 years of Microsoft experience supporting all Microsoft products and programs with specialties in Microsoft OEM System Builder, OEM Embedded and Open Volume programs. He is a regular contributor to http://www.IntelligentSystem.com.