Microsoft Simplifies the Virtual Machine as an Appliance (VMaaA) Offering

In a surprising move, Microsoft announced in January a plan to retire or reach the end of life (EOL) for several VMaaA part numbers in March 2023. This announcement was unusual in the IoT channel, where products usually have long lifecycles. However, Microsoft’s motive behind this decision was to simplify consumer processes. The primary objective was to replace the 20 existing part numbers with two, simplifying the buying process. While this consolidation was advantageous, it posed a challenge for some customers purchasing and selling those 20 products. Some customers found themselves with inventory on hand and needed help with how to proceed.

Fortunately, Microsoft provided a solution by granting an EOL exception, allowing original equipment manufacturer (OEM) customers to continue shipping their existing inventory past the EOL date. As a result, customers could clear out their old inventory before transitioning to the newer, more cost-effective product. In addition to the retirement of VMaaA part numbers, Microsoft surprised the market with an early EOL for certain virtualization SKUs. The new EOL date of March 31, 2023, replaced the previously expected date of November 2031. The purpose of this early EOL change was twofold: first, to simplify virtualization licenses, and second, to make licensing virtual machines (VMs) a more cost-effective process.

In the chart below, you will see the SKUs that went EOL on 3/31/2023 and the two replacement SKUs:

Several Considerations to Keep in Mind

Reducing the options from 20 part numbers to just two undoubtedly simplifies the process. However, it’s essential to consider the following additional aspects:

• What if an OEM still has an inventory of the EOL licenses? – Microsoft allows OEMs to build and ship their solutions with these EOL licenses till the end of 2023.
• The new Windows 10 license is for the 2021 edition. What if an OEM wants to install a previous version? – the OEM can downgrade to the previous version and use their single ePKEA product key for activation.
• The previous licensing requirements have changed, which required the OEM to know if the VM would be running on a qualified operating system (QOS) or a non-qualified operating system (non-QOS). OEMs must use the flow chart down below to determine if the first VM requires a full operating system license.
• QOS vs. non-QOS pricing – Initially, the pricing at launch was based on whether the host machine had a Microsoft operating system, QOS, or other operating systems, non-QOS. However, this stratification received a negative response from the market due to the disparity in QOS pricing compared to non-QOS machines. In response to these concerns, Microsoft has now equalized the pricing to create parity between virtual installations on both QOS and non-QOS machines. 

Figure: Windows IoT Enterprise VMaaA Scenarios

If you have questions about VMaaA, contact us by filling out the form or emailing windowsiot@arrow.com.