Some say they’ve seen it in the wild, and others say they’ve seen it face to face. It’s a tough mystery to solve. I am talking about the Microsoft virtual appliance. I’ve investigated the Microsoft virtual appliance for years, and I’ve gone straight to the heart of Microsoft to find the answers.
Every day, an excited original equipment manufacturer (OEM) customer calls me with dreams of launching their software appliance on a virtual machine (VM). Some can’t wait to offer their virtual machine solution on the Microsoft store or on their own e-commerce marketplace. When it comes to a virtual machine, the mystery lies in how to accomplish this launch with Microsoft software needing to be installed on Microsoft hardware. The hardware and licensing challenges must be addressed first. I will take you through the mystery, discuss each challenge and show you the best solutions.
Let’s start with the definition of a Microsoft virtual appliance. Ideally, this appliance is 100 percent virtual, meaning no hardware, software only. Picture a virtual machine that contains a Microsoft operating system (O/S), and an additional third-party software application, which runs on top. The whole package is contained in a Virtual Hard Disk (VHD). This VHD allows an OEM reseller or Independent Software Vendor reseller to sell a software-only solution to an end- customer. The reseller hopes to ship an electronic downloadable VHD file that customers could then load into their existing hyper-visor environment.
This hope leads us to our first major challenge: hardware. A software-only solution sounds like a slam dunk, but Microsoft requires hardware to be included. Hardware is something that many resellers simply do not want to provide. 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 only available pre-installed upon new hardware, and you can see the challenge here. How can a 100 percent virtual appliance, software-only, exist if all licenses are tied to the hardware they run on? Customers often say to me, “My competitors launched a virtual appliance, so I know it is possible.” And I agree, a virtual appliance is possible. Possible with the right solution that keeps companies on the straight and narrow. Customers can achieve their dream launch, with licensing and hardware options, that stand by the Microsoft rules, and are 100 percent legal.
The key is in the licensing. I’ve worked personally and directly with Microsoft to bring this mystery to life. It’s my job to help customers understand the different licensing programs that Microsoft offers. I provide my best advice, getting them as close to the mysterious Microsoft virtual appliance as possible.
The operating system is at the heart of this virtual appliance mystery. Virtualization licensing rules are different between Microsoft desktop and server operating systems. Let’s dig deeper into the desktop operating system. This may shock you, but technically, you can’t do a virtual appliance with the desktop operating system!
Let me explain 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. Today, in order to purchase a full desktop O/S OEM system builder, licensing requires you resell it with new hardware. In essence, you can’t do a virtual appliance with a desktop operating system.
With the desktop operating system not an option, you might think that you can accomplish the virtual appliance through a virtual environment. Virtual environments also require a full O/S license tied to a physical system. Again, solving the Microsoft virtual appliance mystery is challenging, but doable.
Focusing on virtual environments for a moment, think about a virtual machine that moves between physical hosts. It is very common for customers to have two, three, or even 10 physical hosts. They run their virtual environment on top of, and then they use live migration to move the VMs. With load balancing, these VMs are moved constantly. Every physical host the VM touches, requires a full Windows license.
Here’s an example: A customer has three physical servers, and they want to run 30 virtual desktop machines. In theory, they could purchase 30 full desktop O/S licenses and assign them to one of the physical servers. However, if 10 of those VMs are moved to a second server, then they would be out of compliance. That second server would require 10 more licenses. Even worse, if they wanted 10 machines to move over to a third host, they would need to buy 90 full O/S licenses and assign 30 to each host. For this reason, Microsoft decided to move the actual physical license to the client device that is used to access the VM, resulting in a new licensing method called virtual desktop access (VDA) subscription.
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 must know how they are going to physically access it.
There are options, however. The first option is thin-clients or PCs not running a Windows O/S (e.g. an iPad or 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 option is via a PC with a full Windows O/S on it. Customers using Windows PCs to physically access the VM need to add Microsoft Software Assurance to their PC, which provides all the same benefits of the VDA subscription, including the rights to access a VM.
The server O/S virtual appliance is a good option, if you follow Microsoft’s strict guidelines. With the server O/S, they are tied to physical servers, so a 100 percent virtual server appliance, again, does not exist. But, we can certainly work toward a solution that gets you closer.
There are several license programs that provide a full server O/S. Two such programs include, the OEM system builder, and OEM embedded programs. These two programs are designed with hardware in mind, and use certificate of authenticity stickers. These tiny stickers are licenses, and they must be applied to a server before you can resell the licenses. To use these programs, you will need to sell hardware – plain and simple — making it impossible for a 100 percent OEM virtual appliance to exist.
There is a retail licensing program option, but I wouldn’t recommend it, due to its high cost and very limited choices. 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 must assign that license to their existing server.
Finally, we have open volume, which is actually a virtual license delivered via an email to the end-customer. The catch with this program is that you must know the end-user information at the time of the sale. This can be a challenge for some, but work just fine for others. If you know the end-user company information, you can sell them an open license for the server O/S and explain to the customer you are selling a single license tied to a single physical host. You can build your VHD using open volume media so that the customer can then use their own open volume key code.
I know and understand the key challenges in solving the virtual appliance mystery. If you dream of launching a virtual appliance, I can help you achieve that dream. Each program that I’ve discussed has additional challenges involving key codes, media, languages and region-specific purchasing restrictions. If you would like more details, including the Microsoft legal references and a deeper discussion on exactly how to make these programs work, please contact me at ken.marlin@arrow.com.
Depending on your exact scenario, you might be able to offer the elusive virtual appliance. However, you will need help overcoming the challenges, and understanding the legal terms of each program.
