Ballmer On Windows 8 VDI License For iPads: 'We Are In A Battle'

Microsoft is acknowledging that its Windows 8 virtual desktop infrastructure license, which could raise costs for organizations that let employees use personal iPads and Android tablets to access Windows desktops, is a competitive weapon to wield against its industry foes.

"We are in a battle," Microsoft CEO Steve Ballmer told CRN in an interview Monday at Microsoft's Worldwide Partner Conference. "Our partners will figure that out, and they will find the best value for the customer."

In Windows 8, Microsoft is introducing the Companion Device License (CDL), which gives volume licensing customers the right to access corporate desktops through virtual desktop infrastructure on up to four personally owned devices. The CDL only applies to non-Windows tablets; organizations whose employees use personal Windows 8 tablets with VDI won't have to pay extra for the rights the CDL conveys.

[Related: Exclusive: Steve Ballmer Speaks With CRN At Microsoft WPC ]

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Under Microsoft's current VDI licensing terms, customers who use devices not covered by volume licensing agreements -- such as iPads, thin clients and contractor or employee-owned PCs -- must buy the Virtual Desktop Access license subscription (VDA), which costs $100 per device annually. Microsoft has not yet said what the CDL will cost, so its potential competitive impact isn't clear.

What is clear is that in Microsoft's view, organizations using iPads and Android tablets to access Windows through VDI are getting productivity benefits without paying for them. The CDL is Microsoft's way of closing this loophole.

In the interview earlier this week, Ballmer suggested that customers that purchase Windows 8 tablets will see a cost advantage from not having to also buy the CDL.

"I think we will put things together in a more comfortable package than the competition because it is where our bread is buttered," Ballmer told CRN. "Obviously, if you don’t own a Microsoft device [and] you want to buy a Windows license for it, we are always glad to sell you one. And we do have customers who will buy Windows licenses effectively, whether it is through VDI or people who just install Windows on a Mac."

As PC sales decline and tablet sales rise, Microsoft is adjusting its Windows licensing to account for this shift. Virtualization makes things more challenging for Microsoft, because the technology delivers Windows to many different types of devices, thereby muddying the licensing waters.

Ken Phelan, CTO of Montvale, N.J.-based Gotham Technology Partners, understands why Microsoft is introducing the CDL but is disappointed that Microsoft is continuing to use end points as a licensing control mechanism.

"If we publish a Windows 8 license in a cloud or VDI model for a client, what does it matter how many different devices or end points the client accesses it from? Isn’t that the whole point of cloud desktop-as-a-service?" Phelan said in an interview.

NEXT: Microsoft Partners Weigh In On The CDL

While the costs of the CDL are unclear, some Microsoft customers and partners have been expecting a more expensive and restrictive successor to the VDA's $100 annual fee per device.

Seen in this light, the CDL is actually a compromise on Microsoft's part, according to Mike Strohl, president of Entisys, a Concord, Calif.-based virtualization solution provider.

"It used to be if a device did not run some version of Windows at the physical layer, Microsoft did not want to license it," Strohl told CRN. "Now, they realize that these devices are here to stay, and the CDL shows Microsoft's acceptance of this fact. They could have said everyone with an iPad or Android tablet needs to buy a full Windows 8 license."

According to virtualization experts, some customers are not adhering to the VDA license requirement, and Microsoft does not have a mechanism in place to keep tabs on compliance. It's not known if Microsoft will be able to track CDLs, but in the meantime, at least one Microsoft virtualization partner is planning on steering customers away from the license.

"There is absolutely no way for customers or Microsoft to track compliance based on the way the licensing agreement is currently constructed," said the source, who requested anonymity to protect his relationship with Microsoft. "I would advise my customers to not pay Microsoft one penny for CDL licensing until Microsoft comes up with a way to track it that is not a huge burden for the customer."

Ballmer told CRN this week that between the Surface tablet, and forthcoming Windows 8 tablets from Samsung, Asus and Lenovo, Microsoft is well positioned to take advantage of the bring-your-own-device trend. This is what underpins Ballmer's re-declaration of war on Apple, but the iPad has taken root within enterprises precisely because it is largely unfettered by restrictions.

It remains to be seen how customers react to the Windows 8 CDL, but Simon Bramfitt, founder and research director at Entelechy Associates, a Concord, Calif.-based virtualization consultancy, believes the new license requirement will run counter to the ethos driving BYOD.

"I wonder if he understands just how difficult his desktop team is making it for enterprises to adopt consumerization while complying with the changes to licensing rules that Windows 8 is bringing," Bramfitt told CRN.