Microsoft *FINALLY* creates a cloud service provider virtualization license for Windows 10

For many years, we've wanted service provider licensing for Windows desktop OSes. On Monday, Microsoft announced just that. Here's what we know.

Those of you still alive after holding your breath for the past eight or ten years can finally breathe easy: Microsoft has, against all odds (even though we all knew it was coming), announced a program that finally allows service providers to sell licenses to Windows. The announcement came on Monday, and we would have written about it for Tuesday had the one thing that could've stolen the spotlight not actually happened.

They don't call it SPLA—in fact, there's not even a name for it at all. Microsoft already has a Cloud Solution Provider program, and this change simply allows them to sell subscriptions to Windows that include virtualization use rights. The writing has been on the wall for some time now, and we always knew Microsoft would only do it when they were ready (not when we were ready for it), so the general feeling is less, "Huzzah!" and more, "It's about damned time!"

Still, this news is huge for providers that have struggled over the years with various Microsoft licensing policies. First there was VDA licenses and the costly problems that they introduced. Even when that was fixed by adding a per-user license to Windows (instead of per-device), there was the restriction that Windows desktop OSes had to be on hardware dedicated to a customer. Microsoft eased that restriction in the last year or so, allowing Windows 10 to run in multi-tenant environment for the first time.

Allowing Windows in multi-tenant environments allowed smaller cloud service providers to deliver real Windows desktop OSes to smaller customers that might not have been large enough to warrant dedicated hardware before the new policy. More importantly, it also created the opportunity to build desktop virtualization environments based on Windows desktop OSes in public cloud providers. The only way you could run, say, Windows 10, in the public cloud before was to somehow get dedicated hardware.

Those changes were steps along the way to this latest announcement, which addresses the last big hurdle that MSPs need to clear. Until now, all DaaS that used a desktop version of Windows involved the customer bringing their own licenses. While the service providers could hold the customer's hand, the onus of licensing fell to them. With this announcement, service providers enrolled in the Microsoft CSP program can sell Windows 10 licenses as part of their subscription service.

The breakdown that Microsoft gave in their introductory blog post shows that CSPs can offer the following licenses:

  • Windows 10 Enterprise E3 (which is basically Windows 10 Enterprise with built-in Software Assurance) with or without virtualization rights for VMs hosted in Azure or another qualified hosting provider. (I'm unclear about how a virtual desktop can be deployed from the cloud without virtualization, but I'm sure there's a reason.)
  • Windows 10 Enterprise E3 VDA, which is the same as above but for customers that are accessing Windows VMs without a properly-licensed Windows client (e.g. all Linux thin clients with no per-user Windows licensing).
  • Windows 10 Enterprise E5 (which is Windows 10 plus Advanced Threat Protection) automatically includes virtualization rights.
  • Microsoft 365 Enterprise customers also automatically get virtualization rights.

Since this is so new, there's not a lot of extra information around. It looks good on paper, but I want to visit with a few sources at CSPs once they've had time to sort through the options to see how it affects them. The actual change doesn't take effect until September 6th, but seeing as how we're halfway through July that's closer than it appears.

The key takeaway for now is that Microsoft has taken down the last barrier that prevented service providers from assembling platforms that truly matched up against on-premises deployments. Over the years those obstacles meant that service providers dedicated resources to overcoming them rather than building better overall platforms. There could still be gotchas in the fine print, and the pricing could make your head spin, but from a technical standpoint service providers have never had more flexibility.

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