Microsoft's desktop virtualization announcements: Citrix and customers are the winners

A little while ago, Microsoft and Citrix each made announcements that interlock with one another. Microsoft's announcement spoke of a number of things including changes made to a few licensing rules that would make VDI environments much more int enticing for organizations, transferring some technology to Citrix, and enhancements to some of its server software. In the end, it appears that Citrix and the customer are winners.

Here's how Microsoft summarizes their announcement

Microsoft outlined improvements that make it easier to access desktop virtualization. More information on today’s announcement and Microsoft’s virtualization strategy is available here.

• New VDI promotions available for qualified customers to choose from today. Microsoft and Citrix Systems are offering the “Rescue for VMware VDI” promotion, which allows VMware View customers to trade in up to 500 licenses at no additional cost, and the “VDI Kick Start” promotion, which offers new customers a more than 50 percent discount off the estimated retail price. Eligibility and other details on the two promotions can be found at http://www.citrixandmicrosoft.com.
• Improved licensing model for virtual Windows desktop. Beginning July 1, 2010, Windows Client Software Assurance customers will no longer have to buy a separate license to access their Windows operating system in a VDI environment, as virtual desktop access rights now will be a Software Assurance benefit.
• New roaming use rights improve flexibility. Beginning July 1, 2010, Windows Client Software Assurance and new Virtual Desktop Access license customers will have the right to access their virtual Windows desktop and their Microsoft Office applications hosted on VDI technology on secondary, non-corporate network devices, such as home PCs and kiosks.
• Windows XP Mode no longer requires hardware virtualization technology. This change simplifies the experience by making virtualization more accessible to many more PCs for small and midsize businesses wanting to migrate to Windows 7 Professional or higher editions, while still running Windows XP-based productivity applications.
• Two new features coming in Windows Server 2008 R2 service pack 1. Microsoft Dynamic Memory will allow customers to adjust memory of a guest virtual machine on demand to maximize server hardware use. Microsoft RemoteFX will enable users of virtual desktops and applications to receive a rich 3-D, multimedia experience while accessing information remotely.
• New technology agreement with Citrix Systems. The companies will work together to enable the high-definition HDX technology in Citrix XenDesktop to enhance and extend the capabilities of the Microsoft RemoteFX platform.

Snapshot analysis

It is clear that Microsoft is beginning (finally) to understand that if it allows client systems to more easily run in virtualized environments and offer expected levels of performance for graphically intensive applications, that the company will sell more client OS licenses. It also seems to realize that its long-time friendly competitor, Citrix, could be of help in defeating VMware.

Let's look at the components of the announcement separately.

• VDI promotion - Microsoft is increasingly fearing VMware's intrusion in its client base. As workloads are encapsulated and run in virtual machines, the operating system is less and less important. It is still required, but if a given tool or application is available hosted by a number of different operating systems, it would be far easier to replace a Windows-supported environment. Microsoft has launched a trade-in promotion aimed at VMware's VDI. While this could help in Microsoft-centric environments, it may not be helpful elsewhere.
• VDI licensing change - Microsoft clearly has begun to see that its own licensing model in virtualized environments is getting in the way of its own success. Organizations have long complained that Microsoft's terms and conditions hindered their move into virtualized worlds by limiting where encapsulated workloads could be run and how much it would cost to use a virtualized environment. Although there are still strings attached (the requirement that organizations have a Windows Client Assurance contract), customers will no longer have to buy a separate license to access their Windows operating system in a VDI environment, as virtual desktop access rights now will be a Software Assurance benefit. This, of course, doesn't address the needs of organizations that do not have a Windows Client Assurance contract. It's a start, however hesitant and late, down the right road.
• New roaming use rights - once again it appears that Microsoft is beginning to finally listen to its customers when they ask for more freedom to deploy virtual environments without also having to violate Microsoft's licensing requirements. Microsoft, however, has tied this much-requested change to having a Windows Client Software Assurance contract. The company still doesn't seem to understand that many more Microsoft customers may wish to access a virtualized desktop from the office, from a hotel room, from an airport lounge, from a customer's office and, oh yes, from home without having to pay multiple times for the same piece of software.
• Windows XP Mode - when Microsoft launched Windows 7, they hoped to entice Windows XP users to move to the new environment by telling them that they would be able to keep applications that ran happily in a Windows XP environment, but didn't like Windows 7. Unfortunately, Microsoft tied this capability to systems having VT technology. So, in the end, this feature only was usable by a certain number of people who might be interested in moving to Windows 7. Microsoft appears to have realized that it was slowing or stopping the migration to Windows 7 in some environments and made the software changes necessary so that this technology  no longer required hardware virtualization technology.
• Features for Windows Server 2008 R2 service pack 1 - adding Microsoft Dynamic Memory will bring Microsoft into a more competitive position with VMware and its ecosystem. The ability to adjust memory of a guest virtual machine on demand has been available in the VMware world for a while. Microsoft RemoteFX, designed to enable users of virtual desktops and applications to receive a rich 3-D, multimedia experience while accessing information remotely, will also address the fact that VMware's ecosystem has offered a similar capability for quite some time.
• New technology agreement with Citrix Systems. The companies will work together to enable the high-definition HDX technology in Citrix XenDesktop to enhance and extend the capabilities of the Microsoft RemoteFX platform. This means that Microsoft is asking Citrix to help them make RemoteFX more popular.

An ideal virtual world allows organizations to access their workloads from wherever they'd like and from whatever machine they'd like to use. It would also include the capability to run encapsulated workloads locally, on a workgroup server or blade server, or on a server somewhere in the network or in the cloud. While Microsoft certainly hasn't offered a utopian solution here, it has clearly taken some important steps in that direction.