SPLA Limitations Redux

About 3 months ago, I wrote a post on the limitations on the SPLA program. You can read that post HERE.

I own and operate a business that is a Microsoft Partner in the SPLA program as well as Citrix CSP program. Both of which are “service provider” programs geared towards the “cloud”. I developed a service offering which many others have also, providing a completely hosted infrastructure which requires an endpoint and Internet connection to operate their business.

I’ve had a few comments, TONS of “hits” and some emails asking if there is any update to the post. The short answer is…no.

I recently spoke with the same Microsoft person and even provided a business example that shows the economic sense for Microsoft in hopes that this would help things along.

Using the example I presented in my last post on this topic, Microsoft could DOUBLE their Desktop OS revenue on solutions like this. How? Well, they get revenue from OEM installs of Windows 7 Pro on the endpoints AND they get SPLA revenue from the VDI solution through SPLA. Let’s face it. This solution is best served up on full OS endpoints. That’s what most of my clients want.

One could argue that they would receive that revenue if the client purchased a desktop OS license for a VDI solution through a volume license agreement (which they could). But that basically hangs the SPLA provider out to dry.

Why? For the same reason I explained in the last post. VDI solutions such as these require the Desktop operating systems to be on client-specific hardware. Therefore, I would have to dedicate an ENTIRE server or servers for hosting those VMs and therefore, cannot realize better economies of scale, which reduces my profitability.

So my question is this: Why can’t Microsoft see that they are hamstringing the very people they profess to want to help be successful? The partners that generate TONS of revenue for them building Microsoft-centric solutions.

Once again, Microsoft, please wake up and smell the coffee. SPLA partners NEED this to fully implement the solutions that our clients are ASKING for. Don’t you see that?

The reality of the situation is that we, as SPLA providers, could offer a one-stop-solution for customers wishing to utilize Infrastructure-as-a-Service offerings. Sadly, this is not the case. They will be paying us and Microsoft, and maybe that’s how Microsoft wants it. But the least they could do is be upfront as to WHY they refuse to offer the desktop OS as part of SPLA.

I wonder if I could provide Ubuntu with a Windows-based window manager and applications hosted on XenApp. Reduce my cost to the customer and reduce Microsoft’s revenue while increasing my own. Hmmm. There’s a thought. Perhaps an economic incentive to Microsoft would help the situation along a little faster.

For those readers in similar situations, please comment with a specific example, if you can. This would greatly help Microsoft collect the data it needs to make a different business decision that we all know they need to make.

Mar 27th, 2010

Cloud Revisited

While my previous posts equated Cloud with OSI and Cloud as a marketing term, the fact of the matter is, Cloud is “at market”. Meaning, Cloud computing is a term that I may define as one thing, someone else may define it as something totally different.

My definition of cloud really depends on what we’re discussing. I don’t think any one answer is an absolute but I do believe that given the nature of the discussion and the esoteric abstractions that occur as a result, no one is fully qualified to define it, including me.

So for me, Cloud Computing is about what’s being delivered and how it’s being delivered. Who is delivering it, is irrelevant. Just because a company say the deliver cloud computing or cloud-based computing, doesn’t necessarily make it so. But what the consumer gets, whether it’s a web application like Salesforce or Autotask, or XaaS (X = anything you can think of), then it’s sort of a “cloud” to them. And that’s my principal point.

Whether via the internet, a corporate network or from home, it’s all the same to the consumer. As long as they have what they expect in a service, application, etc.

Once again, my perspective.

Jan 7th, 2010

Tech Note: SPLA Licensing Limitations + Holiday Wish

I own a company that provides managed services, professional services and infrastructure hosting services. I have a product offering where the only thing the client needs to operate their business is an endpoint (desktop, workstation, laptop, thin client – which I can manage and protect) and connectivity (which I can manage and optimize).

Nice, eh? Good value for the customer and it leverages economies of scale for my business. One would think that it’s a pretty nice solution, especially with the Microsoft SPLA program and Citrix Service Provider Programs.

But guess what? I cannot offer a complete solution to my clients. You know why? Because I choose to deliver my solution using virtualization technology to leverage economies of scale in computing hardware.

Example:

A client has an SBS 2003 Premium server (AD, SQL, Exchange, File/Print, etc). They also have 20 workstations running Windows XP Professional with Office 2003/2007 installed along with a Line-of-Business application that uses a SQL database on the server.

Currently, their server is older and pretty close to end-of-life and they’re looking to forklift this to new hardware. Problem is, they have an OEM install of SBS and the cost of new server hardware is not appealing..

My proposal:

Using XenServer + XenDesktop I provide them 24 VMs (1 SBS Server + 23 Virtual Desktops (w/Office + LOB App installed)) for a monthly fee based on usage. That monthly fee includes all software licenses and guarantees that they will have the computing power that they need to operate their business.

They can “pay for what they use”. They only use 20 desktops this month? They only pay for 20. They have 23 next month? They only pay for 23? It’s calculated monthly and is a nice offering.

They don’t have to buy a new server every 3-5 years. They can continue to use the workstation hardware with the Citrix Receiver installed on a minimal operating system. They don’t have to worry about paying for licenses they don’t use. The infrastructure is in a solid datacenter which means redundant power, internet connectivity and with the tools I use, a solid backup solution to my storage pool, antivirus, etc.

BUT I cannot offer them this solution as I’ve stated above. Why? Because I cannot license the desktop operating system (Windows XP, Vista or 7) through the SPLA program.

The only way this works, according to Microsoft, is if the client has licenses for each virtual desktop (which I can manage for them, but they must purchase) AND those virtual desktops MUST run on server hardware that is dedicated to them. So, I would have to dedicate a physical server or servers to that customer and no other customer’s virtual machines can be run on that hypervisor. And the customer still has to pay me + Microsoft for the “complete” solution.

What does this mean? I cannot gain maximum efficiency in server hardware utilization using virtualization technology. And that’s with ANY hypervisor, Citrix XenServer, VMware vSphere, Hyper-V, etc. This also increases the price I must charge to ensure that I’m profitable on the offering and account for hardware utilization.

So, unless the person I’m dealing with at Microsoft is wrong or I have totally misinterpreted what the SPLA program agreement and licensing is telling me, Microsoft has basically shot my offering in the foot. They’re asking me to run a marathon with one arm tied behind my back. Can I do it? Yes, I can, however, my finish time will be much slower.

This problem is contrary to where the entire IT Services industry is going.

So, Microsoft. Here’s my Holiday Wish: Fix this!

A) Allowing me to sell desktop operating systems via SPLA and
B) do not limit me on how I provide that operating system to the end-user (e.g., virtual machine delivered via some protocol – RDP/ICA)

If I’m wrong about this, I will post an update to this article and give my mea culpa accordingly, but as of right now, according to Microsoft, I’m not.

Happy Holidays!

Dec 9th, 2009