Microsoft DaaS: What's the Holdup?

Michael Fraser laid out the case in these pages a year ago for how Microsoft could shift its licensing to enable Desktop as a Service in the next year or two. We caught up with Fraser for a largely discouraging update on progress in the last year.

A year ago, Redmond Channel Partner invited Michael Fraser, a virtual desktop infrastructure (VDI) consultant and expert, to write an article about the prospects for Desktop as a Service (DaaS). Simply stated, the nascent DaaS market is a marriage between VDI and the cloud. The main chokepoint on the emergence of DaaS, Fraser's piece argued, was Microsoft licensing. The headline of the original feature in March 2014 was "Will Microsoft Let DaaS Out of the Box in 2014?" RCP Editor in Chief Scott Bekker caught up with Fraser, CEO, founder and chief architect of Seattle-based VDI Space Inc., by phone to see whether there had been much movement by Microsoft to allow DaaS scenarios. The short answer: not much. As always, the longer answers are more nuanced and interesting. Here are excerpts from the conversation:

Q: How far has Microsoft come on DaaS in a year?
A: To the world, they really haven't come that far. Their biggest accomplishments in DaaS are not really in DaaS itself. The speculation, and this is sheerly speculation, is that Microsoft is working on DaaS on their cloud platform, and that with Windows 10 there will be, possibly, a change in [the Service Provider Licensing Agreement] SPLA.

I also think that because Windows 8 was such a flop for them, similar to Vista, that they're looking to 10 to be like 7 was to Vista. Windows 7 really saved the desktop world on the Windows front. Windows 8 really wasn't geared toward cloud or being able to serve up desktops in the cloud. Windows 10 will be much more cloud-adoptable. It's more portable, more streamlined, has a smaller footprint and has better load times. The free update aspect makes it look very, very subscription-like in the way they're trying to structure it. That would make it DaaS-friendly.

You wrote about VDI and you wrote about DaaS. Are DaaS and VDI still the ballgame or are there other approaches that are becoming more important?
The industry loves new marketing terms. Workspace as a Service is a new all-encompassing marketing term. It's centralizing all of the different components for any end user to operate and do the job. It's encapsulating desktops and applications. But I think it's premature. DaaS is definitely still at the forefront. Amazon dipped in their toes and now we see all the big cloud players wanting to get into it.

"Microsoft should understand that if they were to offer the ability to do a Windows client OS on SPLA, it's not going to hurt them. Hopefully, they'll make that change. If something isn't done within the next 12 to 18 months, people are going to move on past the desktop."

Michael Fraser, Founder and CEO, VDI Space Inc.

Last year, there was speculation that "Project Mohoro" might be Microsoft's DaaS play. Mohoro turned out to be Azure RemoteApp, intended for streaming server-based applications to remote desktops, tablets and smartphones. Was that an important DaaS development, or is it largely irrelevant to DaaS and significant in other sectors?
Microsoft had to make the decision on what they could allow from a technology standpoint. Technically speaking, Azure RemoteApp is a session-based DaaS or app-streaming technology for devices. It does open up the possibility to allow for a full-fledged desktop. It's a stepping-stone. It opens it up, but it wasn't a groundbreaking release for DaaS.

What about Windows Software Assurance per User and Windows VDA per User licensing options? How significant a change are those to end-user options for DaaS or VDI?
It helps to mitigate additional costs for enterprises. Most smaller companies aren't using Software Assurance anyway, so it's not a factor for small businesses. But I think there are other key changes happening in Microsoft's mentality. They're shifting from being a very closed company when it comes to things like open source. One example is .NET becoming open source. Those changes, while not directly related to DaaS, per se, could be good clues about where Microsoft might go with DaaS.

Do Microsoft's Windows Software Assurance per User and Windows VDA per User licensing options affect some of the limitations and problems in the SPLA model, or do those remain?
Nothing of significance has happened to the SPLA model specifically for DaaS. Windows client is still a limitation. It's only allowed on physical hosts in a rental model. You can't use SPLA at all from the standpoint of anything cloud-based or anything that would allow for it to be utilized in a shared environment.

July 1 is the relevant date of any major changes that happen to SPLA, historically. Windows 10 is slated to launch this summer. July 1 would definitely be an opportune date for Microsoft to make a change to SPLA. If they would open up the ability to utilize SPLA on July 1, that gives everybody almost a year to adopt or make the move to DaaS and the cloud.

Has the situation improved for small to midsize businesses (SMBs) interested in VDI or DaaS, or are the solutions still tailored to the needs and budgets of enterprise customers?
No, the situation hasn't improved. There are companies like Parallels who see the relevance. They scooped up 2X Software in February, and that will allow for them to get VDI in a much larger capacity than 2X was able to do.

The problem is still how to get your DaaS product onto cloud providers who would allow for larger adoption. The problem is that everything is being held back via Microsoft licensing. Google is interested. They have people assigned to desktops over there. IBM Softlayer is very active in there. There are large cloud providers that are very interested in DaaS. If Microsoft doesn't make changes soon, more and more applications become less and less Windows-dependent, and that becomes more and more interesting for the open source world.

Are most new VDI and DaaS solutions that came out in 2014 and early 2015 still skinning Windows Server, or has there been some advancement in the approaches?
They all are skinning Windows Server. The majority of them are using Citrix. It's still the exact same thing and more people jumping on that bandwagon and stating that they're providing DaaS. All of the new solutions coming out, new DaaS company, or anything in that capacity at this time, is for the most part either Citrix, VMware or they're trying to do their own solution, but frankly there's a limitation.

Teradici has opened up the capability of using PCoIP [PC over IP] for companies that can provide desktops as a service. It's not just closed to the VMwares and the Amazons of the world. That's a huge change for the market, and I think it's a great change. This allows for savvy companies to be able to utilize PCoIP to create their own DaaS platform.

What are the implications for DaaS of Microsoft's plans to keep Windows 10 updated in an as-a-service approach?
For them it's a perfect business model because it allows for cutting down piracy for a longer term. It gives Microsoft the ability to monetize something month in and month out. It also opens up the floodgates for market adoption in a different model than OEM. The local desktop, the traditional desktop is dead, no matter what. Sales have been declining year in and year out. The OEM model is not conducive, long term, to their business model. But they've done very well with a subscription model in Office. Office 365 is one of their top-selling products.

If you still need access to a client-side OS, subscriptions will also makes sense. And there will still be legacy applications. There are still security parameters. There are all these things that keep the desktop relevant.

You called last year for a service-driven, multi-tenant model for cost-effective and scalable SMB deployments -- in other words, having Microsoft offer Windows 7 or Windows 8 as an SPLA SKU. Any progress toward that?
Nope. That's still something that's not possible and that's, again, why the potential for a Windows 10 change would make it possible for services providers to make that model possible for many different sizes of clients.

Who are the vendors that are pressuring Microsoft to do more on DaaS?
All their main competitors. Amazon, Google, IBM SoftLayer, Rackspace, anybody else that has a public cloud offering that is fairly large and competes with them is a driving factor behind them making changes for market adoption.

What is the market case for DaaS?
What DaaS truly allows is to have freedom from having a local desktop that has any persistent information. It puts security front and center. Anybody who can benefit from a security standpoint of not having to have anything local anymore can benefit from DaaS. From the standpoint of use cases and market share, any company that has a need at this point for Windows desktops with any kind of legacy applications or locally installed applications is a good potential customer for DaaS. A lot of that can be done with session-based technologies available today. But the real differentiator is if users have a need for anything beyond regular applications, such as higher-powered applications with some level of multimedia capability, 3-D rendering and other processor-dependent applications. Use cases are really primarily for companies who just want to have the same experience in the cloud as they have locally. Also, if users want to templatize the user experience. The use cases are far-reaching, for sure. But the primary use case is security, and the second is user experience.

What do you think the prospects are for Microsoft to make some DaaS-friendly licensing changes this year?
Microsoft should understand that if they were to offer the ability to do a Windows client OS on SPLA, it's not going to hurt them. Hopefully, they'll make that change. If something isn't done within the next 12 to 18 months, people are going to move on past the desktop. I'm not saying there wouldn't be a place for desktops in the cloud, but people are always looking for the path of least resistance. Desktops in the cloud are that easy path for now -- if Microsoft gives people that option. If Microsoft doesn't, it could end up causing the DaaS industry to look elsewhere and find other options that could help end users to the same end goal, which is having access to their applications and data. There's a timeline and a window that this could be viable and profitable for Microsoft and anyone else selling Microsoft. It makes sense to do it now because there's still a push behind it. But if there aren't changes in the near future, people will find other ways to do what they need to do.


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