Vista Virtualization Goes Back to the Future

Microsoft partners and customers should not underestimate the implications of the licensing changes, which would let businesses centrally serve up virtualized versions of Windows Vista from a server to PCs.

The change is really more about licensing than technology and foreshadows what Microsoft will likely do with other products. After all, Microsoft is looking at hosted products as a way of combating the perceived threat posed by the Web platform (aka Web 2.0).

What Microsoft gains:

• The new licensing deal essentially is a hosted version of Windows Vista, which companies consume from servers. The virtualized Windows Vista licensing is Microsoft's first real push into hosted services, or what the company is touting as software plus services.
• Microsoft derives revenue through subscriptions. The company has long wanted to shift away from the perpetual license model to one where customers pay for usage rights for a set-time period. Most software services derive revenue from subscriptions, except for those subsidized through other means, typically advertising.
• Microsoft offers customers some of the benefits of the Web platform without creating revenue risk for Office or Windows—and potentially opening up greater revenue opportunity for server software.

The virtualized approach has lots more to do with big-iron server-to-client systems of yesterday than more-recent thin client architectures. Similarities:

• More-end-to-end, with largely one vendor providing all the software (and in bygone days, hardware, too).
• PCs become more like dumb terminals of old, which must be connected for there to be access to operating systems and content.
• End-to-end server-based solution potentially improves security model (although there is no real comparison of today's connectedness to the server silos of yesteryear).

A move backward makes lots of sense for many enterprises. Microsoft says it offers the new virtualized Vista licensing for financial institutions and government agencies with specialized security concerns. But every company with computers leaving the office faces potential privacy, regulatory and security risks.

In the heyday of mainframes, location defined people's work roles and how they interacted with technology. The work day ended and employees went home. Today, role is often defined by interaction rather than location—and the technology as well. A product manager might go from role of parent to supervisor at home in the den, without ever changing location.

Mobile device proliferation enables the overlapping of roles, but the technology tends to be highly decentralized. Mobile workers carry cell phones, PDAs and laptops—with different data repositories—that facilitate the commingling of personal and professional information and behavior.

One solution is do to the enterprise what the Web platform has done for the Internet: Centralize data so that it can be accessed anytime, anywhere and on any device. Enterprises can improve security by pulling data back into the confines of their operations and getting it off all those mobile devices.

Virtualized Vista is a step in the direction backward—to the recentralization of data and software—in order to move forward to even bigger benefits from mobilizing work forces.

A careful study of Microsoft's 2007 product releases reveals that, technologically, many of the pieces for more server-based applications is already in place. Microsoft only needs to flip the licensing switch.

There's been a presumption among blog and news sites that to combat the Web platform threat Microsoft would need to offer hosted versions of Office and other applications. Such an approach is risky, from the perspective of existing Office and Windows revenue stream. But licensing changes that would let enterprises host the Microsoft software—with virtualization technology as one mechanism—is more sensible, particularly if Microsoft can turn customer accounts to subscriptions.

Microsoft has been headed in this direction for some time. Virtualized Vista is a major step forward and shows how going back in time, so to speak, will be the way to move enterprise applications into the future.

Related Posts:

• Who Pays for Software Plus Services, Microsoft Watch, March 15, 2007
• Google and Long Tail Computing, Microsoft Watch, Feb. 22, 2007
• The Weakest Link Is You, Microsoft Watch, Jan. 11, 2007
• Why the "E" in CES Means Enterprise, Microsoft Watch, Jan. 5, 2007
• Priming Vista Security for the Enterprise, Microsoft Watch, Dec. 13, 2006
• Sound of the Opening Bell, Microsoft Watch, Nov. 29, 2006
• Microsoft's New Take On IT Community, Microsoft Watch, Nov. 13, 2006