Microsoft virtualizes Office, not its licensing

Among the many virtualization news included in yesterday announcement one is particularly important: Microsoft now officially supports Office when virtualized through Application Virtualization (formerly SoftGrid).

This is major and welcome move from Microsoft: just like for hardware virtualization, customers find a major challenge in application virtualization adoption because of the severe lack of support from ISVs ( ranks lack of support as first challenge in today’s market).

The fact that Microsoft is finally supporting the ubiquitous Office suite in this scenario may persuade other vendors to do the same, leading to the same acceleration we are seeing in hardware virtualization market today.

With such announcement Microsoft also made clear that it’s finally ready to push for application virtualization: the company acquired the technology from Softricity in May 2006 and in almost two years never released similar support statements.

A reason for this unexpected change depend on VMware, which just acquired Thinstall.

Through a lock-in support strategy Microsoft may want to avoid a further growth of VMware in the application virtualization space: it will be hard for vendor’s customers to adopt its new product if Redmond giant doesn’t offer support for the scenario (kust like Oracle is doing right now with its database).

Despite the step in the right direction there is something that Microsoft is not ready to do: changing Office licensing to reflect the virtualized option.

In the last two years some early adopters raised concerns about the price a virtualized application should have: since SoftGrid technology allows to stream Office components just when they are needed by the end-user, this means that an application is not really always installed on a desktop like in traditional computing or in hardware virtualization. So customers wonder why they should still pay for everyday use when they don’t.

In other words companies are looking for a new pay-per-use licensing scheme. But it would imply a radical impact on the entire Microsoft business model and it’s unlikely to happen anytime soon.