Service provider takeaway: Service providers can use this cost comparison to help their customers choose between a physical PC/Windows upgrade and a move to a virtual desktop architecture.
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For many IT organizations, the cost of eventually upgrading distributed desktops to Vista (including hardware, software and labor), along with the long-running problem of managing distributed desktop software (operating system releases and patches, as well as applications), has caused many IT managers to re-evaluate their desktop strategy. Against the backdrop of the benefits and continuing adoption of server virtualization, have we reached the point where the smartest next move is to implement virtual desktops instead of doing another round of Windows upgrades on PCs?
To answer this question, both tangible issues (cost) and intangible issues (which eventually translate to costs in one way or another) must be considered. The actual costs will vary significantly based on such factors as the hardware a customer has today (and thus the specific hardware upgrade costs), the server virtualization solutions being used, the types and workloads of the various desktop users (since that affects the user/server ratio) and so on. This tip lays out a model for estimating the costs of each approach for your customers.
Vista upgrade costs
When it comes time to upgrade to Windows Vista, the upgrade may involve both hardware and software costs, plus the labor to implement both (either the customer's or a service provider's labor). If the goal is to get all your customers' end users to Vista, there will be licensing costs for Vista whether running on physical or virtual desktops, since each virtual machine (VM) running Vista will still require a license. However, running Vista in VMs can be covered under Microsoft's special Vista licensing option known as Windows Vista Enterprise Centralized Desktop (VECD), but only for customers under Microsoft's Software Assurance subscription as part of an Enterprise Agreement (EA).
There are two VECD options. Users connecting to Vista VMs from rich-client PCs that are already licensed for Windows (any version) can purchase an add-on subscription to their Windows Client Software Assurance option called VECD for Software Assurance, at an estimated retail price of $23 per year. Users connecting from thin clients that are not licensed for Windows can purchase VECD thin-client subscriptions at $110 per desktop. Pricing is different for the two options, assuming that rich clients already include a full Windows license and the thin clients do not. These VECD options are only available through a Microsoft Enterprise Agreement or volume licensing. (Although it is not well-publicized, the VECD licenses also allow downgrading to previous Windows versions, so this pricing can be applied for VMs running XP or previous versions as well.) Customers not on Software Assurance must purchase a retail Vista license for each VM at the same cost as a physical desktop. The standard cost for upgrading the desktop OS to Vista is between $199 and $299 per desktop.
Running Vista on existing physical desktops will generally require some level of hardware upgrade. Vista requires a minimum 1 GHz 32-bit or 64-bit processor with a minimum of 1 GB of RAM and 2 GB recommended. Memory costs are in the neighborhood of $50 to $100 for 1 GB and $100 to $200 for 2 GB. For users running the Aero interface, there may also be a graphics card upgrade required, with at least 128 to 256 MB of video RAM. (The user experience running the Aero interface in a VM is also something to consider, but that's another tip.) There should be at least 15 GB of free disk space, so a hard disk upgrade may also be needed. Vista also requires a DVD drive. Allowing for pricing variance, it could cost $300 to $400 to upgrade each PC, or $1,500 to $2,000 a pop to buy new Vista-capable PCs. Labor involved in upgrading both the hardware and software must be added to the upgrade numbers, whether done by the customer or offered as part of a bundled Windows upgrade service.