As they say, everything old is new again. The emergence of virtualization as a widely accepted computing platform has moved us that much closer to the age-old concept of centralized server-based computing that originated with the first mainframes in the 1970s. Although server virtualization has gained a sizable foothold in the Intel-based server market, the desktop market has not seen such advances. There are many reasons for this, including technology limitations that are only now being worked out, but a key one is the hostility to virtual desktop infrastructure (VDI) by Microsoft, as expressed in its Windows software license restrictions.

The licensing agreements for Windows 2000 Professional and Windows XP Professional never allowed for the virtualization of these products. That didn't keep some enterprises from doing it anyway, nor, to my knowledge, has Microsoft ever held any of these early adopters' feet to the fire over this issue. Perhaps because threatening a customer that has legally purchased a few thousand licenses of your product and used them in a way you didn't foresee doesn't make the best business sense.

Microsoft's licensing rules for VDI cost you more
But that benign neglect of its anti-VDI licensing provision changed about two years ago with the release of the Vista Enterprise Centralized Desktop (VECD) licensing scheme. The original release of this new licensing scheme hit the market with a combination of profound confusion and outcry. So much so that the terms and pricing were slightly modified about six months ago. The current licensing scheme can be boiled down to two different options:

1. If you're connecting to your VDI environment from a Vista-licensed PC already covered by Microsoft's annual Software Assurance plan, you must purchase a Windows VECD for Software Assurance license.
2. If you're connecting to your VDI environment from a thin client or a workstation that is not covered under Software Assurance, you purchase a Windows VECD license.

Both licenses give a user sitting at the licensed client device the right to run and/or connect to up to four virtualized instances of Microsoft Vista (or XP/2000 if you exercise your "downgrade" rights). Those virtualized instances can run on the client device or be centrally hosted -- it doesn't matter where they are stored or how the virtualization itself is accomplished. The important thing is that you're licensing the client device in whatever form that might take, not the VMs themselves.

Source: http://www.infoworld.com/d/virtualization/why-microsoft-sabotaging-desktop-virtualization-066