Microsoft Tries to Embrace Multi-User PCs With Little Other Choice

If you’re Microsoft, then you know that more PCs are good and fewer are bad. You want to encourage people to have individual machines, because that way you’re selling more licenses. So why are the folks in Redmond working with NComputing? For the same reason that they have to make a go of the growing disaster known as Windows Mobile: They don’t have a choice.

NComputing has been making a name for itself, landing some large contracts, like the 1.8 million children in the Indian state of Andhra Pradesh. What the company does is create multiple virtual desktops on one PC. It’s great for the government — or company — that wants to save money and reduce hardware. Oh, yes, and copies of operating systems as well as other software. NComputing claims that 15 million people use its products daily. Multiple that by the amount an OEM spends on a copy of Windows, and you’ve got a big shortfall in Microsoft annual revenue.

Given that there are other companies like Citrix in the same or similar product category and that budget pressures continue to be tight, the chances that virtualized desktops will disappear is remote. So Microsoft does the next best thing. If someone is only going to sell one copy of software, you want it to be yours and more expensive than the desktop version. So NComputing will put its next generation of product on Microsoft software, “such as the forthcoming Windows MultiPoint Server 2010.” The customer would need a copy of the server for the host and “appropriate client access licenses” for each workstation, so Microsoft gets at least a little piece from every seat. There’s an interesting paragraph in the Microsoft press release:

NComputing and Microsoft share a commitment to advance multiuser computing (also known as shared resource computing) to make it easier for teachers and students in libraries, labs and classrooms to gain access to a genuine Windows experience at a lower total cost of hardware acquisition and ownership. The collaboration is aimed at helping educational institutions take full advantage of multiuser computing on the Windows Server platform.

I detect a bit of wishful spin here. Microsoft is used to cutting costs to seed the educational market. But if you look at the NComputing case studies, it is happy to sell to government and for-profit business, both of which are areas that Microsoft would clearly prefer to keep in the buy-many-copies category. However, it may not have that choice, and multi-user systems become yet another pressure eating away at the corporation’s traditional dominance, sales, and value.

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