When you start working with Microsoft licensing – well, to be fair, almost anyone’s enterprise licensing, it can be mind-numbing. Truth be told, when I stepped up to pinch hit for my colleague, to cover the immense changes to SQL Server 2012 licensing, I developed a migraine with vertigo – something that hadn’t occurred for several years. While it could have been coincidence, we’ve taken liberty with it at work, and turned it into a running joke for our boot camps, that enterprise licensing can give you migraines.

In junior high school, we had a science experiment using perspective-flipping glasses (kind of like these). Now the lore goes, if you wear this kind of glasses day in and day out for 3-5 days, your mind will actually adjust, and flip the image right side up (take them off and it’ll take a while to reverse again). I could barely walk, and felt like I was going to hurl when I tried the glasses.

But licensing? I’ve been wearing those glasses for around six months, and you know what? My vision is stabilizing, and I can honestly almost walk straight. So while some people new to (Microsoft) licensing may look at certain things that Microsoft does and say, “WTH?”, I say, “It makes perfect sense – squint and turn your head upside down for a second”.

Two recent decisions from Microsoft fall in this same category:

1. Office Home and Student in Windows RT not including commercial use rights.
2. Windows RT requiring a… bit of work to enable sideloading of applications.

Now, these don’t necessarily have anything to do with each other, except they do. Follow along.

When you have a business model – whether it’s working or not, you like the line for revenue to go up (and operating expenses to ideally go down) – even if it’s just a little bit. Microsoft is fastidious about this. Keep earnings up, and don’t drop the income ball.

So why is H&S free for non-commercial users? Easy. Windows RT (and largely Windows 8) is all about consumers. Look no further than the marketing materials. Windows RT and Windows 8 are intended to bring Windows, touch, and power efficiency to a new world of devices (and ideally, stave off some/much of the appeal of the iPad by doing so). Some businesses may move to Windows 8 in short order, but most won’t. They’ll stick with Windows 7 until they see how, and where, they want to deploy Windows 8. In the meantime, the users within these businesses will buy iPads, Android tablets (somebody does, right?) and Windows RT tablets for home use, and wind up bringing them into the office. All three platforms bring legal landmines for Microsoft and other enterprise software. But this isn’t the place for me to dive into that. We offer a whole 2 day course that covers many of those issues. 🙂 So Windows RT includes Office as, really, a loss leader. It’s a prize at the bottom of the Windows RT box. I don’t mean to denegrate either product by saying that – but the goal is very clearly a better together strategy, even though Windows RT includes only a few of the Office apps, and limited  functionality when compared to Office on x86/x64.

By offering H&S as free on Windows RT, Microsoft can make that platform more appealing to consumers. By not including commercial use rights, Microsoft can ensure that (back to two paragraphs ago) it doesn’t harm their enterprise sales/Office 365 subscriptions/Software Assurance revenue as it does so. All of those are non-small numbers for Office.

Mary Jo Foley walked through how businesses can obtain commercial use rights, and in a nutshell, you buy Office 2013 for a user’s Windows 7/8 PC, they get commercial use rights for Windows RT (turning RT into a companion device by definition). Now, that means that for the business, Office on Windows RT isn’t free, but it also means it isn’t full price. In many ways, businesses get to take advantage of the multiple-device licenses that Office has had for some time (install on your primary and a secondary device), it’s just that the license is applied to Windows RT, rather than the actual bits as users would have historically done in the past. So that’s Office. What’s the deal with sideloading?

Matt’s lengthy walkthrough demonstrates the technical hurdles of sideloading apps (putting apps on Windows 8 or Windows RT without going through the Windows Store), but there’s a licensing angle here too – and in many ways it’s the same one I just demonstrated, if you put your glasses on and turn your head over.

Why is sideloading so complicated? Because there are three competing forces at play (in no particular order):

1. Microsoft’s desire to keep the WinRT platform and Windows Store secure – sideloading gates what can/cannot run on these devices.
2. Microsoft’s desire to keep the Windows Store as the preferred means of obtaining apps written for WinRT – retaining the 30% (or 20%) of revenue from app sales.
3. Microsoft’s desire to (hum along if you know the tune) maintain Windows enterprise licensing sales – Enterprise includes sideloading. It’s a paid option on other editions.

By requiring a key for other versions, and requiring payment for that key, and requiring a minimum number of those licenses, Microsoft discourages “casual bypassing” or piracy of those keys as a mechanism to try and avoid using the Windows Store by tinkerers or hackers, or commercial distribution of apps that wouldn’t meet store guidelines, which is something sideloaded apps can do (see 1 and 2).

By not requiring any special keys or costs in Windows 8 Enterprise, Microsoft rewards those customers who have invested in SA (or Intune) and incentivizes customers on the fence about Windows client SA (or Intune) to take one of those avenues (see 3).

Like Active Directory membership was in the beginning (guilty!), sideloading is important, but I think may have been overblown in terms of either importance or complexity. The more I look at it, the more I realize that there are very few apps that will really require sideloading. Most commercial apps should be distributed on the Windows Store, either for sale (sharing revenue with Microsoft) or for free with a subscription (which, unlike Apple, for now at least, does not require revenue sharing with Microsoft). Instead, only enterprises building in-house Windows 8 and Windows RT line of business (LOB) apps will really need sideloading – at least as Microsoft would like it to exist.

As we start progressing to more of these enterprises building LOB apps, the need for sideloading may become more important. But I don’t anticipate most enterprises going into their own Windows 8 development lifecycle in short order (<6-12 months). They’re still trying to get their hands around the platform as a whole. That, combined with the lack of guidance on building LOB apps that align with the design principles Microsoft has been evangelizing for the last year, are taking, and will continue to take, some time for them to digest. Not that some companies won’t build their own WinRT LOB apps – some already are, and those may likely require sideloading. For customers with SA, which are likely to align reasonably well with those who have the time and energy to build apps for Windows 8 and Windows RT, the licensing “bumps” put in front of sideloading are likely a non-event. For consumers or hobbyists? Sideloading is a non-starter. Exactly as it was likely intended.