OnLive Backs Down, Changes Windows Desktop-As-A-Service

OnLive, a cloud service provider that Microsoft claims is violating its software licensing terms, has apparently changed the way it delivers its Windows desktop-as-a-service to avoid incurring the wrath of the software giant's legal department.

Over the weekend, eagle-eyed posters to the enthusiast forum OnLivefans.com noticed that OnLive is now using Windows Server 2008 in OnLive Desktop, a hosted service that gives iPad and Android device users access to a complete Windows environment with Office apps.

OnLive had been delivering OnLive Desktop via Windows 7 since launching the service in January, but Microsoft said last month that this constituted a breach of its desktop virtualization licensing rules, and that it was in talks with OnLive to address the issue.

By hosting OnLive Desktop under Microsoft's Service Provider License Agreement (SPLA) using Windows Server and Remote Desktop Services, OnLive is now following one of the two Microsoft-sanctioned paths for partners who wish to offer desktop-as-a-service.

While OnLive has not publicly announced the switch to Windows Server, the company last week informed Microsoft that it had made the change, a Microsoft spokesperson told CRN. OnLive made the change on its own and not as a result of legal pressure from Microsoft, the spokesperson added.

"We’re pleased to have been told that the OnLive Desktop application is now accessing our software by hosting it on Windows Server, an important step in delivering any Microsoft-licensed desktop-like service to the public," the Microsoft spokesperson said in an email.

However, in the interest of fairness to other hosting partners, Microsoft still needs to verify that the technical changes OnLive has made are sufficient, the spokesperson said.

"Based on this information, we will work with OnLive to take a closer look at its service and ensure it is operating according to its license like thousands of other partners and utilizing our standing pricing and licensing terms," said the Microsoft spokesperson.

Next: How Partners View Microsoft Licensing Terms

Microsoft hosting partners can offer Windows 7 desktop-as-a-service using desktop virtualization, but the end customer must have an existing licensing agreement with Microsoft, and Microsoft does not allow hardware to be used by more than one customer. These terms have long been a source of frustration for Microsoft partners, who see them as overly restrictive.

Microsoft partners typically opt for the Windows Server route to desktops-as-a-service, but the OnLive situation has apparently fomented some dissent within the channel ranks, especially because Microsoft took two months to acknowledge that OnLive was violating its terms.

Guise Bule, CEO of cloud service provider tuCloud, is planning to challenge Microsoft by offering a full hosted Windows 7 virtual desktop service for $10 per month. The service, to be offered later this month under a newly formed company called Desktops On Demand, is his attempt to deliberately violate Microsoft's licensing terms in order to gauge its response.

Bule told CRN that OnLive's move to Windows Server will have no impact whatsoever on his plans for Desktops On Demand.

"We're using Windows 7 for sure," Bule said. "We don't do servers; we're a desktop business. I'd rather sell my business and walk away from the desktop space" than offer Windows desktop-as-a-service using Windows Server.