Microsoft in dispute with OnLive over Windows desktop-on-iPad licensing

Microsoft finally is going public about OnLive, the company offering hosted Office and Windows on iPads and Android tablets and whether it is in violation of Microsoft's virtualization licensing terms.
Written by Mary Jo Foley, Senior Contributing Editor

Now we know why Microsoft officials refused to discuss whether OnLive -- the company offering iPad and Android tablet users a hosted Windows desktop app -- was in violation of Microsoft licensing terms.

It seems Microsoft believes they are.

"We are actively engaged with OnLive with the hope of bringing them into a properly licensed scenario, and we are committed to seeing this issue is resolved," said Joe Matz, Corporate Vice President of Worldwide Licensing and Pricing at Microsoft, in a March 8 blog post.

From today's post, it seems it took a note from Gartner regarding licensing of OnLive Desktop for Microsoft to finally go public on the question of whether or not what OnLive is doing is legal.

OnLive offers an app called OnLive Desktop, which allows iPad and Android tablet users to run full Office and Windows 7 on their tablets, even if they haven't purchased either product.

In today's post, Microsoft's Matz noted that Microsoft's licensing agreements allow the following:

"* Customers that want to work with partners to have them host Windows 7 in a Virtual Desktop Infrastructure solution on their behalf, can do so when the customer provides the partner licenses through the customer’s own agreements with Microsoft. The hosting hardware must be dedicated to, and for the benefit of the customer, and may not be shared by or with any other customers of that partner.

"* Microsoft partners who host under the Services Provider License Agreement (“SPLA”) may bring some desktop-like functionality as a service by using Windows Server and Remote Desktop Services. Under this solution, the partner is free to offer this service to any customer they choose, whether or not they have a direct licensing agreement with Microsoft. However, it is important to note that SPLA does not support delivery of Windows 7 as a hosted client or provide the ability to access Office as a service through Windows 7.  Office may only be provided as a service if it is hosted on Windows Server and Remote Desktop Services."

Virtualization expert Brian Madden recently questioned via his blog why Microsoft wouldn't disclose how OnLive was legally able to provide hosted Windows, given Microsoft's licensing terms and conditions. In a March 1 post, Madden said:

"For those who haven't seen it, OnLive offers a full remote Windows 7 VDI desktop direct to end user consumers, and the users don't have to buy VDA licenses. Based on everything we know about Microsoft licensing, this should be in clear violation of Microsoft's policies. (And many of the other DaaS (Desktop as a Service) providers are crying foul, noting that it's hard for them to compete against a company who apparently doesn't have to license Microsoft products like the rest of the world does.)"

I've put an inquiry in with OnLive for their side of the story. If and when they respond, I will update this post.

Update: An OnLive spokesperson said via an e-mail: "We have never commented on any licensing agreements," which I'm assuming is a no comment.

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