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Dispute between Microsoft and OnLive over Windows Desktop-like Functionality on iPad License Agreements

Responding to the inquiries regarding licensing of the OnLive’s Desktop and Desktop Plus services, raiesed by the analyst firm Gartner on the question of whether or not what OnLive is doing is legal — Microsoft’s Joe Matz, cvp of Worldwide Licensing and Pricing in a March 8 blog post writes, “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.”

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.

“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),” questioned Virtualization expert Brian Madden.

Matz in the post notes that Microsoft’s licensing 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.”

Adding, he said, “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.”

A OnLive spokesperson via an e-mail stated, “We have never commented on any licensing agreements” to an inquired by MJF.

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