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OnLive in Trouble for Violating Microsoft's Windows License?

By - Source: ZDNet | B 29 comments

Microsoft is reportedly working with OnLive to clear up any possible licensing violations that may be occuring with using OnLive Desktop.

There's no question that streaming a hosted Windows 7 environment to an iPad or Android tablet is a cool thing, especially when it comes packed with pre-installed Office apps. But now there's talk that OnLive may not have acquired the appropriate licenses to provide a Desktop-as-a-Service (DaaS) environment on tablets using Microsoft's products.

On February 29, Gartner said that OnLive Desktop and its premium variants may present Microsoft licensing risks for organizations if consumers install the product on company iPads or use it to edit company documents from personal devices. Even more, neither Microsoft nor OnLive has provided clear instructions on how users must comply with Microsoft licensing requirements.

"Using a Windows desktop through hosted virtual desktop (HVD) requires careful licensing that often includes additional products, fees or Software Assurance," the report states. "Further, Microsoft often requires service providers to license products they provide through a Service Provider License Agreement (SPLA) with monthly payments for devices running the software."

As per Microsoft's virtualization licensing policy, providing access to Windows 7 and Office products in this type of a virtual environment requires the end user (OnLive Desktop subscribers) to have valid license keys for all available products.

Gartner said that OnLive has not disclosed how it is complying with Microsoft licensing, and that if Microsoft were to conclude that OnLive is misusing its products, the Redmond company "could potentially take action against OnLive that could affect OnLive's ability to service clients." There's also potential for Microsoft to hold both OnLive and OnLive Desktop users accountable for any potential mislicensing.

After Gartner's report, Microsoft's corporate vice president of worldwide licensing and pricing Joe Matz said on Thursday in a blog that the company is "actively engaged with OnLive with the hope of bringing them into a properly licensed scenario," adding that Microsoft is committed to seeing that the licensing issue is resolved.

"Our licensing terms provide clarity and consistency for our partners, ensure a quality experience for end customers using Windows across a variety of devices, and protect our intellectual property," he states. "It’s important to us and to our partners that we’re serious about issues of compliance."

OnLive will likely announce a new licensing deal with Microsoft that will allow users to continue to use OnLive Desktop and the premium versions. However there's also a good chance that users will see an increase in price, and possibly a monthly charge for the currently free OnLive Desktop Basic version.

We reached out to OnLive for a comment, but basically received a "no comment" statement in return. "We have never commented on any licensing agreements," a spokesperson said in an email.

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Top Comments
  • 33 Hide
    capt_taco , March 9, 2012 1:47 AM
    phamhlamI am glad MSFT is keeping cool and are talking about a licensing deal.


    well, they're not Apple, after all.
  • 22 Hide
    zankuto , March 9, 2012 2:05 AM
    Microsoft keeping its promise not to sue even when its an outrageous rip of their products and very sue worthy? Lets give microsoft some major credit here I doubt any other company would keep their promise like this. Bravo microsoft.
  • 21 Hide
    phamhlam , March 9, 2012 1:24 AM
    How could Onlive seriously not know they were doing this? I am glad MSFT is keeping cool and are talking about a licensing deal.
Other Comments
  • 21 Hide
    phamhlam , March 9, 2012 1:24 AM
    How could Onlive seriously not know they were doing this? I am glad MSFT is keeping cool and are talking about a licensing deal.
  • 33 Hide
    capt_taco , March 9, 2012 1:47 AM
    phamhlamI am glad MSFT is keeping cool and are talking about a licensing deal.


    well, they're not Apple, after all.
  • -7 Hide
    amk-aka-Phantom , March 9, 2012 1:50 AM
    phamhlamHow could Onlive seriously not know they were doing this? I am glad MSFT is keeping cool and are talking about a licensing deal.


    I'm not! I'd rather MS sue the hell out of OnLive, that company's services are disgusting, I can't stand cloud computing and streaming games/desktops. Thoughtless waste of network bandwidth.
  • 22 Hide
    zankuto , March 9, 2012 2:05 AM
    Microsoft keeping its promise not to sue even when its an outrageous rip of their products and very sue worthy? Lets give microsoft some major credit here I doubt any other company would keep their promise like this. Bravo microsoft.
  • 10 Hide
    upgrade_1977 , March 9, 2012 2:26 AM
    God, i love microsoft!!!
  • 10 Hide
    vilenjan , March 9, 2012 3:09 AM
    Yes good job MS not sending thier lawyer army after OnLive. Hopefully OnLive will be smart and pay up the royalties it owes to MS as apposed getting sued in to bankruptcy.
  • -5 Hide
    Flameout , March 9, 2012 3:27 AM
    Serves OnLive right for deciding to use Winblows anyway
  • -2 Hide
    f-14 , March 9, 2012 3:43 AM
    do i have to get my robot a lics. to run my computer when i tell the robot to fetch me the morning news and the computer runs Windows or IE?
    this sounds pretty bogus if it's just a remote way of running the machine.
    seems like an excessive way for microsoft to collect fees for peripherals that are not dependent on their system to operate
  • -1 Hide
    alidan , March 9, 2012 3:50 AM
    zankutoMicrosoft keeping its promise not to sue even when its an outrageous rip of their products and very sue worthy? Lets give microsoft some major credit here I doubt any other company would keep their promise like this. Bravo microsoft.


    lol, you have to think of this.

    lets say the license price was 100
    lets say onlive effed up,
    now microsoft has 2 options, sue them for 500
    or negotiate a license price of between 100-499

    you see, looking at this cynically, you see an over all GREAT profit that can be made here by not going to court, but having court and a lost cause as a threat.

    that said, its VERY big of microsoft to not go the court route, because either way they are probably paying the same in legal fees regardless of the result, and they could probably get more out of them in court too...

    but than again i cant see onlive as having a crap ton of extra money. so maybe court would be worse.
  • 1 Hide
    lucky015 , March 9, 2012 4:05 AM
    Looks to me like OnLive paid for a service and Microsoft have gone "Hold on, We didn't know you could/would use it like this, lets find a way to charge you more for it".

    I imagine they have some form of pre-negotiated VLK deal with Microsoft, Being a business.
  • 0 Hide
    archange , March 9, 2012 5:08 AM
    Microsoft, like many others, apply "per user" licensing to their software in any client / server scenario. This is called CAL (Client Access License). Since the users of any given OnLive machine are basically countless, thought arises for upping license fees. As simple as that.

    The other licensing method in practice is "per processor". That would maybe help in this case, however being (a lot) more expensive.

    Anyway, my personal opinion is that current licenses are nothing else but schemes to rake in more money from customers. Thing is that they work pretty well for the corporations and nobody bothers contesting them. Hek, it;s THEIR software, even if it's on YOUR computer - right?
  • 4 Hide
    fixxxer113 , March 9, 2012 5:33 AM
    archangeMicrosoft, like many others, apply "per user" licensing to their software in any client / server scenario. This is called CAL (Client Access License). Since the users of any given OnLive machine are basically countless, thought arises for upping license fees. As simple as that.The other licensing method in practice is "per processor". That would maybe help in this case, however being (a lot) more expensive.Anyway, my personal opinion is that current licenses are nothing else but schemes to rake in more money from customers. Thing is that they work pretty well for the corporations and nobody bothers contesting them. Hek, it;s THEIR software, even if it's on YOUR computer - right?



    This case is not a matter of CAL or Per Processor Licensing. That will be the case for the actual server infrastructure licenses needed to run this service. For someone to use Windows as a service through virtual desktop, they have to use VDA and VDI licenses, or have active Software Assurance as the article says. In both cases, the licenses are not perpetual and need renewal every 1(VDA/VDI) or 2 - 3 (SA) years.

    My work involves a lot of consulting on Microsoft Licensing and I can honestly say that their system is chaotic... A lot of customers and sometimes MS themselves don't have a clear idea of what a certain customer has to pay for in a certain scenario. That said, OnLive is not any random customer... They should have consulted lisencing specialists from Microsoft before going through with this.

    Microsoft had no reason to sue them right away. Their general view in cases like this is that the customer is "mislicensed" and just needs to comply.
  • 4 Hide
    agnickolov , March 9, 2012 5:35 AM
    This actually makes perfect sense. OnLive has the potential to become a big corporate customer for Microsoft. You don't make money in the long run by alienating your potential customers dragging them to court...
  • 2 Hide
    doive1231 , March 9, 2012 6:09 AM
    If even Microsoft has not provided clear licensing instructions then it's fair that they negotiate with Onlive.
  • 6 Hide
    tlmck , March 9, 2012 6:36 AM
    Quote:
    "Our licensing terms provide clarity and consistency for our partners, ensure a quality experience for end customers using Windows across a variety of devices...


    There is no way he could have said this with a straight face.
  • -4 Hide
    hiruu , March 9, 2012 7:13 AM
    I love it...you don't see people trying to give apple software away for free. or Google...oh wait they have none worthwhile to do so with
  • 1 Hide
    arlandi , March 9, 2012 8:24 AM
    smart business move by msft.
    if they sue onlive, msft will loose more revenue. imagine having another licensing stream from onlive desktop users.
    lets hope they all will find a win-win scenario (and also not to have ridiculous pricing as a result)
  • 0 Hide
    fixxxer113 , March 9, 2012 9:30 AM
    Quote:
    Quote:
    "Our licensing terms provide clarity and consistency for our partners, ensure a quality experience for end customers using Windows across a variety of devices...


    There is no way he could have said this with a straight face.


    I can't even read it with a straight face :p 
  • 1 Hide
    rantoc , March 9, 2012 9:38 AM
    Seems someone is about to get a$$ raped with a chainsaw. Never liked their service anyway, to much latency (laggy) and the games they provide have to low gfx quality due to the software is run at minimum settings and then the poor quality gfx is compressed with loss resulting in even below minimum quality. No thx!
  • 1 Hide
    gallidorn , March 9, 2012 2:26 PM
    If OnLive was smart, they would have used Ubuntu Linux instead of Windows 7. Then there wouldn't be any problem with licensing of the operating system or the software being used.
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