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OnLive in Trouble for Violating Microsoft's Windows License?

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.

  • phamhlam
    How could Onlive seriously not know they were doing this? I am glad MSFT is keeping cool and are talking about a licensing deal.
    Reply
  • capt_taco
    phamhlamI am glad MSFT is keeping cool and are talking about a licensing deal.
    well, they're not Apple, after all.
    Reply
  • amk-aka-Phantom
    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.
    Reply
  • zankuto
    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.
    Reply
  • upgrade_1977
    God, i love microsoft!!!
    Reply
  • vilenjan
    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.
    Reply
  • Flameout
    Serves OnLive right for deciding to use Winblows anyway
    Reply
  • f-14
    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
    Reply
  • alidan
    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.
    Reply
  • lucky015
    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.
    Reply