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OnLive in Trouble for Violating Microsoft's Windows License?

By - Source: ZDNet | B 8 comments
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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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  • 0 Hide
    n3uromancer , 9 March 2012 15:33
    And here we go...

    The 19th century business model (Microsoft) meets the 21st century issues.
    What if someone bought a Microsoft product, and then remotely connects to it to use it, let's say on Android phone over TeamViewer?
    Is it illegal, since you are using the product, and it is not installed on your mobile device?
    How is that different then what Onlive is doing?
  • 0 Hide
    MKeeper , 9 March 2012 16:03
    @n3uromancer

    because you "bought" the Microsoft product in the first place.

    They are quite justified in my opinion... if OnLive are effectively selling thousands of Windows desktops to end users but haven't paid Microsoft for the same number of licenses then they are in breach.

    Equally I cannot see how they can offer a "free" Windows Desktop without incurring their own licensing costs ... perhaps they are swallowing that cost themselves? I doubt it.. it would be too expensive.

    I personally think OnLive launched this thing without thinking it through .. and just realised they are facing a massive lawsuit because they are effectively illegally distributing unlicensed access to Microsoft products
  • 0 Hide
    hakko , 9 March 2012 16:40
    OnLive is not giving a Windows Desktop with windowing, settings and applications, it's not a proper Remote Desktop where I start applications and interact with the Windows OS itself. OnLive is serving games like a web server, giving us game "pages". Other than knowing that the games are Windows only, you can't tell what OS is there. Interesting to see what the courts say. Would this mean licences for Windows based webservers for each user connecting?
  • 0 Hide
    MKeeper , 9 March 2012 17:02
    @hakko

    read the article before you comment eh?

    This specifically refers to the OnLive "Remote Desktop" .. not their gaming.

    They are offering a Terminal Services / Cisco like experience with access to basic Windows desktop functions including Microsoft Office..

    this is nothing to do with their gaming arm..
  • 0 Hide
    hakko , 9 March 2012 20:10
    So far was aware of gaming side only! Just saw Desktop service on their US site. I'd imagine they would have to get (and imagine they have already) licences for that service.

  • 0 Hide
    Major_Trouble , 10 March 2012 00:46
    I don't think OnLive thought it through well enough as in the article it states.

    "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."

    AFAIK they don't check if the end user has valid licence keys for the Microsoft software so it will come back around to charging for it's use.

    I think Microsoft are well within their rights to charge a fee for use of their software. Why should a tablet user with a Onlive account be able to use a MS OS or office product without Microsoft being paid.

    Perhaps OnLive should consider offering one of the alternative free OS and productivity software that are available. It might help wean the world off Microsoft Office and force them to reduce it's ridiculous price tag.
  • 0 Hide
    n3uromancer , 10 March 2012 01:47
    @MKeeper
    Quote:
    because you "bought" the Microsoft product in the first place.

    ... not exactly.

    I did NOT buy the product, my company did.
    I for myself have a Linux desktop, and an Android phone.
    My company has a Win7 desktop.
    My point is:
    - I connect to the desktop over TeamViewer;
    - I remotely inspect it's funcionality
    - while I am at it, I change the report in MS Excel that resides on that machine, hence "use the product"
    - I log out

    Does this mean that I am breaking the law and/or am eligible to a lawsuit, since I did not buy MS office but am still using it over my phone?
    And on your "bought" point, do you mean to hint that Onlive installs pirated copies of MSWin on their servers?

    @Major_Trouble
    Quote:
    I think Microsoft are well within their rights to charge a fee for use of their software. Why should a tablet user with a Onlive account be able to use a MS OS or office product without Microsoft being paid.

    Because they got payed already.
    Or are you suggesting that people should pay MS every time someone looks at the screen with MS Win on it and uses a program on someone else's PC? (since this is it, working on someone else's computer that someone else already payed for)
    Where does it say it is forbidden to RENT a PC with pre-installed MS Win? How is this not the same?
  • 0 Hide
    Major_Trouble , 10 March 2012 15:56
    At what point did they get paid? Did OnLive buy all their Win7 and Office users a copy each or are the all using the same virtual image. How many copies do you think OnLive bought to be able to offer it to their uses? What if you wrote a book and published it. I bought your book made poor copies and then proceeded to give it away. Would you want some form of compensation. Yeah, thought you would.
    Your company bought the copy of Win7 you are jacking into is it that hard for you to understand. It doesn't mean they can offer it out to everybody without paying a licence fee.