Microsoft to OnLive: You Had Your Fun, Now Pay Up

by: Bogdan PetrovanMarch 8, 2012

Just last week, we wrote about OnLive Desktop, the service that lets you run a full Windows 7 machine, complete with Microsoft Office, on your Android tablet or iPad. In a nutshell, OnLive Desktop works by “streaming” the Windows 7 environment to your tablet – all the software is hosted in OnLive’s cloud and you’re just accessing it from your tablet, just like you would with a Netflix movie.

The most amazing part about OnLive Desktop is the fact that you can get an almost complete Windows 7 experience and the Office productivity apps for free. The paid versions of the app give you more cloud storage space and access to a web browser, but, in order to get Win 7 and Office, plus 2GB of storage space, you don’t have to pay a dime.

Using OnLive May Get You in Trouble, Says Gartner

Now, Microsoft is making most of its money exactly from the two products that OnLive so generously gives away with its OnLive Desktop service. So naturally, news about the service raised many virtual eyebrows across the web, including a very prominent pair from market research firm Gartner.

Gartner noted that neither OnLive nor Microsoft have clarified how OnLive licenses the software that it provides to customers. Microsoft is well-known for its byzantine system of licensing, and Gartner’s analysts have speculated that OnLive Desktop is probably falling into a licensing no man’s land. The firm’s suggestion? Stay away from the service, until OnLive and MS clear it out.

onlive android

Microsoft Breaks Silence

Well, all the media attention that OnLive Desktop has been enjoying over the last weeks has finally triggered an alarm somewhere in Redmond, WA. Yesterday, one of Microsoft’s licensing head honchos has dropped the bomb on OnLive. In a blog post, MS Licensing and Pricing VP Joe Matz revealed how Microsoft is feeling about OnLive’s Robin Hood-styled acts of generosity. The skinny: you can’t do that, but we might change our mind if enough money comes our way.

To our relief (we love the idea behind OnLive Desktop), Microsoft didn’t apply the old “shoot first, ask questions later” strategy, although, apparently, it has all the rights to do so. In fact, in the wooden language typically used by Licensing and Pricing pros, Matz suggests that good ole Microsoft is willing to make things work.

Why is that? Why is Microsoft willing to essentially give away its flagship products to OnLive’s customers? Keep in mind that Windows 8 is just around the corner. Perhaps Redmond would like people to get used with using Windows on a tablet. Or, maybe Microsoft believes that, with consumers moving away from the PC, OnLive Desktop may serve as a bridgehead for accessing an entire new market.

Who knows? For now, we can only hope that OnLive manages to cajole Microsoft into accepting a licensing scheme that would keep OnLive Desktop on Android free (or at least affordable). Fingers crossed.

  • Uh… How is this wrong, MS is getting paid for the licenses of Win7, Office, etc when OnLine purchased them for EACH of their virtual servers/user capacity. Meaning those # of licenses purchased = the max number of users that can use the system at the same time. So the licenses are already taken care of. This is no different than a company buying a workstation or VDI (Virtual Desktop) solution for each of their employees to use.. Not all those employees need to use windows/office at the same time, so they just buy enough to make a pool of servers to use and power on as needed.. So onlive has X number of licenses, and their users are that virtual workforce.. Its not like they are just Duplicating / pirating MS software and then letting everyone use a single copy.. And from what i’ve read they only allow so MANY free users to get on at once ;) – so when that capacity is up – its up, and no other freeloaders can get on until one logs out or until onLive purchases more MS licenses for additional virtual desktop/servers to use for the freeloaders, or the user pays a fee, at which point they get thrown into the extra “Paid” users virtual server pool… This type of service is nothing new, do a search for Virtual Desktop Hosting, VDI, etc – It’s just OnLive is bringing this to the masses in tablet form. Just like they pay a license for each of their servers that is in use running a Windows based PC game.. ;)

    • hey, It’s because Microsoft specifically forbids providing Windows 7 or Office in the way OnLive does. I didn’t include the legalese in the article to keep it short, but here are the key phrases from MS’ post:

      “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.”

      “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.”

  • Graham Laight

    Interestingly, you can get a Windows Live account for free, and it contains a free online version of Microsoft Office! My opinion is that while it is rich in functionality, it isn’t as well suited to the web environment as Google Documents – which are a breeze to use in comparison.

    For future safety, I am writing an important application for myself which requires full desktop functionality (neither Google Documents nor Windows Live Office online can do it) using rather than Microsoft Office – I am betting that online streaming services like OnLive will always be able to offer that.