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Channel Watch

Memo to Microsoft: Allow a Cleaner Hosted Desktop

An important licensing battle between Microsoft and gaming company OnLive over an app that gives users remote access to a Windows 7 desktop exposes a fault line running through Microsoft's products, business models and its hosting partners.

Earlier this year, cloud gaming company OnLive released an Apple iPad app called OnLive Desktop that allowed remote display of a limited-functionality version of Windows 7 running in the Palo Alto, Calif.-based company's datacenter.

The version of Windows 7 served up by the datacenter-app combo included a keyboard button in the taskbar, fully functional versions of Word, Excel and PowerPoint, and a 1Gbps Internet connection.

What was refreshing about using the OnLive Desktop was that it provided a Microsoft experience in a straightforward way -- no convoluted licensing agreement with Microsoft, no setting anything up with the IT department. It was just click, pay and start. That's what users are coming to expect from technology, but it's now clear that it wasn't Microsoft's intention to have its software used that way.

A freebie released in January got a lot of reviews, but a late February update with pay options of $5 and $10 a month seemed to get Microsoft's attention. In mid-March, Joe Matz, Microsoft corporate vice president of worldwide pricing and licensing, suggested very strongly in a blog entry that OnLive is off the reservation.

"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," Matz wrote.

Much of Matz's post was dedicated to spelling out how Windows can only be provided by hosting partners either through a virtual desktop infrastructure (VDI) scheme that involves customers already having licenses, or by having limited desktop functionality served through Windows Server and the Remote Desktop Protocol. The Service Provider License Agreement "does not support delivery of Windows 7 as a hosted client," Matz wrote.

Simon Bramfitt, who's been providing analysis of the OnLive-Microsoft licensing situation on his blog, speculates that OnLive might have been trying to create this fight all along, and that the party in trouble could be Microsoft -- not because it will lose to OnLive, but because Redmond is losing the argument in the market.

"You have to acknowledge that it is long past time for Microsoft to address the shortcomings within its current licensing policy with regard to VDI," Bramfitt commented on Matz's post.

It's a safe bet that Matz's broadside was partly prompted by angry calls from Microsoft's committed hosting partners, who have struggled to play by Microsoft's confusing rules that undoubtedly put off potential customers.

In fact, the content of those partner calls might be different than you'd expect. "I'm very thankful for the situation," says Danny Allen, CTO of Desktone, which offers desktops as a service under Microsoft's licensing rules. "It's raised visibility to the challenges of Microsoft licensing, which has not kept up with the demand that there is for cloud-hosted virtual desktops."

Microsoft badly needs to unshackle its hosting provider partners. Consumerization and mobility are changing the technology world, and if Microsoft doesn't recognize it and act fast enough, it's not just Redmond that will suffer. Committed, rule-abiding partners will lose too.

Can Microsoft afford not to bring virtual desktop licensing in line with market trends? Let me know in the comments below or at sbekker@rcpmag.com.

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.

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Reader Comments

Thu, Apr 5, 2012 80s Rocker

One more thing, Apple does not allow you to host there OS and if they did you would be expected to pay a licensing fee to them also. So before you go after MS, Apple is just as bad, and in a lot of cases worse when it come to protecting their OS. A good example of this is that I cannot go an buy a license for the Apples OS and then install it in a Virtual machine on my windows box for when I want to do iPhone development (unless I get a hacked version). So if you are going to slam MS for their lack of hosting support, you better slam Apple for not only their lack of a hosted Apple Desktop but also the fact that their licensed forbids running on any non-Apple hardware (aka: virtual machine on windows desktop). You cannot criticize one without the other, otherwise you are a hypocrite.

Thu, Apr 5, 2012 80s Rocker

I agree it would be a good idea for MS to come up with a way for hosting companies to provide a hosted Windows Desktop. But until they do lets not forget that OnLive is doing something that is illegal at this time. And if you think it is OK for them to charge money for providing a hosted Windows Desktop without paying MS a dime, then you need to check you morals. Just because you do not agree with MS licensing does not give you a right to their software for free. Also lets not forget about Office 365 which is an hosted version of office that you can purchase (http://www.microsoft.com/en-us/office365/what-is-office365.aspx#fbid=CStiZhqN9DT) so maybe MS is already headed in that direction with Office 365 being the first step.

Thu, Apr 5, 2012 Chris S Washington DC

I was around in the 80's when Microsoft knocked IBM out of the market by providing better way to use inexpensive desktop computers in a business environment. IBM's decision to shackle its partners' platforms killed the software company I worked in, and encouraged the development of new companies. Their decision to (finally) allow partners to develop on non-IBM platforms came too late for the company I worked in. Shoe's on the other foot now, isn't it, Microsoft?!

Thu, Apr 5, 2012 Bill US

I have used RDP to deliver windows based software to tablets (both iPad and Android). From a usability and functionality standpoint it is a very good solution. But every customer chokes on the price of the necessary Microsoft licensing (terminals services client access licenses and sql server licenses - like most business applications ours requires a database). Most choose to go to vendor that does not use Microsoft products. With a lower price this could become the defacto standard for delivering power apps to tablets. At the current price points we are losing so much business to non Microsoft based products - that we have begun investigating options for re-developing our products using non-Microsoft products. We have been successful for 30 years selling Microsoft based products. We do not want to abandon the 100's of development years we have put into our Microsoft based products, but seeing how potential customers are voting with their pocketbooks - it seems like the choice is switch or go out of business.

Wed, Apr 4, 2012 Phil

Looks like you forgot to mention that the app is also available on the more popular Android platform. Not only does that mean it available on a lot more devices but with the Bluestacks program it can also be run on Windows PCs, which means a way to use Office for free on your desktop.

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