OnLive caves to Microsoft's demands, changes DaaS offering to Server 2008 instead of Windows 7

By now you're all familiar with the story of OnLive's Desktop as a Service (DaaS) offering where they appear to flagrantly break Microsoft's Windows 7 licensing model. (If you're not caught up, check out this and this.

By now you're all familiar with the story of OnLive's Desktop as a Service (DaaS) offering where they appear to flagrantly break Microsoft's Windows 7 licensing model. (If you're not caught up, check out this and this.) Over the weekend, the OnLive enthusiasts on the website noticed that OnLive apparently switched their desktop offering to Windows Server 2008 R2 instead of Windows 7, seemingly marking of the end of the licensing battle between them and Microsoft.

This is a good thing for many reasons.

First, it means that OnLive is now on a level playing field with the rest of the DaaS providers. Windows Server 2008 R2 can be provided as a remote desktop for users via RDS CALs, and the RDS CALs are available via Microsoft's SPLA program. So this is something that anyone can get access to.

It's unfortunate that it went down the way it did. Gabe and Jack met with OnLive CEO Steve Perlman back in January and asked how OnLive Desktop was licensed, because it appeared to be illegal. Steve just told them that they had a lot of licensing experts in the company and that it was fine.

Steve has close ties with Microsoft, so we don't know whether anything really changed or whether they just made this small change to satiate the community. "Hey, it's Server now, so leave us alone!" Windows Server 2008 R2 and Windows 7 are fundamentally the same OS anyway, and it's possible to configure the Windows Server desktop to look and feel like a Windows 7 desktop. I would assume that OnLive didn't change their fundamental architecture at all—they just dropped the server bits instead of the desktop bits and all is now well. (Even on the cost standpoint, Microsoft is known to cut special deals with companies for licensing, so it's possible that no additional money changed hands with OnLive. Microsoft might have just said, "Look, just change it to Server and we'll leave you alone."

By the way, I'm still staying out of the MVP program. Microsoft not disclosing how OnLive was licensed with only the final thing that pushed me over the edge to quit. But Microsoft is still screwing the desktop industry by not having an SPLA for Windows desktops and for having those crazy policies on multitenancy.

Finally, it will be interesting to see what Guise Bule does with his "Desktops on Demand" company (which is slated to open for business in a few weeks). In his day job, Guise is the CEO of DaaS provider TuCloud, but he was so mad at Microsoft for allowing OnLive to violate the Windows 7 license agreement that he said, "F it!" and started Desktops on Demand with the open intention of violating Microsoft's license agreement to bring light to the issue. Many folks in the industry have said he's just doing for the publicity, which is true and exactly why it's awesome. (Check out the comments in Simon Bramfitt's post on Desktop on Demand for more info, and watch the segment from the time Guise explained his thinking on Brian & Gabe LIVE.)

So now what? This chapter is done. We still hope Microsoft changes their policies… What else?

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This also shows that OnLive didn't find some loophole (or at least a valid one) and that there was no altruistic motive to bring to light the licensing practices of Microsoft. This was exactly what most of us thought it was from Day 1--OnLive doing it wrong in spite of people telling them that what they were doing was wrong.

At least it's resolved. It's not the goal we all wanted (license reform from Microsoft), but as Brian said, at least it's a level playing field again.


Thats a big WIN for us there I believe Brian.

OnLive have been brought to heel and I think its because you, Gabe, Simon and I kicked up such a fuss about it, rather than because they were 'confused' about the proper way to license, I also think its to clear the decks in preparation for an attack on tuCloud, which is what we are being told by friendly insiders.

It pleases me immensely that this whole debacle exposes the farce that is Windows licensing.

The ONLY way anyone who wants to deploy hosted virtual desktops to their customers is if they user server OS images or slices of server heavily disguised to look like a desktop.

Its a ridiculous farce, not only are the server slice merchants still punting their slices of server and cramming users like rats onto server images, but proper DaaS providers must deploy server images too.

An entire 'desktop' space all stuck deploying server images to customers who think they are getting a desktop.

For all of the arguments about a server OS being almost identical to a Windows 7 OS and a server slice being disguised as a Windows 7 desktop, none of them are actually real desktops.

If a 2008R2 image is almost identical to a Windows 7 one, then why not let us deploy Windows 7 ?

What really amuses me is the lengths the rest of our space will go to in order to perpetuate this farce, other than you guys and Simon Bramfitt, nobody else is really speaking up about this farce.

The general consensus is that everyone else is waiting for me to 'get shot' which I find amusing.

The fear Citrix and Microsoft instill in the rest of our space is a joke, it means that everyone is too scared to speak up and say something in case the Citrix and Microsoft mafia set out to get them and its a very real threat too listening to some of the old hands in our space.

I have been warned that taking a stance against this would make me persona non grata over at Microsoft and Citrix, that private detectives would follow me and try to dig up my secrets, find a skeleton in my closet which can be used to shut me up, that they would go after my customers and everyone connected to me.

Not because I am wrong, but because I am saying something that they do not want to hear.

Because I am saying that if we sell desktops to people, then desktops they should get.

Its a huge conspiracy to deny desktop users a proper desktop, it would be some kind of paranoid delusional conspiracy theory if it were not all true, but such a dull one that I would never make any money if I wrote a novel about it.

And yet the number of apologists for this kind of behavior is incredible, after I publicly chewed up Tal Klein they are wheeling out Shawn Bass to blog about this and rebut my assertions, an indicator of how seriously they take this conspiracy theory.

A whole brigade of Citrix technical professionals are urgently formulating strategy to deal with my assertions that cramming lots of users onto a persistent slice of server is unsafe in comparison to a proper non-persistent VDI environment and to come up with good reasons why we should be using server slices or server images to deploy desktops instead of actual desktop OS's.

Nobody will agree and say "well actually he has a point, why can we not deploy desktop OS?", they would much rather rattle on about how in most cases a slice of server will work just fine.

The hypocrisy is breathtaking and the way a whole generation of technical professionals line up to repeat lies about server slices being desktops and suck Microsoft/Citrix *** because they are scared of repercussions is laughable, do these people have no professional credibility ?

And one day Microsoft will release their own VDI platform based on Azure and suddenly it will be ok, except then Microsoft will once again dominate the desktop space and you collaborators all get to watch Ballmer dance on stage sweating whilst waggling his tongue at you and explaining that DaaS is actually really cool and the way forward.

I mean nobody ever really expected them not to get into the DaaS game did they ?  It is their desktop OS, what do we expect them to do with it in the age of the cloud ?

Do we really think Microsoft will deploy server images or slices of server ?  Really ?

Well as far as I am concerned, the rest of the 'desktop' space can do what it wants and carry on living with Microsoft's boot on their throat and the threat that Citrix will never hire them or throw them work if they speak out.

Me ?  

I am a Virtual Desktop man, virtual desktops is what I do.

I will continue to deliver Windows 7 desktops as I always have done.


Guise's quote: "If a 2008R2 image is almost identical to a Windows 7 one, then why not let us deploy Windows 7 ?" hits it on the head, and is one of the reasons I'm glad he's staying the course.

The key word there is ALMOST.  Believe MS or not, but there is enough of a delta between the server and desktop bits that some applications DO NOT RUN THE SAME (OR PERHAPS NOT AT ALL) on Server 2008R2 and Windows 7.  Sure, maybe 90-something percent of the COTS apps out there can cross platforms without a hiccup, but for custom, home-grown, proprietary apps found in many industry verticals, it's enough of a difference to warrant a potentially costly re-engineering or parallel track of development for the server platform.

The bottom line is that I still fail to see a single valid technical or legal reason why the SPLA has these limitations for a desktop OS.  It's an artificially created barrier to entry for EVERYONE ELSE into the market.  I have seen legitimate use cases for DaaS on (the horror) a DESKTOP OS.  But, the status quo as delivered from Redmond states that it cannot legally exist, so our innovation in that area is limited to telling our application dev teams to re-engineer a desktop client application for a server OS in parallel.  Awesome.    


Frankly I'm a bit disappointed with this.

Yes, I've been agitating for change to licensing policy and my main interest in OnLive was as a platform for amplifying the discussion. But I do feel that there was a worthwhile issue at stake here and that OnLive had a fighting chance if this had reached court, so to see them cave to Microsoft so quickly is a disappointment.

I'm not sure if this will have woken Microsoft to the understanding that a review of licensing is required, we can only hope so, and see if Microsoft will take advantage of the opportunity of Windows 8 to change VDI licensing policies.




" Microsoft might have just said, "Look, just change it to Server and we'll leave you alone."

That's probably what happened.

It's their version of the secret In-N-Out menu for VDA for people who actually bother to license it (hush hush if you buy it we'll give you per user even though it says per device).


Whether OnLive uses Windows 7 "illegally" or they use Windows Server 2008 R2 instances, it's frustrating that they can continue to offer any kind of hosted Windows Desktop at the price points their plans are at.

The SPLA licensing costs for RDS SALs + Windows Server SALs per user are more than OnLive charges for any of their service plans, not to mention the licensing costs for the Office apps. Are they operating at a loss just to grab market share?

Something just doesn't add up here...


"The SPLA licensing costs for RDS SALs + Windows Server SALs per user are more than OnLive charges for any of their service plans, not to mention the licensing costs for the Office apps. Are they operating at a loss just to grab market share?"

That's a very good point. Microsoft may have actually had a special deal with OnLive that did allow them to use Windows 7 in the way that they were using it, perhaps formulated for their gaming platform without Microsoft realising the full implications. That would put Microsoft in the position where they couldn't admit that they had a special deal, but instead had to appear to be doing something about it and OnLive may have been able to use that as leverage to get extremely cheap Server 2008 R2 and RDS licensing....

This is all just speculation. We'll probably never know what has actually gone on, but as you say, something just doesn't add up.  

@Guise Bule, I agree totally with your point, but if you are so intent in offering a desktop service to the public, why don't you just do it now with Server 2008 and individual non-persistent VMs? I know it isn't as good as doing Windows 7, but at least it can be done legally and I can't see why it wouldn't be a good service given the constraints.


A few things are going through my brain because I do not get the point that Microsoft refuses to give hosting providers a SPLA for Windows 7 but points everybody to Windows 2008 in a custom shell. It absolutely makes no sense to me. Untill i figured out that it stops their largest competitor in the hosting space. VMware. Vmware view can not clone Windows 2008 servers.

So is this the main reason for Microsoft to refuse windows 7 under SPLA.

I am tremendously interested in what the others in this space think about that?


@Martin Sheppard is right, the RDS SALs still make this a money loser and just keeps the debate going that OnLive is getting some kind of preferential pricing from Microsoft, or they are licensing their servers by the CPU and just counting on such low concurrencies that they can over subscribe their service and servers.  That's not  providing an Enterprise class service in my opinion and not the kind of service we would want to provide to our clients.  This still doesn't address the MS Office SPLA licensing costs and when you add that in it all gets even uglier.



Rest assured that no one is "rolling me out" to defend RDS vs VDI.  I will release a blog about the security aspects of VDI because frankly I'm tired of vendors pushing the VDI agenda as if it miraculously solves all security related issues. I will release a blog describing in point what VDI does and not do from a security perspect.  Look for it soon.  But as I said rest assured, I'm not here to defend RDS vs VDI, nor am I being "rolled out" by anyone.  I work for myself, I'm not Bromium or any other vendor's puppet as you imply.



I still believe OnLive is doing it illegal. Their main product is Onlive Gaming, where games are rendered on Windows OS and delivered to user. So, even this counts as providing remote access to Windows OS.  Many games they provide are supported on Windows Server 2008 edition.


@Shawn I understand, I meant no offense I just repeated what I am hearing from the space.

Personally speaking I have the highest regard for your thinking, blog posts and technical expertise and experience, all of us do.

But chatter I am hearing Citrix and Microsoft circles is that you and Tal are being wheeled out to fight us.

I think its a bit like at school where everyone stands round the combatants in a circle shouting fight, fight, fight.

To be honest we are all quite looking forward to the blog post you promised us on the subject.

But never an insinuation of you being anybodies puppet, merely the suggestion that tribalism surrounds us.