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What OnLive app compliance means for Desktop as a Service providers

The OnLive app for cloud-hosted desktops has bent to Microsoft's will, opening the door for more DaaS offerings and making it known that violations won't be taken lightly.

Now that the OnLive app finally complies with Microsoft cloud-hosted desktop licensing policies, all Desktop as a Service providers are back on equal footing.

Over the weekend, users noticed that the underlying operating system for OnLive's Desktop as a Service (DaaS) offering changed from Windows 7 to Windows Server 2008 R2 Remote Desktop Services (RDS). It's an under-the-radar move, for sure, and one that all but acknowledges that the OnLive app was operating outside Microsoft's rules that govern Windows 7 virtualization for cloud-hosted desktops.

Desktop as a Service providers on level playing field

The people getting the raw end of the deal so far have been the business-oriented Desktop as a Service providers who are playing by the rules. They've built their cloud-hosted desktop models to operate within the confines of Microsoft's licensing -- despite how absurd those rules appear to be. The OnLive app threatened to blow that away by offering DaaS for a price that obviously showed it was either ignoring something, had found a loophole or had a special licensing agreement with Microsoft.

Enterprise Desktop as a Service providers probably haven't lost business because of this, though, because any company looking at the OnLive app was skeptical of how there could be such a difference in offering and price. Still, the turmoil around cloud-hosted desktop licensing over the past few months may have slowed down adoption among other Desktop as a Service providers.

The best thing to come from all this is the validation that the DaaS industry, community and even Microsoft can police and enforce (in the case of Microsoft) those rules to make sure everyone plays fair.

The door is open for more DaaS

Clearly, the OnLive app controversy struck a nerve with both IT pros and consumers, and it could be that this shows a definite market for consumer-oriented Windows virtual desktops.

DaaS could be another angle for virtual desktop hosting companies to take advantage of beyond business use cases. An offering using Windows 7 is almost impossible to deliver for a reasonable cost, but Desktop as a Service providers could deliver one that uses RDS for an extremely low cost. Plus, Windows Server 2008 R2 can deliver desktops under a Service Provider License Agreement (SPLA), which makes it very easy to achieve the density that lowers the cost per desktop to a level that consumers might be willing to pay to access Windows from their iPads.

Are Windows devices on the way out?

We're seeing more people favoring native applications running on iPads and other mobile devices, interacting with data through cloud storage services such as Dropbox. Windows devices aren't exactly going away, but their market share is decreasing as companies release more devices and users purchase them. The physical number of Windows devices hasn't started to decline yet, but the percentage of time consumers are using Windows to do things is on the way down.

More on cloud-hosted desktops:

Microsoft clarifies cloud-hosted desktop licensing, stings OnLive

Cloud providers defy Microsoft licensing to compete with OnLive

OnLive app appears to cave to Microsoft's demands

It's only a matter of time before people realize that they don't need a Windows computer at home for the more complex stuff if they can just access a Windows remote desktop on their iPad. They can even pair it with a Bluetooth keyboard and use the iPhone as a trackpad.

This isn't likely to happen in the business world for a while, but consumers are a lot more nimble than companies. A free or cheap product delivering Windows desktops to devices that cover those one-off situations where people need Windows absolutely makes sense.

Microsoft licensing remains unchanged

Unfortunately, the licensing reform we all wanted didn't happen. There is still no SPLA license for Windows 7. Still, the community rallied around it, and Microsoft is more aware than ever that people want it.

Most importantly, it means Microsoft wasn't working any secret, back-room deals that gave one company an unfair advantage and that Microsoft is clearly holding everyone to the same set of rules for cloud-hosted desktops and more.

Maybe OnLive can join the fight now, campaigning for some sort of SPLA program for Windows 7 or Windows 8. Now that they're playing by the rules, I see the value in the OnLive app for cloud-hosted desktops. If others see it, too, perhaps we can all make a larger case and Microsoft will bend a bit.

If nothing else, a new use case has been born, and we're likely to see consumers hopping on board as we move into a world where you don't need a physical PC to do things.

Gabe Knuth
is an independent industry analyst and blogger, known throughout the world as "the other guy" at BrianMadden.com. He has been in the application delivery space for over 12 years and has seen the industry evolve from the one-trick pony of terminal services to the application and desktop virtualization of today. Gabe's focus tends to lean more toward practical, real-world technology in the industry, essentially boiling off the hype and reducing solutions to their usefulness in today's corporate environments.

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Should Microsoft add a Service Provider License Agreement to Windows 7?