Will Microsoft let Onlive’s Windows Desktop service survive?

I’ve tried Onlive’s Windows Desktop service and I have to say it is pretty slick, maybe too slick. The service is aimed at iPad tablet users who wish to have a full Windows Desktop on their iPad. It specifically solves the challenge of providing applications that are not available on the iPad such as Office and Adobe Flash. It is very similar to Citrix’ XenDesktop solution. In my experience the ability to present multimedia content to the iPad via the streaming desktop is comparable to Citrix HDX protocol. Onlive’s main business after all is streaming games to PC’s and now their TV appliance. It seems like something that Microsoft would like. After all you get Windows and Office in more users hands especially consumers who may not normally splurge on the latest copy of Windows or Office. However, that’s not the case. Microsoft has a beef with how Onlive is providing the service.

You see Microsoft never envisioned streaming desktop as a service to consumers. Their licensing model isn’t very friendly to the non-enterprise. An enterprise must purchase a VDI client licensing for every device that will access the streaming desktop. This way Microsoft gets to capture licensing costs for the physical device and the virtual desktop. More importantly one of the advantages of application and desktop virtualization is that you get to save on software licensing costs. One of the synergies of Virtual Desktop Infrastructures (VDI) is that organizations can “pool” desktops and application licenses. Most application licenses are for concurrent use meaning, you only have to pay for the number of active users of the application. So, if you have a thousand users that need to use Microsoft Project but only 100 people use the application at any given time then you only purchase 100 licenses and install it on a VDI service like Onlive or Citrix.

What does this all have to do with Onlive Windows service for consumers? Why does Microsoft care if Onlive is paying for all the client licenses for users to connect? What if Onlive decided to make this service available to users of their new TV Appliance? Add a keyboard and mouse and consumers who purchase this $99 device never have to buy a full desktop PC again. And remember this is pooled licensing. Onlive may have 100,000 users but only 10,000 concurrent users at any time. That means Microsoft just missed out on 90,000 Windows and Office licenses.

Onlive is an example of a great idea that I don’t believe Microsoft will let survive for a long time. Especially, since it may compete directly with its Surface Tablet strategy. Do you think Microsoft will work out a licensing deal with Onlive?







Published by Keith Townsend

Now I'm @CTOAdvisor

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