OnLive recently expanded from the realm of cloud gaming to providing virtual access on your iPad to a hosted Windows 7 machine, but it sounds like Microsoft isn't too thrilled about the idea. The standard for desktop virtualization services involves licensing fees to whoever made the OS, but apparently OnLive isn't currently paying Microsoft those fees, making it hard for other cloud desktop hosting services to compete. 

Microsoft's VP of worldwide licensing and pricing, Joe Matz, has said in a recent blog post:

"Some inquiries about these scenarios have been raised as a result of recent media coverage related to OnLive’s Desktop and Desktop Plus services. Additionally, the analyst firm Gartner raised questions regarding the compliance of these services last week. 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."

Putting aside the fact that Windows 7 running on an iPad is more than a little Frankenstein-y, hosted cloud services like OnLive are going to become a much bigger part of the mobile ecosystem as processor and wireless bandwidth increase. Local storage can be especially limiting to app availability in the SD card-less iOS world. Squabbles like these between Microsoft and OnLive may provide momentary roadblocks to otherwise smart services, but in the long haul, it's easy to see desktop virtualization becoming popular on the iPad, and tablets everywhere.

It sounds like Microsoft doesn't want to stop OnLive's service, just make them pay for it. Which in turn probably means OnLine will have to pass that cost on to end users; namely us.

If you're using OnLive on your iPad, would giving Microsoft some money bother you?

Source: Gartner, TechNet via ZDNet