8 ms·

CEO dares Microsoft to sue him over virtual desktops that flout licensing

143 points by GreekOphion 15y ago

jlawer 15y ago
The funny thing is the worst thing Microsoft could do to this is ignore them.... That would leave the issue unresolved, exactly what the Desktop as a Service people don't want. I suppose the real question is if Microsoft's position on the desktop makes it illegal to do a favorable deal with On-Live? I am not aware if this would be illegal or not? One would think it would be at least against the spirit of the law to carve out a market niche for a microsoft "old boy" and protect it through their monopoly position... but it wouldn't surprise me if there is no regulation in place to stop this. I am wondering what the shareholders think. They are refusing to license to most players in order to protect windows and office on the desktop. On the other hand they are giving up a new non-trivial revenue stream during the transition period. I would think a lot of investors would want to take the short term cash and run. Having previously worked for Red Hat on the Red Hat Enterprise Virtualization support team, it always was strange looking at the VDI products that it was SO SO expensive to run the infrastructure purely due to Microsoft Licensing. Microsoft don't want to loose the grip so they make VDI licensing difficult, instead pushing mixed virtualization where you need to run windows on your desktop as well. VDI struck me as almost purely a windows solution. If your running linux you have a range of other options to have multiple users on a single infrastructure in a workable way without having hundreds of VMs.
- toomuchtodo 15y ago
  Why don't more Desktop as a Service organizations get together and refine LibreOffice to heavily compete against Microsoft? It clearly works; look at other open source solutions that are a collaborative effort. Linux as a whole, Python, Ruby, OpenStack, etc.
  - rbanffy 15y ago
    LibreOffice's codebase is enormous and complicated. It's being cleaned up, but it may still be hard to maintain. It's doable, of course, but if you implement too much Office compatibility, you risk Microsoft suing you for some frivolous patent they keep just for the purpose of crushing LibreOffice when it becomes a threat.
    - rbanffy 15y ago
      It's interesting how the downvoting of comments critical to Microsoft is time-related (down trends around noon and midnight UTC, up trends shifted about 6 hours). One day I'll have to write a bot to check up/down votes and relate them to sentiment. The demographics may prove interesting.
      - rbanffy 15y ago
        to say nothing about downvoting of comments that are made to the wrong comments ;-) That should teach me not to post right before going to bed.
  - nkassis 15y ago
    I like your idea but you'd have to do some hard marketing work to get customers to use it in my opinion. That might not be cheaper than this lawsuit ;p
  - kklimonda 15y ago
    Well, I'm pretty sure all the money of those companies would not be enough to get LibreOffice to become 100% compliant with MS Office formats in a timely manner. Those formats represent decades of features, bugs, fixes and quirks that would have to be replicated in order to make sure that LibreOffice can replace MS Office in all its uses.
    - toomuchtodo 15y ago
      Let's assume it costs $5/month per instance of Office 2000-Whatever. It's really more than that with the MS ASP licensing, but let's use $5 for round number sake. Let's also assume they have 500K users using Office, also what I would consider a conservative number. That's $2.5 Million/month in licensing costs alone. That pays for quite a bit of developer time.
      - Drbble 15y ago
        The real question is, could Office be cloned for less than the user cost of Office? It almost certainly can't be cloned for less than Microsoft's cost to make Office.
        toomuchtodo 15y ago
        Has Linux cost more than Windows Core to build? In dollars or time?
  - jlawer 15y ago
    The biggest problem is that clients WANT Microsoft Office. You can offer them something else (Apple iWork, Lotus Symphony, Open Office, LibreOffice, KOffice). It can do everything they need and they will still argue that MS Office is what they want because of a myriad of factors (training, familiarity, computability, etc). Some people might be able to shave off some customers, but you are going to have to have some killer feature (even if it is price).
- nknight 15y ago
  15 USC §1: "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal." Such is the very first sentence of the Sherman Antitrust Act. Getting convictions can be a pain in the ass, and there are many things that could be violations but are not usually treated as such in practice, but the statute in theory is very broad, and the general principle is that actions which seriously harm competition in a market are unlawful. The acts do not have to be specifically enumerated in advance.
  - jlawer 15y ago
    I am unfamiliar with many of the details of US laws, but does signing a special deal to offer a new product with 1 exclusive partner mean you have to offer it to everyone? In the physical world many companies have patented processes that they don't offer to others. I am not a lawyer, but I think unless there is existing case law there will be enough points for the case to go on for many many many years making the point moot.
    - nknight 15y ago
      > I am unfamiliar with many of the details of US laws, but does signing a special deal to offer a new product with 1 exclusive partner mean you have to offer it to everyone? If the deal hurts competition in a market, the deal may be illegal, yes. > In the physical world many companies have patented processes that they don't offer to others. Which may or may not harm competition in an identifiable market. Compulsory patent licensing regimes are sometimes forced upon companies in the US as a result of antitrust action, and other countries sometimes have general compulsory licensing schemes that are always in effect. Are you confusing "harming a competitor" with "harming competition"? They're not the same thing. > I am not a lawyer, but I think unless there is existing case law there will be enough points for the case to go on for many many many years making the point moot. Major antitrust cases always take years. Any major litigation takes years. The first AT&T antitrust case in the late 40s/early 50s took 7 years to settle, and the second one, which broke the company up, took eight. Those didn't even go to trial.
- vDesktop 15y ago
  Facts do not cease to exist because they are ignored.
  - jlawer 15y ago
    No, but clearly people are wanting Microsoft to take the bait.. This is being backed by the Desktop as a Service providers who want to be able to deploy this. Unlike trademarks to my knowledge there is nothing that devalues their offering by NOT suing, and instead suing other providers, at least until it gets large enough. Hell they even make money on each windows 7 license they need. On the other hand, I really don't expect Microsoft to do this. It might take them years to bother to sue, but I see them taking it on simply because they can't turn a blind eye to piracy.
deleted 15y ago
[deleted]
savrajsingh 15y ago
This is definitely an interesting space. I keep a Parallels Windows 7 VM on my machine, and I use it for the amazing features in the Windows version of Microsoft Office (former MS Office UI PM here). If I could replace that with an always up-to-date cloud-based copy (I'm always installing security patches since I rarely boot it) I'd do so in a heartbeat.
jpdoctor 15y ago
Not that I don't admire the guy's bravado, but there is no obligation for Microsoft to sue everyone equally. IANAL so correct as necessary, but he seems like he's tilting at windmills.
- rbanffy 15y ago
  nknight points this out very well: https://news.ycombinator.com/item?id=3726555 https://news.ycombinator.com/item?id=3726555
  - jpdoctor 15y ago
    Not really. The amount of time and money for DOJ to prosecute microsoft the first time was huge, and there are competing virtual desktops, so good luck getting them on this point.
    - nknight 15y ago
      Antitrust cases against big companies are always going to be expensive, but one of the many stupid things the DOJ and states did in the Microsoft case was making Microsoft fight for its life. It was unnecessarily aggressive and drove up the expense. And, there were competing browsers and operating systems during the first case, too. The mere existence of competitors does not preclude antitrust action. Just ask AT&T and T-Mobile.
      - jpdoctor 15y ago
        > The mere existence of competitors does not preclude antitrust action. Agreed. I just don't see the anti-competitive behavior around virtual desktops that we did with WinOS and IE, so I think it would be a very tough sell.
        rbanffy 15y ago
        What are the reasons to favor one specific vendor giving it a key advantage over the other? Microsoft seems to be clearly playing favorites here. What are they trying to do? Give a monopoly to their favorite vendor? Is it legal to use your monopoly to expand someone else's? Can we really call this company, with its seemingly deep and strong ties to Microsoft, a separate entity? If it's not, this is clearly something the DoJ should look into.
powertower 15y ago
I don't get it... If I provide a virtualized hardware desktop hosting platform that can enable the client to load an ISO of Windows and enter his own serial key, am I violating any Windows hosted desktop restrictions? Or am I only violating it if I supply the serial keys (from legit separate/per-customer/never re-asigned OEM copies)? I think it's the latter, because in the former there is absolutly no contract between myself and Microsoft. What the client does with my platform is his business and doing. If he activates Windows there, that's between him and Microsoft. So what is the problem that these articles are trying to point out? How is it difficult for customers to buy their own OEM copy and supply a serial key?... Cusomter goes to your panel, clicks to load some already predefined or prehosted VHD or ISO, then supplies serial key him/herself. Problem solved? Or is this all about the cost of OEM copies?
- tomku 15y ago
  These services are not VPSs. They're basically selling RDP access to pre-installed copies of Windows, where the service provider handles all the licensing and serial keys. The idea is to target non-technical users who want to run MS Office or Flash websites on their iPad without paying for a PC running Windows.
- wvenable 15y ago
  From the article: "We do know from Microsoft's blog post that vendors can only host Windows 7 desktops in a virtual desktop infrastructure setting if the customers buy their own licenses from Microsoft. Even if this requirement is met, the vendor must host the desktops on separate physical hardware for each customer, ruling out a multitenant arrangement." You might be able to enable the client to load an ISO of Windows and have him enter his serial key but you'd have to separate hardware for each customer making any virtualization completely pointless.
J3L2404 15y ago
Well it is digital so a copy of it is only like savoring the scent.
- vonkow 15y ago
  It's software, everything's a digital copy.
- deleted 15y ago
  [deleted]
forrestthewoods 15y ago
This really is a fascinating problem. If Guise Bule gets his way the the maximum number of software licenses sold would be equivalent to the maximum number of concurrent users. I don't think that's particularly desirable for either developers or users. A similar situation exists with video games. The market is going pure digital and gamers want the ability to sell "used" digital games. If that were possible then a middleman service would appear which would instantly "buy" and "sell" the game as you launched and closed a game. A wildly successful game such as Skyrim sells millions of copies but only had ~300,000k concurrent users (on PC) at launch. A couple of months later and that number is only ~50,000. Suffice to say this will never be allowed to happen.
- psykotic 15y ago
  This already happened for video games under similar circumstances with Internet cafes. These days the typical video game EULA prohibits use in Internet cafes without a special license, but as far as I know that has not been tested in court. The easier workaround from the developer and publisher's point of view is to just go online-only, which to a large extent has already happened, especially in Asia where gaming in Internet cafes is widespread.
  - forrestthewoods 15y ago
    Nice point! Valve has a special program just for cyber cafes (https://cafe.steampowered.com/index.php https://cafe.steampowered.com/index.php ). I have no idea how much it costs but you can pay some recurring subscription for access to a large number of titles. My impression is that most popular cafes pay this and it does very well for both Valve and the cafes.
    - bane 15y ago
      "Add a wide range of 100+ popular titles to your catalogue. We provide complimentary promotional materials and marketing support for your cafés. We are happy to support for in-café tournaments and special events. Please let us know about your upcoming events. All participants have access to the private Café Forums where they may discuss trends and issues in the cybercafé industry with fellow café owners and operators." Once again Valve is showing the world how things should be done, is wildly successful, and nobody else seems to pay attention. It shouldn't be such a huge issue to just meet your customer in the middle.
vDesktop 15y ago
Guise Bule here ! Am just about to begin an IAmA on reddit if you fancy joining me there : http://bit.ly/redditor http://bit.ly/redditor Or follow my updates on twitter about this : https://twitter.com/#!/Guise_Bule https://twitter.com/#!/Guise_Bule OR go read my blog post : http://bit.ly/MicroFap http://bit.ly/MicroFap
- Drbble 15y ago
  Wow, with that bitly URL for your AMA, you could launch a second career as an Internet marketing consultant.
  - vDesktop 15y ago
    Yeah, attention to detail is important :)
alanh 15y ago
I’m going to lose mad karma, but we have done all this before, so: zzzzzZZZZZZZ
Osiris 15y ago
I'm curious, why don't they just provide Windows Server 2008 R2? With the Desktop Experience installed, it's functionally identical to Windows 7, and you can license an unlimited copies on Windows Server Datacenter Edition, which is $3,000 per CPU. I have a hosted WS2008R2 instance that I can RDP into and use for whatever I want. Are there some other licensing constraints that prevent WS2008 from being used in that manner?
brisance 15y ago
I don't think Microsoft is playing favorites with OnLive; rather, they are trying to save their hardware "partners" from certain doom since they do not have any such offerings. This would indirectly impact Microsoft itself since OEM licensing makes Microsoft a lot of money.

143 points by GreekOphion 15y ago

The funny thing is the worst thing Microsoft could do to this is ignore them.... That would leave the issue unresolved, exactly what the Desktop as a Service people don't want. I suppose the real question is if Microsoft's position on the desktop makes it illegal to do a favorable deal with On-Live? I am not aware if this would be illegal or not? One would think it would be at least against the spirit of the law to carve out a market niche for a microsoft "old boy" and protect it through their monopoly position... but it wouldn't surprise me if there is no regulation in place to stop this. I am wondering what the shareholders think. They are refusing to license to most players in order to protect windows and office on the desktop. On the other hand they are giving up a new non-trivial revenue stream during the transition period. I would think a lot of investors would want to take the short term cash and run. Having previously worked for Red Hat on the Red Hat Enterprise Virtualization support team, it always was strange looking at the VDI products that it was SO SO expensive to run the infrastructure purely due to Microsoft Licensing. Microsoft don't want to loose the grip so they make VDI licensing difficult, instead pushing mixed virtualization where you need to run windows on your desktop as well. VDI struck me as almost purely a windows solution. If your running linux you have a range of other options to have multiple users on a single infrastructure in a workable way without having hundreds of VMs.

toomuchtodo 15y ago
Why don't more Desktop as a Service organizations get together and refine LibreOffice to heavily compete against Microsoft? It clearly works; look at other open source solutions that are a collaborative effort. Linux as a whole, Python, Ruby, OpenStack, etc.
- rbanffy 15y ago
  LibreOffice's codebase is enormous and complicated. It's being cleaned up, but it may still be hard to maintain. It's doable, of course, but if you implement too much Office compatibility, you risk Microsoft suing you for some frivolous patent they keep just for the purpose of crushing LibreOffice when it becomes a threat.
  - rbanffy 15y ago
    It's interesting how the downvoting of comments critical to Microsoft is time-related (down trends around noon and midnight UTC, up trends shifted about 6 hours). One day I'll have to write a bot to check up/down votes and relate them to sentiment. The demographics may prove interesting.
    - rbanffy 15y ago
      to say nothing about downvoting of comments that are made to the wrong comments ;-) That should teach me not to post right before going to bed.
- nkassis 15y ago
  I like your idea but you'd have to do some hard marketing work to get customers to use it in my opinion. That might not be cheaper than this lawsuit ;p
- kklimonda 15y ago
  Well, I'm pretty sure all the money of those companies would not be enough to get LibreOffice to become 100% compliant with MS Office formats in a timely manner. Those formats represent decades of features, bugs, fixes and quirks that would have to be replicated in order to make sure that LibreOffice can replace MS Office in all its uses.
  - toomuchtodo 15y ago
    Let's assume it costs $5/month per instance of Office 2000-Whatever. It's really more than that with the MS ASP licensing, but let's use $5 for round number sake. Let's also assume they have 500K users using Office, also what I would consider a conservative number. That's $2.5 Million/month in licensing costs alone. That pays for quite a bit of developer time.
    - Drbble 15y ago
      The real question is, could Office be cloned for less than the user cost of Office? It almost certainly can't be cloned for less than Microsoft's cost to make Office.
      - toomuchtodo 15y ago
        Has Linux cost more than Windows Core to build? In dollars or time?
- jlawer 15y ago
  The biggest problem is that clients WANT Microsoft Office. You can offer them something else (Apple iWork, Lotus Symphony, Open Office, LibreOffice, KOffice). It can do everything they need and they will still argue that MS Office is what they want because of a myriad of factors (training, familiarity, computability, etc). Some people might be able to shave off some customers, but you are going to have to have some killer feature (even if it is price).
nknight 15y ago
15 USC §1: "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal." Such is the very first sentence of the Sherman Antitrust Act. Getting convictions can be a pain in the ass, and there are many things that could be violations but are not usually treated as such in practice, but the statute in theory is very broad, and the general principle is that actions which seriously harm competition in a market are unlawful. The acts do not have to be specifically enumerated in advance.
- jlawer 15y ago
  I am unfamiliar with many of the details of US laws, but does signing a special deal to offer a new product with 1 exclusive partner mean you have to offer it to everyone? In the physical world many companies have patented processes that they don't offer to others. I am not a lawyer, but I think unless there is existing case law there will be enough points for the case to go on for many many many years making the point moot.
  - nknight 15y ago
    > I am unfamiliar with many of the details of US laws, but does signing a special deal to offer a new product with 1 exclusive partner mean you have to offer it to everyone? If the deal hurts competition in a market, the deal may be illegal, yes. > In the physical world many companies have patented processes that they don't offer to others. Which may or may not harm competition in an identifiable market. Compulsory patent licensing regimes are sometimes forced upon companies in the US as a result of antitrust action, and other countries sometimes have general compulsory licensing schemes that are always in effect. Are you confusing "harming a competitor" with "harming competition"? They're not the same thing. > I am not a lawyer, but I think unless there is existing case law there will be enough points for the case to go on for many many many years making the point moot. Major antitrust cases always take years. Any major litigation takes years. The first AT&T antitrust case in the late 40s/early 50s took 7 years to settle, and the second one, which broke the company up, took eight. Those didn't even go to trial.
vDesktop 15y ago
Facts do not cease to exist because they are ignored.
- jlawer 15y ago
  No, but clearly people are wanting Microsoft to take the bait.. This is being backed by the Desktop as a Service providers who want to be able to deploy this. Unlike trademarks to my knowledge there is nothing that devalues their offering by NOT suing, and instead suing other providers, at least until it gets large enough. Hell they even make money on each windows 7 license they need. On the other hand, I really don't expect Microsoft to do this. It might take them years to bother to sue, but I see them taking it on simply because they can't turn a blind eye to piracy.

deleted 15y ago

[deleted]

savrajsingh 15y ago

This is definitely an interesting space. I keep a Parallels Windows 7 VM on my machine, and I use it for the amazing features in the Windows version of Microsoft Office (former MS Office UI PM here). If I could replace that with an always up-to-date cloud-based copy (I'm always installing security patches since I rarely boot it) I'd do so in a heartbeat.

jpdoctor 15y ago

Not that I don't admire the guy's bravado, but there is no obligation for Microsoft to sue everyone equally. IANAL so correct as necessary, but he seems like he's tilting at windmills.

rbanffy 15y ago
nknight points this out very well: https://news.ycombinator.com/item?id=3726555 https://news.ycombinator.com/item?id=3726555
- jpdoctor 15y ago
  Not really. The amount of time and money for DOJ to prosecute microsoft the first time was huge, and there are competing virtual desktops, so good luck getting them on this point.
  - nknight 15y ago
    Antitrust cases against big companies are always going to be expensive, but one of the many stupid things the DOJ and states did in the Microsoft case was making Microsoft fight for its life. It was unnecessarily aggressive and drove up the expense. And, there were competing browsers and operating systems during the first case, too. The mere existence of competitors does not preclude antitrust action. Just ask AT&T and T-Mobile.
    - jpdoctor 15y ago
      > The mere existence of competitors does not preclude antitrust action. Agreed. I just don't see the anti-competitive behavior around virtual desktops that we did with WinOS and IE, so I think it would be a very tough sell.
      - rbanffy 15y ago
        What are the reasons to favor one specific vendor giving it a key advantage over the other? Microsoft seems to be clearly playing favorites here. What are they trying to do? Give a monopoly to their favorite vendor? Is it legal to use your monopoly to expand someone else's? Can we really call this company, with its seemingly deep and strong ties to Microsoft, a separate entity? If it's not, this is clearly something the DoJ should look into.

powertower 15y ago

I don't get it... If I provide a virtualized hardware desktop hosting platform that can enable the client to load an ISO of Windows and enter his own serial key, am I violating any Windows hosted desktop restrictions? Or am I only violating it if I supply the serial keys (from legit separate/per-customer/never re-asigned OEM copies)? I think it's the latter, because in the former there is absolutly no contract between myself and Microsoft. What the client does with my platform is his business and doing. If he activates Windows there, that's between him and Microsoft. So what is the problem that these articles are trying to point out? How is it difficult for customers to buy their own OEM copy and supply a serial key?... Cusomter goes to your panel, clicks to load some already predefined or prehosted VHD or ISO, then supplies serial key him/herself. Problem solved? Or is this all about the cost of OEM copies?

tomku 15y ago
These services are not VPSs. They're basically selling RDP access to pre-installed copies of Windows, where the service provider handles all the licensing and serial keys. The idea is to target non-technical users who want to run MS Office or Flash websites on their iPad without paying for a PC running Windows.
wvenable 15y ago
From the article: "We do know from Microsoft's blog post that vendors can only host Windows 7 desktops in a virtual desktop infrastructure setting if the customers buy their own licenses from Microsoft. Even if this requirement is met, the vendor must host the desktops on separate physical hardware for each customer, ruling out a multitenant arrangement." You might be able to enable the client to load an ISO of Windows and have him enter his serial key but you'd have to separate hardware for each customer making any virtualization completely pointless.

J3L2404 15y ago

Well it is digital so a copy of it is only like savoring the scent.

vonkow 15y ago
It's software, everything's a digital copy.
deleted 15y ago
[deleted]

forrestthewoods 15y ago

This really is a fascinating problem. If Guise Bule gets his way the the maximum number of software licenses sold would be equivalent to the maximum number of concurrent users. I don't think that's particularly desirable for either developers or users. A similar situation exists with video games. The market is going pure digital and gamers want the ability to sell "used" digital games. If that were possible then a middleman service would appear which would instantly "buy" and "sell" the game as you launched and closed a game. A wildly successful game such as Skyrim sells millions of copies but only had ~300,000k concurrent users (on PC) at launch. A couple of months later and that number is only ~50,000. Suffice to say this will never be allowed to happen.

psykotic 15y ago
This already happened for video games under similar circumstances with Internet cafes. These days the typical video game EULA prohibits use in Internet cafes without a special license, but as far as I know that has not been tested in court. The easier workaround from the developer and publisher's point of view is to just go online-only, which to a large extent has already happened, especially in Asia where gaming in Internet cafes is widespread.
- forrestthewoods 15y ago
  Nice point! Valve has a special program just for cyber cafes (https://cafe.steampowered.com/index.php https://cafe.steampowered.com/index.php ). I have no idea how much it costs but you can pay some recurring subscription for access to a large number of titles. My impression is that most popular cafes pay this and it does very well for both Valve and the cafes.
  - bane 15y ago
    "Add a wide range of 100+ popular titles to your catalogue. We provide complimentary promotional materials and marketing support for your cafés. We are happy to support for in-café tournaments and special events. Please let us know about your upcoming events. All participants have access to the private Café Forums where they may discuss trends and issues in the cybercafé industry with fellow café owners and operators." Once again Valve is showing the world how things should be done, is wildly successful, and nobody else seems to pay attention. It shouldn't be such a huge issue to just meet your customer in the middle.

vDesktop 15y ago

Guise Bule here ! Am just about to begin an IAmA on reddit if you fancy joining me there : http://bit.ly/redditor http://bit.ly/redditor Or follow my updates on twitter about this : https://twitter.com/#!/Guise_Bule https://twitter.com/#!/Guise_Bule OR go read my blog post : http://bit.ly/MicroFap http://bit.ly/MicroFap

Drbble 15y ago
Wow, with that bitly URL for your AMA, you could launch a second career as an Internet marketing consultant.
- vDesktop 15y ago
  Yeah, attention to detail is important :)

alanh 15y ago

I’m going to lose mad karma, but we have done all this before, so: zzzzzZZZZZZZ

Osiris 15y ago

I'm curious, why don't they just provide Windows Server 2008 R2? With the Desktop Experience installed, it's functionally identical to Windows 7, and you can license an unlimited copies on Windows Server Datacenter Edition, which is $3,000 per CPU. I have a hosted WS2008R2 instance that I can RDP into and use for whatever I want. Are there some other licensing constraints that prevent WS2008 from being used in that manner?

brisance 15y ago

I don't think Microsoft is playing favorites with OnLive; rather, they are trying to save their hardware "partners" from certain doom since they do not have any such offerings. This would indirectly impact Microsoft itself since OEM licensing makes Microsoft a lot of money.