Fluffeh writes "Word from Ars Technica is that OnLive, a service provider that seems to totally flout Microsoft licensing and offers iPad users a Microsoft Desktop for free (or a beefier one for $5) isn't being sued by Microsoft, as this blog quotes: 'We are actively engaged with OnLive with the hope of bringing them into a properly licensed scenario.' The people who are angry include Guise Bule, CEO of tuCloud. He accuses Microsoft of playing favorites with OnLive — whose CEO is a former Microsoft executive — while regularly auditing license compliance for companies like tuCloud that provide legitimate virtual desktop services. Bule is so mad that he says he is forming an entirely new company called DesktopsOnDemand to provide a service identical to OnLive's, complete with licensing violations, and dare Microsoft to take him to court. Bule hopes to force Microsoft into lifting restrictions on virtual desktop licensing that he says inhibit growth in the virtual desktop industry, and seem to apply to everyone except OnLive." One of the restrictions applied to licensed remote desktop providers is that each user must have his own dedicated machine (pretty onerous in the days of 16+ core servers costing a mere grand or two).