I’m guessing some licensing experts in Redmond are now busy reevaluating the Office and Windows Server licensing terms and conditions
[…] Instead of offering a hosted Windows 7 instance, OnLive apparently now offers one based on Windows Server 2008 R2. Under Microsoft licensing rules, hosted virtual instances of Windows 7 cannot be provided unless each user has a license from Microsoft, and Office can't be provided as a service at all except when it's hosted on Windows Server and Remote Desktop Services.
"Windows Server 2008 R2 and Windows 7 are fundamentally the same OS anyway, and it's possible to configure the Windows Server desktop to look and feel like a Windows 7 desktop," Madden wrote. "I would assume that OnLive didn't change their fundamental architecture at all—they just dropped the server bits instead of the desktop bits and all is now well."