Cloud gaming company OnLive announced last month that they had added a free version of their Windows 7 desktop for iPad users, giving them access to a virtual Windows 7 desktop on their iPads and the ability to run Microsoft Office applications.

At the time, Microsoft remained quiet about the announcement, despite concerns being raised about whether licensing requirements were being met. The Redmond-based software giant has now spoken out, and it appears the service from OnLive might have been too good to be true, after all.

In a post on the Technet blog yesterday, Joe Matz, corporate vice president of Worldwide licensing and pricing for Microsoft went on the record with the company's position in regards to OnLive.

"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," Matz wrote. "In the meantime, it is of the highest importance to Microsoft that our partners have clear guidance so that they can continue to deliver exceptional expertise and creative solutions to customers within parameters of licensing policies."

The decision to go public was in part due to the report by Gartner into OnLive's services. Gartner analysts Michael Silver, Federica Troni and Frances O'Brien pointed out in the report that while the features being offered would likely become very popular, they warned that such methods used by the firm were very likely in violation of Microsoft's licensing terms.

"Organizations and end users should note that OnLive Desktop Plus may present Microsoft licensing risks for organizations if consumers install the product on company iPads or use it to edit company documents from personal devices. Neither Microsoft nor OnLive has provided clear guidance on how users of these DaaS products must comply with Microsoft licensing requirements," the report read.

It is thought that Microsoft is speaking out in a bid to make clear where their licensing policies stand in regards to running them in virtualized environments. 

Microsoft has not responded to requests for further details. OnLive responded by saying they never comment on licensing agreements but refused to discuss anything further.