Steve demonstrated his latest brainchild, OnLive, to me about a month ago. In fact, I think I was the first person in the press and analyst community to see it. Here are the basic facts about the announcement.
1. OnLive has a bunch of servers on the net, running Windows. Soon some will be running Linux.
2. On these servers are running a bunch of games. OnLive has agreements with all the biggest third-party game makers including Electronic Arts, Ubisoft, Take-Two, and Warner.
3. Because of arrangements OnLive has made with many of the biggest broadband providers, these games can be streamed to most of the US.
4. This means you can play the games on any PC or Mac or with a small and presumably cheap controller, on your TV or HDTV. No console.
 The secret sauce here is very low-latency delivery of compressed, fast-motion, regular or high-definition video from those servers to whatever screen you have in your house. The business model for this gaming service has not been announced yet, only the technology, but it's reasonable to assume that the publishers will allow you to rent time on games or subscribe to them.
No console. This goes right to any screen in your house.
Since this is not a gaming blog, why am I writing about this? Because by putting all the hardware in the cloud and streaming the video down to your TV (or PC), OnLive means hardware doesn't matter any more. Gaming is the hardest app to do this with, because of the demands on the processor and the fast action. If you can do it with games, you can do it with anything.
Because the hardware is gone, OnLive will include features like spectating (watch your favorite players play) and "BragClips" (push a button to save and then share your last 15 seconds of play). Not a problem, since it's only video you're seeing, all the crunching is taking place somewhere else.
But, as Morpheus said, free your mind. If they can do this for games, imagine for a moment that you can get access to cheap computing power in the cloud (just as you can get cheap storage now -- thanks YouTube) and then stream the results down to any screen, PC or TV. What could happen?
- You could put your whole PC life on a server and then access it from any TV or PC or Mac. Just carry a little adapter with you and plug it into the local broadband and TV screen.
- If you feel like it, carry with you a laptop that's just a big flat screen, a keyboard, and enough processor power to decode the streaming codec. Except for sharper screens or longer battery life, not much need to upgrade. Oops, sorry Intel.
- Watch airlines and 3G vendors vying to give you connectivity, to make those low-powered laptops useful everywhere.
Or maybe forget the laptop -- wherever you go, they'll have one. In a world like this, all you really need to carry with you is your identity, and you can carry that in your brain. This compression and streaming is a big step forward in cloud computing.
Go ahead, tell me this won't happen. Microsoft won't license its applications for streaming. Broadband won't be broad enough. All the hardware makers will line up against it. I know, I know. But do you see the way the tide is flowing?
OnLive needs to deliver on its promise. The powers that make the computing world will find this very threatening, and for now, expect OnLive to concentrate on gaming. But stay tuned, this new world could look very different.
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