The CEO of a virtual desktop company who dared Microsoft to sue him by launching a service that would intentionally violate Windows licensing rules said today he is going to back down and issue a public apology.

Guise Bule, CEO of tuCloud, was angry that competitor OnLive offered a free virtual desktop service to iPad users for months without any public intervention from Microsoft, despite the service violating Microsoft’s rules for delivering hosted desktop services. The rules that everyone else has to follow, he said, are harmful to tuCloud because they impose licensing restrictions regarding the deployment of virtual Windows 7 desktops on multi-tenant infrastructure and to customers who haven’t bought Software Assurance and Virtual Desktop Access licenses. Only the biggest customers can afford that, he said.

In protest, Bule launched a new site called Desktops On Demand that promised cheap virtual desktops without following Microsoft licensing rules. Subsequently, OnLive pledged to Microsoft that it would go legit, but even then Bule said he would not back down.

Today, he told us he has changed his mind, saying, “That site is coming down; we have decided to focus on our core business and not get distracted anymore. It's just too much trouble. I am going to publicly apologize and put the idea of a rebel platform to bed.”

Bule had promised to offer services through Desktops On Demand by the end of April but didn’t meet that timeline. Since Bule never actually followed through in offering services that violated Microsoft’s licensing rules, he has likely escaped any legal hassles. The site is still up as of this writing, but it doesn’t look like it will stay on the Web much longer.