You cannot compete, service provider licensing specifically _disallows_ being able to provide desktops. The closest you can get is skinning a server OS to look like a windows 7 desktop.
You cannot host XP/win7/PoS unless the hardware it's on is dedicated solely to the one client and that it cannot share any other resources like a SAN. The client has to has software assurance for the own desktops in the office and assign them to you for usage reporting and a pile of other hoops that you have to jump through.
MS want this market for themselves to prop up the flagging desktop OS sales.