SOFTWARE LICENSING

Microsoft Surface's Success Driven by 'Holy Trinity' of Device, Software and Licensing Optimization

By Rachel Ramsey, TMCnet Web Editor

Tablets are on their way to becoming just as popular as smartphones. Mobile devices, led by emerging mini tablets, are forecasted to account for 20 percent of all IT spending in 2013. The tablet space was previously dominated by Apple’s iPad, but recently met its match with the introduction of Google’s Nexus 7 and Microsoft’s (News - Alert) Surface, which is predicted to see 1.3 million in sales in the fourth quarter.

Flexera Software’s Matthieu Baissac, vice president of product management, recently discussed the “holy trinity” that will guide Microsoft’s Surface success with IDG Connect.

Manufacturers have shifted from focusing on innovative hardware to innovative software. Embracing software apps on devices is a way to improve customer experience and create new revenue streams. Microsoft has an advantage over other manufacturers, though - at its core it's a software company, and it must leverage its understanding of the value and potential of software to make Surface a success. Unquestionably, software is the primary differentiator in such devices - the primary vehicle delivering value to the end-users.

Besides differentiating mobile phones, applications by themselves are a $10 billion market. Forward-thinking device manufacturers are seeing the value of software and using innovative approaches to monetizing that value.

Manufacturers in virtually every industry are transforming their business models and making their devices intelligent by controlling their features and functionality through software. This allows them to very quickly tailor and customize their products for different customers and markets, not by manufacturing different physical models, but by turning on and off software features to create those different models, explained Baissac.

Manufacturers can make more money doing this because through software licensing, they can monetize different features and functionality much more easily, while at the same time reduce costs by manufacturing fewer model variants.

Image via IDG Connect

The “holy trinity” that Baissac refers to is what guides all intelligence device manufacturers now: device + imbedded software + flexible licensing and entitlements = increased profits.

“While Microsoft knows how to monetize its software through licensing and entitlements, the company is not used to manufacturing intelligent devices, or applying the ‘holy trinity’ to those devices,” said Baissac. “It must adopt and imbibe the tenets of this approach. It is this principle that's powering BYOD, the consumerization of IT, and the Internet of Things.”

With the Surface tablet also came the newest operating system for Microsoft, Windows 8. The OS is optimized for touchscreens, mice and keyboards, applications and offers plenty of exciting new features.

Compared to previous editions, Windows 8 supports two types of devices: the well-known PC but also ARM (News - Alert) device-based tablets such as the new Microsoft Surface. Microsoft has not changed the core of the Windows software licensing model. To learn the steps and options for Windows 8 licensing, click here.

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