Ballmer On the Separation of Software and Hardware

      by Wyatt Walter

In another part of the recent the Churchill Club event I talked about a few days ago, Microsoft CEO Steve Ballmer talked for a bit on mobile phones and hinted at Microsoft’s strategy on competing with Google.

Well, okay, it’s more than a hint. Microsoft is depending upon being able to license its mobile OS to cell phone manufacturers to be able to beat out competitors Nokia, RIM, and Apple (and Palm if their new Linux-based OS ever arrives) just like it did to beat out IBM, Apple, and others. Using this strategy it was able to accomplish over 90% even now, many years later. I would agree to a certain degree that allowing its OS to mobile phone makers, Microsoft could create a potentially larger market for itself, however I’m not sure that the potential gains are worth the risk.

What makes the desktop market different than the mobile phone market? It’s quite simple: standards. If you give me two different phones from two different manufacturers, chances are the key layout is different, the power cord is different, the screens have different resolutions, and so on. Give me two different PCs from different manufacturers and I don’t necessarily have the same screen resolutions, but I have standards-based peripherals (keyboards, mice), internal components, and even network connection types. Often, on top of the differences in cell phone makers we have phones that have been customized to each provider.

So what benefits do keeping the software locked into a hardware and locked into a provider give us? This too is pretty simple, support and ease of use. The iPhone has been met with a significant amount of criticism since its only available for AT&T and only on the Apple hardware (unless unlocked, of course). But, at the end of the day when I call support because my phone doesn’t work the only questions I have to answer are whether it’s a first or second generation and what size. The developers, support personnel, and end users are never met with surprises. RIM’s Blackberry devices are close, though they have a much wider variety of devices for different types of users.

Why then should Microsoft take this stance and not lock its software to a piece of hardware? For the same reasons it was successful in the PC market. It doesn’t matter if I buy an HP, Dell, Lenovo, or whatever, more than likely it has Windows on it. Sure, nowadays we can buy PCs with Linux (a good move, I think) and occasionally (questionably) OS X, but that’s more of a recent trend in the mainstream market. Having a ton of phones with Windows Mobile on them makes it much easier for Microsoft to get its product in front of end-users. As we learned from the success of Internet Explorer, it doesn’t matter what’s a better product, it’s what comes on the device “out of the box” that most users will use. This also gives them the opportunity to push more users to its search engine and advertising market which really is what it’s all about.

Any company that takes the plunge and licenses its OS on any hardware also takes a risk in compatibility issues. Both Linux vendors and Microsoft have found this out the hard way on the desktop side. Linux has been plagued for years with driver issues since very few manufacturers make drivers for Linux for their hardware. Vista was hit hard with this especially in its first year. Most of the driver issues seem to be disappearing, but Microsoft had a lot of trouble dealing with hardware vendors right away and took a beating from Apple. They apparently have learned their lesson and are hoping to not make the same mistake again on Windows 7.

From either perspective, licensing a mobile OS to a non-standardized marketplace can be a risk. Microsoft has seen some success in the past, of course, but will it eventually win out using the same tactics of its day of old like Ballmer says? It’ll be interesting to see. Microsoft has had recent failures in keeping quality drivers and hardware support in consumers hands and Apple was right on their heels with its hardware-OS bundle and benefited from Vista’s shortcomings.

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Filed under Tech Trends : Comments (1) : Sep 29th, 2008