Could it be possible that Microsoft has finally seen the light?
Since its inception, Microsoft’s business model is based on receiving a license fee from each copy of its operating system. This model is great when you own a 95 percent market share as Microsoft did during the 1990s. However, it’s not so good when your competition gives away their product for free.
The mobile world now dominates the technology sector, and Google and Apple dominate this world. The business models for both Google and Apple subsidize the development of their operating systems in order to obtain revenue from other sources — online ads for Google, and hardware and App Store content for Apple. In this scenario, very few people are willing to pay an additional Microsoft “tax” for their device.
This isn’t to say that Microsoft is unfriendly toward the cloud. Quite to the contrary, their Office365 offering is quite compelling, especially for small businesses. The Office365 is a subscription-based service that provides business-class email, online file storage (known as OneDrive), conferencing and IM, and, most importantly, the ability to install Microsoft Office applications on up to five devices per user.
In addition to Office365, Microsoft’s Azure platform provides a virtual infrastructure for hosting applications, especially those that are heavily weighted toward Microsoft SQL and/or SharePoint. Throw in Bing and Skype, and Microsoft has a more than respectable, comprehensive cloud offering.
Unfortunately for Microsoft, Google and Apple also have great clouds, and they do a much better job of guiding consumers to their online services. As well they should, since the consumers are interacting directly with their software — either Google Android or Apple iOS. Microsoft has a very good mobile operating system in Windows Phone, but no one uses it because of the expense. I wonder what would happen if Microsoft started giving away a version of its OS away for free?
We might get to find out. Several outlets have reported that Microsoft is experimenting with a version of Windows 8.1 that will be released as a free or low-cost upgrade. The version is named Windows 8.1 with Bing, and it’s expected to be released later this spring. Early previews don’t indicate a large change in functionality, since Bing-powered applications are already included in 8.1. Even if it’s only a licensing change, this is a big change for Microsoft and could have a large impact on the mobile environment.
K-Cup Lockdown — By now, we are all familiar with the printer market works — sell a low-cost printer to the consumer to get them locked into buying consumables (i.e., ink). In order to keep third parties from selling alternative (i.e., reasonably priced) cartridges, manufactures may include a smart ID tag or some other proprietary feature that cannot be copied.
Using a similar thought process, Keurig appears to be locking-down its next release in order to prevent other from copying its K-cups.
Keurig’s new version of brewers will include interactive readers designed to work only with official Keurig-licensed K-cups. This change is intended to counter the loss of sales that’s occurred since its patent expired at the end of 2012. Since that time, numerous competitor cups have been marketed at significantly reduced pricing.
Originally, the Keurig Vue brewer was intended to replace the K-Cup, but the Vue has not received widespread adoption. Will Keurig be successful in recapturing the K-Cup market? This consensus around our office is, “Ummm… na.”
Until next time, I’m off the grid @gregory_a_baker.