Editorial | Surface Phone: the MS Contingency Plan

[a5cent]

Windows Phone exists mainly to support the MS ecosystem. Just like the XBOX console exists to support LIVE and video game licensing.

I don't have the financial data to really form an opinion on that. Maybe you're right, but I'm not yet convinced.

As far as I can tell, the only ecosystem related revenue streams Microsoft has from selling WP are:
- their share from app sales
- XBOX music subscriptions
If WP and WRT are truly "nothing more" than ecosystem support products, then I would expect Microsoft to be rolling out a much more monetizable "ecosystem" at this point. I just don't see those revenue streams supplying the hundreds of billions of dollars Microsoft's mobile division requires during the next few years to stay competitive with Apple and Google.

That money needs to come from somewhere, and I think WP and WRT are destined to replace, what Windows license sales have been in the consumer space during the last decade. Like I said though... all just speculation on my part.

 

[Reflexx]

I don't have the financial data to really form an opinion on that. Maybe you're right, but I'm not yet convinced.



As far as I can tell, the only ecosystem related revenue streams Microsoft has from selling WP are:

- their share from app sales

- XBOX music subscriptions

If WP and WRT are truly "nothing more" than ecosystem support products, then I would expect Microsoft to be rolling out a much more monetizable "ecosystem" at this point. I just don't see those revenue streams supplying the hundreds of billions of dollars Microsoft's mobile division requires during the next few years to stay competitive with Apple and Google.



That money needs to come from somewhere, and I think WP and WRT are destined to replace, what Windows license sales have been in the consumer space during the last decade. Like I said though... all just speculation on my part.

I imagine that what we're seeing tight now is merely the foundation being set. I wouldn't be surprised to see MS to have a Netflix-like service in the future.

But having WP also gives MS a mobile platform that is in their control. They can confidently market interoperability between different element of the MS ecosystem without having to worry about what Google or Apple might do with their OS in the future. They won't be dependent on them and subject to their whims.

I'm sure that they do want to make money in licensing. Don't get me wrong. But I dont think that's the immediate focus.

 

[a5cent]

I imagine that what we're seeing right now is merely the foundation being set. I wouldn't be surprised to see MS to have a Netflix-like service in the future.

But having WP also gives MS a mobile platform that is in their control. They can confidently market interoperability between different element of the MS ecosystem without having to worry about what Google or Apple might do with their OS in the future. They won't be dependent on them and subject to their whims.

I'm sure that they do want to make money in licensing. Don't get me wrong. But I dont think that's the immediate focus.

More thoughts... if monetizing the ecosystem is central to their WP business plan, wouldn't you expect Microsoft to be much more aggressive in bringing Zune Pass to other markets? Apple has got iTunes everywhere, when most countries in the world can't even access Zune. If ecosystem monetization is Microsoft's focus, then isn't that Zune fruit hanging far too low to not be picked? Microsoft also seems to be making a deliberate effort to promote WP as an open business platform, hardily welcoming everyone including Amazon. If ecosystem revenues were their focus, wouldn't you expect them to act more like Apple (disallowing Amazon to offer some of their services directly via iOS apps).

I certainly agree with the point you raised about Microsoft needing at least some control over the mobile computing space. Mobile is a huge part in the future of computing and Microsoft won't be Microsoft if they can't be a part of that.

Anyway, Microsoft's actions (those I have seen) don't yet convince me that ecosystem monetization is a priority, but I reserve the right to change my mind tomorrow

 

[Reflexx]

(snip)

Navigating international laws when it comes to content distribution is tricky. One reasonS partnered up with Nokia was so that they could come to an agreement regarding app distribution in international markets. Nokia already has distribution outlets with well over 100 countries, each complying with the local rules and regulations as well as having already gone through whatever long processes are associated with it.

But when we look at XBOX LIVE, Office 365, the new Outlook, and Skydrive, we see that MS is moving towards being service based.

For some reason, they are rebranding Zune to Microsoft Music. With the removal of the "LIVE" branding in the XBOX Extras app, I wonder if there might be a rebranding of that to something like Microsoft Gaming.

Perhaps there is a bigger services suite that is being put together, but until all the elements are ready, MS is dependent on other services.

Also, since Windows 8 is a new big risk, I imagine that associating the brand with a few already established services is a good strategy to ease people in.

MS also has to be careful not to be too exclusionary. They just barely finished serving the 10 yr penalty from the US government for using monopoly power illegally. I'm sure they don't want to go through that again.

 

[a5cent]

back atcha

So you are saying Microsoft is planning to distribute media using Nokia's existing legal framework and contracts, instead of their own? That would floor me. Good bye Microsoft and Nokia and hello Microkia! Can you reveal your sources? Apple had most of Europe (political, not continental) covered in only two years. Why should it be so much harder for Microsoft?

I get that Microsoft is becoming a service provider. Windows Azure was the foundation and all of their services, like Office 365, are getting built on top of that. I just don't see how the monetization of those services relates to WP. But you may be right. A lot may be somewhere in the pipelines of Microsoft's product divisions that we don't yet know about.

Wait and see I guess.

 

[Reflexx]

snip.

I wish I could say I had fancy sources. But the use of Nokia's existing marketplace agreements was something that was reported several places way back when the partnership began. I'm on my phone, and don't have the energy (I'm being lazy) to look up articles right now, but I imagine it was probably mentioned here at WPCentral.

It was mentioned as part of what MS was paying for when it was reported they were giving Nokia millions. Nokia's Symbian marketplace was already in place, and MS sure needed help.

If I stop being lazy tomorrow I'll look it up.

 

[jdevenberg]

Burning Platform was sent out in February 2011, not 2010 as you state. They went from announcement to market in 9 months, not 20.