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back to article Microsoft's Surface proves software is dead

Did Microsoft finally get the memo on software licensing? While Microsoft's legal department continues to believe that software licensing is the industry's best business model, its mobile team now acknowledges that software is just one piece of an overall product, and not even the part that consumers buy. With the launch of its …

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I bet Microsoft won't be giving-away Windows 8.

The "OEM" 32-bit edition of Windows 7 cost £100 from Amazon. Does Matt Asay claim that something similar won't happen with Windows 8?

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Re: I bet Microsoft won't be giving-away Windows 8.

and you can bet Office won't be given away either!

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Re: I bet Microsoft won't be giving-away Windows 8.

companies dont pay that for licencing though. We pay about £3k per year for 300 W7 pro, 300 office pro. Sure we dont own it, it is rented but over 5 years lifespan that is 15k for 300 copies of XP and office pro so £25 per PC assuming I change OS and office version (which is about right i'd say).

Filemaker pro is more expensive and dont get me started on photoshop.

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Re: I bet Microsoft won't be giving-away Windows 8.

I meant to say £25 for each os and £25 for office.

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WTF?

HAHAHAHAHA

Matt is obviously smoking the same crack as Microsofts Metro team.

The middle market software vendors are thriving. The only reason they dont get any bigger is that they tend to get borged by one of the big guys. Its got nothing to do with the price of their software - just a reflection of market maturity.

Google and Facebook grew big on the back of their software - they just choose to monitise it indirectly - its hardly free, just the cost is something intangible - your data privacy.

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It's not free if it needs a dongle

Software sold in a device is just using the device as a dongle. You can't say the vendor is "giving away" the associated software for free unless you can get a version 2 out of them a year later and upgrade your device for free. As far as I can tell, this is *not* the experience people are having with most hand-held devices (from MS or otherwise).

Microsoft's new-found interest in making hardware is so that they can stop you running non-Microsoft software on your devices. It's part of the same strategy as "secure boot" on the PC and the restrictions on Windows on ARM.

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Re: It's not free if it needs a dongle

With regard to free upgrades of software: "most hand-held devices" presumably isn't meant to include iPhones, then? Mine gets an upgraded software load every 2-3 months, I'd guess, and started on 4.something a-year-and-a-bit ago and is now on 5.1.1. And in money terms the upgrades themselves didn't cost anything, or nothing that can be separated from the price of the phone in the first place.

In this respect (I know that MacOS upgrades are different here, thanks), Apple *is* giving away the software on the device.

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Re: It's not free if it needs a dongle

"most hand-held devices" presumably isn't meant to include iPhones, then?

So you got Siri when you upgraded your iPhone 4 then? Oh, no you didn't because oddly enough that "OS feature" actually required you to go out and buy new hardware anyway. Updating an iPhone and buying a new one isn't really on parity, even from a purely software point of view.

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Re: It's not free if it needs a dongle

Mr. Hagan and El Andy are right. Apple is an old hand at "dynamic obsolescence" for hardware--in a class with the Detroit auto makers in the 50s and 60s, and presumably with the same future. And the fanbois wouldn't have it any other way--if they didn't have a new latest thing every couple of years, they wouldn't know they were alive.

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Anonymous Coward

Re: It's not free if it needs a dongle

Software upgradability is just delayed obsolescence.

For the past few decades the military has been dicking around with "software defined radios". The promises originally included all the lies about how such hardware could be SW upgraded endlessly. In fact, because they typically only mandate 50% spare CPU cycles, 50% spare RAM/ROM, etc. the hardware only supports incremental updates. They fail to notice that generational changes requires 20x more HW resources. End result is that SDR are a 'cure' that's clearly worse than the disease. The whole project has been a bit of a fiasco in my opinion.

The correct approach would be modular hardware with a signal processing chain that was both based on SDR principles and designed to enable easy-to-swap hardware upgrades. Even this is risky as the waveforms have intense requirements on the linear circuitry.

The next thing to point out is that the boundary between SW and HW is very fuzzy. VHDL code leading to a sea of gates spans the boundary nicely. It's a spectrum.

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WTF?

Uuuh, it seems to prove the opposite

People don't buy hardware either. They buy a device, and the device is the integral, inseparable sum total of its hardware and software. Most people probably wouldn't even be able to precisely tell you which bit was which.

Apple recognised that very well written, stable, easy to use, tightly integrated software was a key component in devices. The original iPhone was, compared to other contemporary leading smartphones at release, poorly specified and expensive. But it sold like hotcakes not because of hype, or clichéd notions of hipsters and stereotypes, but because IT WORKED. Other smartphones were a ridiculous, confusing joke of numerous GUI metaphors, design paradigms and serious bugs all wrapped up in one uninspiring package.

Moreover, the iPad and iPhone are often touted as being *all about* the software. "The device gets out of the way". Microsoft "borrowed" this quote, along with several others, when talking about Surface in their launch event. They've realised that you need to have the most unobtrusive hardware you can, which presents the best possible software in the best possible way to the user.

This is why there are app stores, and why app stores generate lots and lots and lots of money. Software is key.

In summary, I can't imagine many ways in which Mr. Asay could have been more wrong in his analysis.

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Re: Uuuh, it seems to prove the opposite

People buy "solutions" - h/w without s/w is a paperweight, s/w without h/w isn't even that.

The change is h/w is now cheap & fashionable. Only geeks buy PC's because of the look & the spec, everyone else bought them because they needed them for apps (business, games, ...). People do buy handhelds / phones /laptops because of the look & spec so h/w has a mass market appeal it never had before.

Apple made h/w a consumer product - blue iMacs, white phones, ... They also tied s/w to h/w making it expensive and reliable but the cost can be hidden in the packaged solution.

However, there are plenty of business users who want beige boxes to run apps to do something.

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FAIL

"Ken Hagan

It's not free if it needs a dongle. Software sold in a device is just using the device as a dongle."

Er, which browsers, applications, phone numbers will a dongle connect me to please ?

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Billion Dollar Industries with Billion Dollar Companies are Dead?

Apple's app store is pure software sales, so they must have recently announced that it's not making any money... oh wait app store developers made $3.4 billion last year (http://www.wired.com/gadgetlab/2011/12/ios-revenues-vs-android/) which translates to $1.5 billion for Apple at their 30% cut. But its Apples' brilliant hardware that really makes these sales... which is internally identical to the same hardware you get everywhere else and is mostly differentiated by excellent aesthetics and EXTREMELY GOOD SOFTWARE.

Surely this is just a fluke example case, I mean it's not like one company could make €3.438 billion dollars by itself on software like.... SAP did in 2011 (and growing).

But that's enterprise software. Everyone knows that Microsoft's consumer-facing product divisions make the real money... or actually that Microsoft's massive software licensing for Windows and Office in the enterprise props up all of its consumer sales in divisions like entertainment that flip back and forth between small (by Microsoft standards anyway) profit and loss every quarter.

Software sure sounds dead to me.

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Anonymous Coward

Stagnation

The open software model only works so long as the leaches don't significantly outnumber the contributors.

While there are companies still getting 100% of the benefit of their 'closed source' investments they feel able to take the risk of new investment and thus provide some forward momentum. If 'Software was Dead' then why take the risk of new doing development, your competitors would just share in the rewards at no risk. If there is a bug just hope that somebody else fixes it.

The selfish, but logical choice is to only do what makes you money. If somebody else does do some development then take advantage, but don't risk your own money if it doesn’t give you a competitive advantage.

Of course the reality of the current situation in mobile is that there may not be a licence fee but you are tied in much more securely than previously. E.G. would you buy, or could you sell an Android phone that only worked with search, mail and app store provided by a company such as LG? This is not an open model this is a lock you in forever model, the free sample to get you hooked. And once everybody is locked in to either Android or iPhone what is the motivation of either side to offer new free services? It's too much of a hassle for most people to move when they have so much invested. There will always be a few floating voters but not enough to cause concern.

You only need to look at the number of fans of each system and the aggressive posts that are made by them to see the the investments here are emotional as much as financial. Say, you've spent £500 on iTunes, are you really going to say I've been a fool I should have bought an Android (or vice versa), you are more likely to try talking yourself (and everybody else) into affirming your decision.

The battle will continue for a time yet while there is still markest share to be gained in the developing world but ultimately It looks like stagnation to me. The example of Microsoft and Nokia may well yet be used as a reason why you shouldn't try and challenge this duoppoly.

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a53
FAIL

It's not a badly written argument

It's a badly written title.

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Anonymous Coward

Re: It's not a badly written argument

Above a badly written argument

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Software isn't dead

It maybe more splintered but surely not dead.

There are still major environments where OSS simply has no or a minor foothold. Note that I'm not talking quantity here but quality.

Take for example sound / sound processing or sound synthesis environments. Or even multimedia programming environments. There are open source alternatives available but more than often do those lack features which have already become mainstream within the market.

For example; a big player when it comes to multimedia programming is Max/MSP(/Jitter) which also has an open source counterpart called Pure Data. But although Pure Data is an excellent environment it also lacks features in comparison, even if we're talking set standards. For example; many of these environments support the so called "ReWire"protocol; this allows different environments to communicate with each other and exchange (audio) data.

Pure Data lacks this for quite some time. Doesn't have to be an issue perse depending on what you're using it for, but in many cases it makes its usage harder than it should be.

And as far as hardware and free software go... A lot of these company sell software, and have recently started to produce and sell hardware (controllers) to enhance their software as well.

So quite frankly; I'd suggest to look around further than merely some players on the market. The software market is much more extensive than merely Microsoft or Google, especially when you're looking at specific segments.

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Stop

Surface has *nothing* to do with software

It has to do with Microsoft getting it's lunch eaten by Apple who have control over the software *AND* hardware, while Microsoft's partners keep turning out the same bland crap that barely works, with no support.

I bought an HP laptop and I had to fight to get the OS disks, then I had to fight to get recovery disks, then I had to fight again to get recovery disks THAT WORKED, all the while putting up with a support site and phone support system that mostly didn't work. I don't wonder why some of my friends, who are Apple fanatics, laugh at me and tell me to buy Apple.

This is why Microsoft brought out Surface... to jolt its partners with "either you make better stuff or we will"

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Anonymous Coward

Re: Surface has *nothing* to do with software

True. For example I always rated sleep on my PC are very poor and blamed Microsoft. Then for other reasons I changed my motherboard from an ASUS one to a Intel one and used the same OS version, hay presto it works. I hardly ever fully power down the PC now and it always wakes from sleep without any glitches.

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Anonymous Coward

Re: Surface has *nothing* to do with software

Just FYI, Asus M4A78LT-M sleeps and wakes very very nicely, in addition to the various other interesting motherboard features. I'd try the Intel ones, but I've always been something of an AMD type of guy as far as CPUs go.

Even the Linux installation sleeps and wakes properly. Now that's amazing.

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Re: Surface has *nothing* to do with software

When I did warranty work for HP they would tell me that there is a bug in windows that makes it not sleep right. There was nothing that HP could do. With BS answers like that no wonder people hate PC.

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FAIL

The ignorance displayed in this article is astonishing!

Apple sell Iphones, not IOS? Since when? Apples WHOLE marketing strategy is based around iTunes and the integration of IOS across devices! One of their major selling points is you are paying above the odds for the tech, but with a promise of free IOS updates.

They take a small cut of apps sales..... Given Apples figures for 2010 as a net $4.1 billion from iTunes and the app store, this is the MAIN part of Apples business model, not something tagged on!!!

I’m not even going to START on major players entering hardware/software and both markets in the last 22 years - that's possibly the most ludicrous statement I have ever read!

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Pirate

Re: The ignorance displayed in this article is astonishing!

Yep - it is up to his usual standard.

Matt Asay seems to think that some grand convergence of market modelling is somehow inevitable in the it/software/tech industries without a shred of evidence to support it - indeed the long-standing diversity of succesful business models in the sector suggests completely the opposite.

"Everyone is going to have to go the Apple way" (or the Facebook way if there isn't an "r" in the month) seems to be the standard line. Usually supported by quotes from "market analysts" (aka stockbrokers fluffers) who have an interest in talking up the market and evangelising the one true path to $$profits.

Still - it usually makes for a good laugh on a slow afternoon.

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Re: The ignorance displayed in this article is astonishing!

> Apples WHOLE marketing strategy is based around iTunes and the integration of IOS across devices!

Erh, if you read Matt's article (properly this time rather than reading just the title) then I think you will find that this is exactly what he is saying.

iTunes is a service and that is where Apple make the bulk of their money. Selling hardware and software is just a means to an end. Services is where the future is.

Apple could release the source for their iTunes applications tomorrow (if they weren't so damn secretive) but they would still make their money from the services it provides. And that is access to their music catalogue.

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Sil

Re: The ignorance displayed in this article is astonishing!

The business model of Apple is full control over itunes.

Of course it will never open source it, the success of itunes (from the point of view of Apple, not the consumer) is 100% control of the distribution channel.

Had Apple opened itunes to competitors, or had Apple opened the iPhone/iPad to other non-itunes distribution channels, it would never have had the financial success it enjoys with what can only called abuse of monopoly power. And that's what everybody else is trying to replicate: Google (store), Amazon, Microsoft Marketplace, ...

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Kill it with fire...

... ya'll fanbois have your fun,,,

->biding my time with Win7Pro until Win8SE comes out, maybe.

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Anonymous Coward

Re: fanbois

Are you responding to some imaginary comment, or could you translate that into English please?

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“Software is dead” line is twaddle

Apple pretty much own the tablet market with huge economies of scale and scope to halve the price and still make a profit; but they have a weakness: iPad “is” just software and marketing with the hardware done by Foxconn in China.

Too take-on Apple at its weak point, you need to be able to prime the actual hardware manufacture with a compelling prototype and a huge order.. and this is where MS Surface comes in: If Foxconn take the MS prototype and make it into a real product, it will have all the quality and finish of an iPad, but different software.. with plenty of scope for OEM to undercut on price, or simply stick a different label on the box.. in short “the Nexus play”.

Too conclude that “Surface” -> “software dead” is both absurd (Apple hasn’t been a hardware company for a long time), and misguided: “Open Source” doesn’t mean there isn’t any money in software anymore, but the days sitting back on fat licence fees are gone.

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FAIL

Libre? What About The Appliances?

The GPL is all about not restricting the source code. If you modify it and distribute the modified binaries, you must also distributed the modified source under the same GPL you got it under. However, "appliance" computers need not distribute the source code used to compile the binaries that run inside them. This is believed to be within the letter of the GPL and apparently the FSF has no truck with this PoV. But most certainly the spirit of the GPL is, ah, compromised. Even IBM is guilty with the HMC and SE managerial appliances that control zSeries CECs. They are so unauditable the customer doesn't even know what packages are onboard. The boxes are fully networked and only the IBM Support Center can perform software maintenance upon them. The customers must take IBM's word that the appliances are completely secure and nobody on their support team can subvert their computational integrity--there is no way to audit them. But they have the connectivity to peruse and possibly interfere with just what exactly is going on in the customers' LPARs without the customers' technical staff having any way to determine if that processing has been compromised.

So leave libre out of this opinion piece, please.

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Anonymous Coward

Sigh

As usual in this column, there's too much gibberish to be bothered objecting to it all, but how do you convince even yourself that the following is true?

"Microsoft has declared what much of the rest of the industry already knows: software is dead.

... "The market has not generated a large technology vendor oriented around selling software in twenty-two years," as Facebook, Google, Red Hat, and more have learned to sell services based upon or built around software. But the software itself? Free."

For a start, software is not dead. The quote is in no way trying to say "software is dead", it's saying the top grossing software vendors have been around for some time. This is hardly surprising really, is it?

Further, Facebook, Google, Red Hat and more have learned to sell services ... have they? Anyone paid Facebook or Google for their services recently? I've not. I was under the impression they made their money from advertising, and what they sell is knowledge of and access to market to their users.

Does Red Hat make more money selling services than Microsoft make selling software?

Does it fuck.

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Anonymous Coward

Comments from the Metro hater.

My daughter's on the Iconia right now. Playing games. Almost total instant addiction. This is good, because anything that f*cks Steve Jobs is good for me, because I hate the way he treats his customers. (Or put more accurately, it's embarrassing that members of my own species are so stupid as to let themselves be so used.)

I'm going to have to buy three windows 8 tablets for my kids.

Naturally this makes no difference whatsoever on the work front, as I really want Windows 8 as it's so fast, but want Metro dissolved because it's shit.

Ps. all the people who can't get their Iconia 3g working. Download the Huawei drivers from the ASUS website instead.

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Trollface

Re: Comments from the Metro hater.

>My daughter's on the Iconia right now. Playing games. Almost total instant addiction. This is good, because anything that f*cks Steve Jobs is good for me

Wow, interesting parenting and incisive, relevant comment. I mean, you could replace it with

"anything that f_cks %s..." % random(["Steve Ballmer","Sergei Brin","Richard Stallman",....])

and it would be a fail as well.

Plus, wasn't this article about the Windows tablet?

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Megaphone

Re: Comments from the Metro hater.

AC @ 17:35 writes...

"Ps. all the people who can't get their Iconia 3g working. Download the Huawei drivers from the ASUS website instead."

And THAT, in a nutshell, is how Apple has succeeded in a world where most people don't want to screw around with drivers...

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Stop

Gentlemen , choose your poison

Don't get me wrong. I love The register. I love the comments section. I've learned a lot reading other people's comments and made a few contributions myself. But i am more and more often picking a trend that is starting to become an annoyance: the never ending feud between faction A and faction B (for variable values of a A and B, mainly Apple iOS-Android, Apple-Google, Apple-Microsoft, Linux-Windows, etc.).

I know, people tend to be hot blooded (I love a good OS Bashing amongst friends) but seriously, I cannot but shriek when I see that some people defend brands or business models as if their lives depended on them. Like Microsoft, Apple, Google, Facebook, IBM or whatever ? buy their products. They are all imperfect, prone to fail and will disappoint you eventually, because believe it or not even though they make your life easier than ever, provide you with countless features and are beautiful to the eye (of the beholder) they are only things made by a company to make money. That is it. And believe it or not, those companies will go out of their way to deprive you of your joy if that is what makes their bottom line blacker. So be kind, rewind and stop killing each other over utter bollocks.

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Holmes

Re: Gentlemen , choose your poison

holy wars /n./

[from Usenet, but may predate it] /n./ flame wars over religious issues. The paper by Danny Cohen that popularized the terms big-endian and little-endian in connection with the LSB-first/MSB-first controversy was entitled "On Holy Wars and a Plea for Peace". Other perennial Holy Wars have included EMACS vs. vi, my personal computer vs. everyone else's personal computer, ITS vs. Unix, Unix vs. VMS, BSD Unix vs. USG Unix, C vs. Pascal, C vs. FORTRAN, etc., ad nauseam. The characteristic that distinguishes holy wars from normal technical disputes is that in a holy war most of the participants spend their time trying to pass off personal value choices and cultural attachments as objective technical evaluations. See also theology.

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Re: Gentlemen , choose your poison

@Destroy all Monsters : indeed. But if my memory serves me right, the REAL Holy Wars never ended well , if indeed they have ever ended..... So this is another Really smart reason to fight right ? RIGHT ?!

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An un-shipped product proves nothing.

Until this Surface thing has shipped and been responded to by the market it proves nothing.

It is not even as relevant as Zune or Kin.

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Happy

>Software is dead

Quick, someone get on the phone and tell Larry Ellison Matt said he can't afford his new island anymore.

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Anonymous Coward

Do vmware know this?

Pass them the memo, I could do with some decent free virtualisation software!

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Sil
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Highly irrealistic

Sounds seducing, is completely irrealistic.

First Microsoft makes most of its money with software, and its profits dwarfs those of most internet companies - probably combined- even Facebook, and this for decades. As does Oracle, SAP and many others.

Second Surface proves nothing. It does not exist economically it's vaporware until it is available. As many told, it is probably more a strategy to motivate its partners than really getting into the very low margin business of tablets. What Microsoft wants is to replicate Apples' success in taxing every piece of software - yes software, not services - with a monopoly-like 30% cut.

Third nobody gives mountains of code. The contributions of Google or Facebook are absolutely dwarfed by what they earned with free software and of course what they open source does not bring any competitive advantage. The interesting code, such as many c++ uses @ facebook are highly not open source.

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Linux

Even Microsoft Techs?

This was some time ago, about 2002, when I reached MS 2nd level support for a virus on my Windows 2000 Pro box. The guy I spoke with told me he was building a hundred boxes a year "for friends and family" - all running Linux.

I've only converted one person so far, but am likely to convert more.

There IS an answer to oppressive use of proprietary licenses.

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Anonymous Coward

Microsoft hankers after openness?

"the truly impressive thing about the launch of the Surface tablet is, as Reg-correspondent-turned-Bloomberg-hack Ashlee Vance writes, that Microsoft would finally risk annoying its OEM partners to build a holistic product that embeds software but doesn't attempt to sell that software".

I thought MS launched it's own tablet as the iPAD was cutting into the virtual monopoly in its own OEM channel. As in MS can't dictate and play-off-against-one-another the major players in the mobile market.

As for Microsofts conversion to open-source licensing, is this the same company already taxing Android developers through the aggressive promotion of its vast patent portfolio. We can assume such strategy will continue into the future and be extended to other licensees.

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Massively overstating the case

There are plenty of companies doing very well licensing software, like Oracle, SAP, IBM... and, most notably, Microsoft. They made $23.15 billion in profits last year, so they are not exactly dead. Licensing is still the predominant model.

The mobile market has never been based upon software licensing to OEMs. Nokia, BB, Motorola, and the other mobile kings of the past never followed that model, so it is hardly anything new. Microsoft has never been able to compete with their model in mobile. Microsoft's major problem is just that their software has never been able to compete with Apple, Android and, in previous generations, BlackBerry. It is all about the software. No one buys a product for the case. No one cares what sort of processor is in their phone. Google is actually doing well with Microsoft's distributed OEM model although they chose to take their cash in ads rather than licenses. It is really the first time that an OS provider has been able to push their OS across all sorts of OEMs in mobile. If anything, that would indicate that the trend is toward the distributed (rather if it is licensed or not) model in mobile.

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Anonymous Coward

Re: Massively overstating the case

"There are plenty of companies doing very well licensing software, like Oracle, SAP, IBM... and, most notably, Microsoft"

(27:16) "Most of hardware is software", Larry Ellison

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Mushroom

PROPERTY is what is dead

The whole idea of being able to build something, charge for it, and then charge for it again, is WHAT IS DEAD: PROPERTY. Creators may get a kiss for the creation but tomorrow will need to serve or create again. "What have you done for me lately" and TOTAL economic insecurity is the future. Those who adapt will enjoy it; may the others please starve or go broke quietly lest civilized people have to nuke em.

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FAIL

Nonsense. Without iOS apps Apple wouldn't be selling hardware at all!

What made iOS the huge success it is among common people (not programmers nor power users) that then made it a success for developers, because common people owning Apple iOS devices are willing to spend a few bucks on the apps they like, it's just the Apps that mostly freelance developers created and keep creating for iOS. And although some Apple policies for apps are some times dumb negating good apps to be allowed in the iTunes App Store, that still gave an higher qualtiy control level and there are more quality apps on iOS than on any other platform.

WindowsPhone is plagued by the mess that MetroUI is all about, just plain unusable.

Android is a Java Virtual Machine over Linux mess on its own and Google doesn't care about quality at all. And Android customers don't want to pay for apps, they want everything for free.

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"Android customers don't want to pay for apps, they want everything for free."

My hundred-odd pounds worth of paid apps stands in stark contrast to your statement.

Android "customers" just have a much larger selection of adware than on iOS.

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Meh

"At long last, Microsoft is a poised to be a competitor again"

Yes but this time they have zero chance of destroying all the competition.

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"The market has not generated a large technology vendor oriented around selling software in twenty-two years,"

Never heard of VMware?

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