Microsoft's comments on happenings outside its immediate product portfolio are rare, and all the more valuable when they do appear. Here's one from Horacio Gutierrez, “Corporate Vice President and Deputy General Counsel”, entitled “Apple v. HTC: A Step Along the Path of Addressing IP Rights in Smartphones.”
By now, all the alarm bells should be going off: this is from Microsoft's top intellectual monopoly bloke, writing about one of the most surprising and potentially disruptive lawsuits in the world of technology – and one that doesn't even involve Microsoft directly. Why on earth is he doing it? Answer: because Microsoft has something very important to communicate.
He begins with a fair analysis of how the mobile market has evolved from one centred around the “radio stack”, and making calls, to the smartphone market today. Of this he says:
Now, however, as a new category of ‘smart’ devices has emerged, the value proposition has moved to the software stack. As is clear from advertising by all of the major brands – Apple’s iPhone, RIM’s Blackberry, Palm’s Prē, Motorola’s Droid, and Windows Phones – people buy smartphones because they are fully functional computers that fit in the palm of your hand. The radio stack is still valuable, as it allows the phone to connect to the Internet. But what is most valuable is not the connection per se, but the new things that users can do with it – find nearby restaurants and movie theaters, send and receive email, and watch video, just to name a few. The primary driver for adoption and sales in this market is the software on and available for the device.
That's indubitably true, but notice how he's shifting focus on to the *software* stack. He continues:
The smartphone market is still in a nascent state; much innovation still lies ahead in this field. In all nascent technology markets, there is a period early where IP rights will be sorted out. This is particularly true in a market, such as smartphones, in which a number of different technologies previously offered on a standalone basis now converge into a single device. Indeed, smartphones are a product of the ‘open innovation’ paradigm – device manufacturers do not do all of their development in-house, but add their own innovations to those of others to create a product that users want.
Interesting to see one of Microsoft's old favourites - “innovation” - being paired with “open”, a word that it is beginning to throw around increasingly. What follows is particularly noteworthy:
Open innovation is only possible through the licensing of third party IP rights, which ensures that those who develop the building blocks that make a new technology possible are properly compensated for their investments in research and development. After all, technology just doesn’t appear, fully-developed, from Zeus’s head. It requires lots of hard work and resources to create.
Well, it's certainly true that technology requires work to create, but it doesn't follow that innovation only occurs by licensing other companies' technologies. Indeed, but I can't help thinking of another rather senior and similarly-misguided Microsoftie writing in a similar vein some time back in the past:
Who can afford to do professional work for nothing? What hobbyist can put 3-man years into programming, finding all bugs, documenting his product and distribute for free?