An Integrated Hardware/Software Approach

Over the last few weeks both Google (see Nexus Tablet and Nexus Q) and Microsoft (see Surface) have announced major hardware initiatives.  In both cases, these hardware initiatives have been primarily focused on the mobile/tablet ecosystem.  Even Microsoft’s recent software announcement – Microsoft SmartGlass – is targeting the growing tablet ecosystem.  Both companies are taking a more hands-on approach to the growing tablet ecosystem as they seek to more closely integrate their software strategy with a hardware component.  These moves are partly in the hopes that a hardware component will spur software demand and help buoy their entire platforms respectively.Contrary to some opinions selling hardware is not completely new to Microsoft. They have long had success building reference designs and prototype devices.  And oh yea, don’t forget about that little Xbox experiment that has sold over 60 million units not inclusive of millions of MSFT Kinect units and other Xbox branded accessories.

In launching hardware devices, Google and Microsoft are in many ways simply extending what they’ve always done in building reference designs and prototypes.  They are building halo devices that will (in their minds hopefully) extend their reach and market attraction.  But I believe in both the case of Google and Microsoft, they fully anticipate their hardware partners will play pivotal roles moving forward.  I don’t believe either are looking to take an Xbox-like hardware approach where they singularly own the hardware and the software.

As Michael Gartenberg told SNL:

“When your OEMs aren’t delivering what you want, sometimes you have to take matters into your hands,” he said. “I think that’s what we’re seeing here.” Ultimately, he said, the Nexus 7 is an “ecosystem play” for Google, an attempt to get consumers to use Google as their cloud service of choice for all things entertainment, all by making the best possible Android tablet.

Though all the talk is on an integrated hardware-software approach, as Chris Dixon accurately points out, the move to an integrated approach won’t last forever.