Tuesday, 16 August 2011

Google buys Motorola... so what next??

Google has acquired Motorola 12.5 billion dollars which is close to double the amount Oracle paid for Sun and Java. The acquision is mostly about the patents for mobile business which Google has under estimated so far. Actually this reminded me the blog post of former Sun CEO Schwartz.

In 2003, after I unveiled a prototype Linux desktop called Project Looking Glass*, Steve called my office to let me know the graphical effects were “stepping all over Apple’s IP.” (IP = Intellectual Property = patents, trademarks and copyrights.) If we moved forward to commercialize it, “I’ll just sue you.” My response was simple. “Steve, I was just watching your last presentation, and Keynote looks identical to Concurrence – do you own that IP?” Concurrence was a presentation product built by Lighthouse Design, a company I’d help to found and which Sun acquired in 1996. Lighthouse built applications for NeXTSTEP, the Unix based operating system whose core would become the foundation for all Mac products after Apple acquired NeXT in 1996. Steve had used Concurrence for years, and as Apple built their own presentation tool, it was obvious where they’d found inspiration. “And last I checked, MacOS is now built on Unix. I think Sun has a few OS patents, too.” Steve was silent. And that was the last I heard on the topic. 
... and the story goes...

So that interaction was good preparation for a later meeting with Bill Gates and Steve Ballmer. They’d flown in over a weekend to meet with Scott McNealy, Sun’s then CEO – who asked me and Greg Papadopoulos (Sun’s CTO) to accompany him. As we sat down in our Menlo Park conference room, Bill skipped the small talk, and went straight to the point, “Microsoft owns the office productivity market, and our patents read all over OpenOffice.” OpenOffice is a free office productivity suite found on tens of millions of desktops worldwide. It’s a tremendous brand ambassador for its owner – it also limits the appeal of Microsoft Office to businesses and those forced to pirate it. Bill was delivering a slightly more sophisticated variant of the threat Steve had made, but he had a different solution in mind. “We’re happy to get you under license.” That was code for “We’ll go away if you pay us a royalty for every download” – the digital version of a protection racket. Royalty bearing free software? Jumbo shrimp. (Oxymoron.) But fearing this was on the agenda, we were prepared for the meeting. Microsoft is no stranger to imitating successful products, then leveraging their distribution power to eliminate a competitive threat – from tablet computing to search engines, their inspiration is often obvious (I’m trying to like Bing, I really am). So when they created their web application platform, .NET, it was obvious their designers had been staring at Java – which was exactly my retort. “We’ve looked at .NET, and you’re trampling all over a huge number of Java patents. So what will you pay us for every copy of Windows?” Bill explained the software business was all about building variable revenue streams from a fixed engineering cost base, so royalties didn’t fit with their model… which is to say, it was a short meeting.

So thats pretty much the reason, Google needed patents to defend themselves (and the partners) also since android has achieved a great success, it might be wise to jumo into hardware business and make few bucks out of it.

Till today Google released two Android devices with Google brand on it... the Nexus One and Nexus S. Both are reference implementations of the upcoming Android Os releases and great hardware but none were as appealing as Apple devices.

Google has choosen another strategy and stepback in implemantation release of Honeycomb and left it to Motorola with the Zoom. That time Samsung was questioning why Motorola had more access to new OS than any others who were also building devices.

Today everyone is congratulating Google for the buyout and defending its partners but very soon this acquision might bring if everyone has equal access to new sources. However if Google succeeds to keep Android as an open platform, it might just drive all other vendors to design great appealing devices as well as good hardware.

So good move Google, expensive but a clever move... Wonder if Apple would buy the USA as a countermove since they have that much cash.

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