Open Innovation and Microsoft's approach to it

Topics: Tablet PC, Microsoft, Multi-touch Pages: 11 (3441 words) Published: May 3, 2014


E&I Zone: Challenges with Open Innovation
Team assignment
Microsoft Corporation

April 10th 2014
Zuzana Vojtekova, 1350495
Kamil Kania ,1353678

Microsoft & Tablet Market

Microsoft Corporation as in multinational enterprise headquartered in Redmond, Washington. Microsoft is one of the richest companies with regards to revenue, yet it is also one of the world’s most valuable companies with market cap of $330 921 millions (Reuters, 2014). It disposes of very broad product portfolio ranging from computer software to game consoles. Most lately they have been again investing in the tablet market segment which we will focus on in this paper.

Microsoft started to be engaged in tablet market already in 1999, but unsuccessfully. It was mostly due to technological insufficiencies which in that time level of technology could not address. Heavy weight, lack of specific software features and applications made the 1999 tablets rather unpopular.

After launch of Apple iPad device in 2010, the demand for tablets increased substantially, which can be seen in the growth of tablet shipments (Exhibit 1.0). The tablet shipment was at 0% to 5% growth in 2010, but it spanked to 20-30% 1Q of 2013 leaving tech companies highly interested in this high growth market (Betanews, 2013).

Exhibit 1.0

Source: Betanews, 2013

Microsoft started to reinvest in tablet segment slightly before 2012, when they again entered tablet market by launching line of tablet computers under flagship name Microsoft Surface.

Microsoft Tablet’s timeline

2000 PaceBlade develops the first device that meets the Microsoft's Tablet PC standard and received the "Best Hardware" award at VAR Vision 2000. 2001 Bill Gates of Microsoft demonstrates the first public prototype of a Tablet PC (defined by Microsoft as a pen-enabled computer conforming to hardware specifications devised by Microsoft and running a licensed copy of the "Windows XP Tablet PC Edition" operating system)at COMDEX. 2002 Microsoft releases the Microsoft Tablet PC, designed and built by HP. 2012 Microsoft releases Microsoft Surface RT with an ARM microprocessor and kickstand 2013 Microsoft releases the Surface 2 with an ARM microprocessor and two step Kickstand and the Surface Pro 2 was released with an Intel(R) core I5 processor

Means of IP protection in Microsoft
Intellectual property is a crucial part of Microsoft activity. Value of company is in wide range of unphysical products offered by company based on intellectual effort of Microsoft workers. Company spends in average 7 billion dollars annually on innovation and development. This work is done by more than 1 100 workers around the world in several innovation centres. Innovation engagement forces company to efficiently manage IP, of which key area is IP protection.

Microsoft is owner of more than 45 000 patents registered in 68 countries. Part of its patents are technologies related to inter alia: solutions used in application (e.g. 131908, Canada), computer equipment (e.g. 308242, Australia), or hardware drivers (e.g. MY131926A, Malaysia). Importance of IP protection and legal affairs is proved by Brad Smith, Microsoft General Counsel who said: ‘At Microsoft, we believe diversity in our legal teams is a business necessity. We cannot be effective if we cannot understand and appreciate the interests of the incredibly diverse individuals who make up our stakeholder groups. This is important both for our own department and for the law firms on which we rely.’1

In regards to technology related to the latest area of company activity – tablets, Microsoft is owner of 87 patents registered in 9 countries and European Union. The greatest number of patents, the company has in the USA – 22, but in EU its technology is protected only by 1 patent. Registrations areas are also countries which domains are electronic production oriented, such as Russia located in East Asia, with big market potential or...


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