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Is Microsoft gearing up for the big give-away?

They are deciding whether to stop charging ODMs for Windows Phone and its tablet OS, Windows RT.

Now, pause and…. breathe.

This is like Coca Cola giving away its secret recipe or, closer to home, Apple deciding to license its iOS to other players.

Microsoft is, at the end of the day, a big, fat software licensing machine and always has been. If it starts not charging for licences, where does the money come from?

On the other hand, there’s not a lot money changing hands for either OS at the moment so nothing much lost in the short term (I suppose MS could start charging again later). And, since Nokia’s phone business is due to be joined at the corporate hip with Microsoft soonish, there will be even less, since a license fee in those circumstances would simply be giving with one hand and taking with the other.

Such thoughts are doing the rounds. Consultancies such as the Yankee Group feel that Microsoft is happy enough to line itself up beside Google. Google has an OS (free) and it has bought its own hardware manufacturer (Motorola). Microsoft is looking to compete with Google across the board with Bing, its search engine, generating the cash against Google Search. So it now has its own hardware ODM (Nokia) and all it needs to line up now is a free OS.

“The idea is clear,” writes Yankee analyst, Boris Metodiev, in an advisory. “Microsoft would sacrifice the Windows Phone and Windows RT licensing fees with the hope that it could attract more original device manufacturers (ODMs) to create more Windows devices and increase the platform’s market share, which would eventually drive the development of more apps and a better ecosystem. “

But there is still the perception problem - both internally and externally. Something that used to cost is being given away. It sounds like a fire sale and that’s not a thought you’d want to lodge with a potential customer thinking about buying a new tablet or smartphone.

We shall see.

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