How will Microsoft make money from Silverlight?

Indeed, will it do so? I like Silverlight a lot; though I appreciate that to a Flash developer it may seem pointless. It does a lot of stuff right: small download, powerful layout language, cross-platform (with caveats), rich media, fast just-in-time compiled code.

Still, what intrigues me is how Silverlight has come from nowhere to what seems to be a central position in Microsoft’s product strategy in just a few years. What’s the business case? Or is it just that someone high up experienced a moment of horror – “Flash is taking over in web media and browser-hosted applications, we gotta do something”?

Let’s eliminate a few things. It’s not the design and developer tools. Making a profit from tools is hard, with tough competition both from open source, and from commercial companies giving away tools to promote other products. I don’t know how Microsoft’s figures look for the Expression range, but I’m guessing they bleed red, irrespective of their quality. Visual Studio may just about be a profit centre (though the Express series is free); but Silverlight is only a small corner of what it does.

Nor is it the runtime. Adobe can’t charge for Flash; Microsoft can’t charge for Silverlight.

I asked Twitter for some ideas. Here are some of the responses:

migueldeicaza @timanderson, my guesses:WinServer built-in-steaming;Strengthening .NET ecosystem, and client-server interactions;Keep share in RIA space

IanBlackburn @timanderson Isn’t Silverlight going to become the "Microsoft Client" and central to s+s?  Apps built with it can be charged in many way

harbars @timanderson no doubt with annoying adverts

mickael @timanderson isn’t silverlight a defensive move against other RIA platforms (like Adobe’s one)? They might only plan selling developmt tools

jonhoneyball @timanderson In the long term by hosting tv stations’ internet traffic and providing the charging/hosting/download/player model.

jonhoneyball @timanderson ie azure cloud + silverlight + someone elses content = ms revenue. no, it wont work, but its not unexpected ms-think.

jonhoneyball @timanderson why no work? price war to come on cloud host/delivery etc Someone will host BBC for free. Game over

There are two main themes here. One is media streaming; as the Internet takes over an increasing proportion of broadcasting and media delivery (note recent comments on Spotify) Microsoft plans to profit from server-side services. The challenges here are that there may be little money to be made; Adobe has a firm grip on this already; and Apple will do its own thing.

The other is about applications. This is the bit that makes sense to me. Microsoft knows that the era of Windows desktop clients, while not over, is in long-term decline; and that applies to applications like Office as well as custom business applications. Silverlight is a strong client platform for web-based alternatives. So I’m voting for Ian Blackburn’s comment above: it’s the Microsoft Client.

If that’s right, we’ll see Silverlight embed itself into more and more of Microsoft’s products, from desktop to server, just as Adobe is gradually remaking everything it does around Flash.

The difference is that Microsoft has far more invested in the status quo: selling Windows and Office. I’m guessing that there are heated internal battles around things like Web Office. The briefing I attended at the 2008 PDC on Office Web Applications was fascinating in respect of its ambivalence; for every web feature shown, the presenters wanted to emphasise that desktop Office was still the thing you should have.

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6 comments to How will Microsoft make money from Silverlight?

  • Joe

    Do I need to state the obvious.
    Microsoft isn’t going to make money “on silverlight”, it’s going to make money using it’s database to service silverlight applications. It’s mapping framework, and it’s SSDS services which companys will pay for because they are so easy to use.

    The databinding done with silverlight to using the entityframework talking with sql server.

    VS is great, and costs some cash, which developers pay for via subscriptions. But the most revenue will come from data services, which MS knows and has seen the future. They are in the thick of it.

    Not only that, Windows 7 smokes everything in terms of an OS. People buy good stuff, and who wouldn’t want to buy Windows 7 to enable thier systems to run much faster. Comparitivly Linux is clunky, slow, has a crappy feel even against Vista systems. Why waste time with Linux desktop stuff, when there is better stuff available?

  • Miles

    Silverlight has megabyte pesistent cookies, like Flash. You can block Flash cookies (very obscure, google to learn how) but you cannot block Silverlight cookies. MS will make money by selling marketing intelligence obtained by tracking individual web surfers.

  • cak

    Hilarious, after using Vista, I will never use or trust another Microsoft system again. Windows 7 is nothing but a tweaked version of Vista. You clearly have never even tried Linux. You are a joke, sir, nothing but a joke!

    The fact is that Microsoft has a lot of cash, and can either give it shareholders as dividends, or start up projects like this that may turn into something, or may not. Just like the Zune, XBox, etc…

    This is once again Microsoft using their OS to further their own needs, and try to stop the onslaught of Flash.

  • tim

    You clearly have never even tried Linux.

    Cast your eyes to the left, Categories column. Click Linux.

    Tim

  • “Not only that, Windows 7 smokes everything in terms of an OS. People buy good stuff, and who wouldn’t want to buy Windows 7 to enable thier systems to run much faster. Comparitivly Linux is clunky, slow, has a crappy feel even against Vista systems. Why waste time with Linux desktop stuff, when there is better stuff available?”

    Are you on the payroll at M$? W7 Smokes everything??? Vista yes (but that wouldnt be hard) Vista was a demonstration in how to take a perfectly stable and usable OS in XP, try to pretty it up like OS X (and fail) and destroy the performance in the process. Yes people do buy good stuff which is why in fact OS X sales are increasing more than windows (ok so starting from a smaller base) and Linux is a viable alternative which is more secure, more robust and way faster than vista on the same hardware.

    You are seriously deluded.

  • Azure luver

    All MS needs is the next Twitter/Facebook like company to be written on Azure using maybe Silverlight/WPF as the UI/UX and then they’ll make boat loads of money.

    As someone that uses the AZURE and Silverlight stacks everyday, it is damn powerful. I’d pay to put my apps in there cloud and to build it with Silverlight/WPF…