How Microsoft, Google, and Square use hardware to market their software and services
Hardware is becoming an increasingly important aspect of traditionally software-focused companies. Microsoft and Google have both introduced their own hardware over the last year, with the Surface tablets and Chromebook Pixel; Square recently announced the Square Stand, which turns an iPad into a cash register; and Adobe announced its own stylus and a "smart ruler" around the same time it said that its design products would only be available by subscription.
It's doubtful that any of these companies got into the hardware business just for kicks; despite lower barriers to the hardware business, entering the physical realm is still a challenge. But why, then, are these companies building their own hardware even as they work to increase software's role in our everyday lives? The answer, it seems, is that hardware is the best advertising platform available for their software.
Take the Surface tablets, for example. Microsoft is said to have sold a scant 900,000 units since the Surface RT was released in October 2012 -- hardly a knock-out product that could turn Microsoft into a devices and services company.
But that hasn't changed Microsoft's commitment to hardware, with Microsoft CEO Steve Ballmer recently telling MIT Technology Review that he is "super-glad we did Surface," adding that "I think it is important—and not just for Microsoft, but for the entire Windows ecosystem—to see integrated hardware and software." Surface is both a shift in Microsoft's strategy and an attempt to show consumers and manufacturers that Windows is meant for more than bargain-bin hardware.
Google is doing something similar with the Chromebook Pixel and the Nexus-branded devices it co-develops with hardware partners. The Pixel is the first high-end computer to operate Google's Chrome OS, and the first step towards creating a true Chrome OS ecosystem. And the Nexus products allow Google to demonstrate the virtues of stock Android, allowing the mobile operating system to reach consumers without being marred by manufacturers' custom skins.
Sundar Pichai, Google's senior vice president of Chrome, Apps, and Android, recently told Wired that "Any hardware projects we do [at Google] will be to push the ecosystem forward." Even though Google is emphasizing hardware more than it ever has in the past, what with Glass, the Chromebook Pixel, the Nexus line, and, potentially, its own smartwatch, these efforts are meant to improve Google's ability to provide users with information (and ads).
The company underscored hardware's position in its future during the Google I/O keynote yesterday, where the only hardware-related news involved giving free Chromebook Pixel computers to attendees and bringing a "Nexus user experience" to the Samsung Galaxy S4.
And then there's Square, the payments company that has had a tumultuous relationship with hardware from the beginning. Square first attracted attention due to its Card Reader, a thumbnail-sized device that took advantage of smartphones' headphone jacks to simplify credit card-based payments. Then, once it had users' financial information, it introduced Square Wallet (formerly Card Case and Pay with Square), which promised to allow users to pay with nothing but their faces.
Wallet has largely failed to gain traction, and has suffered from a disastrous rollout at Starbucks. Square simplified hardware so that it could kill it; failing that, it's decided to "reinvent" the cash register... again. The original Card Reader showed consumers and businesses alike that Square is more convenient than traditional payments processors; maybe the Square Stand can keep those people hooked while Square continues to experiment and try to find ways to do away with hardware completely. (Or, at least, getting rid of registers and fumbling with cash or credit cards -- credit cards are probably here to stay, at least in some form.)
Adobe's stylus and smart ruler -- dubbed the Mighty and Napoleon, respectively -- will likely serve as free marketing for the company's tablet applications. Adobe has a long history of producing desktop applications; now that the world is shifting towards tablets and smartphones as the main computers in many people's lives, Adobe needs to show that it can survive the shift to touch-screens as well. Developing hardware that only works (or, at least, works best) when paired with an Adobe-made app is a fine way to realize that goal.
We reported yesterday on Rishad Tobaccowala's claim that "Commerce has become marketing and marketing has become commerce," which is best summarized as turning every sale into a potential advertisement for a company's product -- "closing the loop," as my colleague Erin Griffith put it.
Microsoft, Google, Square, Adobe, and probably countless others are taking that a step further and developing entire products that exist largely so their software can attract more attention. Hardware is, at least for these companies, a way to ensure that software continues to consume the world, of showing consumers, manufacturers, and businesses what software is capable of when it's housed in complementary hardware.
[Image courtesy Stratageme.com]