Microsoft Acquires Perceptive Pixel – But Why?
Umang is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Microsoft (NASDAQ: MSFT) at a worldwide conference in Toronto announced that it will buy Perceptive Pixel Inc. (PPI). Along with that they also announced that Windows 8 will be released to manufacturers in August and commercially available from October.
Perceptive Pixel Inc., specializes in research, development and production of multi-touch interfaces. It gained major popularity when CNN used one of its displays as one of its large display interactive U.S. map for presidential election coverage. Recently in June PPI announced Petro touch simulation software for Schlumberger ltd. (NYSE: SLB). This would help Schlumberger use touch sensitivity for carrying out their search for oil and gas reserves.
What is in store for Microsoft?
Cisco (NASDAQ: CSCO) is a major rival of Microsoft in the enterprise collaboration market. It has excellent lineup of video conferencing and tele-presence products. Along with Cisco, Oracle (NASDAQ: ORCL) is also a major player, which was evident with the launch of Oracle Social Network (OSN) in 2011. Microsoft will look forward to use the PPI technology with Microsoft’s Lync Product like IM, web meetings, video conferencing and IP telephony. This will help them gain market share in the collaboration platform market.
Advantages of the Synchronization
Windows 8 has an inbuilt interface called Metro, which has been optimized for touch input. This technology when combined with PPI’s touch screen technology will open gates of big companies for Microsoft to sell its windows. This is one of the possible reasons as to why they announced the availability of Windows 8 along with this acquisition. Microsoft is planning to combine their OEM’s hardware to create new possibilities of productivity and collaboration.
This synchronization might help in the price reduction of the multi-touch display solutions. This would be primarily because the software would be Windows 8 and the cost of research on hardware could go down drastically.
There is also a possibility that they will use the technology of PPI to improve the touch ability of its surface tablet to create its foothold in the smartphone market. As we know, Apple (NASDAQ: AAPL) with its iPhone has one of the best touch screen smartphone in the market. Thus if they want to create an impact in this market share they need to come up with better technology at an affordable price.
With integration with office programs like OneNote and Lync conferencing software, we are looking at the ease of work, especially for the government defense projects. PPI’s technology muscle with Microsoft’s arm will help them also to create the impact in the enterprise collaborating market.
The financials have not been disclosed as of now, but overall the prospect of this acquisition looks pretty exciting. The shipment time of Windows 8 was another strategic move they made hinting at the intention for this acquisition. Surely, Oracle and Cisco would be watching this deal closely know the impact that Microsoft could make to their revenue in the collaboration market.
The question to think is that can Microsoft extend this acquisition of technology to create a change in its tablet market? If so, how much would that hurt Apple? And is Apple prepared to bring this multi-touch fight into the smartphone war?
Umang27 has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple, Microsoft, and Oracle. Motley Fool newsletter services recommend Apple, Microsoft, and Schlumberger. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. If you have questions about this post or the Fool’s blog network, click here for information.