Microsoft Licenses Tech IP to Startups

Microsoft said on Monday it has signed intellectual property licensing agreements with a number of companies that will use technology developed by Microsoft Research, as well as Windows fonts and Windows Connect Now.

Inrix, a Seattle-area company, will build its business around real-time traffic prediction software from Microsoft Research. Inrix will be the exclusive third-party licensee of technologies code-named "SmartPhlow," "JamBayes" and "ZoneZoom."

Microsoft says by opening its IP vault, it is "jump-starting the growth of our partners that can take some of our early ideas and build upon them." But Jupiter Research senior analyst Joe Wilcox downplayed the significance of the Inrix announcement.

"While Microsoft may tout the licensing agreement as a big deal, I see more marketing going on than substance - mainly because the IP licensing is like lending money to distant cousins. Maybe not part of your direct family, they still are relatives," said Wilcox.

"I say that because former Microsoft and Expedia employees -- Bryan Mistele, Craig Chapman and Seth Eisner -- are Inrix founders. These guys aren't exactly strangers to the Microsoft clan."

Still, Wilcox says the move is a step forward for Microsoft, which announced plans to focus on IP licensing in late 2003. Hardware vendors such as SMC and D-Link have also signed on to license Microsoft's Windows Connect Now technology to simplify adding devices to wireless networks.

"Microsoft's whole business is about licensing, which is one of the pillars behind the company's success. Microsoft succeeded because its Windows licensing model allowed lots of companies to make lots of money," added Wilcox. "IP licensing could open up new revenue spigots for Microsoft and startups like Inrix."