Friday, September 19, 2008

MicroSoft Technology vs. Business Model

I had the wonderful experience of attending the eInsurance Symposium in Dallas earlier this week. Bill Hartnett, Microsoft's U.S. Insurance Industry Solutions Director, gave a talk in which he highlighted the SilverLight product they have developed.

I have to admit I was blown away by the technology of the service. It was a very good visual presentation of information integrated with a wide variety of useful web services. I thought "This could really have an impact". Then I recalled Bill's opening remarks.

Bill started the talk by asking "How many of you were here when I spoke last year?". I few hands went up and his next comment was something close to "Good, then I won't be repeating myself too much.". At this point a light should have gone off - repeating yourself a year later would seem to be saying not much has changed in the past twelve months.

Next, it became clear to me that Microsoft is selling this product to insurance companies to push out. This makes sense when you recall that Microsoft sells operating systems to PC manufacturers who then push the product out.

This business model was reinforced later when Bill talked about Microsoft Sync in Ford's new cars. Again, Microsoft sells to Ford who pushes this out to their customers.

I honestly can not tell you if Microsoft has sold any users on SilverLight. I also have to admit that Microsoft is extremely profitable and as such it is hard to seriously criticize their business model.

Nonetheless, I left feeling like SilverLight was never going to be a major factor in the insurance space simply because of the model.

Here is the model I would think about. Offer the SilverLight service free to anyone who buys insurance services. Allow these users to invite insurance providers to accept a data pass of information from the buyer in order to provide the buyer with an proposal on their account. Require the insurance providers to pay to be able to accept the data and respond.

This model ends up making the same party pay for the service - the insurance company - but it allows customers to push the product into the company instead of having the service pushed onto them.

I could be way off base here. This is just a different distribution model, but I think it would make all the difference in the speed or even the "if" of any adoption of the service.

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