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Strategy Map›Layer 5 · Go-to-Market Strategy›Distribution Strategy/Partners+ from outside the named canon

OEM Licensing

What is OEM Licensing?

The company licenses its software or service to hardware or device makers, who ship it inside their products so buyers get it with the device.

How OEM Licensing works

Shipping inside other makers' devices puts the product in front of every buyer of that hardware without a separate purchase decision.

How companies won with OEM Licensing

From the win chains in Strategy Canon case studies: what the winner did, and what its rival did at the same step.

vs. Blockbuster · 2007–2011

Netflix

Unlimited streaming in the subscription creates new viewing demand

What it did
Instant viewing added at no extra charge (Jan 2007) on partners' devices (Roku 2008, consoles and TVs 2010)
Blockbuster
Bought Movielink, a per-title download store with 3,300 titles (Aug 2007)
Read the Netflix case study →
vs. Quark · 1982–87

Adobe

Innovation: PostScript, one device-independent page language licensed into every printer

What it did
Warnock and Geschke had designed Interpress at Xerox PARC
Quark
Quark began as an Apple III word-processor maker (1981)
Read the Adobe case study →
vs. Apple · 1976–85

Microsoft

Hardware-independent OS licensed to every PC maker

What it did
Gates had licensed Microsoft BASIC non-exclusively to TRS-80, Apple II and PET makers (1977–78) and won arbitration over MITS's attempt to block licensing to others
Apple
Macintosh (Jan 1984) shipped only on Apple hardware
Read the Microsoft case study →

Also tagged: Autodesk

The question to ask of a company

Which makers ship it inside their devices, and how much of its reach came that way?

Who names it — 2 of the canon

AuthorWhat they call it / where it appears
ChristensenModular components carried by others' products
ThompsonDistribution through OEMs
Note. Near miss: An app in a phone's app store. Does not count: A software partnership with no hardware; an app available for download on a device.