The popular service for streaming video and movie/TV series renting, Netflix, on Monday announced its financial results for the first quarter of 2014. According to the data, Netflix in this period achieved revenues amounting to $1 billion and received 4 million new subscribers. Now they have more than 48 million subscribers, which is still less than HBO's 130 million.

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“I will speak slow so that those of you with PhDs in the room can understand.” – Doug Carlin, “Deja Vu,” Touchstone Pictures, 2006

Having been around the software industry from the earliest PC days (and before) it is interesting to see the companies come full circle and the uproar that is surrounding the latest announcements that software would be on a subscription basis.

Much of the furor comes out of a very basic misconception … that you pay once and you “own” the software.

Unfortunately, that tells me that few people really read their license agreements.

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Adobe is jumping on the revenue stream bandwagon and has announced that they will no longer release boxed versions of their creative suite products. Instead they are pulling everything back into their Creative Cloud and forcing users into a subscription service. In other words they are joining Microsoft and a few others in the attempt to make your software turn into a recurring charge instead of a one-time purchase. This new business model seems to be catching on with many larger software developers and we do expect it extend down into game developers in the next few years.

MS Surface

Recently there was a report that Microsoft might sell the Surface RT for $199. This report raised even more ire from long-time partner Acer who basically begged Microsoft not to sell Surface at anywhere near that price. The question on everyone’s mind of course is, are these reports are true. We took a look at the reports and then compared it to what we know about Microsoft’s MO and found a rather interesting connection that could indicate the reports are almost correct.