Published on June 19th, 2012 | by Steven Hodson


Microsoft Finds Its Balls

I think I’m pretty safe in assuming that you’ve heard the latest Microsoft news – they’re going into the tablet market.

In the lead-up to yesterday’s ‘surprise’ event the rumors where all over the place with everything from a Barnes & Noble specific tablet to … well you name it and people were posting it, but in the end it came down to being a Microsoft vision of what they wanted a tablet to look and feel like.

While what tablet rumors were floating around proved to be partially true the kicker was that this tablet was strictly a Microsoft manufactured and branded tablet, not a rumored partnership with existing OEMs like Samsung, Lenovo, or any of the current tablet manufacturers.

The reason this wasn’t an expected move is because most of the tech pundits said that there is no way that Microsoft would endanger its OEM relationships by going it alone in manufacturing a tablet but I’m not surprised in the least that they did; and in fact I’m glad they did.

The Lead-up

This is something that we should have seen coming ever since Microsoft first announced that they were going to enter the retail chain and the availability of Microsoft Signature branded PCs and laptops.

Even though, for all of its history up until this point, Microsoft has maintained, for the most part, a hands-off approach when it came to the hardware side of the computer business it is an attitude that has constantly come back to bite them on the ass. Granted much of the public’s, and tech industry’s less than positive attitude towards the company was Microsoft’s own fault the hardware OEMs need to take ownership of that negative attitude as well.

After all there is no getting around the fact that OEMs operated on slim profit margins and as a result had no qualms about using hardware that was very often just barely able to meet any requirements that Microsoft set for Windows, or their other software, to run on. Then on top of that we were forced into bundling hell with software trials of all kinds being stuffed into the machines creating a frankly shitty user experience.

As Long Zheng noted in a post this morning

In the Windows PC space, quality control is the silent killer across individual hardware components and even drivers. According to the individual I spoke to, Microsoft has been frustratingly aware of quality assurance issues, or there lack of among many of the value-driven brands. And there was little Microsoft could do. They were at the mercy of their own ecosystem which has let them down over and over again.

So when Microsoft decided to get into the retail business the only real differentiation they could make from other computer sellers and OEMs was in the user experience which meant de-crapifying the products sold under their Signature brand, as well as meeting or exceeding the hardware requirements suggested by Microsoft.

This was the beginning of Microsoft finally putting its foot down with OEMs and moving beyond just suggesting system requirement but rather telling them what it would be and finally taking the user experience seriously. After all what could they lose from doing this other than a write off of maybe a billion or two if the experiment failed, it’s not like people would stop buying Windows.

It should be noted, and credit given where it is due, that this was also happening during the explosive growth that Apple was experiencing. No longer was Apple just some quaint computer company selling systems to a certain segment of computer users; and I think seeing this, Microsoft was emboldened to finally rethink its position on getting into the hardware business, beyond the wildly successful Xbox and other hardware like mice and keyboards.

The Phone

If there was ever a hint as to what Microsoft had up its sleeve the arrival of the Windows Phone should have been the first clue.

For the first time ever Microsoft drew a line in the sand and set the minimum requirements of any smartphone handset that was going to run the Windows Phone operating system. Requirements that were designed to maximize the user experience regardless of what the handset makers might have wanted to do; and there is no give or take as far as Microsoft is concerned.

The end result is that the Windows Phone, even when it comes to the first retail generation, is for the most part a consistent experience; but even there it hasn’t been a perfect experience as evidenced by the Samsung Focus when Samsung changed chips at the very last moment.

It was, however, a good start on the road to a more controlled Microsoft ecosystem and I think it also proved to Microsoft that it could indeed take more production control of a mass consumer product.

The Ecosystem

It is important to take a moment here and take a look at this “ecosystem” idea that Microsoft has been talking up, especially with the imminent launch of Windows 8.

From Microsoft’s perspective the PC is no longer just that beige box sitting on your desk. Personal computers are devices of all kinds whether it be the desktop computer, the laptop, the smartphone, or the tablet and the glue that is pulling that personal computing experience together is Windows 8.

We are becoming a device agnostic world but we want to be able to have the same user experience regardless of the device we are using and we what them all to work together, hence the popularity of cloud computing which makes accessing and sharing our data a ubiquitous experience.

For Microsoft, Windows 8 can provide the second part of the equation – the ability to create and access our data regardless of the device or where we are and do it within a common user interface.

The Tablet

Now with the tablet as the newest player in that ecosystem Microsoft probably faced some hard choices. Go the typical route of just licensing Windows 8 to tablet OEMs along with strict requirements as to the hardware and hope that they don’t get screwed like that have in the past, or take a bold step and do it themselves.

At this point Microsoft’s experience with setting stringent hardware requirement when it came to Windows Phone showed that while it improved the experience for consumers it still came with the same old OEM problems.

On top of this there was an even more important obstacle that Microsoft would have to fight hard to overcome. That of course is Apple and its almost absolute dominance of the tablet market with the iPad. When it comes to the iPad it wouldn’t be just a matter of trying to equal the numbers sold, but it also would mean that Microsoft would have to do something that could go up against the consumer mindset of what a tablet is; which for the large part has been defined by the iPad.

I think that it is because of the potential size of the tablet market, and because of their long experience with OEMs,that Microsoft made the decision to design and engineer their own tablet regardless of what the reaction from the OEMs night be.

The OEMs

One of the standard arguments that is always used when it comes to why Microsoft shouldn’t get into the hardware business is because they could potentially turn away their OEM partners that they need in order to sell their Windows operating system.

If this was proved wrong anywhere it is with the success of the Xbox, even though they did have a really rough first generation with the console, and to a lesser degree with Windows Phone. With the Xbox Microsoft ‘designed and engineered’ the complete experience and with Windows Phone they set the phone hardware requirements in stone.

With the imminent launch of Windows 8, and the effort t o bring about their vision of a cohesive ecosystem Microsoft has a lot riding on their efforts and especially when it comes to the tablet. The last thing the company needs is another decade of bad user experience because of OEMs.

We saw this hard stance when it was reported that HTC wouldn’t be getting any licenses for Windows 8 when it comes to their tablets. This should have been the second clue that Microsoft was looking to shake things up but it turns out that the OEMs knew this was coming, this according to a report on SlashGear this morning:

Microsoft warned PC manufacturers that it was planning its own range of Surface tablets, CEO Steve Ballmer has confirmed, giving them advance notice it would be challenging them on their own turf. ”Our PC partners knew in advance we were announcing something today in this space” Ballmer told AllThingsD in the aftermath of the Surface reveal, a pair of Windows-based slates targeting the iPad and enterprise markets, though the chief exec declined to comment on the reaction those OEMs had.

As for OEM reaction?

Well it seems that LG has decided to sideline any tablet work for the time being:

When asked about Microsoft’s recent Surface announcement, the Korean company said that it “doesn’t see Surface competing with anything we’re focusing on at the moment,” but more importantly indicated that it would be taking a step back from the tablet market.

Ken Hong, a spokesperson for LG, said the following in an email: “We’ve decided to put all new tablet development on the back burner for the time being in order to focus on smartphones.”

Personally I have absolutely no sympathy for the OEMs as they are only reaping what they have sown after years of treating consumers as nothing more than cash cows.

The Price

After the announcement yesterday there were two key points that weren’t directly addressed. Those being: availability and price.

When it comes to availability the answer is pretty simple – Windows 8 is supposedly going to be available in October so that will be when we see the first of the Surface tablets being available.

Now for the pricing, and this is where it gets tricky. As Mary Jo Foley noted in her dissection of the fine print the final pricing will be available closer to product availability but expect it to be on par with comparable ARM tablets:

Pricing: Another case where there’s no real answer yet. “Suggested retail pricing will be announced closer to availability and is expected to be competitive with a comparable ARM tablet or Intel Ultrabook-class PC. OEMs will have cost and feature parity on Windows 8 and Windows RT,” according to Microsoft’s press release. Company officials are not sharing any guidance beyond that at all.

My feeling on the matter when it comes to the pricing of the ARM version of Surface is that Microsoft will set its sights on equaling the iPad as it is already apparent that the Surface is meant to be an iPad competitor and not a generic type Android tablet competitor. If it can equal the iPad in price but prove to be a better product for both consuming and creating then they should have no problem.

The interesting part of the pricing question comes when we look to the Intel – Ivy Bridge – based Surface which Microsoft is referring to as the Surface Pro and they already are suggesting that the price for it will be in the neighborhood of the ultrabooks that are on the market, or coming to market. This of course has the tech pundits up in arms and claiming that once again Microsoft has proven that it doesn’t get it.

Well, I think it is the pundits that need to get a clue. Just stop for a second and realize what the Surface Pro is. This sucker isn’t any old tablet knock-off, it is in fact equal in power to just about any laptop but in a form factor that would make a MacBook Air jealous.

The Surface Pro is in fact a powerful ultrabook laptop hiding in a tablet, especially when you add in the TouchCover. There is no reason that something like the Surface Pro couldn’t replace a large percentage of laptops for both the general consumer and for the business user.

Finally …

A lot of play was made of Steve Ballmer’s recent statement about how the company was making its “riskiest bet yet” and that the company was re-imagining itself. Well, I think that we now are really seeing just how much of a bet the company is taking and I applaud them for it.

Even though I still have my fingers crossed when it comes to Windows 8 I know I want to get my hands on a Surface as soon as I can after it comes available; but even more importantly I really hope that Microsoft pulls this off if for no other reason than to prove all those pundits wrong.

If Microsoft does indeed pull this off they will be able to look back on their history and know that they have successfully changed personal computing not just once but twice. If they fail then all the pundits can pat themselves on the back, pop the champagne corks and return to writing the same old Microsoft is dead crap.

Personally I’m just glad that Microsoft has done what it has and it’s good to see some fire returning to its belly. It should prove to be an interesting time ahead but in the meantime; and just in case you haven’t seen it yet, here is the full presentation from yesterday (thanks to the guys at The Next Web).



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About the Author

Steven has been around the tech world long enough to see most of the stuff we think of cool happen before which leads to a certain bit of cynicism that has contributed to him being known as the cranky old fart of the Internet. Besides sharing some of the goodness that he finds with you here at 42x you can also find him curating some digital goodness at Winextra (tech type stuff) and Rotten Gumdrops (for your daily dose of WTF).

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