Yesterday, Microsoft dropped a bit of a bombshell announcing its new Surface tablet hardware and positioning it against Apple’s leading iPad offering. Currently, there really isn’t a tablet market, there is an iPad market and this mirrors very closely the conditions that existed when Microsoft entered the MP3 player market unsuccessfully with Zune and the gaming market successfully with the Xbox. The key for Microsoft’s execution will be mirroring the latter and avoiding the mistakes of the former. It did announce this earlier than it needed to, which I agree with Carl Weinschenk may have been a mistake.
What Microsoft has brought to the table in terms of hardware and software is compelling, but its decades-long history of underfunding efforts like this does provide a note of caution and a foundation to also argue that Apple could win this fight. Apple is again entrenched and it is likely to defend this turf far more aggressively than Sony did in the game space.
In the end, however, from an IT perspective, this offering is vastly better than the iPad. Let’s explore all of that today.
What really defined these two efforts were that they were both consumer-focused products, much like smartphones and tablets are today, but they had no IT value, which is clearly different than what is happening with tablets and speaks to my last point. That point was that IT should uniquely prefer the Microsoft offering over alternatives.
Other similarities between the Xbox and Zune was both groups were initially staffed with segment experts, both products had key advantages, and both products were initially seen as potential game changers. What was different was that the Xbox effort received nearly a blank check with regard to funding and the Zune was constrained and under-resourced. Xbox carried massive losses for years but emerged dominant in the gaming segment and the Zune failed.
So this speaks to the key lesson that Microsoft hopefully has now learned given the success of the Xbox and the failure of the Zune and that is funding has to be both at a high level and adequate or the offering will be strangled to death and die a very public and embarrassing death. Unlike gaming and telephony, which aren’t critical to Microsoft’s current revenue streams, this latest offering puts Windows at risk and Windows represents three of Microsoft’s five revenue pillars. The three are Windows, Office and Internet Explorer. This means there is far more skin in this game and a far more dire outcome if Microsoft fails here.
This new platform has three to four clear advantages over the iPad and other tablets. Three of these are directly attractive to IT. The fourth may be depending on implementation. The first two apply to both the ARM (NVIDIA Tegra)-based product and the x86 (Intel)-based offerings. They are Office support (Office is the most popular productivity package in market), and full management and security support. Increasingly, personal products are under attack and need to be remotely managed and updated. The one feature that only applies to the x86 version is legacy desktop application support and full accessory support (the ARM, Windows RT product, only supports class drivers).
Now the fourth advantage is unique and Apple can’t easily get access to it because the technology was developed by Microsoft for the initial Surface tablets. This is the optical display, which can see whatever is placed on it. This could be anything from game piece, to business or credit cards and blending the input. This has mostly been used to date in entertainment or commerce areas and this will be the first single-user-oriented use of this technology, which means the real promise of this advantage may take some time to emerge particularly on the IT side. However, the technology is vastly more capable and faster than the existing screen technology and that alone could make it much better for those using the tablet for editing (particularly graphics editing), sketching, gaming and presentation.
Like Zune and the Xbox, the Surface tablet success will come down to resourcing. It has a ton of advantages, but unless Microsoft can convince buyers the iPad isn’t good enough, we’ll have another Zune event but this one will damage Windows. On the other hand, Microsoft hasn’t fielded a more completely thought-through competitive product to Apple ever and even before we see the creative, it is far ahead of where Zune was and even where the Xbox was initially because it is more fully utilizing Windows.
Finally, the market that the iPad is in generally moves from flashy thing to flashy thing, suggesting this Surface tablet could be the next flashy thing. The nice thing is that this offering will have built in a ton of IT support and security so, for once, the next flashy thing won’t make our eyes flash red.