The Redmond-based software giant is blazing a new trail in an attempt to stay relevant in an increasingly Apple/Google-centric device world. While the rationale for Microsoft's change is sound, the two divergent paths being taken is turning the PC eco-system on its head, as the firm prepares for war not only with Apple, but with the very customers who helped build its software empire.
What is clear to me, however, is that Microsoft would very much like to be more than a software company, and use its Windows RT Surface platform to replicate the success of its Xbox games console in the PC world.
The trouble is, there’s a key difference between the launch of Xbox and Surface.
Xbox wasn’t based on Windows and had no eco-system to speak of, so Microsoft was able to build a community and credibility with the gamers in parallel, resulting in a strong second effort with Xbox 360.
Surface is coming to market in a mature Windows eco-system and is designed to compete with the very customers that made Microsoft the software behemoth it is today.
“On one hand, it's a pretty radical departure from the workflow that people are used to in the PC space...so it's bound to make OEMs uncomfortable,” said Analyst David Kanter. However, he added, “it's manifestly clear that PC OEMs are very unsuccessful in creating products that capture the imagination and desires of consumers, compared to Apple. So Microsoft's actions seem driven by a desire to create successful products and ultimately serve consumers.”
Historically, said Kanter, “OEMs have not performed well compared to Apple, and what we are seeing is Microsoft taking a more active approach in leading the ecosystem.”
While that may be true, as OEMs got wind of Surface, many of them bailed on RT altogether and those who didn’t showed signs of faltering in their long-term support and commitment in designing new RT systems until they could gauge the success of Surface.
At Surface’s current price point of $499 OEMs will be hard pressed to compete for the consumer’s share of wallet, both with Microsoft directly and with Apple pulling a squeeze play with its low-cost, high performance iPad variant. In short, the prospects look pretty dismal.
Getting iTunes to work on Windows RT would be a start if Microsoft wants to convince consumers to migrate back to Windows for their content consumption. Likewise, getting a product out on time instead of simply manufacturing slidewear would be wise.
"Microsoft took a page out of Apple’s PR manual and did a great job creating buzz around the initial Surface announcement in June. Then they blew it by failing to have a product ready to ship, or even to pre-order. It’s a PR sin to get your audience hot and bothered, and then leave them hanging like that," said Brookwood.
Microsoft will also do an X86 version of Surface in early 2013 but its OEM partners will have a head start with 100’s of platforms in the market in advance of this.
Either way, Microsoft is bringing the battle to OEMs on both fronts but in the X86 the firm may well stand a chance.
One has to wonder if this debacle with Surface and RT could have been avoided if Microsoft had doubled down efforts with its key partners versus adopting the nuclear strategy.
Going to war with the very community that made you successful seems like a recipe for disaster at a time when Microsoft needs its friends more than ever. Successfully competing with Apple will require an army and right now Microsoft seems resigned to go into battle alone.