Some thoughts on the implications of Microsoft’s Surface launch:
Microsoft and tablets
I found the Microsoft a curious device full of interesting design choices. It was interesting because it seemed to be defined by what it wasn’t. The device was a world way from the clunky tablet keyboard combos by the likes of Fujitsu and Motion Computing who had helped Microsoft get tablets a niche place in the enterprise many years ago.
The keyboard covers were also an acknowledgement that whilst keyboards are useful tablets aren’t really content creation devices in the sense that ultra books are. The keyboard looked like the kind of membrane keyboard found on industrial computer kiosks or the vintage Texas Instruments Speak’n'Spell toy. For the supposed ultra book competitor it was an interesting choice. As a MacBook Air user, I already chafe at the limited travel keyboard on the device with its limited haptic feedback which acts as a limiting factor on my touch typing speed.
What I haven’t been able to reconcile is where a tablet fits into my life. I have used one to enjoy my South China Morning Post subscription and have skimmed the online version of Wired magazine (give me the print any day). However most of the time it just services as an ancillary screen displaying ambient media like TweetDeck or the occasional Skype call. Quite how tablets will revolutionise my life is at the moment unclear. My architect friend who evangelised the iPad to me originally seems to be using it a lot less since upgrading to an iPhone 4S, and isn’t in the market for a new iPad unless something radically changes.
Curious design language
When I saw the pictures of the Microsoft Surface, the first thing that I thought of when I saw the magenta and cyan keyboards was Nokia’s design language for the Lumia handsets. The Windows 8 colour palette may naturally dictate some of the colour choice, but it did make me think that Nokia could be integrated into a newly muscular hardware division at the right (fire sale) price. Quite how Microsoft would keep the complex carrier relationships and channel together is another matter, maybe I am reading too much into this design choice?
Microsoft and the PC manufacturer
Whilst some articles have talked about the Surface as signalling a post-PC age; I think that this lacks a certain amount of nuance. It more resembles the approach of corporations who ‘right-size’ their organisations cutting out swathes of management and flattening the organisation to get closer to the consumer. In this respect the Surface is an expression of an aspiration for a post-PC manufacturer age.
Let’s reflect for a moment on the relationship between Microsoft and its manufacturer partners. The Microsoft monopoly was started off by IBM back in 1981 and innovators like Dell and Compaq were instrumental in driving the PC into the corporate arena. Compaq is now just a memory as part of HP’s business pioneered portable computing, Windows-based PDA devices and the MP3 player. IBM’s ThinkPad line was a mix of robust engineering and clever product design that popularised the notebook as an enterprise computing device. Dell innovated on process, allowing customers machines tailored to their needs, developed new techniques in global supply chain management and pioneered direct-to-customer telephone and online sales.
By the early noughties however, the PC as a product offered little margin of profit for the manufacturer. Manufacturers like Sony and HP relied on software distribution deals to subsidise the cost of a computer and IBM had realigned its business towards services and consultancy so saw no need for its own PC business.
It is hard to invest in continual product innovation when you are running flat-out to stay afloat. By this time, Microsoft had maximised its profit on these computers, but its partners had reached the end of their usefulness so a vertically integrated model became inevitable.
This antagonistic and excessively exploitive approach to business is likely to act as a warning for future Microsoft potential partners like cellular phone and fixed line telecoms providers or handset manufacturers. Every step forward that Microsoft takes disrupts an intricate thread of relationships in markets that are key to the company’s future.
Microsoft and technical capability
One of the arcane features of using Microsoft Windows over the years has been getting the different components to talk to each other. A PC gaming rig at one time needed as much care and attention as an MG sports car, tweaking, prodding or even replacing components to get the machine to work with a new game. Prior to Windows’95 it was the Sound Blaster series of audio cards that allowed multimedia playback. A standard that coalesced in spite of Microsoft rather than with their help. All the different hardware permutations that need to be accounted for take a toll on code creation, integrity and innovation.
By taking control of the complete product including both industrial design and hardware, Microsoft has reduced this effort massively. It means that the all-in-one vertically integrated model of old computing (DEC, Hewlett-Packard, IBM, CDC etc) that was considered to handicap Apple is now economically sensible again. It is like the swing of a massive pendulum with a forty year sweep is finally going backwards.
When Steve Jobs was commissioning the original sit-up and beg Mac design he looked to the likes of Sony and Cuisinart for inspiration. Apple’s concept of the computer as an appliance took about three decades to get mass-acceptability and the Surface gives it the Microsoft seal of approval as an approach.
Microsoft and the channel
The fact that Microsoft is prepared to go to the mats with the manufacturers that have supported its business for the past three decades indicates that Microsoft doesn’t need these people to reach out to the channel. Of course, Microsoft has its own retail channel relationships for software, the XBox and accessories like mice and keyboards. The question is how receptive and/or passive will the channel response be to Microsoft? If Microsoft will roll on partners like Dell and Acer with this tablet launch what will it do to the channel partners?
Secondly, as the PC industry became unprofitable companies like IBM, HP and Dell moved into services; for large enterprise clients the very manufacturers that Microsoft has just spurned become the channel. Awkward.
Microsoft and the supply chain
Looking at the Surface immediately brings home the fact that Microsoft must have worked closely with an original design manufacturer such as the likes of Foxconn, Compal or Quanta to create their tablets. This is a calculated risk by the company involved as it is likely to lose business from affected PC manufacturers.
The choice of original device manufacturer will be instructive, if it was Quanta in particular, Microsoft is likely to be relying on their patent portfolio to provide the Surface with ‘air cover’. Foxconn is more likely to invest in specialist production facilities like the thousands of milling machines it uses to produce Apple’s i range of devices.