Sunday, October 21, 2012

Microsoft's Billion Dollar Mistake

Bill Gates has been carrying around a tablet PC for years, but never managed to make it popular. To me they always seemed gaudy, like something you'd carry around on the floor of a manufacturing plant or for getting signatures for delivering a package. They ran Windows, had handwriting recognition, and some had a bulky keyboard or stylus. Some of the nicer ones were essentially laptops where the screen rotated and folded back. A business machine, not something fun and playful.  And they always looked heavy.

Then, 3 years ago, Apple announced a tablet PC called the iPad. The idea wasn't new by any stretch, but the implementation was. The only input method was your finger. Now Windows OS. No keyboard. No stylus. And no handwriting recognition. Not what Microsoft (or anyone) thought of when they thought of a tablet. Except maybe those Star Trek Next Gen producers - they were way ahead of their time in predicting future computer interfaces.  But it already had a market - millions of iPhone users with thousands of iOS developers ready to make software for it.

When I saw the first iPad, I scoffed at it. A novelty, surely. I was still using my Windows Mobile phone with a stylus at the time, and a Dell laptop. My belief was that same as Bill's - a tablet was something that looked and acted very different from what Apple had just made, and I thought its only market was people who worshiped at the alter of Apple. I ignored the sleek size, the thriving app ecosystem, the unprecedented battery life, the well placed price point, and the huge attention to detail in the touch interface.  I focused on the sub par weight and lack of camera and wrote it off.  A year later, I had relented (repented?), and had both an iPhone and an iPad 2 in my possession, and have not looked back.

Fast forward to today, and the iPad is to tablets as Kleenex is to facial tissues. No other single model of tablet comes close to Apple's total iPad sales. Turns out, we didn't need to run Windows after all to have an awesome computing experience. A fact emphasized by the fact that I develop software for the Microsoft platform, and my positive iOS experiences have led me to purchase 2 Macs. (Both refurb - Macs are still horribly overpriced retail!) And this is Microsoft's fears from 1995 come true - when they battled Netscape it was because the web threatened the dominance of Windows. I use FireFox or mobile Safari to browse the web. I'm always within reach of an Apple device. I'm not Windows free due to my profession, but I don't have the attachment I once did. Except, as a .NET developer.  I would love to write more mobile software. Enter Surface...

There are tons of Windows tablets, but Surface is the only one anyone might be able to identify by name, and you can't even buy it yet. It's nice looking. Actually, it's beautiful.  It runs Windows (RT though, not full Windows but they hope you won't notice). And it's coming out with Windows 8, just in time for Christmas shoppers. There's only one problem - how will they get anyone to care? Everything that isn't an iPad is the Kerry/Romney of the tablet world - the only real thing going for it is that it's not the other guy.

Microsoft's been late to the market before, but they've done it better. When C# showed up, Java had a choke-hold on development innovation. When SQL Server showed up, people were still forking over countless millions to Oracle and legions of highly specialized DBAs. The XBox has dethroned Sony for many hardcore gamers. But Microsoft has had it's share of struggles too. The Zune, and Windows Phones the most obvious two examples.

Microsoft is a multi-billion dollar international powerhouse, but their success in the consumer market has been with only two main product lines.  Windows and XBox.  If you insist on counting Office (which I don't as a consumer product), you might graciously give them 3.  Microsoft's success has overwhelming been in the commercial market, and that was largely due to their Windows monopoly.  XBox is really their only product where they've fought their way up from nothing in the consumer space.

And that's the issue that Microsoft has to answer or else it's about to cost them a billion dollars in sales. What about the Surface will compel people to buy it? I'm a Microsoft platform developer and I don't even know. And even if they get a customer base, what will make them love it and evangelize it and upgrade to the next version rather than switching to Apple or Google? The pricing has been announced, and sadly it's no different than the iPad. As pictured, it's $599. At that price, why wouldn't I buy a real iPad?  Or, for less, get an iPad-mini?  Or is this meant to be a commercial product, in which case I have to ask why sell it in powder blue and hot pink?

Windows and Office are no longer the killer apps they once were, but that seems to still be the only strategy Microsoft has for selling this thing. Time will tell, but from what I can tell there are only 4 real contenders for the tablet market - Amazon's Fire, Google's Nexus, Apple's iPad, and Microsoft is hoping its Surface offering will be in the running. I don't like betting against Microsoft, but the deck's stacked against them this time. Did they learn anything from the Zune?  XBox?  Time will tell.