Everyone is talking about yesterday’s Surface announcement from Microsoft. If you missed it, Microsoft announced two tablet models of their own, plus two smart covers. What’s notable about the announcement is that this marks the first time Microsoft will design, build, and ship its own computers. Previously, they have exclusively relied on their hardware partners for this, so it’s a big shift.
I wanted to collect a few thoughts I had about the device and the announcement, because I’m opinionated by nature. Also, a few folks have asked for my thoughts, and since I used to work at Microsoft in Windows Live group (we made Messaging, Mail, Calendar, etc for the device), perhaps my opinion means something more (or less).
First though, full disclosure. As mentioned, I used to work at Microsoft and was fairly close to a lot of the Windows 8 stuff. That said, I’m not privy to any confidential information, and don’t know anything more than was publicly announced. Also, it’s important to know that we’re a multi-platform house here at the Nichols household. We’ve got two Macs (and will buy another this summer), plenty of PCs, a couple of iPads, an iPhone, a Windows Phone, and various other devices. We don’t discriminate against anybody here, except maybe Android, although I’m supposed to be getting an Android handset at some point.
Anyways, on to the meat of it. This is a long read, so fair warning.
The devices that were announced yesterday, the Surface and Surface Pro, are reasonably competitive with the iPad and many Android tablets in terms of physical size. According to the spec sheet, they come in at around 1.5 pounds and 2 pounds respectively, compared to the iPad at just under 1.5 pounds. That’s respectable, and good to see that Microsoft has been able to engineer such a thin and light device. There’s a lot to like in that.
The Surface and Surface Pro are also fairly attractive devices. They look a lot like many Android tablets, which I suppose is a good thing, although it’s not clear how distinct they are from other tablets. The covers (more on those below) come in four colors, which is great, except the colors are kind of ugly in my opinion. All in all, a decent effort on the design side.
As is consistent with past Microsoft announcements, these are 16:9 widescreen devices. I think this is a tremendous mistake. Microsoft is excited about 16:9 because it gives them the opportunity to provide a better multitasking experience. However, 16:9 tablets miss the mark because they are uncomfortable to hold, especially in portrait mode.
Try this experiment: find a 16:9 tablet (lots of Android tablets are 16:9) and hold it in portrait mode for an hour, as if you were reading a book. Chances are you’ll notice two things. First, your hands are likely holding on to the end of the device that’s closest to you, as this is the most natural and stable position to both hold the device and reach the keyboard. Second, the device feels top heavy and uncomfortable. I’ve tried this with lots of different 16:9 devices, and they are all this way. I don’t expect the Surface to be any different.
Why is this important? I don’t know about you, but I use my iPad in portrait mode all the time. As you may know, the iPad is not a 16:9 device – it’s close to 4:3 (but not exactly). It’s a device that’s meant to be held in any orientation. Apple’s own developer documentation even says as much. I routinely use mine in portrait mode when I’m reading a book or reading sheet music on my piano.
Not everyone shares my opinion, and that’s okay. For me, at least, widescreen is for TVs, laptops, and monitors, not for tablets. It’s unfortunate that Microsoft has built a product and a platform that doesn’t recognize this, although I guess the same could be said the other way for Apple.
The smart cover was easily the most innovative thing shown yesterday. Clearly the tech press agreed, as it was the only moment that anyone cheered. If you missed it, Microsoft announced two covers that feature keyboards and trackpads on the back side. One is a touch keyboard that just has pictures of the keys on the cover, and the other has actual keys for touch typists.
I think the cover is incredibly smart and a great way for Microsoft to differentiate itself. It sets a clear example for other OEMs on the kinds of things that they need to do to be successful. It looks very slick.
At the event yesterday, nobody was able to use the covers. The devices with covers attached were all off, and the covers that were available to touch weren’t plugged into anything. What this tells me is that there is a problem with the cover, and Microsoft is hiding that, and probably wisely so. However, if the cover, which is arguably the most innovative and unique feature of your announcement, doesn’t work, why bother doing the announcement? I have more specific thoughts on the presentation below, but the way they handled this yesterday is baffling to me.
It’s easy to surmise that the cover is so buggy as to be mostly useless, and I suspect that’s probably not far from the truth. Microsoft has time to fix it though, so let’s hope they do.
Any discussion about cost (and availability) was absent from yesterday’s presentation, aside from the statement that cost would be “competitive”. I think that not presenting this was a huge mistake. Let me tell you what I think is really happening.
The plain truth of the matter is that Surface won’t be able to match the iPad on cost, unless they sell it at a loss. The new iPad costs about $375, give or take, which is quite frankly amazing given everything that goes into it. Apple is able to do this because they have a huge amount of control over the manufacturing process and logistics that go into building the device. Besides dominating much of the supply for the raw parts that go into their device, Apple has also been able to negotiate steep parts discounts that other manufacturers can’t match.
The effect that a good supply chain has is evident when you look at a device like the Kindle Fire. The Kindle Fire is sold at a loss to Amazon at a cost of around $210, and it’s arguably a very cheap device. When you consider that the Surface is (presumably) made from premium parts, it’s hard to imagine the cost being anywhere near $375. There’s no evidence to suggest that Microsoft will be able to do better.
My bet is the raw cost of the Surface exceeds the retail price of the iPad. This puts Microsoft in the awkward position of either having to sell their device at a loss, or having to sell it a higher price point and convincing consumers to buy. Neither is an enviable position given how far behind they are in terms of market and mind share. Microsoft is surely very well aware of this, and I’d be willing to be that this is the reason that they haven’t announced pricing. My expectation is that they are trying to work on bringing the manufacturing cost down, and that they will ultimately ship the device at a loss in order to win share.
Regardless of the situation, it’s really unfortunate that the price point wasn’t discussed yesterday, as that’s such a huge part of the story. Think about the Fire again for a minute – the Fire’s main selling point is that it’s cheaper than the iPad. If the Surface’s main story is that it costs the same as an iPad, why would anyone buy a Surface when they could just buy an iPad? Sure, Microsoft could wage a long and costly ad campaign to convince people that Windows 8 is better than the iPad, but for reasons I’ll get into later I suspect that’s a losing battle.
How then will Microsoft position the Surface? The only strong play I can see is to position it as a premium product at around a $1,000 price point to compete with ultrabooks and the low-end MacBook Airs. That might work for the Pro version, but I’m not sure that strategy fits with the regular version of the Surface.
Maybe Microsoft will surprise everyone and the Surface will be cheaper than the iPad. That would be something. But the truth is nobody knows, because Microsoft said nothing yesterday. Instead we’re left to speculate.
Device Convergence and Windows 8
Microsoft and Apple have taken up two different strategic positions in the Great Tablet Wars. Microsoft feels that one device and one operating system should be able to handle all possible tasks that a user needs. That is, Windows 8 on a desktop, laptop, tablet, and maybe one day a phone (if Gizmodo is to be believed). For Microsoft, a crucially important feature is being able to run Excel on the same machine as Angry Birds and Fruit Ninja.
On the other hand, Apple believes that each device serves a particular purpose, and although some feature crossover is important (see OS X Lion), each device is distinct. The iPad is not just a big iPhone; it’s a separate device with separate use cases. It’s the device you go to when you’re sitting on the crapper or watching TV or just need to take couple of notes. It’s not the device you go to when you want to write this blog post. For that, you use a computer with a keyboard, that’s faster, has a bigger screen, and can in general do more.
Who’s right? They both are, to some extent. I can certainly envision using a single Windows 8 device as a laptop and tablet, which is effectively what the Surface is. All of the things that I want to do are certainly possible, and assuming all the apps are there, the experience should be reasonable. But the thing is, once you’ve experienced the other way, where each device is purpose-built for each task, the single device approach seems silly.
Let me give you a personal example. I bought my iPad about a month before I bought my MacBook Air. When I bought the Air, I considered selling my iPad, believing that the Air could serve both purposes. I also considered not buying the Air and just doing everything on the iPad. Certainly cost was a factor, but like a lot of people, my computers are the center of my professional life, and it’s important to have the right tools for the job.
I’ve had them both for a while now, and I use both more than ever. The iPad is the device I grab from the top of my dresser first thing in the morning. It’s the device that I sit in front of the TV with, and what I use for sheet music when I play the piano. But I would never envision writing long emails on it, or taking hours worth of notes on it, or writing code on it. That’s what the Air is for, and for the even heavier tasks, that’s what the other Mac and my big beefy Windows tower are for. Is there overlap? Sure. But over time I’ve come to appreciate the differences that each device offers.
The statement that Microsoft is making with the Surface and with Windows 8 is that I don’t need to compromise, and I can just hook up the soft keyboard to type, or fire up Visual Studio to code. But that isn’t how reality works. For one device to satisfy all of my needs, it would need to be simultaneously be fast at all costs, have a keyboard, not have a keyboard, be small, be large, have a huge amount of storage, be as cheap as possible, run Windows, run Mac OS X, run Linux, and so on.
There is no such thing as a “no compromise” device or system – all devices are compromises. There are four computers on my desk (and another couple on the other desk) right now because all devices are compromises. It is not possible to make one device work for every one in every situation, and even if it were, it would cost so much that nobody could afford it.
All of this is why I really don’t understand Windows 8, and I worked on it. The vision was great, but the execution isn’t. I used to think that the poor execution was due to some factor at Microsoft, but more and more I’m starting to think that Microsoft is trying to solve an inherently intractable problem. I think the problem really stems from the top and Ballmer’s “ideas matter” mantra. Sorry, Mr. Ballmer – ideas matter, but not as much as execution does. The best idea is worthless without perfect execution.
This brings me to the Surface’s competition. Microsoft thinks they are competing against Apple. They’re really competing against Google and Android. Let me explain why.
Apple builds premium products for people that don’t want to screw around. Don’t have time to fix your computer? Buy a Mac. Buying a tablet for your mom who can barely use a computer? Buy an iPad. Willing to pay a premium for better quality hardware that will last? Buy a Mac. Need your computer to run and do everything? Buy a Mac, install Windows + VMWare Fusion or Parallels on it, and enjoy using the best of what OS X, Windows, and *nix have to offer. Apple’s value proposition is clear.
Google’s Android vendors build products for a different crowd. Like tinkering with your device? Get an Android tablet. Don’t want to spend a lot of money? Get an Android tablet. Want a broader selection of hardware that might fit your needs a bit better but isn’t as well tested? Get an Android tablet. Want to run a lot of software, more than you’re ever likely to need? Get an Android tablet, as the Android market is much larger than the Apple App Store. Like Apple, Google’s value proposition is also clear.
Where does Windows 8 fit into all of this? Does it have more in common with the Apple approach or the Google approach? Let’s see how Windows 8 matches up with the Apple value prop:
- Don’t have time to fix your computer? Anyone that’s ever had a Windows machine knows you have to fix it a lot, but at least Windows 8 has a reset option so you don’t have to flatten and reload all the time. You’ll still have to do things to a Windows 8 tablet that you’ll never have to do to an iPad though (anti-virus anyone?)
- Buying a tablet for your mom who can barely use a computer? HELL NO. The first time my mom uses a Windows 8 tablet and gets dumped into the classic desktop, it’s over. I’m not the only one that believes this.
- Willing to pay a premium for better quality hardware that will last? The Surface looks nice, but it’s a big unknown. Microsoft has been hit or miss with hardware in the past, to say nothing about the wide range of quality delivered by its OEMs.
- Need your computer to run and do everything? Sure you could build a Hackintosh, but the average user will not be able to do this. And *nix? Yeah, you can run Cygwin, but that’s spotty at best.
Sure doesn’t look to me like Windows 8 is a strong competitor against Apple’s strengths. How about Google and Android?
- Like tinkering with your device? Windows PCs are practically made to be tinkered with. How many of you geeks have built your own PC? I’ve built plenty over the years. Windows 8 continues the tradition that Windows has carried forward of being very customizable, but is in many respects better than Android as it’s a much slicker environment, harder to shoot yourself in the foot, etc.
- Don’t want to spend a lot of money? There’s going to be a Windows 8 tablet for you. One of the great strengths of Microsoft’s strategy is that OEMs are free to experiment and offer a variety of different hardware options, whereas with Apple you can have any color as long as it’s silver. This in turn means that prices are lower, which means you’ll be able to spend practically whatever you want on a Windows 8 tablet, much like you can do with Android.
- Want a broader selection of hardware that might fit your needs a bit better but isn’t as well tested? There are going to be lots of Windows 8 OEMs, and by extension, lots of hardware choices. You’ll have your pick of processors, video cards, storage, you name it, but unlike Android, Microsoft imposes pretty rigid controls on what OEMs can do with Windows 8, so while you’ll have choice, you’ll also have some assurance of quality. That’s a huge competitive advantage over Android.
- Want to run a lot of software, more than you’re ever likely to need? The Android market has a lot of software, but that’s nothing on what runs on Windows. Get a Windows 8 tablet and all of your Windows software + all of the new Metro apps will run on it. If you really want an Android app on it, go get BlueStacks and you can run all of your Android apps on Windows 8. Why would you buy an Android tablet then?
It sure seems to me like Windows 8 is in a much stronger competitive position against Android. It’s great to have goals like being #1 at something, but when you aren’t even a competitor in the tablet marketplace, you first have to beat everyone else before you can get to #1. Microsoft should focus on beating Android, and on emphasizing why Windows 8 is better than Android. What Microsoft has really built, after all, is a better Android.
I think Microsoft can build a very strong case for the Surface with consumers that would otherwise buy Android devices. It’s a great looking device, matches up well spec-wise with other Android tablets (modulo the cost, which remains to be seen), offers features those devices don’t have, and offers a much more solid operating system, in my opinion. Against Android, it’s a real winner, particularly since nobody besides Amazon has made a credible Android tablet.
But Microsoft can’t beat Apple with Windows 8, at least not yet. While you can go down the list above for Android and tick off the “advantage Windows 8″ box on each one, you can’t do that for Apple. Can Microsoft beat Apple at its own game? Maybe, but they’ll have to overcome an attitude issue (see Device Convergence above) and quality issues first. But maybe Microsoft doesn’t have to beat Apple. Maybe a two-horse race is enough? We’ll see.
Presentation and Timing
Finally I wanted to comment on the presentation yesterday. Specifically, the way in which the actual presentation went, and the timing of it. Let me first draw your attention to this:
Yikes. Earlier today I jokingly tweeted wondering if anyone at Microsoft actually knew how to give a presentation. Setting aside the glaring and obvious product issues in that video – the broken IE tabs, what’s likely a broken game experience while SteveSi hides the screen, the need to get a new, not broken device during the presentation – Sinofsky is just hilariously bad and flustered.
Demos often go bad, I get it. I’ve done enough demos over the years and had enough of them go bad. We all have. It’s about how you handle yourself when it happens, and Sinofsky just looks so unsure of himself. Maybe he was having a bad day or something, but it’s hard to take him and Microsoft seriously when he just falls apart. I’ve seen him do this sort of thing before. Why didn’t they get Jensen Harris or Chris Capposella to do the presentation? They’re great presenters and would have done fine.
And what about the timing of the presentation yesterday? Microsoft gave a few days advance notice to the press, which was strange, but then demoed a product with no release date, no price point, and no real ability for the press to get to know the device. To me, it actually feels like they rushed the presentation. The product was clearly not ready (see the video above), and that coupled with no price or availability information makes it feel like a rush job.
This might sound a little wild, but what Surface really feels like to me is a minimum viable product. It has all of the hallmarks of an MVP: a product that’s half finished, some press to get the word out, and barely enough information about what was announced. The official web site even has a signup form to collect email addresses:
This is a classic MVP strategy: create some buzz around a product that doesn’t exist yet, and collect email addresses from those that are interested. If you collect enough email addresses, make the product. Otherwise, don’t.
If Microsoft is truly approaching Surface as an MVP, then my hat is off to them, as that’s pretty ninja and very forward thinking of them. It’s exactly the strategy they should pursue. Sadly, I don’t think that’s the case, but I’d be very happy to be proven wrong.
This post is getting long, so I’ll wrap up. The Surface is an interesting idea, and I think Microsoft has something that will be a strong competitor against the Android tablets that are on the market. I don’t think they will be successful against Apple and the iPad with this. Yes, they’ll capture some market share, but not to the point where Apple no longer has a majority share. They are too far behind and haven’t built the right product to compete in this regard on any reasonable timescale.
Assuming the Surface isn’t a minimum viable product, Microsoft needs to be more forthcoming about the cost, availability, and battery life for the surface. These are important details and the entire presentation yesterday feels incomplete and amateurish without them. There aren’t a lot of people that have a lot of faith in Microsoft’s strategy at the moment, and being more forthcoming and transparent about this would certainly help buoy that.
Being from the Seattle area, I have a vested interest in Microsoft’s success. They are vitally important to the local economy, and many of my friends and colleagues either work at Microsoft or work for Microsoft in some capacity. I want them to be successful, and with a few tweaks to the strategy, I think the Surface and Windows 8 will be successful enough for Microsoft to book a win.
What do you think?
Welcome!My name is Jack Nichols. I'm an entrepreneur, professional software engineer, and all-around nice guy. This is my web site, full of random stuff that's on my mind. More