Microsoft’s great week

I have been down on my former employer for some time. A large part being that it was growing very tiring to see them operating from behind, time and time and time again. The list seemed long Google in Search, VMWare in virtualization. Apple in mobility (think iPhone and iPad), Amazon in the cloud and the list goes on.  But with the drum beat starting to ring louder and louder to the tune of Windows 8, Microsoft made a few announcements that made a lot of people’s heads turn and generated a fair amount of buzz in the industry.  Of course not without some questions and issues, but that is to be expected.  Starting Monday June 18th, with the Microsoft built Surface tablet in Los Angeles, at what looked like some very swanky digs.  The second occurred at the Windows Mobile Developers conference a few days later in San Francisco, where Windows Phone 8 software was unveiled. Let stake a look at what was announced.

There is no question that Microsoft blew it in the tablet space.  Starting with Steve Ballmer’s comments leading up to the release of Apple’s iPad, “They’ll never sell those things”. Since that time we have been waiting for Microsoft to do something, and it has taken a while, but they finally did this past Monday.  With the release of the Microsoft Surface Tablet, Microsoft is in.  What are the big features and changes? First it is a slick-looking device with color (Microsoft does have a history of being color blind).  It is very thin and slick-looking, with a cool flip stand attached to the device, so no accessory needed.  You will be able to stream video in a very comfortable manner.  Should be great for those with NetFlix accounts.  It also has a keyboard that acts as a cover and can be flipped over and connects with a magnet.  I will be honest on this point, I am not a fan of the keyboard.  It seems to be like Microsoft wants to make the tablet act more like a laptop, since that is a market they understand.  The market may prove me wrong on this one.  At the same time when my thirteen year old saw a picture of it he said, “What’s with the keyboard?”.  All this skepticism being said I will just add, the keyboard is there and there is no need to use it, but of you have to it is available.

A big question is what will the price point be for the Surface Tablet (some people do not like the name, but I actually do like it)?  This is a big one.  Can it be in the range of the Kindle Fire?  That would be cheap $199.  It’s a big “if” to me.  When I look at Kindle Fire I see a device that is a loss leader in order to get you to buy from Amazon.  Would Microsoft want to price something so low that they were not making any money on the Windows 8 OS?  Another area i t he first release appears to be on the ARM processor.  It has to be priced lower and I would argue much lower tan a iPad.  The WindowsRT that runs on arm needs to build early momentum, due to lack of backward compatibility and applications.  It will have to be a loss leader.  Otherwise interest could lesson before it even has had a chance to succeed. In the end I don’t expect a Kindle Fire price, but $299 or $399 would be competitive visa vi the iPad.

Finally a big change is that Microsoft will bypass its OEM channel to manufacture the device itself (actually someone like Flextronic’s will do this).  It’s a big decision, but it was something that I think had to be done.   Dating all the way back to the MP3 players versus iPod’s and actually earlier the Microsoft model was to make great software and have hardware partners create innovative devices.  Partners like Dell and HP have not delivered time and time again.  It’s not that they are bad but in terms of coming up with exciting and new form factors built with the Microsoft platform, they are batting below the Mendoza line (the Mendoza line is a batting average of .200, named after former Mariner Shortstop Mario Mendoza).  I pick on the two big guys Dell and HP, but the list is long and not limited to those two publicly traded companies.  I guess one last ask on this is to SteveB.  When you do an announcement like this could you act a little more excited?  It is kind of weird for me to ask that since you always used to seem so highly caffeinated back in the day, now you are looking, well I guess like the rest of us…old.

Windows Phone 8 provided additional excitement as Microsoft seemingly found parity from a look and feel, plus a technically great product.  No product to me has symbolized Microsoft ineptitude more than Windows Phone.  I sat in the same building with the Windows Phone product group for years listening to their great “wisdom” regarding mobile lifestyles and how pocket Office would help me work while watching my kids play soccer.  Of course then the goal was to kill RIM Blackberry.  With the move to a unified OS Microsoft is aiming to create a seamless user experience between devices.  The competitive landscape is harder, you have great iPhone’s and a lot of cool Android devices, though it seems like Samsung is starting to own the Android space (how the Samsung-Google relationship progresses should be interesting to follow, could be a blog post).

There are challenges for developers as there is no backward compatibility between applications on Windows Phone 7.5 and Windows 8.  This is problematic for developers and hardware manufacturers. Specifically Nokia, who almost seemed out of the loop and on the defensive with this announcement.  Windows Phone 8 will lay the foundation for the future.  And luckily (or unluckily) the current market share for Windows Phone is around 2%, so not many people and developers will be affected. The hope for developers is there will be a development environment will be similar across PC’s, tablet and phones.  Microsoft still has a very large development community it can leverage, though most developers these days develop to the web.

The final key will be release date , which we still do not know.  Part of the Microsoft strategy is to generate excitement in the market place and cause consumers to withhold or delay purchasing other devices until the release of Windows Phone 8.  It’s a very competitive market with companies like Apple and Samsung also releasing products now or in the very near future. The sooner the product is released and can be sold the better.  The loser here could be Nokia as they have spent a lot marketing the Nokia Lumia 900 and now it appears to be dead in the water until they can ship a Windows Phone8 device.

When you read this I think we can agree from the technology standpoint that Microsoft really has done a great job.  Windows 8 is a major release for the company because it really is Microsoft’s first true mobile OS.  The big question will be can Microsoft do the right sales and marketing job to position the Windows tablet for success.  Recent history does not bode well for Microsoft on this  front.  However this is a company that has backed itself into a corner and I would be surprised if it does not come out swing like Jake LaMotta (Raging Bull for you Robert Deniro fans).  In technology there is nothing better than a good fight, especially when it gets into the later rounds.  The bell has rung and the clock is ticking.  Microsoft is behind on points so a knockout round is needed.  It lacks the grace of Sugar Ray Robinson, so onward and lead with the chin and if you remain standing rage forward, because Jake never backed down from no one.

Good Night and Good Luck

Hans Hoffmann June 29, 2012

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