Microsoft Finally "Surfaces" In The Tablet Market

Without announcing prices or release dates, Microsoft recently introduced a pair of tablets named Surface. Leaving the analysis of the technical details of each tablet to those who attended the announcement, the most striking element of this announcement to me is the dramatic departure from Microsoft's 37 year old tradition of avoiding direct competition with their hardware partners. Considering Apple's success, one might argue a Microsoft tablet is long overdue but too late to have an impact.

Microsoft Surface
http://www.microsoft.com/surface/en/us/default.aspx

In reality and despite the substantial lead forged by Apple with the iPad, a huge untapped market for tablets exists. As even more functionality is added, the prospects for overtaking the low end netbooks and notebooks market increase. Besides, everything new today becomes dated within 18 months, so the upgrade market will always loom on the horizon.

Microsoft's entry will up the ante in the tablet market by jump-starting the competition among all its OEMs. Many have not entered the market, much less considered it viable, because Microsoft did not exhibit any serious interest in tablets. Microsoft's Surface will alter that perception.

The real question remains whether Microsoft can manage the change in mindset this break in tradition will require.

For most of its existence, Microsoft has dominated the operating system and office applications market, as well as the network server market after the demise of Novell's NetWare. Microsoft is accustomed to controlling markets, not competing for them. The transition will not be easy.

It isn't as if Microsoft has never ventured into the hardware arena. The success of Xbox demonstrates what Microsoft can achieve when they fully dedicate themselves to something new, even as radical as moving from software to hardware. The Xbox set new standards for game consoles upon its release, helping it to immediately capture market share. Yet, because the other major players were already well entrenched with loyal user bases, none were driven out of business by Microsoft's market entry. By contrast, the Zune exemplifies how quickly Microsoft will abandon a product that does not quickly live up to its expectations. While loaded with features, the Zune was merely another clone in an already saturated market that saw many competitors come and go. The Surface shares characteristics of both the Xbox and the Zune. Only time will reveal which approach the Surface mimics.

How can Microsoft pull it off?

Ultimately, Microsoft must be willing to truly compete. They cannot expect to dominate or control the market. They cannot keep features or functionality in reserve for their product in an effort to give it an upper hand. Doing so will alienate their hardware partners. Such action could threaten their operating systems products now that Linux is becoming more of a viable alternative, not to mention the potential impact of regulatory injunctions due to anti-competitive practices. Similarly, Microsoft cannot simply acquire and crush the competition as they have done in the software market over the years, akin to robbing Peter to pay Paul. No, Microsoft is going to have to learn how to truly compete on a level playing field for once.

That will be the great factor in whether the Surface tablet rises to the challenge or sinks under its own weight.
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