In Microsoft’s defense, we can see why they might have felt this way. After all the PC market was becoming extremely stale. Dell, Gateway, HP and other major Microsoft partners did not seem to be capable of building exciting or working systems. People were turning to other options for their computer love including leaving the PC fold completely. Steve Ballmer watched as Apple built an empire around a device and service combo, the iPhone and iTunes. It shocked him to see this bloom into even more of the same when the iPad hit the streets.
Sadly Ballmer (and Microsoft in general) simply did not have the imagination to build this type of company. With the notable exception of the Xbox almost all of Microsoft’s device endeavors have failed, and failed big. You have the Sidekick, The Kin, The Zune (and ZuneHD) and now we are seeing the crowning jewel of this; the Surface. In the simplest terms they do not know how to market a product to their real consumer base (a base they have built over 20+ years).
So now we have Microsoft looking to try and dig the Surface brand out of an almost $1.2Billion dollar hole with a new version of the Surface that could be even more confusing to consumers. Despite relatively poor sales of the original Surface Pro (and Pro2) and the confusing changes to the Surface RT line up Microsoft is back at the Surface.
In its next incarnation they are going with a 12-inch tablet that is thinner, lighter and even less user upgradable than the others. In other words they have built… a tablet version of the Air. You are going to end up with a $1200+ disposable device. For Microsoft’s customer base this is exactly what they do not want. They want to build their own systems, update them as needed, in other words they want flexibility. The Surface is not flexible, it is (to many people) a $1200+ iPad that is running Windows. This type of push from Microsoft is simply not going to work. Sadly we fully expect to see the Surface 3 fall down like many of Microsoft’s other projects.
No matter what group Microsoft tries to push the surface to it is probably not going to resonate well in the community. Even the initial coverage of the Surface Pro 3 is lukewarm. It looks like a solid piece of hardware, but it does not make sense in terms of price and usage. Microsoft does not have the pull to create a new market like they used to especially in the hardware/systems arena. They still can be a strong software (and services) company if they put their efforts back into this.
In our opinion, Microsoft needs to find out who they are, not based on their wants for a new revenue stream, but on their customer base. The must identify what has worked in the past and expand on that. If this means passing the baton on the Surface to a worthy partner, then that is what needs to be done so they can get back to what they are good at.
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