Microsoft’s Future?

Windows 8 is battling to get traction. And it’s not surprising. Microsoft is a bit behind the curve of Blackberry’s catastrophic decline, but the underlying causes are the same.

I remain unconvinced of touch screens for the desktop. On a recent plane trip, I tried a game on the entertainment system that used touch, and reaching the distance comfortable for viewing the screen was uncomfortable after a while, and touching the screen obscures your vision of the detail in a way that using a touch pad or mouse doesn’t.

Just because tablets are outselling desktops it doesn’t mean desktops should work like tablets. In some parts of the world bicycles outsell cars: should we replace the steering wheel by handlebars?

Microsoft is in an unenviable position. When you hold 95% of a market and it tips away from you, what do you do? Try to tip it back, or go the new direction and lose your status as a leader? Think US auto makers when the Japanese first started to make inroads. They’ve never recovered.

British-style interior

US-style interior

British-style exterior

US-style exterior

At the time, I wondered why the US car manufacturers did not simply adopt their own European designs, some of which were quite good, to US conditions – with minimal changes. For example, putting them through additional ruggedness testing for higher distances and worse roads typical of US driving would really have been enough. To the extent that they tried this, they made the wrong changes. Instead of focussing on reliability, they changed the exteriors to look more American (fatter) and interiors so they looked like folded cardboard, in keeping with domestic designs. The Japanese, meanwhile, forged ahead, keeping their designs consistent across all markets and working on reliability – useful in all markets.

Source: WikiPedia (retrieved 5 July 2013: RIM=Blackberry)

So what is Microsoft to do? Their position is inenviable. Almost anything they do is going to be wrong. If they break away from Windows compatibility in mobile devices, they have no edge to grab attention from the dominant players, Android and iOS. Ask Blackberry how well it works to be late in a market that you used to dominate, then let others redefine the user experience before you end up playing catch up. If they stick with Windows as their starting point, no one wants their devices – except hard-core fans. I tried playing with Microsoft’s Surface range on a recent overseas trip, where I finally found some set up for demo in a shop. They keyboard covers are not brilliant to type on, and one I tried was unreliable in its connection to the device. Putting them on a counter-top to demo illustrates exactly the point I’ve made earlier, that it’s a portable device that you can only use comfortably in a fixed environment – a laptop you can’t use on your lap. If an iPad or Android tablet is set up for demo, you naturally pick it up – the way you would usually use it. I saw no one pick up a Surface and if you did, the keyboard cover and kickstand arrangement would make it awkward to hold.

Apple had it relatively easy. At the time they launched the iPod, the start of their current trajectory, the Mac wasn’t doing particularly well, so launching into a whole new niche that had the potential to leave the Mac behind wasn’t a huge risk. The fact that the iPad ultimately has had the momentum to outsell the Mac by a huge margin wasn’t planned, but it also wasn’t hindered by a desire to bring along the Mac base. That indicates where Microsoft is going wrong: they are obsessed with bringing their base along with any major new platform. As long as Windows dominates the desktop, you can see why. But the desktop is fast shrinking to a minority market – even if it remains large in absolute terms.

The real paradigm shift that could eventually be the killer blow is the shift from corporate-defined equipment purchase to consumer-defined choice. Apple failed in the business market not because the IBM PC was superior, but because business buyers wanted to buy from a trusted source. IBM remains one of the most trusted players because they look after their customers – no one ever got fired for buying IBM, as the saying goes. Microsoft rode in on IBM’s coattails. The problem is, in the consumer space, that sort of preference doesn’t apply, and now that devices have become so cheap that anyone (on a salary) can afford one, they have the same purchase status as buying a pen of a watch. With that paradigm shift, Blackberry and Microsoft, to survive, have to appeal directly to the consumer not to the corporate buyer.

Microsoft has demonstrated that capability to some extent with Xbox, and Blackberry with selling to consumers in lower-income countries on the basis of providing cheap Internet access – but both have yet to show that they can leverage those successes in the broader consumer space. As long as they primarily see themselves as owning the corporate space in their respective segments, they will have a block against shifting to the consumer space. And the fear of losing their major advantage over outsiders in the corporate space further exacerbates that block.

Will Microsoft Surface Sink?

In the wake of complaints that Microsoft didn’t give their hardware partners sufficient notice of their Surface announcement, it seems Ballmer thinks he can get close to Apple’s success by copying the jerk side of the Jobs persona. Nice try, but there was more to Jobs than that. There’s also the perfectionism, the sense of style and the ability to get the best out of people.

Absent all that, why announce a product with so little detail? The biggest effect this is likely to have is chilling prospects of aggressive hardware development for Windows 8. Anyone partway through a design will be strongly tempted to go Android instead, with the threat of such a big player invading their space. An example of this effect: Intel’s IA64 (Itanium). IA64 never delivered in a big way, yet it essentially killed off development of future generation MIPS processors for the high performance market, and killed both the HP PA-RISC processor and the Alpha (by then also owned by HP, but for practical purposes killed by Compaq, who bought DEC and drank the Itanium Kool-Aid).

I don’t understand why the media have been so conned into reporting this as the product that will knock down the iPad. That story has been done so often it’s become ridiculous. The only thing Microsoft adds to the game is some hardware innovation that no one really wants. We have at this stage no data on some rather fundamental details like when it will ship, performance, battery life and what communications it supports besides WiFi. To add an edge to the bizarreness of the whole thing, the case is made with a technology called “VapourMg”. You can just imagine the jokes that will provoke around Microsoft announcing vapourware.

The big thing missing here is how Microsoft will tackle Apple’s massive lead in free and low-cost apps targeting this market. And also Apple’s massive lead in a customer base in hundreds of millions who’ve entrusted their credit card details to a 1-click order process. The x86 version will run standard Windows software and dropping the price on those will be a huge risk when Microsoft and partners are dependent on a much higher pricing model on desktops, and the cheaper model with an ARM processor will require recompiles at very least, and it will look very odd if Microsoft has two very similar looking options with radically different pricing policies on apps. The most likely scenario is that the two will have completely different software models, adding confusion to the market. It’s not just a matter of choosing based on speed and screen resolution; if trading up to the faster model means replacing all your software, the two devices might as well be different brands.

What they still don’t get about the Jobs story is the big breakthroughs happen when you don’t listen to your customers. Arrogant though that sounds, customers used to an old paradigm aren’t the best people to ask about game-changing ideas. I bet this thing was designed based on focus groups who said, “If only we could get a tablet that worked just like a desktop machine.” Guess what? The same people in those focus groups won’t buy one, any more than people in 1900, asked what an automobile should be like, and who said it should have a horse manure scoop, would buy one for that feature.

Tablets with keyboards have been done, and failed. Doing the keyboard better in some way (thinner, sort of possible to ignore because it’s a semi-rigid dust cover you can presumably fold out of the way) doesn’t fix that. I don’t see the value of a keyboard without tactile feedback (if they’ve achieved that with something a few mm thick, that would be a real first, and no one has mentioned that). It means you have to keep looking to type, negating the value of separating it from the touch screen.

Microsoft is trying to find a reason to use Windows in this new form factor, and it doesn’t add up. If Microsoft wants to get into hardware, they would do better making an Android tablet and adding value, as others like Samsung and Amazon have done. There really are only two operating system kernels in wide use (if you don’t count embedded systems where the market is highly fragmented): variants on UNIX (including Linux and Apple’s OS X and iOS), and variants on Windows. Maintaining your own kernel without some significant value you can add is nuts. The cost is huge for no perceptible benefit. Apple discovered that only after nearly going broke (I told them to use a UNIX kernel with a Mac outer layer in the late 1980s: there are times when they should listen).

Another missing detail: how well will it work away from a rigid surface (aka desktop)? If Microsoft have invented a notebook computer you can’t use on your lap top, that would be an interesting first.

In the meantime of course the rest of the field won’t stand still. Apple, Samsung and the rest of the Android crew have time to think up other ways to add value.

I’ve been wrong before but not as often as the journalists who’ve reported yet another iPad killer. Time will tell.