Is Surface Microsoft's last-gasp pitch to keep IT shops Windows-only?

Is Surface Microsoft's last-gasp pitch to keep IT shops Windows-only?

Summary: Forget consumers. Forget partners. Forget ISVs and the channel. When Microsoft top-dog Steve Ballmer walked on stage last week to introduce the company's Surface "tablets," he really spoke to one audience only: Windows-centric enterprise IT.

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It was a back-to-the-future moment last week at the Surface for Windows 8 introduction. Ballmer and company pitched a retro Microsoft IT dream straight from the from the 1990s: A heterogenous technology shop with Microsoft running on both server and client sides, on all form factors, from the data center to the holstered Windows phone. Surface and Windows 8's mobility APIs will offer IT management the chance to support a well-understood mobile platform, without contamination from Macintosh laptops, Apple iOS tablets and smartphones, and various flavors of Unix.

I was struck at the way Steven Sinofsky, president of the Windows and Windows Live division, at the introduction talked about connecting a Surface for Windows 8 Professional machine with a dock and external monitor — just the way most current Windows notebook users interact with their machines nowadays.

The apps that I’d be showing you, they look really great in the native resolution of the screen, the 1080 resolution. But if you want to unlock the highest possible resolutions that Ivy Bridge supports. Even higher resolutions that are possible on via HDMI out. We have DisplayPort. So now with DisplayPort, I can take this PC. I can docket and I basically have a full professional workstation with the power of a desktop PC.

I have one here that’s plugged in and synced up to the show monitor and this kind of a PC is powerful enough to run big applications. Applications like Photoshop, Autodesk, Solidworks, enterprise applications that require a TPM chip. In this case, I’m going to copy some higher-res photos on to the PC and edit them in Adobe’s Lightroom. So on copying on to the desktop and what you’ll see here, this is the five-second copy. That’s a whole gigabyte. That’s a whole gigabyte of pictures. They just copied in five seconds.

It's interesting that Microsoft talked about content-creation applications, software categories that are usually thought of by PC users as Mac strengths. The message here is that you really don't need a Mac, Surface Pro will be enough for anyone, even a Mac lover.

For more than five years, IT organizations have been fighting the wave of "consumerization" in the enterprise. This is the arrival of iPhones, iPads, Android devices and MacBooks that are being used by clients in the enterprise in contradiction of policy. Instead of directing information technology, the IT label in many organizations is called an "inhibitor of technology."

After speaking to a number of analysts about the trend at the 2007 Gartner Symposium/ITxpo, I wrote a post about this fear and loathing in IT shops, which was then just getting going. Van Baker, then a Gartner vice president, said keeping out such personal technology would be difficult, especially since they were coming in from all levels of a business.

"People are going to bring these things in, and IT is going to have to figure out how to deal with them. Especially when its a C-level exec who brings the thing in, who thinks its cool and wants to read his e-mail — IT will have to figure out how to make it work," Baker said.

He added that IT objected to Windows when it first arrived.

"Now, if we look at the list of technologies that IT has successfully stopped from coming into the enterprise — which has absolutely nothing on it — you realize this is a losing battle. You can't stop this stuff from coming in," he said.

That was 5 years ago. More recently, Forrester Research put out a fall 2011 report about Macintosh in the enterprise by David Johnson, titled: People Are Bringing Macs To Work — It’s Time To Repeal Prohibition: An Empowered, Laissez-Faire Approach Will Forestall Insurrection. Johnson described the increasing penetration of Macintosh in large and mid-size businesses, and how tension over consumerization is increasing between clients and IT professionals.

There is a correlation between innovative, productive company performance and personal freedom for personal computing choices. Savvy I&O pros should work to find ways to enable Macs for other high performers who wield influence. Those continuing to force prohibition risk being labeled as irrelevant at best and are holding back the competitive potential of the company’s employees.

Holding back innovations doesn't sound like a good place to be. But no doubt, some IT managers will believe that Surface may provide the key to turning back the clock. Surface appears to have enough of a tablet in it for the IT organization to be able to tell users wanting a mobile client — make that an iPad — that they can make do with Surface. And it's enough of a laptop that users can be put off buying a MacBook Air or MacBook Pro.

So they believe. So Steve Ballmer hopes.

By announcing the devices well in advance, Microsoft hopes to stop the market for the iPad and MacBook in the enterprise market. Many reports expect the Surface Pro to ship in the first quarter of 2013. My experience with such hardware and software releases as well as Microsoft's own history of promises and schedules lead me to expect a ship date perhaps a year from now. Or more.

Perhaps Microsoft's stalling strategy is working even now as evidenced in some press reports. I noted many reports described Surface in the present tense, as if there were models to buy, or about to enter the market. But there is no there there with Surface. Despite the "hands-on" reports, I understand no reporter at the release event was allowed to work with or even play with a Surface device. Touch, maybe.

ZDNet's Mobile News blogger James Kendrick points out that while he was impressed by the Surface event, Microsoft was being overly protective of the new platform.

It’s understandable that Microsoft is being careful with the impressions these early version tablets give the public. The approach is standard for not-yet-released hardware for some companies. The problem with that approach is it doesn’t speak very highly of what Microsoft feels about this new ground-breaking hardware.

At Marketing Land, editor Danny Sullivan described in hilarious detail how Microsoft minders prevented him from checking hardware details and chided him on the effort.

After asking repeatedly if I could hold one — I felt like a seven-year-old, “please can I hold it, please can I try, would you mind if I try” — one of the Microsoft guys gave me a shot. I brought up the Start screen by hitting the Windows button on the front of the tablet, hit Desktop to get to the Windows 8 desktop, did a long press guessing that would bring up the Screen Resolution setting and it did — at which point, the unit was literally jerked out of my hands.

Oh dear. Did I mention having a Windows Phone? Maybe I should have waved it around more. Anyway, I don’t think Microsoft guy number one quite knew what I was doing (you know, trying to actually use the damn computer the way I’d use a computer), so Microsoft guy number two didn’t catch on that by no means should I be allowed to hold one of these devices again. After more begging — “please can I hold it please please please can I hold it” — I got another maybe 10 seconds to repeat what I did before. That got the unit jerked away again, with a “Nice trick” remark.

There's nothing like hands-on experience, but Sullivan says there was none. And the thin, keyboard technology of the Surface units was also unavailable for examination, Sullivan continued.

To me, putting a unit in your lap and pretend typing on it isn’t hands-on. Especially with this keyboard, that tells you nothing. I pretend typed on it myself at two different stations. That didn’t give me any sense of how typing on it really works, any more than playing pretend airplane when I was a kid actually let me fly through the sky.

Listen, the biggest issue for IT in 2012 and over the next few years will be mobile device management. And that ain't about Surface.

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Topics: Operating Systems, Apple, CXO, Hardware, Laptops, Microsoft, Mobility, Software, Windows

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203 comments
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  • 3dfx

    The Surface makes me think of 3dfx. Way back they were king. They produced chips and OEM's made those into cards. It was all nice and good, one hand washing the other. Then 3dfx stabbed their partners in the back and started making their own cards. The OEM's responded by embracing the fledgling nVidia, Ati, and so on. In the end 3dfx dug their own grave and were gobbled up by nVidia never to be seen no more.

    The Surface makes me think of that. Will the OEM's who have suddenly been given the short-end of the stick respond by moving to alternatives? Android, Linux, both of those are viable for "Mom and Pop." Windows' strength is its legacy support, Windows RT doesn't even have that - what was the point of going with it again? Combined no-backwards-compatibility and stabbing OEM's in the back may make Microsoft rue the day they decided to enter into the computer/tablet market themselves.
    BP314
    • Hold on there.

      Microsoft is hardly giving OEMs the short end of the stick now. It's taking matters into it's own hands to make sure that Windows 8 and Windows 8 RT are viewed as great. It's saying the buck stops here and basically telling OEMs to produce something quality if they want to continue to compete.
      Alleycat5
      • Except OEMs must pay for Windows 8, whereas MS does not.

        So in a market with razor thin margins, MS deals itself an advantage. The only way for OEMs to compete with that is for them [i]also[/i] not to pay for the OS.

        Hmm, where would OEMs get a free tablet OS...?
        Zogg
      • How do you know that?

        How do you know that a separate MS hardware division wouldn't have to pay for the licenses?

        It's not uncommon, (especially for accounting practices) for divisions to "buy" from other divisions.

        But if what you say is true, then it's really not all that different then Apple - they give all their own stores all the Mac's, iPhones, iPads, software, accessories, ect for free, while their competitors (Best Buy, Target, Walmart)have to float a loan to purchase the units they want to sell.

        Doesn't sound all too fair to me, especially if that would mmake their margins razor thin compared to Apple stores, as they are effectively getting it "at cost"
        William Farrel
      • Zogg: that is a lot of free developers

        [i]Except OEMs must pay for Windows 8, whereas MS does not.[/i]

        Where did Microsoft find so many developers willing to write Windows 8 for free?
        toddbottom3
        • ANDROID

          he spoke of android!
          to pay for windows that has the android with an ecosystem of applications for greater touch
          Henrique Dourado
      • MS is learning from Apple

        Apple controls both the OS and the hardware. If MS is going to compete this is a logical step. It's the smartest move they've (MS) in years.
        cuulblu
      • Congratulations on completely misunderstanding the point, toddy.

        The point is that MS doesn't need to pay itself to put Win8 on a tablet. Geez, even William Farrel understood that much!
        Zogg
      • Again, please provide the source for your information

        [i]The point is that MS doesn't need to pay itself to put Win8 on a tablet[/i]

        Again, where is MS getting all these coders that are willing to work without pay? You are the one who is stating that MS doesn't need to pay its own employees to create Windows 8.
        toddbottom3
      • It's pointless trying to converse with you, toddy.

        [quote]You are the one who is stating that MS doesn't need to pay its own employees to create Windows 8.[/quote]
        I said no such thing. Please learn to read properly before attempting to reply again.
        Zogg
      • More importantly, Microsoft is taking the risk by bringing out ...

        ... a reference platform for an untested product. This puts the risk on Microsoft's back. More likely than not, Microsoft OEM's will not be cut-out forever.
        M Wagner
      • Zogg: backup up your statement

        You wrote this:
        [i]So in a market with razor thin margins, MS deals itself an advantage.[/i]

        With Surface, MS is competing in a market with razor thin margins. YOU said this. Let's, for the sake of argument, pretend that before the cost of the OS, the average profit margin on an MS OS powered tablet is $100 and that the OS license cost is $85.

        If the OEM sells 100 tablets, they pay MS $8,500 and make $1,500 profit. If the OEM sells 1 million tablets, they pay MS $85 million and make $15 million profit.

        Let's say it cost MS $100 million to write Windows 8 tablet specific code (and I'm being VERY generous, it likely cost substantially more). If MS sells 100 tablets, they pay $100 million for Windows 8 and lose $99,990,000. If MS sells 1 million tablets, they pay $100 million for Windows 8 and make $0 profit.

        [i]MS deals itself an advantage[/i]

        You are so naive.
        toddbottom3
      • @superZealot: MS has a serious cost advantage over OEMs.

        You are the only one to claim MS engineers work for free. While the profit margins on PC hardware have been razor thin for 1.5 to 2 decades, the MS tax on software has, until very recently, been some of the highest in the industry. MS has the extremely high margins to work with on software to help balance out the cost of hardware.

        Note: I have no issue with this and think it will greatly improve the dismal UE of Windows past.
        Bruizer
      • @Zogg

        [b]So in a market with razor thin margins, MS deals itself an advantage.[/b]

        How? I'm pretty sure for accounting reasons if nothing else the hardware department has to pay the OS Software department for a license of the OS in each tablet they make.[b]

        The only way for OEMs to compete with that is for them also not to pay for the OS.[/b]

        AND to make a tablet that is not sucky... granted we do not know how good or suck the Surface tablet is but IMHO Microsoft is showing OEMs what they want to see as far as tablet hardware. Given what little real information we have I'd say the Surface Tablet is worth a look... and I'm saying that as an Android user and an iOS user.[b]

        Hmm, where would OEMs get a free tablet OS...?[/b]

        Yeah I wonder... and some of them already make tablets based off of that OS.
        NonFanboy
        • Ah, no.

          "I'm pretty sure for accounting reasons if nothing else the hardware department has to pay the OS Software department for a license of the OS in each tablet they make."

          I find this wildly unlikely. You don't think Apple charges itself for using iOS on the iPad, do you?

          When Microsoft issues a license, it's creating money out of thin air. You don't REALLY think they're selling the worthless license back to themselves and incurring an expense, do you?
          William Carr
      • Are you claiming that the Surface dept must be profitable immediately?

        [quote]@NonFanboy How? I'm pretty sure for accounting reasons if nothing else the hardware department has to pay the OS Software department for a license of the OS in each tablet they make.[/quote]So if the Surface department made a loss [i]on paper[/i], are you saying that the other MS departments wouldn't pick up the tab? Because I remember the Xbox making [b]huge[/b] losses for [i]years[/i].
        Zogg
      • MS pays for personal use

        @Zogg
        Somewhere, deep within the corporate ledger, there is a line item, several, that denotes the cost of a copy of Win8 and MSO that was installed on a Surface device. That is corporate finance 101.
        rhonin
      • @Zogg

        MS deals itself an advantage? Not so sure about that.

        What you seem to be forgetting is some pretty darn simple economics here. If MS doesn't attach a price for the Windows 8 OS to the Surface price tag, than MS is then not getting paid for Windows 8 every time an MS Surface sells with Windows 8 on it. Lets say the Surface is hugely popular and sells many millions of copies. Who was the brain wave who walked into some MS executive office and said, "I have a great idea that results in Microsoft not getting paid for several dozen million copies of Windows 8 over the next couple of years" ?

        who would do that? And why? Its an idiot idea, and completely unnecessary.

        This whole dumbo notion that because Microsoft owns Windows they can afford to give away several millions of copies is a non starter. Do you honestly think that MS just enters into plans where they are about to just give away copies of Windows 8 for free?

        Wow. Think about it chum. Its not going to happen. The cost of Windows 8 is built into Surface and the consumer will pay. Believe it.

        JUST ADDED:
        I thought "loss leader". It does not work in this kind of case. Suppose MS charges only $45 per copy of Windows 8. Suppose Microsoft only sells 2 million Surface units over 2 years. Its still 90 million worth of loss leader. Too much. Its not that MS couldn't handle that loss, its just that its still too much of a direct loss without a good reason. And by the way, $45 is in the range of what MS would charge historically.
        Cayble
      • MS only seems to care about the overall bottom line.

        MS showed with the XBox that its internal departments don't have to stand on their own two feet: Losses which would sink other companies are absorbed by other profits elsewhere. And I can totally imagine MS giving Win8 away at first, if it means its new Surface tablets are more competitively priced. Think "loss leader"... ;-).
        Zogg
      • Now there's choice

        You know, Microsoft has to thank Apple's walled garden for Windows, because it made them the only game in town for OEMs. That's not the case with mobile. They have Android, and Android is years ahead Microsoft.
        YouAreSuperWrong