With Surface, does Microsoft trust the fate of Windows 8 to OEMs?

With Surface, does Microsoft trust the fate of Windows 8 to OEMs?

Summary: Microsoft is relying on Windows-powered tablets to make the touch features present in Windows 8 and Windows RT mainstream.


While I was watching Microsoft's Surface tablet announcement the other day, a question kept nagging at me throughout:

"Why is Microsoft choosing to enter the tablet market with its own hardware?"

It just didn't make sense.

Sure, Microsoft has dabbled with hardware such as mice and keyboards, and enjoyed considerable success with its Xbox hardware, but traditionally Microsoft is a software company and it leaves the hardware to OEMs and ODMs.

Microsoft Surface tablet (Gallery)

Image Gallery: Microsoft Surface tablet Image Gallery: Charge Image Gallery: Charge
Why the interest in hardware --- and in particular tablets --- all of a sudden?

Then last night the answer came to me.  The reason why Microsoft has decided to enter the tablet market is because it doesn't trust the fate of Windows 8 and Windows RT on tablets to the OEMs.

When it comes to desktops and notebooks, Microsoft knows that all of its hardware partners will pull their weight. They have to because this is where the bulk of their profits come from. OEMs like Dell, HP and Sony know how to build desktops and notebooks, and replacing Windows 7 with Windows 8 doesn't change things that much.

Same hardware, different operating system.

But tablets are a different matter. Apart from the likes of Apple, Amazon and, to a lesser extent, Samsung, tablets -- both Windows and Android -- have so far only offered hardware makers an almost sure-fire way to lose money.

While Microsoft would like us all to feel that tablets are a slam-dunk guaranteed success, plenty of OEMs have already been dealt a bloody nose by thinking they could take on the iPad with Android tablets. Losing money is one way to make OEMs and ODMs nervous, and my contacts within some of the world's largest OEMs are telling me that they're far from convinced that Windows 8, or Windows RT --- otherwise known as Windows on ARM --- will be any more successful against the iPad than Android was.

Nervous hardware makers mean that they are less likely to take chances with Windows 8 and Windows RT tablets. Microsoft would ideally like to see a whole slew of tablets hitting the market, incorporating fancy high-end features and fittings.

The reality will be conservative designs that err on the side of caution and put price above premium features.

Why doesn't Microsoft just allow the hardware makers to do what they want in the tablet market? It's because the success of Windows 8 and Windows RT is tied to the success of tablets because of the heavy emphasis on touch. Unless touch gets significant traction quickly there's a significant possibility that the new Metro user interface found in Windows 8, along with other trappings such as the Windows application store, could be in danger of being axed from the next incarnation of Windows.

Microsoft is relying on Windows-powered tablets to make the touch features present in Windows 8 and Windows RT mainstream.

If tablets fail, touch on Windows becomes essentially irrelevant. Microsoft knows this, and it has decided to take the fate of tablets out of the hands of the hardware makers and has come up with an x86 and an ARM tablet of its own. Not only will this mean that consumers are guaranteed that there will be high-quality tablets on the market, but it also shows the OEMs and ODMs that Microsoft is confident enough in tablets to bring its own to market.

This is why Microsoft has bought its own line of tablets to market, and this is why it decided to announce them so far ahead of the actual release of the tablet.

Will this gamble pay off? We'll have to wait and see to find out.

Image credit: CNET.


Topics: Windows, Hardware, Laptops, Microsoft, Mobility, Operating Systems, Software, Tablets

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  • Maybe the next move...

    Will be to acquire a hardware maker like Nokia or RIM with the manufacturing know how and distribution muscle to push these things out en mass while controlling both cost and quality.

    The idea seemed out of line a week ago but makes a lot of sense now because it would mean that MS could produce and market an entire line of Surface devices, tablets, Ultrabooks, phones and desktops without trying to cajole the likes of Samsung to split its attention between MS flagship products and Google flagship products and then just hoping they bring the MS vision of the product to market.
    widow maker
    • It makes no sense for Microsoft to become a hardware maker

      There are plenty of places to outsource these devices and, like Apple, Microsoft is big enough to call the shots.
      M Wagner
      • They're not manufacturing.

        Adrian's not saying that Microsoft is physically manufacturing these in Redmond, just that they secretly designed them and spec'd them out to be manufactured exclusively for Microsoft. Not exactly the same as building the factory & assembling them, but a big jump away from telling other makers, "Here's an operating system. Anybody want to buy it & put it in something?"
      • @kidtree . . .

        you are splitting straws. Apple does not manufacture its own hardware, either. It has other companies make the hardware on its behalf. In reality, MS will be doing nothing different to Apple.
  • With Surface, does Microsoft trust the fate of Windows 8 to OEMs?

    I am sure that Microsoft is rebranding these tablets and they are not manufacturing them. OEM's will use this table as a benchmark. I am sure that the OEM's will be just fine!
    • Rebranding is taking a product someone else designed.

      It's pretty clear that this is a pure Microsoft product. Which is both good news and bad news. While they look great and have some novel features, it doesn't mean they're easy or profitable to produce. Beyond that, it's also questionable if MS has the kind of supply-chain management expertise to drive sustainable margins.
      • There is no question that, MS can get the same supply-chain advantages

        that Apple enjoys from manufacturers and distributors. After all, MS is still the biggest software vendor out there, and they've been in the hardware business all along, especially with the XBox. "Expertise" is not the problem. Attaining the goods, at prices that will allow great profits, is the area to be concerned with, and, no doubt that, MS has the same kind of clout, or perhaps bigger clout than Apple. After all who wouldn't want to have a vendor that has 90+% of software and OS, and wants to enter the hardware arena with those products? Fact is that, the manufacturers will be more than happy to sell to MS and manufacture for them. It could bring in many times more business and sales than Apple could.
    • This took a year to design

      Any OEM whose gear doesn't stack up well against this has to do a design reset four months before launch. Otherwise people will not buy their tablet, and wait for the Microsoft tablet to come back in stock - which it won't. And besides throwing away their design investment it's probably not even possible to get a qualified platform in that short a time.

      The very idea of "design the software and hardware together" ought to scare the pants off of Windows PC OEMs because it's the thing they can't do with Microsoft software on tablets, PCs or laptops - only Microsoft can. They can, however, do that with Android and Linux so if it's that great an idea I guess they can find a way to use it.
  • Insightful, Adrian!

    much more interesting than your knee-jerk reaction yesterday. Totally agree that MS makes this move because it cannot trust oem on this. They would offer half-baked devices full of shovel-ware. MS cannot take that risk
    • "Then last night the answer came to me." = Readers told him en masse!

    • Yet you trust MS, with little history of hardware success

      The closet thing to Surface is the Zune, both products designed to restore relevance of a company being slammed by a competitor in a growing market.

      It was a disaster. Others may point to the XBox360, hardware so poor around 24% had warranty issues.

      Hardware has not been the issue behind MS's lack of success with tablets, it was their poor software offering. OEMs must be disorientated by this announcement, what's special about laptops/desktops?
      Richard Flude
  • BYOD

    OK, love it or hate it, IT administrators can tighten security, grant permissions on tablets issued to staff in their organizations if they go for MS tablets and if MS allows them to. It's even better if the tablet can dual-boot, one for work and one for home. If this happens, it will be a huge selling point for business customers.
  • AKH: you got this one right

    OEMs have proven that they can be profitable, and contribute to MS's profitability in the PC market. Everywhere else though, OEMs have failed Microsoft. MP3 players and tablets are 2 examples of this.

    I even agree with you on how important the tablet market is to the general success of Windows 8. Touch screen All-In-Ones are going to be a niche market and is not what Windows 8 was built for. Windows 8 will be judged based on the success of Windows 8 and Windows RT tablets. The hardware has to be right and MS is absolutely right not to leave this one in the hands of OEMs that have, historically, messed everything up.

    Is MS throwing its "partners" under the bus? Sure, in the same way that Apple threw the clone makers under the bus. Yet for some reason, that was viewed as "brilliant" instead of being characterized as "Apple is a horrible, untrustworthy company". MS is being brilliant here.
  • Nope

    Obviously Microsoft doesn't trust its partner OEMs.

    With good reason, too: They trusted Samsung to do the right thing with Windows Phone and look where it got them.
    • The Samsung Focus is a great phone

      I'm curious why you think Samsung mucked up WP7. Mine has worked like a charm for 18 months now. Other than a flakey battery (replaced gratis after 2 months), my daughter's worked well for a year, until she dropped it on a concrete floor (while standing on a ladder). The screen cracked horribly (it looks like a car windshield after a hail storm), but it still works well.
      • Kind of agree...

        I own a Samsung Focus S & love it as well, but... the reality is that Samsung is pretty much slapping Windows Phone OS onto Android hardware. I'm sure that makes sense to them, but it doesn't really make the Windows Phones standout the way the Nokia hardware does.
      • Not surprising

        metromalenyc - The Windows Phone platforms are designed around successful Android platforms, so this should not be a surprise - nor a mark against Samsung. Samsung didn't build the phone to the software: Microsoft built the software on their smartphone platform.
  • With Surface, does Microsoft trust the fate of Windows 8 to OEMs?

    They have to trust their fate with OEMs. Just because Microsoft chose to make their own doesn't mean that the others can't make some hardware just as nice. Microsoft set the bar for Windows 8 tablets and its up to the OEMs to match that quality if they want to sell anything. Its funny how you said you found the answer as to why Microsoft is releasing their own hardware. Its because several people stated the same thing in your nonsense blog post you made yesterday.
    Loverock Davidson-
    • But, that is the point

      Microsoft is unwilling to leave the OEMs to do whatever they want. Surface sets the bar. Surface says, "this is what you can do with Windows 8/RT." I am convinced that OEMs will make Windows Tablets, both 8 & RT. When you look at the Android tablet market, you see that most of the tablets offered sell for less than the iPad. I think that Surface will match the iPad on price (Surface Pro will be more). OEMs can choose to come in under that price with a cheaper tablet, or match that price and run with the big dogs, but if they match Surface on Price, they will have to match Surface on features and quality.

      One problem with Windows Phone 7 is that none of the OEMs pushed the phones out to the limits of what you can do with the OS. Only Nokia has come close. Microsoft doesn't trust the OEMs to do any better with tablets.

      And of course, it came to him last night, probably right after he woke up from being bludgeoned by his readers over the stupidity of the last one.
  • Big gamble, big risk

    I guess MS doesn't want to risk OEMs staying with Windows-7 for their large volume enterprise laptop and desktop buyers, and not totally "embracing" Windows-8. Companies will choose which OS to use with their office laptops and desktops; along with their existing software and applications. May be better OS "win." So what if Windows-7 stays with the enterprise venue and Windows-8 goes with tablets and smartphones. The market is large enough to support both Windows OSs and Apple.