Microsoft: The Evil Empire re-Surfaces

Microsoft: The Evil Empire re-Surfaces

Summary: Microsoft seeks to demolish the 30-year-old industry that it worked so hard to create, and to return to its monopolist roots.

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Last week, Microsoft announced its Surface Windows 8 Tablet, breaking 30 years of tradition of strictly being a software company, their consumer video game console efforts with XBOX and sad Zune experiment notwithstanding.

The event was a surprise to everyone and it generated a lot of excitement for Microsoft. The tablet itself appears to be a compelling device and the company should be commended for its engineering efforts. If it means anything, I'm going to be buying one myself, although I haven't figured out whether I want the x86 or ARM version.

I haven't decided whether the Surface keyboard cover is a legit enhancement and key differentiator or just a gimmick. Nobody outside of Microsoft, not even the journalists covering the Surface pre-launch event has actually typed on the stock detachable keyboard cover yet, so as to how effective it will be as a data input device is questionable.

However the higher-end detachable black tactile keyboard (an additional purchase) looks like it will be comparable to an Ultrabook or a subnotebook typing experience. For getting "Real Work" done with Microsoft Office for the road warrior it will be useful and I will likely pick one up.

I will note, however, that similar 3rd-party products already exist for both the iPad and Android tablets, so it's not like detachable keyboards for tablets are a huge innovation.

Microsoft introduced a new hardware product far ahead of its general availability, which has brought it considerable criticism, even from its most stalwart advocates in the tech media. The ARM Surface won't be available probably until October and the x86 will not be available until the January timeframe, so the product still has the stench of vaporware on it despite all evidence to the contrary that the Surface is a very real product.

Compared to the way Apple does business, with products being immediately available for pre-order or in the channel within weeks of announcement, this comes off as amateurish.

I have made the argument here that while the Surface itself appears to be a solid and innovative piece of hardware, its release will have negative repercussions for the entire PC industry.

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In essence, by pre-announcing this device, it has created an "Osborne Effect" for the PC OEMs currently working on similar spec-ed tablets and Ultrabooks who must not only license Windows 8 from Microsoft but also leverage the same ODM component and manufacturing channel, putting them at a serious disadvantage on pricing for many models currently planned for the Fall 2012 and Winter 2013 release timeframe.

While my detractors now claim victory for end-users which will now have access to a high-quality Windows device directly from the source, the reality is that in the long term, this will have a negative impact on consumers.

With Surface, Microsoft seeks to remove vendor and device choice, which has always been one of the primary advantages of being a Windows user and a prime differentiator from using Apple products.

All things considered, a transition towards the Surface and other Microsoft-branded hardware would be a step backwards for the consumer, not forwards. And it damages Microsoft as well, because they would be competing in a very low-margin business against a company that is far more skilled at vertical integration than they are -- Apple.

Because Microsoft is new to the vertical hardware and software integration game, it is going to make early mistakes that its closest competitor, Apple, has spent two and a half decades learning from. The people who are going to suffer from Microsoft's early mistakes who jump into Surface hardware are going to be end-users, whether they are consumers or enterprises.

We don't know how many generations of updates Microsoft is going to support with their own PC/Tablet hardware. Since Windows is not an embedded operating system like iOS or Android is, nor is it truly modular in nature, it has a much larger payload. It is also vastly more complex to develop and maintain and thus has a much longer release and update cycle than its competitors.

While Microsoft has transitioned to a more of an incremental update model than its Service Pack model of previous generations, it is still a much less agile platform than that of iOS or Android in terms of the frequency of ongoing maintenance and upgrades. This is going to be perceived in some circles as a key differentiator or a key disadvantage depending on how you look at it.

We also are well aware of how difficult the new EFI bootloaders which are Windows 8 compliant are going to make installing competing OSes like Linux and Android. On a Surface tablet, you can be assured that there's no chance in hell an end-user will be able to make Linux or Android work on it, even if only a small minority of people would want to do it.

It sounds crazy, but even Apple's x86 hardware is more flexible in this respect.

This puts its users as a serious disadvantage. Arguably, this is true for the OEMs as well, but at least you have some additional flexibility with an OEM and with corporate managed hardware, such as delaying updates that would normally be forced on a consumer population.

We also don't know how Microsoft is going to address the demands of large corporations with imaging and pre-loads that OEMs currently do for their large customers. It probably isn't even possible with the ARM model and may not be practical at scale for them to do with the x86 model depending on the relative demand for the two products.

In the short term I believe Surface really is more of a consumer product than it is an enterprise/business product. I believe businesses require more resilient and ruggedized x86 hardware for their mobile computing needs if they require real PC applications, and if they require content simply consumption they have iPad which has a much larger library of apps to choose from.

From a vertical application development and device customization standpoint Android has a substantial lead over Windows RT and Windows 8.

If Surface succeeds then it is going to have to succeed at the expense of the OEMs which license its consumer Windows software and represents the bulk of its traditional revenue stream along with its enterprise software. The company cannot have its proverbial cake and eat it as well.

A success for Surface means the destruction of the OEM ecosystem and turning into another Apple. I'm not sure consumers and businesses really want another Apple, one walled garden is enough -- and at least Apple's walled garden is highly customer focused and has a good history of supporting products long after their sales lifecycle.

Conversely, in the consumer space, Microsoft has a reputation for abandoning technologies and customers when it suits them, so they are going to have to make a huge effort in changing their spots if they are truly committed to being a hardware manufacturer.

And I think it is also worth mentioning that antitrust forces in the United States and Europe could be brought to bear on Microsoft if Surface really does become successful and damages the business prospects of OEMs. If you thought MS-DOJ in the 1990's and the billions of fines from the EU in the last five years was a heck of a bumpy ride, think of what else is likely to come down the pike.

I have made the case elsewhere that the post-PC is definitely in the early stages and we are within 5 years of a full transition away from the x86 architecture as the predominant end-user computing platform, so I'm not going to backtrack on that.

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I don't wish to sidetrack, but what has not yet been considered in the coverage of this product at all is the effect that Surface will have on retail. You will notice that Microsoft hasn't made any announcements as to retail launch partners for Surface whatsoever.

The domain and the lifeline of most OEM PC equipment sales (save for Dell, which has always been partial to a direct sales model) has largely been in retail stores, so I think we should address this.

I have also in my writings have said that retail itself is in grave danger of being displaced by online sales -- clicks are inevitably going to kill the bricks.

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While Microsoft plans to build out its retail store infrastructure, I find it hard to believe that they will execute on the same scale and with the same effectiveness as Apple has done. Or will devote so much time to retail in order to speed adoption for Surface.

The reason being is that Microsoft has a massive employee base in product development and company operations (92,000) and only a small force in retail.

Apple has over 60,000 employees and only a fraction is in product development and company operations compared to their number of retail employees in their own 370-odd stores worldwide.

Additionally, Apple has considerable experience leveraging the traditional retail channel, and is building store-within store experiences to further increase their presence.

I don't see how Microsoft is going to be able to make significant headway here without disrupting the model somehow. They either have to put a lot of energy into direct sales -- which will whack the OEMs, or they have to put considerable resources into building their own retail infrastructure.

My ZDNet colleague, Ed Bott tells me Microsoft plans to build "hundreds" of Microsoft stores. If that's true, then you can be assured that Surface is going to be the most favored product there. So that whacks the OEMs too.

However, my bet is that Microsoft is going to favor direct and online sales over retail, bypassing many of the channel inefficiencies, as that will deliver the most bang for the buck.

Much of the blame for Microsoft's decision to go at Surface on its own rather than bring in a strategic OEM partner -- as Google has done in the past with its Nexus hardware -- is that the OEMs are dropping the ball and flatlining on innovation.

I would not dismiss all OEMs as having flatlined. I concede that Hewlett-Packard hasn't done anything interesting in a long time, and neither has Dell.

But if you look at what the Asian OEMs like Lenovo, Asus, Acer, HTC and Samsung are doing, those companies are making some very interesting and compelling products and arguably, have pioneered in the same convertible form factor which the Surface uses.

I will add, however, that these interesting designs we have seen from the Asian OEMs have largely been introduced with the Android and ARM space.

If anything, Microsoft's slow entry into the ARM architecture with Windows and allowing Android a 4-year head start hasn't helped their situation at all. So they are assigning blame in hardware innovation to the OEMs when they themselves have made their bed with Intel and maintained and coddled the quid pro quo PC architecture for the last 30 years.

If Windows RT provides a compelling platform, then the OEMs will exploit it.

But with Surface, Microsoft just kicked them all in the nuts and they are now probably thinking about differentiation and how to deal with a clear margin and supply chain disadvantage.

OEMs may have to cancel some products, including Ultrabook designs, that would have had to compete unfairly in the marketplace against Surface next year. And they are probably also examining the developments over at the green pastures in Android-land as a possible way to diversify.

They've had all of their eggs in Microsoft's basket for decades and the wolf just raided them.

For the Surface tablet (and for Windows 8 ) to succeed it is going to need many new exploitive applications written for the new Metro UI and WinRT API set.

So far, I have not seen compelling evidence that the traditional Windows software developers are devoting tremendous resources to this yet. So the bulk of the applications we are going to see at launch for Windows 8 will be on the x86 version, which are legacy Win32 apps.

That being said, Windows 8 represents a radical shift from the traditional Windows experience. So it's a huge risk for Microsoft.

Enterprises are going to be wary of Windows 8 until they see from limited pilot implementations how well it integrates into their environments and how they can manage it, so until then, Windows 7 will be king.

Many organizations only just migrated or are finishing their migrations to Windows 7, so a good deal of them are going to wait until the next major Windows upgrade cycle before making any more substantive changes.

And end-users? With Windows RT, they're going to have to buy all new replacement applications with the exception of pre-loaded Office. With Windows 8, there's very little advantage in using it to run traditional Win32 applications when Windows 7 does it so well and in such a familiar fashion. Buying retail copies of Windows 8 to upgrade existing Windows 7 PCs also doesn't make a lot of sense.

The Surface isn't the only product which Microsoft has demonstrated is self-centered and has no consideration for its end-users and its partners. Windows Phone 8 is just as much as a customer love-fest as its desktop and tablet sibling.

Microsoft apologists will likely burn me in effigy for this answer, but I think the company has made a strategic mistake by unifying the Windows code-base for Smartphone and Tablet-based OS with their desktop PC OS.

With Windows Phone 8, the software now runs on the same basic core as Windows RT and Windows 8, using an NT kernel and an NTFS-based file system in favor of a more traditional lightweight embedded Windows CE core.

There are some traditional advantages to code unification such as portability of applications, but running a heavyweight monolithic kernel on an ARM smartphone (and even a tablet) means you need much more RAM and CPU horsepower to power the stack. And in the case of Windows Phone, porting existing mobile Metro apps to Windows RT and Windows 8 isn't necessarily a slam dunk despite sharing a basic OS core.

I'll quote Microsoft directly here:

"Developers who build applications for Windows Phone will be very well prepared for building applications for Windows 8...and in many cases, may be able to reuse assets and business logic in building new Windows 8 applications... While Windows Phone applications cannot run on Windows 8 without being modified, developers have found it's fairly easy to port a well-written Windows Phone app to Windows 8"

Thats a pretty cagey answer.

This shift towards core OS code unification has made the Windows Phone 7 hardware immediately obsolete. By comparison, Apple has been able to support several generations of older iOS hardware such as the iPhone 3GS and the iPad 1 with successive OS updates which only have single processor cores and small amounts of RAM.

For the time being, Apple has kept their desktop OS and their Smartphone/Tablet OSes on separate development paths, although user experience innovations from iOS are being migrated/ported to OS X. This is very different from what Microsoft is doing.

Windows Phone 7 was able to leverage a single processor core and a lot less RAM and did not require a journaling file system, all of which taxes the hardware.

Additionally, by obsoleting Windows Phone 7 hardware so quickly, this is going to leave a lasting impression on consumers and its hardware partners and its carriers which sell their hardware that the company abandons its users and science projects whenever it suits them.

While the Microsoft's new tablets and Windows Phone 8 devices appear... on the Surface... to be a huge leap forward in Microsoft's evolution, they are indeed bad news for the end-user.

With Surface, Microsoft seeks to demolish the very same 30-year old industry that it worked so hard to create with the support of the OEMs and the users who depended on them and and provided the company with so much revenue for so many years.

Hurting the OEMs ability to compete and moving towards a direct manufacturing model hurts the end user because it will reduce choice, and threatens to establish the company as a monopolistic, closed-off ecosystem.

If the OEMs fail because of Surface's success, it will mean the loss of jobs in the manufacturing sector, particularly for OEMs that have a strong base of US operations such as Dell and HP, as well as other companies which support the OEM ecosystem such as resellers and distributors.

If Microsoft chooses a direct sales approach for Surface, retail will also suffer and it will also result in lost jobs. Despite what you might think, not all of this will come at the expense of Asian companies.

Microsoft has also hurt their early adopters and manufacturers of Windows Phone 7 devices by significantly changing the requirements for Windows Phone 8 and making all previous hardware incompatible.

This may sound trivial given the company's pitiful market share in the smartphone space, but having displayed such a willingness to abandon customers and orphan products cannot possibly bode well for the users who were duped into thinking they had a migration path and the manufacturers and carriers which signed on as partners.

In short, one thing is for certain. The Evil Empire has re-Surfaced.

Topics: Mobility, Apple, Hardware, Microsoft, Operating Systems, Smartphones, Software, Tablets, Windows

About

Jason Perlow, Sr. Technology Editor at ZDNet, is a technologist with over two decades of experience integrating large heterogeneous multi-vendor computing environments in Fortune 500 companies. Jason is currently a Partner Technology Strategist with Microsoft Corp. His expressed views do not necessarily represent those of his employer.

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76 comments
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  • Who are you and what have you done to the usual Perlow?

    Or, not what I would have expected. However, a fun not so little thesis. Now, if I'd written something like that I'd have hit a new record in downvotes!

    I'd watch out for flying surfaces if I were you!
    ego.sum.stig
    • The problems with ZDNet bloggers

      While an anti-MS bias obviously does exist in some ZDNet bloggers, the raging against MS and Surface has picked up a couple of notches.

      The worst part of it all is that if you disagree with a columnist, want to correct his (hmmm why are they all men?) "facts" or express your outrage that something as vapid, fact-free and inflammatory as their blog got published, you only have one recourse - PAY THEM.

      ZDNet bloggers are paid by the number of posts, because advertisments pay for this site. The number of posts represent the number of people exposed to the ads. Our nice new comment system also allows us to express our delight or disdain, but I suspect this too is tied into blogger's revenue.

      So why do we get such crap? Simply because trollbait earns money for the blogger without any need for research or work. Perhaps it's because their chosen devices are so bad at actually doing real work, that they opt for fiction that pays better than truth.

      How do we address this issue? Unfortunately we have no way of showing our opinion of a blog that doesn't end up paying the blogger.

      I can only suggest don't do what I'm just doing - posting a reply. If you can just count to 10 and move to another blogger, Jason, SJVN et al will be only left with their tiny choir singing their praises and that huge drop in revenue might get them to reconsider their flame bait or get them dismissed as their main purpose here is to increase the number of people scrolling past the ads.

      The increased anti-MS activity of late does suggest MS is doing the right things ;-)
      tonymcs@...
      • I don't know what world you walk in

        But the pro-Microsoft voting/comments/etc are getting louder.

        Besides, the whole surface idea, it's insane. Do you intend buying the higher price beastie and expect to use touch regularly? The answer is no by the way. Do you intend to buy the RT and live in crippleware land? I hope not.

        You might also have noticed that I'd rather use an iPad as a tea tray or something to throw at people than try to work on it.
        ego.sum.stig
  • Come on Dude

    A lot of these bloggers are way out of touch with reality, and end users.

    I was a Windows Phone early adopter and I just upgraded to a Lumia 900. I was not duped by anyone. And the migration path for me is very clear. Upgrade to the latest and greatest after my next upgrade cycle.

    Why are you making such a big deal about this?
    jthompso@...
    • CE to NT means incompatibility

      Anyone who has read about WP8 knows CE was being replaced with an NT kernel. You don't do this without introducing significant compatibility hurdles. Moreover, multi-core, NFC, SD support, higher screen resolution are all hardware dependent and no existing devices ships with these capabilities. As such, I agree 100%. No one was duped. And the 900 can now be had on Amazon wireless for $.01 and will get 7.8 in the next six months. What's not to love?
      jjworleyeoe
      • WP7.x apps run on WP8 devices

        Porting a WP app between 7.x and 8 doesn't take that much effort if you are a .Net developer. That is because you are writing to middleware. Therefore most developers will be developing for WP 7.x and 8, because the former market is substantial, and targeting both platforms requires minimal effort (in many cases less than a week). In fact with the new environment, targeting Windows 8, WP8, and WP7.x is extremely efficient, and much easier than targeting the iPhone, the iPad, and Mac OS.
        P. Douglas
      • CE to NT is the best thing to do - jump the hurdles, its worth it

        CE to NT is the best thing to do - jump the hurdles, its worth it
        pethers
    • You may not beeen duped...

      ...but others sure were. At least when WindowsCE devices came out. My accountant bought one of the first HTCs with WinCE, thinking "it's windows, it'll integrate better with my laptop, document on the go, etc." - only to discover he would've been better with Palm Phone (remember those?).
      vgrig
  • Perlow, please quit...

    Perlow, please quit blogging, your articles are nothing but non-sense in the last one year or so...
    owllnet
  • This is quite comprehensive

    for a troll post.

    Seriously ZDNET, why are there so many troll post lately? I come here for news and professional opinion, not amateur hours.
    Samic
    • That sir is ZDNet of the past

      Aside from a couple decent bloggers this site is filled with one sided troll blogs filled with lies and misrepresented information all with the intent to get clicks and comments to make the advertisers happy.
      bobiroc
      • You mean that this isn't a useful tech site

        And that folk like Bott do [i]"one sided troll blogs filled with lies and misrepresented information all with the intent to get clicks and comments to make the advertisers happy."[/i]

        I'm shocked, nay stunned, nay disillusioned. Oh dear, woe is me, it is the end of the world!
        ego.sum.stig
  • A Little OTT

    You have been on the attack for much of the last two weeks, give it a break.

    For a company that still allows me to load software over twenty years old on to a device and make it work. And still pushing new device and software ideas out to world, i say they are not doing too bad.
    bates40
  • Were

    You able to put say Android on your ipad2 ? Or even a version of ios older then the last two, without saving blobs or other silly stuff ? Yet if Microsoft does it on their tablets it is evil and the consumer looses, I stopped reading after this I'm afraid.
    sjaak327
    • It's called "jail-breaking", and YES you can jail-break an iPad.

      And you can also jail-break an Android device. But Secure Boot will prevent you jail-breaking a Surface tablet.
      Zogg
      • Nope

        Jailbreaking is something else entirely, it enables you to sideload applications, it does not enable you to put Android on an Ipad, the only ipad where you can do this is the original ipad. I have a jailbroken ipad2 but no way for me to put android on it.

        Silly argument in any case, jailbreaking is exploiting a vulnerability in Ios to enable code to run, hence bypassing the walled garden, the bootcode of the A5 has to date not been beaten, and of course wgo is to say there won't be a jailbreak or even a bypass mechanism in uefi to disable secure boot ? In all cases you need to hack your way in, so Ms is no more evil than Apple in this aspect.
        sjaak327
      • Who wants to put Android on an iPad? But people DO jail-break.

        Unfortunately, the Secure-Boot functionality will prevent you replacing the installed OS with [i]anything[/i]. Even a customized / jail-broken version of the exact same OS. That's its entire [i]point[/i].

        [quote]w[h]o is to say there won't be a jailbreak or even a bypass mechanism in uefi to disable secure boot ?[/quote]The argument for Secure Boot is that the security it gives you is worth the extra complexity. So if someone ever does manage to bypass it then the OEMs will have been made to dance through hoops for nothing.
        Zogg
  • I dont know what to say

    Maybe I will troll a little bit just to fill space in here.... I stoped my reading at the middle of the post, it was too long and talking how bad Surface is... But you forgot that it will be backed by a FULL OS Windows 8 because you mention iOS and Android to be more mature... but they are not a Full OS
    pepe-el-Toro
    • So it will be a really expensive Netbook

      Rather than just an expensive Netbook...
      Jumpin Jack Flash
  • Nope...

    [quote]In essence, by pre-announcing this device, it has created an ???Osborne Effect??? for the PC OEMs currently working on similar spec-ed tablets and Ultrabooks [/quote]

    Nope, the Osborne effect means killing a product that's already on the amrket by pre-announcing a better succesor. Microsoft is not killing other vendors Windows RT tablets because 1) they are not on te market yet, and 2) they won't be out before Surface anyway.
    dsf3g