Microsoft Surface: Why hardware really matters again

Microsoft Surface: Why hardware really matters again

Summary: Getting its Surface tablet right is critical for Microsoft, but also reflects how hardware has become important all over again.


Microsoft has barely started to even show off its Surface tablet, but chief executive Steve Ballmer is already talking about plans for more hardware.

The Surface tablet could be the start of new wave of hardware products from Microsoft. Image: CNET

"Is it fair to say we're going to do more hardware? Obviously we are... Where we see important opportunities to set a new standard, yeah, we'll dive in," Ballmer told the BBC.

Since when did hardware get to be cool again? For years we've been told that all the innovation is now in the software; that with the advent of the cloud, it doesn't matter which hardware we use because we'll still be able to get access to everything we need.

True, hardware is becoming commoditised when it comes to the enterprise. And yes, browser-based apps are a standard part of our tech world. And yet, in terms of the smartphone, tablet or desktop, the hardware we use has become even more important than ever.

Microsoft has made hardware before of course — the Zune, Kin phones and the Xbox (well, one out of three ain't bad) — so this is not a complete revolution. Whether Microsoft is thinking about tablets or even phones remains to be seen, but Ballmer's comment shows how the competitive landscape has changed.

Much of this is a response to Apple, and a lesser extent to Amazon and Google and the products and services they are creating.

Mobile revolution

For a long time, Microsoft could be relaxed about the hardware side of things. That was because whatever the hardware it was that was out there, it would have to run Windows.

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The runaway success of tablets and smartphones (not to mention the 'bring your own device' movement) has made that relaxed stance look somewhat flat-footed.

The iPad, Kindle Fire and Chromebooks (plus the iPhone and any number of Android devices) have shown why hardware still matters. Control the primary hardware used by consumers, and you can build an ecosystem out from there — whether that's selling music, books, films or apps.

Control the hardware, and you control the wallet (sometimes literally in the case of smartphones).

Microsoft pretty much won the operating system battle, but now the war has moved on, and the hardware is now a key battlefield again. That's why much depends on the success of Surface and the hardware that might follow it.

Topics: Tablets, Hardware, Microsoft, Mobility, Software, Windows

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  • My prediction...

    Android will walk away with the majority of "smartphone" unit sales.

    Apple will walk away with the majority of smartphone profits (stabilize to 18-24% unit share).

    MS will continue to falter in the mobile handset world.

    MS will take a majority share of tablet OS units sales. The Surface will do well and 3rd party Win8 Slates will do well.

    Android will falter in the tablet space.

    Apple will walk away with the majority of tablet profits. (stabilize to 24%-35% unit share).
    • It is not a prediction

      It not a prediction. It is current situation.
    • Apple knows how to make money

      I will give Apple credit. Their business model is pretty amazing. It doesn't bode well for consumers who care about how much money they spend on products, but i guess there are enough people who are wealthy enough or foolish enough to drop serious money on these things. $100 for 16 additional GB of memory? Another $100 for an additional 32 GB of memory? Do you people like being robbed? Apple's business model is great for Apple. In my humble opinion, it is not so great for the consumer. But what Apple has done has made people not care how much it costs. I think Apple could charge another $200 for their Ipad and people would still buy it.
  • Hardware Counts But .....

    The best hardware in the world will not overcome a software lacking in flexibility and adopt-ability.

    Decision on RT for me is currently - No.
    I will seriously look at Pro when it launches.

    For me, Android is providing me with "RT" flexibility and more. This precludes my adoption of another OS.
  • Disagree...

    "Control the primary hardware used by consumers, and you can build an ecosystem out from there — whether that's selling music, books, films or apps."

    Hmmm, how did that work for Palm or even RIM?

    Hardware is one side facet of it but software and marketing are still the big dogs and always will be and MS excels at both.
    • Both are wrong.

      The thing you have to be able to do is systems engineering. This means being able to do hardware, software, interconnects, protocols and licensing. MS has a decent handle on the software and they showed they can do hardware with the surface (for content). They have the pieces to do the protocols and interconnects but they seem to have forgotten they know. They are a bit behind on the licensing front.

      Oddly, Apple has been putting these pieces of the puzzle together since the first iPod over 10 years ago. I have no idea if Steve knew what he was doing at the time of if Apple just got lucky with his planning.
  • Surface Is a Center Piece

    Surface is the spokeman for windows new operating system Windows 8. It will increase consumer awareness of the "Modern Tile" of the new UI and along with the XBox UI. It will bring WP8 to the forefront of consumer minds when they see how smartglass can be used in concert with them. WP8 will be the enterprise darling in a few short months. When companies start buying new PC they will start to get accustom to the "Modern Tile " UI and look first to the similar UI that is on WP8 and realize all it's enterprise and security features fit their needs. The lack of apps for WP8 has already been taken care of by the Bluestack app which allows close to 500,000 android apps to be used, so those quoting lack of apps are missed informed or are trolls. Windows 7 had just as much negative articles and reviews before and at release that it's funny to see negative comments and reviews for Windows 8 when the desktop part is similiar and fast than 7. Windows products may take some time but they are on the right track.
  • Hey Steve, lay off the memes, do some journalism

    The tech blogger meme about Microsoft and hardware with the standard three examples: Xbox, Kin and Zune is getting rather tired. Microsoft has made keyboards, mice, web cams, controllers, even routers. There are more successes than failures. (And of course, Zune was not a failure as a device but because of bad or at least slow business decisions.)

    I'll agree with your basic premise that hardware is important and that at least part of the change in Microsoft is based on what the from Apple. I argue that it is also important as a means to help their hardware partners. Without Microsoft creating the Surface and pricing it as they did, the likely scenario for OEMs would be a continuation of the race to the bottom on margins.
    • Microsoft doesn't build hardware

      The contract it out to an ODM like Foxconn. Fxconn designed the Lumia phones, the Sufrace, the Kin, etc. Microsoft does ot have the talent in place to design hardware. Even the xbox was designed by Sega.
      Troll Hunter J
  • what?

    "Much of this is a response to Apple, and a lesser extent to Amazon and Google and the products and services they are creating."

    LOL, I'm sure M$ never noticed that Google/Android has taken over the smartphone market. Ya, all about Apple...I'm sure M$ wants to loose the vast majority they established, just like Apple. Closed systems, closed minds. Not great for business.
  • Surface Phone? Surface all-in-one computer?

    I'd LOVE to see some more hardware from Microsoft. A powerful, top-of-the-line all-in-one gaming PC would be awesome with the Surface branding. So would a Surface Phone. I'd buy both!

    I've already pre-ordered two Surface RTs. :)

    Primarily because:

    Windows 8 and RT are both a hot mess

    No Apps

    Heavy Hardware
    • Since you have to lie about Windows 8

      then I take it as you giving it an official seal of approval!

      Nice backfire, omandy!
      William Farrel
  • Oh give me freaking break. It's

    been about the hardware for the past five years (see Apple). You were just in denial about it. So when MS, a company that has seen its value drop 70% in the last ten years, finally admits to itself that the Apple business model is where the money is at, you are stunned. That noise you just heard that has you all confused is the sound of your little bubble of fake reality popping.
    • Microsoft and Apple

      1: Once upon a time, there was this company that was making personal computers, Apple Computer and that other company, Microsoft, that was writing software for Apple's personal computers.

      Then IBM came along with the desire to make Apple go away. They hired the Microsoft company to help them do the dirty job, but Microsoft eventually tricked them, stole their projects and became rich. To do that, they decided tic copy Apple. It was a success.

      Then, Microsoft decided they know everything and became utterly arrogant. One day, a wake up happened - consumers went in droves to buy Apples new shiny toys. Toys, was Microsoft's response. But, that toys turned out to be more desirable than Microsoft's junk.

      So, Microsoft decided to copy Apple again. Welcome to WinRT and the Surface.

      History is cyclic, you know... Goto 1.
      • give me a break

        What Microsoft junk? MS Windows is still the software installed on the majority of the computers in the world, which are not made by MS btw. Tablets? It was the wrong time for MS and hardware manufactures to make tablets and install MS desktop OS on them back in 2000s. Although not terribly successful, the tablet PCs were much more successful than the first Apple tablet (they supposedly had it 20 years ago or so). If you look at the last 15 years you will see that Apple did copied (or re-invented if you wish to call it this way) MP3 player, smartphone, tablet...
        • Can you say "Forced sale"?

          "Windows is still the software installed on the majority of the computers in the world, which are not made by MS btw." Not by choice, but rater the most restrictive licenses ever forced on the public. Microsoft has been shown time, and time again, to abuse their customers. For all the trolls, and fanboys that complain that Apple doesn't offer choice, Microsoft offers only one choice. Their choice, and as prt supplier, they exercise more power than they have.
          Troll Hunter J
      • Revised history

        IBM had the hardware but no way to make it all work togther. Gates and Microsoft was a very small company that was making software for anybody, including a small bit for Apple, but their main customer was Altair. IBM did not want MS to have the intellectual rights to DOS because they wanted to dominate the PC market. Tiny Microsoft talked IBM into letting them retain intellectual rights to Q-DOS, which Bill Gates had purchased from Seattle Computer Products (developer of the first Intel 8086 computer) for 50 grand and renamed it MSDOS. I didn't think they had a chance at the time, but they prevailed and now IBM is barely a footnote in the hardware area. That was only 31 years ago. Since I started in the IT field in the early 70s until now, it has always been hardware first and software to make it work. Microsoft and Apple have done it very well and that is why they are in the position they are in now.
  • Good article, Steve

    If you search my comments you will find i am often extremely critical or articles here which strike me as shallow and underinformed.

    But i think you hit the nail on the head here. if i have any critique I think a bit more attention should have been paid to Apple in specific and how they are using their control of critical hardware points like the phone and tablet to leverage the rest of their hardware, and by implication software stacks, into homes and offices.