The Demise of Microsoft's Surface Is Greatly Exaggerated

It really gets under my skin when Microsoft's Surface devices are described as an abject failure. Indeed it's fair to say that Microsoft has failed to make a meaningful dent in the tablet market with the Surface including distribution blunders and poor marketing that led to Microsoft's $900 million write-down. But to suggest they're DOA is premature.

The Surface could wind up sharing the same fate as the Zune (it's already outlived the ill-conceived Kin) but the game is far from over despite Microsoft's gaffes with its tablet entries. Forget the failure of the Zune and remember other technology entries where Microsoft was late to the party such as Windows NT, Active Directory, Hyper-V and even Internet Explorer.

Though the clock is ticking, there's still time for Microsoft to generate demand for the Surface and Windows 8/RT. In Nick Bilton's Bits blog yesterday in The New York Times he refers to the Surface as a failure, though he stopped short of comparing them to the Zune.  

"The Surface failed because Microsoft confused consumers who didn't want to think about RT or Pro or what version of Windows their new device would run," he wrote.

Bilton is right in that Microsoft needed to offer customers better clarity about the differences between Surface RT and Surface Pro. A better name for RT (maybe Express or Lite) to better clarify the differences between the two would have helped avoid that confusion.

Microsoft's long-term vision for Windows is a day when people have all but forgotten about the traditional desktop interface that now powers over a billion PCs and have moved on to its new modern tile interface. But presuming Microsoft can convince its base of developers and customers to make that transition, it will be many years before that happens.

In the meantime, Microsoft needs to play to those who only want to shell out a few hundred dollars for a device and those who want a full-function system that can appeal to workers who need more than a tablet intended for information consumption.

Until the economics make it possible to offer Windows RT machines -- including Surface RTs -- for less than $300, they will have a hard time moving the needle. It's getting closer with the latest price drop. Having a low-cost alternative to the iPad and devices based on Google's Android (as well as its Chromebooks) is a must if Microsoft wants to be in the game.

At the same time Microsoft has to figure out how to walk the fine line for those who want the desktop. It must make that experience appealing while tempting (but not forcing) them to dabble into the new tile interface. And of course getting key apps in the Windows Store is going to be essential -- emphasis on key apps. Microsoft CEO Steve Ballmer last week told employees in a town hall meeting that, "We built a few more devices than we could sell," as reported by The Verge. A "few" is a "halfhearted" overstatement, opined Computerworld's Preston Galla who sniped: "To me, a six million tablet oversupply is quite a bit more than 'a few,'" he wrote.

A report by Neowin.net noted Ballmer also said new Surface devices will offer "typical" improvements, though The Verge last month reported that the new tablets will come with Qualcomm Snapdragon processor (the current version has an NVIDIA Tegra 3 chipeset) that will include an option for LTE broadband connectivity. Ballmer is also keenly aware that getting quality apps in the Windows Store is critical, according to the Neowin report.

I for one am looking forward to seeing what the next crop of Surface devices offer (hopefully a mini is in the works too) as well as the anticipated onslaught of new devices from Microsoft's partners in the coming months -- especially the new Ultrabooks based on Intel's new Haswell processor -- which I hope Microsoft offers in the next Surface Pro.

With what's in the pipeline, it's too early to bury the Surface. At the same time, it would be premature to do a victory lap.

Posted by Jeffrey Schwartz on 07/29/2013 at 1:15 PM