Yesterday, we reported on yet another Microsoft OEM thumbing its nose at Windows RT.
Toshiba said in a statement that it had cancelled all plans to produce tablets based on the platform citing “component shortages.” This is the third OEM to do so, after Acer CEO JT Wang publicly trashed Redmond over its decision to produce the Surface. HP said no thanks in June.
“Toshiba will focus on bringing Windows 8 products to market,” a spokesperson told us. Ouch.
It’s no secret that Microsoft’s tablet has ruffled feathers. It disrupted a business strategy that the company has followed for nearly three decades: Build the platform, but leave the job of producing the hardware to your partners. This worked rather well for a very long time, but not anymore. These partners have become progressively lazier, so it’s time to lay down the law.
Apple is a great example of the positives of this top-down, vertically integrated approach. The company produces both the software and the hardware it runs on. The result? Products that work the way they’re supposed to with little fuss, and set the standard by which all others are judged. While both Microsoft and Google employ a very different business model, they would equally like to see products that “just work.”
Nobody can do it better
Microsoft and Google have both now seen the light. Allowing your partners to run free and design hardware as they see fit is great for variety in the end product, but it does come with disadvantages. OEM partners drift from your initial vision, and this leads to problems that you end up having to fix.
Just look at the amount of crappy Windows and Android-based hardware out there. While this is wonderful for the bargain hunter, it’s not for Google and Microsoft. A good portion of the problems experienced by users have a lot to do with hardware issues, and not necessarily the software itself.
In these situations both the hardware manufacturer and the software developer are blamed for the problems experienced. OEMs have become lazy, and hardware quality has suffered. This in turn has held back Microsoft and Google, as they have to cater to the lowest common denominator.
In the case of Microsoft, as Ed Bott wrote back in June, the Surface is not a move to kill the OEM. “OEMs can whine all they want about Microsoft’s decision to engineer their own hardware,” he argues. “But maybe when they’re through whining they can accept the challenge that Surface represents: You’re in the hardware business. Do better than this.”
That’s the point.
A swift kick in the pants
Surface (and the Google Nexus line) are examples of this gentle prod to do better. Microsoft and Google’s in-house devices are built to work in concert with the software, not against it or around it: Everything melds together in perfect harmony. These devices are also innovative, something that many OEM devices don’t manage. That’s the biggest thing.
In a search for maximising profit margins, OEMs have cut corners. While this has a lot to do with consumer’s desire for cheap stuff, it doesn’t help Microsoft’s case. Windows 8 is a big step forward for Microsoft in advancing the Windows platform. If it’s running on sub-par hardware, the consumer is not going to be happy.
Microsoft and Google’s flirtation with home-grown hardware is a kick in the pants to their partners. While executives like Mr Wang like to complain about these companies encroaching on their turf, it would have never had to happen if hardware kept pace in the first place. Microsoft and Google aren’t hurting the OEM – they’re helping them. Perhaps driving this point home, Microsoft has said that the Surface will only be available in Microsoft Stores in the US and “select online Microsoft Stores.” It’s not like the Surface will be competing with OEM PCs on sale at Amazon or big box retailers.
The OEM isn’t dead
With companies like Microsoft and Google in the mix producing their own devices, OEMs now know what is expected of them. The result will be products that are built with some thought put into them. The consumer wins because the quality of product increases as a result. OEMs will try harder because they have to.
Neither Microsoft nor Google have anything to gain from turning their backs on their partners, and likely much more to lose. Software is a much higher margin product than hardware is, so these companies will always want the OEM around to handle a far less profitable venture. At the same time, active participation in hardware manufacturing will set an example of what these companies expect, and limit the amount of junk on the market.
Could it lead to a drop in support of sub-par hardware? Maybe. But at the same time, that’s not necessarily a bad thing. One of Microsoft and Windows’ biggest minuses (and some may argue the exact opposite, for valid reasons) is the insistence on hanging onto legacy hardware.
Maybe it’s time for a clean slate. The transition may be hard, but the benefits might just be worth it.