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Surface's success will spell end for Windows RT OEM

This week I spent some time at Microsoft headquarters talking to the designers, developers, and engineers who created the Surface with Windows RT, the company's response to the Apple iPad. The event was a rare, behind-the-scenes look at how Microsoft designed the Surface, and I got to see everything from discarded 3D-printed prototypes to a lesson on how finger paint helped determine the placement of the space bar. It was kind of geek heaven. At the end of the day, I took away one key point: this software company is completely committed to building hardware.

The product is being developed in the Windows and Windows Live Division under the direction of Steven Sinofsky, who, by any measure, is a software guy. "I love software," said Sinofsky. "When you make a software product, you are only limited by time and your imagination. You can do anything. You just run out of time."

Making hardware is different. "When you design hardware you have to follow all of these physical laws, and that requires very deliberate decisions about what you can and can't do," he said.

And yet, Sinofsky and his team seemed to relish the challenge. For example, it wasn't enough that the kickstand was solid and easy-to-use, the hinges also needed to sound just right. Evidently, two of the three hinges seal the stand, the other hinge is there just to create the right noise.

"It is like the sound of a really high-end car door closing," Sinofsky said with a grin. "It just sounds nice."

There is pride in that statement. It is the same pride you hear in Tim Cook's voice when he stands on stage and tells a crowd he is holding the "best iPhone ever made." It was at that moment I realised Microsoft is officially a hardware vendor. (Yes, I'm ignoring the Xbox 360, Zune, and a host of peripherals, but bear with me.) It is also when I realised that Windows RT OEMs are in big trouble.

Microsoft has always depended on vast ecosystems of hardware and software vendors to fuel its success. And it will definitely need their support for Windows RT if it is going to take even a small slice of the tablet market. But OEMs? I think Microsoft can take them or leave them. More specifically, I think they should leave them.

Let's set aside the issue of whether anyone should buy a Windows RT-based tablet. I need to spend more time with one before I decide if this platform has legs. (When the original iPad came out, I questioned its usefulness as well and now I can't leave the house without it.) Let's frame the question this way: why would anyone buy an RT tablet that isn't a Surface?

Asus, Dell, Lenovo, and Samsung have all said they will build Windows RT-based devices. I don't see the point. The Surface seems to have the inside track here already. And that was very much by design. "We knew we wanted to design a complete computing experience," Sinofsky said. "So we designed all of the elements of the hardware and software together."

What exactly are the OEMs going to add? They will have to work hard just to match the Surface's feature set.

Take the Surface's innovative Touch Cover. It is perhaps the biggest selling point of the device; it is what turns the Surface from a media consumption tablet to a serious productivity tool. The magnetic connection that attached the cover to the Surface also powers the keyboard. It is a nifty bit of technology, and one that Microsoft will have to license explicitly to third-party cover makers. And since it doesn't want just any gadget connecting to the Surface and sucking battery life, it will have to be selective.

Right now, there are no third-party covers for Surface, but Microsoft's Touch Covers are on sale now.

Sinofsky made the Surface's advantages clear when he casually referred to Panos Panay, general manager for Surface products at Microsoft, as "an OEM of Windows RT." Sure, it's just another OEM, but it's an OEM that has been working on his hardware platform on the same floor as the software engineers who were writing Windows RT; an OEM that has been in every Windows RT strategy session and read every usability study; an OEM that was a co-creator of the "complete computing experience."

Sinofsky laid bare the risks of being a Windows RT OEM when he described his own experience using Surface over the last few months. There is a Yogi Berra-like quality to the logic here, but the sentiment is undeniable.

"I've used a lot of tablets, and this is not a tablet," Sinofsky said. "And yet it is the best tablet I have ever used.....I've used a lot of laptops and this isn't a laptop. But it is also the best laptop I have used."

Tough competition. What could a Windows RT OEM hope to do better?