Over the last year I have been quite critical of Microsoft's decision to enter the hardware business. Mainly, that's because its history as a leading software provider has fuelled the company for decades and I consider moving into hardware a slap in the face to the companies that have loyally – and perhaps in some cases, blindly – committed their entire PC businesses to backing Microsoft software products.
Indeed, OEMs I've talked to pretty much considered Microsoft's decision to release the Surface and Surface Pro a betrayal of trust, straining their relationships with Redmond. And while I still question the idea of Microsoft being a hardware player and competing with its partners, I have come to understand why it took this calculated risk.
It all comes down to an attempt to thwart the advances of a major rival, Apple. The iPad became a major threat when it started attracting serious interest from businesses and IT departments.
If you know Microsoft's history in tablets, you know it was the first big player to back the tablet concept with its Windows pen-based devices in the late 1990s. They were supposed to be the tablets that changed the world of business and consumer computing forever. However, the technology was not ready and the fact that they were built on Windows with an inferior pen-based UI hampered broad market acceptance. While they did get some traction in vertical markets, they never really took off in the mainstream.
When Apple introduced the iPad in 2010, Microsoft had to sit back and watch as Cupertino set business and consumer expectations of what a tablet should be. While Steve Jobs mainly promoted it as a consumption device, software vendors who wrote business applications quickly saw its potential for productivity. Within six months on the market, the iPad started making serious inroads into hundreds of businesses and IT departments. In fact, in the iPad's first year SAP purchased as many as 10,000 iPads for deployment in its IT programs, and Salesforce.com CEO Marc Benioff made the iPad the standard tablet in the company.
To say the iPad's inroads into enterprise alarmed Microsoft would be an understatement. Microsoft realised that if the iPad continued its ascent into business and IT, it would sap a great deal of revenue away from its Windows franchise, something that could have a trickle-down effect on Microsoft's continued thrust into global business markets.
That realisation spurred the company to create a secret team of hardware and software developers to begin developing its own tablet. The goal was to make it as powerful as Apple's iPad with the added bonus of giving PC customers access to existing programs as well as new, tablet-optimised ones.
The key question was whether Microsoft could entrust this effort to its hardware partners or would have to create it in-house. I understand that while both options were considered, Microsoft's decision to build the hardware itself was based on the fact that it would have to be developing Windows 8 with its Metro UI simultaneously with the dedicated tablet hardware in mind, too.
At that time, the next version of Windows was destined for desktops and laptops but with the added burden of making it tablet friendly. The company finally determined the only real option was to work on both of them together in-house. Adding third-party hardware partners to the equation would only have complicated matters and the company would not have had any control over hardware designs that really would be optimised for the hush-hush version of Windows in development. Plus, it would delay its ability to rush a competitive product to market.
While the first versions of Surface and Surface Pro were serviceable models, the new Surface 2 and Surface Pro 2 models (which are shipping over in the States this week) are superior. With their enhanced keyboards and additional accessories I believe they are now truly competitive tablets for business and IT. In fact, this decision is starting to pay off. Recently over in the US, Delta Airlines bought 10,000 Surface Pros for its pilots after a serious test program that also considered iPad and Android tablets.
So what will make the Surface Pro 2 truly disruptive? It now has an optional docking system (pictured above) that gives it extra I/O ports, including an RGB monitor port that lets you hook it up with a large monitor. Using the existing keyboard or an external Bluetooth keyboard, the tablet can fundamentally double as a desktop computer as well. Still not impressed? Sure, we've heard of 2-in-1s or convertibles, but think of this as a 3-in-1 because now when docked it triples as a desktop computer.
For many business users this is the ideal device and I suspect the Surface Pro 2 used as a 3-in-1 will be quite attractive to some IT departments where a mix of mobile and desktop work applications is key to user productivity.
While I am still thrown by Microsoft's decision to compete with its customers, it's clear that Redmond created the Surface and Surface Pro to prevent Apple from gaining too much ground in the highly competitive business and IT markets. The move will continue to ruffle the feathers of its OEM partners but for Microsoft, it was a calculated risk that had to be taken.