If the holiday season is any measure, the Microsoft (MSFT) Surface
and Windows 8 have been a complete dud. In fact, I saw this headline come
across my stream this morning: Sell
Microsoft NOW! Game Over - Ballmer Loses.
The article, by Adam Hartung, notes that for the Christmas period, Microsoft sold only 5% as many Surface tablets as Apple did iPads.
To be frank, I’m surprised they sold that many.
This first version of the Surface was aimed at consumers. And why would a consumer buy a Surface rather than an iPad, an iPad Mini or a Nexus 7?
- The Surface runs on Windows RT. It doesn’t run Windows software. Instead, it runs special Surface apps that you can download from the Microsoft Store. And how many apps are in the Microsoft Store? Around 20,000 at last count. Compare that to the one million apps in the Apple App Store.
- Add the fact that the Microsoft Surface does not yet support cellular (3G/4G/LTE) access – it’s a WiFi-only product today. And most of the initial reviews of the Surface were lukewarm at best.
- Even those users who don’t like Apple, or feel Apple is becoming too powerful, have options like the Google Nexus 7.
So the question is not why Microsoft only sold about a million Surface tablets to-date. It’s why anyone would have chosen the Surface instead of the alternatives.
For Microsoft, the goal is not to have the best consumer tablet product. That game is over and Apple (AAPL) has clearly won. Microsoft is focused on the enterprise and I believe that they still have a realistic shot at gaining strong market share there.
The Surface Pro, previewed to journalists at CES, is due for release the end of January. And while it shares a name with its consumer-focused sibling, it’s a completely different product. The Surface Pro has an Intel I7 processor and runs the full Windows 8, just like any laptop or desktop PC. It won’t be quite as portable as an iPad – more like a MacBook Air in size and weight – but it will be the first touch-screen tablet computer to run a full computer operating system.
The Surface Pro will be a compelling solution for many enterprise IT departments. While the BYOD trend has taken hold at many organizations, most large enterprise companies still have limited or no support for user-owned devices on their networks. That’s why you still see so many people carrying both an iPhone (for personal use) and a Blackberry (for corporate email). At many large companies, users have both a desktop PC and a laptop, with the latter used largely for travel purposes. As it comes time to upgrade those laptops, it would make sense to swap them out for Surface Pros. While the Surface Pro costs as much as a laptop ($899), it would probably make users happier and reduce pressure on corporate IT to fully support employee-owned iPads.
The good news for Microsoft is that these organizations tend to buy devices in large quantities. A hospital looking to provide its nurses and doctors with tablets could buy several thousand. Large corporations could buy even more. And government agencies? The US Department of Defense just inked a $600 million contract for the Windows 8 operating system. Just think how many Surface Pros they could buy if they decide it's the right mobile device for them.
Personally, I don’t see myself switching. I’m happy with my MacBook Air and my iPad and I've never been much of a supporter (or defender) of Microsoft. But for large companies locked into the Windows platform, the Surface Pro has the potential to be the device of choice for mobile computing.
Image courtesy Paulo Ordoveza Flickr.com/8211313831
