Surface Tension: Could Microsoft Lose by Winning?

Members of the tech media are falling all over themselves to weigh in on the Microsoft Surface. Unveiled during what many refer to as an Apple-like spectacle, the iPad-like Surface has caused reactions ranging from second-coming awe to dismissive derision. The first PC ever for Redmond! The iPad killer! The next Zune!

Pragmatically speaking, Microsoft is no stranger to tangible products, and Apple has shown that a company can do very well indeed with a focused and integrated mix of OS and hardware. And Redmond has never shied away from pushing a late-arriving underdog into an unknown and unfriendly market.

People are already talking about Metro -- Microsoft's typography-based design paradigm -- and now about Surface. It seems a pretty smart move to leverage Windows 8 with an actual tablet (or is it the other way around?). By the time the finished products hit the shelves, Microsoft will face two significant challenges -- one from a longtime competitor, and the other from a longtime circle of friends. And in both cases, the company may be repeating history.

If Microsoft = Google, then Surface = friction

The news that Google was acquiring Motorola Mobility led many to predict uneasiness among manufacturers such as HTC, Samsung, LG, and others in the Android stable. Although the Nexus project certainly must have caused a little bit of grumbling amidst the competition for Google's branding, it was a clear partnership. Despite assurances to the contrary, having Mobility in-house confers automatic development advantages on Motorola's Android products.

Likewise, Microsoft's maiden voyage into hardware PC manufacturing is bound to cause a re-evaluation of long-standing relationships. Surface is competition -- not simply for the manufacturers of the handful of Windows tablets, not merely for the more prevalent and relatively successful Android tablets made by the aforementioned manufacturers, but for the consumer's computing dollar. PC companies have already felt the bite of increasingly powerful mobile devices, but they could always count on Microsoft's market penetration, which is still dominant, and still-growing -- albeit admittedly at a much-reduced rate.

You might think that manufacturers who produce desktop PCs would be less concerned than those who focus on notebooks and tablets, but consider this: Microsoft is making a clear statement with Windows 8 that the future is indeed Post-PC. All of the spotlights are being shone on Metro, on tablet features and functionality. The desktop side of Windows 8 is unchanged from Windows 7, except where features have been removed to highlight Metro integration. The heart of the PC world is basically telling manufacturers of desktop PCs and components: you are part of the past. You can ride along with the neglected half of our Gemini OS, but sooner or later we'll drop it like we did XP.

Microsoft is not really Google, in that Redmond's tablet division can't boast the built-in R&D, experience, and brand recognition that Motorola Mobility brought to the table. Competing manufacturers may be concerned about the long-term ramifications, but a Microsoft tablet or two doesn't scare them like the prospect of a Google Motorola Nexus Droid. Unless, of course, Microsoft does the unthinkable -- i.e., ends up leaping over everyone else in the market, and going head-to-head with the archenemy. 

If Sony = Apple, then Surface = transformative.

"Let’s be clear, though," warns Bloomberg Businessweek's Ashlee Vance. "Microsoft making hardware is not a natural action. It’s what the company does in times of desperation."

Oddly, this statement immediately follows a mention of the Xbox, without any apparent indication of self-conscious irony. Microsoft was not suffering from desperation when its first-generation of gaming consoles launched -- diversification, perhaps, but not desperation.

The company was making a bold play for a market utterly dominated by a diversified electronics giant. Sony had no reason to fear any real danger after two blockbuster generations of console gaming. Sure, Nintendo attracted many with the N64 and GameCube consoles, and led the mobile market with a series of Game Boys (each better than the last). But Sony didn't lose too much sleep over this competition; they consistently gained gamers on either side of the Pacific Ocean, while Nintendo catered more and more to a shrinking pool of hardcore Mario and Zelda fans. The last thing Sony worried about was a third entry into the market, by a company whose Zune had utterly failed to steal listeners from the iPod.

By the time the second-generation Xbox 360 appeared, nobody needed to be convinced that Microsoft had leapfrogged Nintendo on the way to become a major player. Sony has been forced to work very hard to maintain a competitive position, let alone a dominant one. Let's put that in more general terms to drive the point home: a worldwide technology giant, with plenty of cutting-edge resources at their disposal and a commanding lead in a coveted market, suddenly found themselves challenged and arguably beaten by Microsoft, who had little to no prior experience in that market.

Playing to the console's strengths, Microsoft turned a solid gaming system into a well-rounded entertainment center and Internet portal. Ironically, the company largely responsible for the Age of Desktop PCs had proved the means for a generation to get their Internet fix from a versatile set-top box. Apple, never the gamer's best friend, provided the essential mobile factor, but continues to struggle with establishing an enduring relationship with the ubiquitous TV. 

Will the Surface do to the iPad what the Xbox did to the PS2? Will the Surface 2 split the tablet market with the next-generation iPad? It seems a bit unlikely at the moment, to say the least. Android has been working so hard to steal market share from Apple, and there have been some outstanding products along the way. That's why it's so difficult to take seriously a latecomer like Microsoft, which has so far been relegated to single-digit market share throughout the mobile landscape.

However, the marketing machine has certainly been churning over Windows 8, and the Surface is the icing on a much-hyped cake. "Both the kickstand and cover-cum-keyboard seem like such obvious ideas now that we’ve seen them, yet the great army of PC makers failed to think up anything so clever over the past two years," writes Vance. "You can make something different and sexy with a bit of effort, guys."

Let's get real about this. There's no shortage of effort, and there's no shortage of different (we'll avoid "sexy" as we would any other four-letter vocabulary shortcut). As I said, those last 18 months of Android tablets have given us not simply competition, but a distinctly different approach from Apple's consistently similar product. We've seen actual  innovation from Asus, Amazon, Samsung, and even HP -- sneer all you want, but WebOS coulda' been a contender, and the TouchPad made for plenty of headlines last summer.

And yes, these manufacturers have brought to market integrated kickstands and keyboards (and the stylus) during the last 18 months. They've also experimented with form factors and features that differ far more from the iPad than Microsoft's Surface does. The only real novelty that Redmond is displaying is with Windows 8, and that novelty is only relative -- Metro, as inviting as it may be, follows iOS, Android, BlackBerry, and others who have embraced the touchscreen, app, and tile-based mobile OS approach.

We have a love-hate relationship with Microsoft; you can't throw a stone without hitting a vehement hater, but that rock will hit more than a few PCs along the way. And everybody loves a good underdog come-from-behind victory (unless the underdog falters, in which case they turn on them like has-been actresses commenting on Oscar night fashions). The question is not really whether Microsoft is Google, or even whether Apple is Sony, but whether Microsoft is the company that created the Xbox franchise, or the company that created the Zune... and Vista and ME... and the email watch, and the talking paperclip...