Will Microsoft’s Surface Win The Business Tablet Market?

Microsoft has announced the Surface tablet. At the centre of CEO Steve Ballmer’s presentation yesterday was a single message: the integration between the hardware and the software is key to deliver better experiences to end-users.

The hardware designed by Microsoft tries to capture the interest from users for a device that combines a PC-like and a tablet experiences. Therefore, this tablet is clearly targeted to professional users in the first place.

The physical keyboard, the lack of a camera and the focus on the MS Office environment shows that Microsoft is targeting the business segment, where they can differentiate and take some share from Apple. Microsoft’s tablet will probably come with the best MS Office experience, the killer application of the device. The keyboard is also a very important accessory for a professional usage.

Despite some interesting hardware features, almost nothing was mentioned about the software, the user interface, the user experience and the ecosystem. Some of these points were previously introduced by Microsoft on previous presentations of Windows 8. Although Microsoft needs to start bringing together the different pieces of the Windows 8 story.

What makes the iPad the most successful tablet on the market is the software, the applications and the added value that end-users perceive from that. The reason why Android tablets need to be cheap is because they do not deliver value. Besides Apple, no other manufacturer has captured a relevant market share in this segment. The main focus has been on the hardware and specs only.

What I was expecting to hear from Microsoft was how the Surface delivers an integrated experience with the PC, what additional services or features are available and how the Microsoft ecosystem is growing to be a real alternative to the iPad or any Android tablet.

Hardware-wise Microsoft did a very good job by launching a device that can really be exciting and different but it needs to deliver what has been promising with the new Windows 8 strategy. Consumers will not buy, and specially not pay a premium price for the Surface until they understand what is the additional value they can get compared with the iPad and how the device integrates with their PCs, the Gaming Console, the Windows Phones, etc. The entire ecosystem is what will make Microsoft proposition attractive and not unlinked pieces of it.

Microsoft has also showed how serious it is about controlling the hardware. This tablet could had been announced with any of its partners (or several). But by designing and launching its own branded tablet, Microsoft is clearly refocusing its approach to a more closed strategy. And if that is the case the company will need to take a different route and to acquire a manufacturer that knows and controls the entire supply chain.

Francisco Jeronimo joined IDC in June 2008 as research manager for European Mobile Devices. Based in London, he is primarily responsible for research that covers mobile handset trends across Europe. He is also responsible for the European Quarterly Mobile Phone Tracker program. Francisco has been working in the telecom industry for 10 years in countries such as Japan, Finland, and Portugal. Before joining IDC, Jeronimo was responsible for the mobile devices business of LG in Portugal, in particular developing the open market channel and the business with Vodafone. In Portugal, he worked with all the mobile operators and managed the distribution channel of the second-biggest wholesaler. He launched a mobile software development company and did project management and consultancy in mobility for several companies in different industries. Before that, in 1998, he started working for Nokia R&D Center in Japan and then in Finland. He has a master's degree in management from Oporto University in Portugal and is a postgraduate in sales management from Lisbon University with a major in telecoms. He is fluent in English, Spanish, and Portuguese.

  • Jan Dawson

    I believe the surface doesn’t yet live up to the promise of encompassing all the benefits of the tablet-optimised environment and the classic desktop approach and apps. There are no surprises in the software – the Surface tablet uses the same two desktop and RT versions of Windows 8 we’ve been hearing about. As such, nothing has changed there and it still looks like a huge break with the past on the surface but with a jarring switch back to the old desktop world hidden beneath. In theory, it delivers all the benefits of both the tablet-optimised environment and the classic desktop approach and apps, but in reality the versions available to try at the moment are a horrible mishmash of the two worlds that is likely to be confusing for the consumer. On the hardware front, what does it say about the tablets Microsoft is seeing from its OEM partners as it gets ready to launch Windows 8, that they felt they needed to launch their own tablet? Either they are not happy with the devices out there, or they are not satisfied with only taking a licence fee from selling Windows based tablets. Either way, it is a huge vote of no confidence in its OEM partners, who should rightly feel slighted. It is rarely a good idea for an OS owner to start competing with its OEM partners, and this does not feel like an exception. The device itself looks compelling, but as usual we are left without pricing information, making it impossible to judge for certain what the market impact will be. Windows does have a huge installed base, and to the extent that IT managers see this device in one of its versions as a replacement for the Windows computer it should see some decent desktop adoption. But whether it sees much consumer interest will depend entirely on price and whether Microsoft is able to fix the poor UI experience in Windows 8 and RT.

    Jan Dawson – Ovum.

  • Salman Chaudhry

    Microsoft needs to be ticking a number of boxes in terms of unique selling points. We have seen how Apple has succeeded in the tablet space and how Google has fallen down by not owning their own hardware, which led to no uniformity and an unregulated jungle of apps. Many might argue that Microsoft’s tablet launch is too little too late, however if certain criteria are met and by coming into this market later than other vendors, Microsoft is in a strong position to take on Apple by bridging the gap between PCs and tablets with productivity tools such as Office – one of the key areas most other tablet manufacturers haven’t been able to cater for.

    We would anticipate that Microsoft will be following its x-box model strategy by looking to gain mindshare and market share despite potential initial losses
    made on sales of the device itself. Once enterprise adoption has been created, this will be followed by consumer adoption – which is taking a reverse approach to Apple.

    Key factors for the launch of the device to succeed:

    - Cloud-ready
    - Set of unique high-quality apps
    - DLNA compatibility
    - Native interoperability between office and mobile hardware
    - Device needs to work flawlessly
    - Maximize and nurture relationships with existing OEMs (overcoming the challenge of maintaining a hardware development strategy while keeping OEMs
    happy)
    - Price point below $500
    - X-box live functionality

    Salman Chaudhry, mobile computing analyst, CONTEXT.

  • Tony Grace

    Microsoft has always been a favourite for business use and these Surface tablets will usher in the next generation of ‘consumerised’ IT. Marrying consumer and business applications, the desktop application supportive device marks a step-change across business and consumer usage.

    We’re likely to see companies looking again at implementing ‘Bring Your Own Device’ schemes after their initial popularity following the launch of the iPad. These schemes give staff the freedom to choose the kit they want to use, for both work and play.

    Any business that is looking to embrace ‘BYOD’ must ensure they’ve the right policies and processes in place to ensure safe use at all times. Already our research shows 42 per cent of staff are using their own gadgets at work, with one in five (16 per cent) of companies offering ‘BYOD’ schemes. This is set to increase, with a further 20 per cent looking to roll-out similar schemes in the future. Companies will have to keep a watchful eye on this to make sure all devices accessing their networks have been checked and approved by IT teams.

    - Tony Grace, Chief Operating Officer of Virgin Media Business.

  • Max Tatton-Brown

    Warning: There are some generalisations ahead but I think they are ones we can all live with…

    MARKET

    Firstly: you aren’t going to buy a surface alongside your iPad – until it needs upgrading. I’ve long thought Apple is running to a 2 year product cycle (if you’re on iPhone 3G, you’d upgrade to the 4/ if iPhone 3GS, it’s the 4S) but there’s a catch with this; it’s largely perpetuated by the next Apple release, not those from external vendors.

    I think it’s fair to say, if you just bought a The New iPad, you likely aren’t in the market for this.

    If you have an iPad 2 (released March 2011, you’d have to be pretty unhappy with it to be upgrading again. And ask how many iPad owners feel that’s the case – out of the millions, I’m sure it’s a minority.

    So that leaves iPad 1 – early adopters. How many of those who weren’t happy with their tablet will have already jumped to Samsung Tabs or Playbooks by now? Were they really holding out for a tablet that included the full Windows experience?

    Time will tell. But the other side of market here is price.

    PRICE

    Although unannounced at yesterday’s conference, if MS can squeeze the Windows RT edition of the tablet (running on ARM and with just the Metro
    interface, no full edition of Win 8) out at a cheaper price point, perhaps the combo of familiarity and accessibility could turn the heads of those who
    haven’t previously taken the tablet leap.

    Kindle pricing has made its products widespread on the average tube carriage or aeroplane. But it hasn’t buoyed the more expensive Kindle Fire
    (still not available in UK) as Amazon might have hoped.

    With the iPad 2 already out there at £299, Microsoft will have to work hard to get a product of competitive quality out there at a point where
    price is a true differentiator – and strategically, they may be sticking to the braver route of taking Apple head on over ten years or so.

    After all, look at the Xbox. Generation one built a foot hold, Gen two has given Sony a run for its money in the same way that company disrupted
    the previous market leaders.

    APPS

    And where would this discussion be without mentioning the app ecosystem these days. Unless you go for the higher end model, which features the full Windows 8 experience behind the scenes, you’re tied to the Windows Marketplace. I dread to think how many apps I have backlogged in my
    iTunes account that I would immediately lose access to if I jumped ship to another vendor’s platform. Many other people must be on the same boat.

    METRO

    If there’s one thing going for the machine, I think it’s the Metro interface. For the first time since picking up my first iOS device, Metro presented a clear and distinct design vision made for the mobile experience. It’s not without its quirks and room for improvement but if they can tick the other boxes, there’s no better ambassador to the public than a fine interface like this.

    The last note should also consider the tech involved in this – Microsoft’s previous Surface project (now renamed “PixelSense“) has been officially going since 2008 and has prototypes being demoed long before the original iPhone. They also may have stacked the Zune project but the hardware in the Xbox has shown they can make a machine like this work.

    The tablet industry is young but, as with the smartphone market, things are levelling out after another ridiculous Apple head start. Microsoft has proved it can work hard in a market to move from being underdog to leader. If you look at the original Xbox, launched in 2002, it took ten years to make that leap – no doubt it will be interesting to take another look at this same market in 2022…

    - Max Tatton-Brown.

  • Mark Jackson

    Ultimately the problem for businesses isn’t so much whether the device is a Tablet, Laptop or Desktop computer; rather it is an issue of operating system usability and friendliness to their environment.

    As a business you look for different things to consumers and yet Microsoft’s Windows 8 operating system appears to be shunning the traditional desktop and familiar working environment in favour of something (Metro UI) that is perhaps not best suited to their needs.

    Having a slick user interface is all well and good but it won’t necessarily improve your productivity, especially if you’re primarily using computers for work related purposes, in fact it might even obstruct you. In some cases it can be akin to changing the layout of keys on your keyboard or the buttons on a calculator, making some features harder to find and use.

    Some businesses might justifiably feel like skipping Windows 8 altogether and sticking with the proven merits of W7.

    - Mark Jackson, Editor-In-Chief, ISPreview.

  • Judi Cogen

    Can’t wait for the Surface. I haven’t wanted to switch everything to an Apple platform, but I’ve been desperate for the portability of a tablet. This will definitely have a huge impact on how we work.

    - Judi Cogen, Principal, J Grace Consulting

  • Richard Barker

    With the increasing popularity of tablets in the marketplace, many businesses have been quick to follow the fashion and adopt new ‘must have’ technology on a ‘me too’ basis, without thoroughly considering the business case for say, a suite of brand new Microsoft Surface tablets. Tablet technology offers the chance to transform business, removing paper and reducing risk. But it is imperative for companies to understand the strategic role tablets can play, ascertain the fundamental IT needs, and make intelligent business decisions on investment.

    However, at the moment, the adoption of this highly promising technology lacks serious corporate commitment and strategy. In the vast majority of cases, it is individuals opting to use their own personal equipment to improve business performance, rather than a corporate decision and investment. Yet the appeal of this technology is compelling: unlike the barrier created by using a laptop, the tablet is easy to use within a meeting, providing a simple way of sharing a raft of information, from emails and documents to presentations.

    There are, understandably, some security concerns from the IT department, as well as those tasked with compliance activities. It is therefore essential that the business world takes a serious look at tablet technologies, assess the corporate risk and compliance implications and, critically, assess the role that can be played in improving efficiency and effectiveness. This is an important technological evolution; organisations should not allow a piecemeal, user-led adoption, but should encourage the setting of clear strategies for usage and security strategy.

    Before making a heavy investment in the latest tablets, companies need to understand the value of such a move, both from a finance and efficiency standing. If used effectively, there is little doubt of the value that tablet technology can bring to the business arena. Providing one single portal for emails, spreadsheets and documents and increasing productivity levels both in and out of the meeting room, tablet technology seems to unquestionably hold the future of acceptable, easy-to-use, business IT. Furthermore, reducing paper waste in meetings and removing the intrusive barrier of a laptop in the Board Room, tablets streamline both day-to-day business activities.

    With the pool of choice for tablet technology seemingly ever-growing, it is vital for companies to ascertain their core business requirements and determine whether tablet technology will allow them to get the most from their IT investments. If this is the case then businesses should be free to invest in such a tool. If it is not the case however, perhaps it is time to overstep the trend and concentrate on investments which will allow core business competencies to flourish outside of the ever changing fashion IT landscape.

    - Richard Barker, CEO, Sovereign Business Integration Group

  • Gideon Shmuel

    There are two ways that the Microsoft Surface has the opportunity to dominate the business market on launch. One is obviously the integration with Microsoft Office, the most popular office suite in the world. The smart clip-on keyboard lends this device perfectly to word processing and casual working in a way that other tablets with touchscreen inputs haven’t yet mastered. However I believe the real opportunity for Microsoft to get ahead of the curve in the tablets for business market is through offering a range input options. There are certain situations where touch based input just isn’t practical and I believe integration of other input methods such as voice and gesture control are integral to Microsoft’s success.

    The problem is that integration isn’t enough. These input methods should be seamlessly integrated and easy to use. The voice input must be able to understand a range of accents and the gesture control input must be able to interpret natural human gestures. Some gesture input solutions force users to adapt to their system with stiff or unnatural movements, whereas software such as eyeSight’s recognise a range of natural motions and gestures. Similarly some voice input forces the user to speak slowly and methodically without taking in to account difference in natural tempo and intonation.

    Simply put, customers buying for business use will flock to the devices that provide the most comfortable and natural user-experience for a range of situations. From board room executives to BYOD workers, the Microsoft Surface must be flexible enough to deal with a range of scenarios and inputs.

    - Gideon Shmuel, eyeSight’s CEO

  • Mick Rigby, MD, Yodelmobile

    From a business perspective, enterprise is going to like Surface for a number of reasons – it’s Microsoft, it’s a tablet, and it has the functionality of a laptop. It’s an IT department’s dream. And in the short term at least, Microsoft needs to focus on the enterprise market in order to get numbers up.

    From a marketing perspective, having other tablet players out there and doing something in the market is going to be beneficial. At the moment, the iPad has the sole monopoly on mobile marketing quality. Brands looking to enter the mobile marketing space only stand to benefit from having other players competing with the iPad. In the UK, certainly, there are no real competitors so another channel providing another way to reach new audiences will be great for businesses.

    For Microsoft the challenge will be widespread adoption. The problem it faces is the number of apps that are out there. If you’ve got the tablet, you need the content – content is king – and Microsoft is starting on the back foot. In order to make Surface work, it is crucial that it engages developers to develop quality quickly for the device. The key to mobile from a marketing perspective is volume – being able to deliver the numbers that marketers want to reach. In a fragmented market, Microsoft needs to consider how it’s going to get those numbers quickly.

  • James Bird, CEO Stone

    It is apparent that through the launch of the Surface Tablet, Microsoft has identified the business sector as a market where a single provider is still yet to dominate, unlike the consumer tablet market where Apple is leading the way.

    In business, the majority of challenges with the iPad and the adoption of Apple technology lie within trying to integrate the technology into Windows based networks. Most Public Sector organisations in the UK are still running a Windows based network and whilst integrating Apple devices is possible, it is not something that many organisations have been comfortable in doing.

    Against a backdrop of increased consumerisation and rise of BYOD in the workplace, organisations have been cautiously supporting tablet technology. However, with the introduction of Windows 8 and the launch of the Surface tablet, we predict that many more organisations will feel increasingly confident in using tablets as part of their mobile/field working strategies. IT Managers will take comfort from the relative ease in which the Surface tablet will integrate with their Exchange Server and existing enterprise applications that are designed to natively support Microsoft Operating Systems.

    The presence of a keyboard will be an added incentive for businesses to adopt the Surface tablet as it provides the potential for it to be used effectively in more situations than other tablets available in the market.

    A mobile workforce is increasingly becoming viewed as an effective and efficient workforce as mobile technology continues to develop. This is an exciting introduction from Microsoft and it will be interesting to see how Apple and other major tablet providers respond.

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