Jun 25, 2012 — by: E. Werner Reschke
Categories: iPad, Predictions, Review

Microsoft-surfaceThis past weekend I spent some time thinking about the two presentations in June by Apple and Microsoft. Apple's WWDC Keynote was once again on stride, showing break-through hardware with the MacBook Pro Retina Display, OS X Mountain Lion and iOS 6. All three demonstrate Apple isn't lost, wandering in the desert, but has a plan and knows where it wants to go next. However, Microsoft's announcement manifests how much trouble the software giant is in.

Steve Ballmer did his best to put a smiley face on a project that is clearly late to market. The announcement of Surface would've been revolutionary if Ballmer made it in 2008 — even 2009. While the number three is usually good to Microsoft, Microsoft's third attempt at developing hardware and software together (Zune, Xbox and now Surface) will ultimately fail. The reason why is pretty simple: the market has passed Microsoft by.

Microsoft only has two, maybe three, major wins to show for its multi-decade effort as a tech-giant: DOS, Windows (coupled with Office) and Xbox. Examining those areas it is easy to see that in each case, Microsoft only had one challenger who was significantly smaller or less focused. With DOS, there really was no competition except for Apple who was charging 2-3 times as much for their product. Windows took several years of development, as most don't remember Windows 1 or Windows 2. It wasn't until Windows 3 and the 3.1 that Microsoft got it "right enough" that the market shifted gears. Again the only competition was a struggling Apple under the helm of John Scully (and soon several other ineffective CEOs) and a natt called Amiga. Windows 95 came to market with a roar and soon after Office took out struggling competitors WordPerfect and Lotus 1-2-3. Again Microsoft was taking on competitors that were far smaller or far less focused. The gaming market saw Sony and Nintendo as the Kings until Microsoft entered with Xbox. It took several years for Microsoft to make an offering compelling enough to steal Play Station's Thunder. In response, Nintendo ran to a different niche called "causal gaming" with their Wii.

Historically, for Microsoft to win a market, marketplace conditions must be just right:

  • A limited number of competitors
  • Competitors struggling to take the lead
  • No competitor has captured 50% of the marketplace
  • Competitors are resource constrained compared to Microsoft

In marketing terms, the market must be in the Innovative or Early Adopter stage.


Source: NN/g - Nielsen Norman Group

As the graphic above shows, customers in the Innovator and Early Adopter stages are willing to live with technology that occasionally fails, provide feedback and then eagerly await fixes. This is where Microsoft has won, when the market is in these two stages. Windows 1, then 2, then 3. Xbox, Xbox improved, then Xbox 360. However, in the later three stages customers are unwilling to put up with the test, break, fix, test-again mentality. They want products that work and make their lives easier. The only feedback they will provide a company is that they will never buy another product from that company again. With blogs and social networks, the opinions of these people spread like wildfire, and a company's product then has an extremely difficult hurdle to overcome: public perception against their product.

Ultimately, this is why Surface will fail. It's not because Microsoft is a bad company, or incapable of making a good tablet. It is because the market has already crossed the chasm into the Early Majority stage. People are unwilling to see which Surface product makes it in the market place: Surface RT or Surface Pro. There are already very good tablet solutions for customers (iPad / Android). Despite all this, Microsoft came out of the gate last week pretending they were the fist to introduce the market to this new tablet technology.

History has shown Microsoft doesn't succeed in the later stages of a market. Surface will be no exception.

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  1. Kevin ~ Jun. 25, 2012 @ 9:51 am

    With Zune Microsoft pretended the market was in the early adopter stage. The entire mantra as "If we didn't believe this market was in transformation, we wouldn't be playing in it." That was a constant defense line when questioned by the tech media if it was too late against iPod. Clearly, the tech world knew it was too late so they questions Redmond about it. And what was Mr. Softie's response? A denial statement about "transformation..." What this reveals is Microsoft is so arrogant, they believe they are powerful enough to sway the market to being where they want it to be - not where it is... A fools errand some might say. I would also point out, by the time Surface's both ship they'll both be two - if not three - years late. RT won't run jack squat, and Pro will be an overpriced behemoth of a laptop with a screen glued on top. I loved the way they showed off the magnetic keyboard cover - as if we've never ever, ever seen something like that before, or use one now on the iPad! Talk about living inside the beltway!... If you want a magnetic keyboard that acts as a cover, go buy one for your iPad, or the iPad you'll soon own. There are many to choose from - oh and the iPad is shipping - today - and it has 625k apps to choose from. Any questions?... ~K #
  2. marlo ~ Jun. 25, 2012 @ 9:55 am

    I agree with you. Too late to the technological landscape with their attempt. Maybe they are trying to satisfy the needs of those windows crowd who are also late to the party. #
  3. PhillyG ~ Jun. 26, 2012 @ 12:30 am

    On the eve of the iPad introduction back in 2010, Steve Ballmer made a very similar presentation. Back then, he got Hewlett Packard to provide a prototype HP Slate. That presentation failed on two counts. It failed to hamper the successful launch of the iPad, and it failed to promote the success of the HP Slate. Lucky Ballmer, the stink of failure did not stick to Microsoft, it stuck to HP instead. This time, on the eve of a Google Tablet introduction, no OEM wanted to "shine" in the Microsoft spotlight, having seen what happened to HP the last time. That's why Microsoft had to fabricate its own prototype hurriedly, out of magnesium vapor (I wonder if that is a euphemism for hot air). For some strange reason, the same "journalists" that in the past accused Steve Jobs of "distorting reality", have accepted this Steve Ballmer tale as the gospel truth. Maybe they think that since Microsoft doesn't have a scapegoat like HP this time, Microsoft must be telling the truth. #
  4. CuJoYYC ~ Jun. 26, 2012 @ 6:49 am

    Two years. That's how long Surface will be in the market and then, like removing an icon from the dock, poof. Gone. M$ geeks and some M$-focussed companies will buy Surface. Other than that, few will be sold, especially in the consumer market. #
  5. Alexander ~ Jun. 26, 2012 @ 1:34 pm

    What's funny is that as you say, public perception of the company and the product are decisive for the product's success. In this regard, it doesn't really help that Steve Ballmer and that Sinovsky guy were totally incapable presenters, neither does the fact that the only occasion anyone tried to do anything with the tablet, it crashed ;) #
  6. Sheryl Ting ~ Jun. 26, 2012 @ 2:24 pm

    You have omitted Microsoft's last failed attempt to enter the Tablet market with it's failed Origami Project, and the short-lived fiasco of the UMPC, not to mention the abandonned Courier just a short time ago. The latter was shut down before it even made it past Prototype. #
  7. Gsreth ~ Dec. 10, 2012 @ 4:55 pm

    Right oh so you list these circumstances as required for Microsoft to succeed. Historically, for Microsoft to win a market, marketplace conditions must be just right: • A limited number of competitors • Competitors struggling to take the lead • No competitor has captured 50% of the marketplace • Competitors are resource constrained compared to Microsoft So when Xbox came to market, sony, nintendo, sega and neo geo were not already well established market leaders ? People whinges for ages that xbox was never going to be a success. But loo t it now. The surface and in fact the windows 8 tablet, IS a new device type. Laptops were invented to provide some level of mobility by compromising desktop computing power. tablets up until now have been a device which is even more limited to provide even more mobility, bur even devout ipad fans wont use there ipads to do more complicated thins like book an airline flight over the web, or write more than short email, basically the same sort of thing you already did on your phones. Even the surface RT with the limitation of only MS store apps works absolutely fine for composing long emails and documents, working on complex spread sheets, plus all the consumption that you might want to do with watching movies with no big black borders, super fast and slick responsive web browser that puts all other 'pinch to zoom' implementations to shame. Sure windows RT is brand new and there are some kinks, but the kinks are jut tht, not massively limiting. For a student for example, with the touch or type keyboard, standard office applications and long battery life its a much easier tool to get work done on. Sure there are no as many fart apps on the store, But give it time and the store will grow, in the mean time you can use your surface for something useful rather than just playing angry birds. I do not need to lug my laptop sith md now, it can stay docked at work and all I need is my surface RT with me to perform almost any task (rdp to laptop for those that I cannot do on it) There is so much anti Microsoft sentiment that many reviewers start their review of the surface with such unbiased comments as. Is it better than my ipad and then go onto say that they hzte it because its not an ipad, and completely miss the point that you do not need to limit yourself to only what an ipad can do to test this out, as it can do so much more and be so much more useful than an ipad. An ipad is an extra device that some people like. Its a toy that you can sometimes trick into doing something useful. The surface is something useful that you can do consumption stuff on too. The mount of interest my single surface put in the hands of many local business owners and employees, many of whom have already tried, and failed, to put an ipad to productive work in their business, is stunning, explaining to them they although its good that the oems should be bringing out a much bigger variety of devices and there might be an even better fit. but they see virtually no value in their ipads at work, and lots of value in a proper tablet with real productivity tools included. #

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