The Real Problem with the Surface RT

When Microsoft introduced the Surface RT, people responded with disdain. It was a Windows tablet with a limited version of Windows. The tablet could run specially-compiled applications and a few "real" Windows applications: Internet Explorer, Word, Excel, and Powerpoint.

Many folks, including Microsoft, believe that the problem with the Surface RT was that it was underpowered. It used an ARM chip, not Intel, for the processor. The operating system was not the standard Windows but Windows RT, compiled for the ARM processor and excluding the .NET framework.

Those decisions meant that the millions (billions?) of existing Windows applications could not run on the Surface RT. IE, Word, Excel, and Powerpoint ran because Microsoft built special versions of those applications.

The failure of the Surface RT was not in the design, but in the expectations of users. People, corporations, and Microsoft all expected the Surface RT to be another "center of computing" -- a device that provided computing services. It could have been -- Microsoft provided tools to develop applications for it -- but people were not willing to devote the time and effort to design, code, and test applications for an unproven platform.

The Surface RT didn't have to be a failure.

What made the Surface RT a failure was not that it was underpowered. What made it a failure was that it was overpowered.

Microsoft's design allowed for applications. Microsoft provided the core Office applications, and provided development tools. This lead to the expectation that the tablet would host applications and perform computations.

A better Surface RT would offer less. It would have the same physical design. It would have the same ARM processor. It might even include Windows RT. But it would not include Word, Excel, or Powerpoint.

Instead of those applications, it would include a browser, a remote desktop client, and SSH. The browser would not be Internet Explorer but Microsoft's new Edge browser, modified to allow for plug-ins (or extensions, or whatever we want to call them).

Instead of a general-purpose computing device, it would offer access to remote computing. The browser allows access to web sites. The remote desktop client allows access to virtual desktops on remote servers. SSH allows for access to terminal sessions, including those on GUI-less Windows servers.

Such a device would offer access to the new, cloud-based world of computing. The name "Surface RT" has been tainted for marketing purposes, so a new name is needed. Perhaps something like "Surface Edge" or "Edgebook" or "Slab" (given Microsoft's recent fascination with four-character names like "Edge", "Code", and "Sway").

A second version could allow for apps, much like a Windows phone or iPhone or Android tablet.

I see corporations using the "Edgebook" because of its connectivity with Windows servers. I'm not sure that individual consumers would want one, but then Microsoft is focussed on the corporate market.

It just might work.

An imaginary Windows version of the Chromebook

Acer and HP have cloudbooks - laptop computers outfitted with Windows and a browser - but they are not really the equivalent of a Chromebook.

A Chromebook is a lightweight laptop computer (in both physical weight and computing power) equipped with a browser and just enough of an operating system to run the browser. (And some configuration screens. And the ssh program.) As such, they have minimal administrative overhead.

Cloudbooks - the Acer and HP versions - are lightweight laptops equipped with the full Windows operating system. Since they have the entire Windows operating system, they have the entire Windows administrative "load".

Chromebooks have been selling well (possibly due to their low prices). Cloudbooks have been selling... well, I don't know. There are only a few models from Acer and a few models from HP; much fewer than the plethora of Chromebooks from numerous manufacturers. My guess is that they are selling in only modest quantities.

Would a true "Windows Chromebook" sell? Possibly. Let's imagine one.

It would have to use a different configuration than the current cloudbooks. It would have to be a lightweight laptop with just enough of an operating system to run the browser. A Windows cloudbook would need a browser (let's pick the new Edge browser) and stripped-down version of Windows that is just enough to run it.

I suspect that the components of Windows are cross-dependent and one cannot easily build a stripped-down version. Creating such a version of Windows would require the re-engineering of Windows. But since this is an imaginary device, let's imagine a smaller, simpler version of Windows.

This Windows cloudbook would have to match the price of the Chromebooks. That should be possible for hardware; the licensing fees for Windows may push the price upwards.

Instead of locally-installed software, everything would run in the browser. To compete with Google Docs, our cloudbook would have Microsoft Office 365.

But then: Who would buy it?

I can see five possible markets: enterprises, individual professionals, home users, students, and developers.

Enterprises could purchase cloudbooks and issue them to employees. This would reduce the expenditures for PC equipment but might require different licenses for professional software. Typical office jobs that require Word and Excel could shift to the web-based versions of those products. Custom software may have to run in virtual desktops accessed through the company's intranet. Such a configuration may make it easier for a more mobile workforce, as applications would run from servers and data would be stored on servers, not local PCs.

Individual professionals might prefer a cloudbook to a full Windows laptop. Then again, they might not. (I suspect most independent professionals using Windows are using laptops and not desktops.) I'm not sure what value the professional receives by switching from laptop to cloudbook. (Except, maybe, a lighter and less expensive laptop.)

Home users with computers will probably keep using them, and purchase a cloudbook only when they need it. (Such as when their old computer dies.)

Students could use cloudbooks as easily as the use Chromebooks.

Developers might use cloudbooks, but for them they would need tools available in their browser. Microsoft has development tools that run in the browser, and so do other companies.

But for any of these users, I see them using a Chromebook just as easily as using a Windows cloudbook. Microsoft Office 365 runs in the Chrome and Firefox browsers on Mac OSX and on Linux. (There are apps for iOS and Android, although limited in capabilities.)

There is no advantage to using a Windows cloudbook  -- even our imaginary cloudbook -- over a Chromebook.

Perhaps Microsoft is working on such an advantage.

Their Windows RT operating system was an attempt at a reduced-complexity configuration suitable for running a tablet (the ill-fated Surface RT). But Microsoft departed from our imagined configuration in a number of ways. The Surface RT:

- was released before Office 365 was available
- used special versions of Word and Excel
- had a complex version of Windows, reduced in size but still requiring administration

People recognized the Surface RT for what it was: a low-powered device that could run Word and Excel and little else. It had a browser, and it had the ability to run apps from the Microsoft store, but the store was lacking. And while limited in use, it still required administration.

A revised cloudbook may get a warmer reception than the Surface RT. But it needs to focus on the browser, not locally-installed apps. It has to have a simpler version of Windows. And it has to have something special to appeal to at least one of the groups above -- probably the enterprise group.

If we see a Windows cloudbook, look for that special something. That extra feature will make cloudbooks successful.

Microsoft adjusts the prices for Surface tablets

A lot has been said about the pricing of the Microsoft Surface tablets. Here's my view:

Microsoft introduced the Surface RT at $500 (well, $499) and the Surface Pro at $1000 (okay, $999).

In June, Microsoft announced a promotion: a free keyboard with the purchase of a Surface RT. The keyboard normally sold for $100, so June saw a discount of $100.

In July, Microsoft dropped the price of the Surface RT by $150 -- and cancelled the promotion for the free keyboard. In effect, Microsoft dropped the price by an additional $50. (For some reason, lots of the media claimed that this was "slashing the price".)

In August, Microsoft reduced the price of the Surface Pro by $100.

Looking at the trend, I would say that Microsoft is testing the market, gradually dropping the price and measuring demand. Economics 101, so to speak.

My guess is that Microsoft will keep measuring and dropping the price. Or perhaps dropping the price and removing features. The cannot change the hardware (assuming they sell the existing units) so they may remove software. The natural selection would be to remove the "no business use" version of Microsoft Office, but with the dearth of apps in the Microsoft app store, it would render the device all but useless. Could they remove something else?

Microsoft seems to be announcing changes every month. Let's see what September brings.

The Surface RT needs fanboys

The response to Microsoft's Surface tablets has been less than enthusiastic. Various people have speculated on reasons. Some blame the technology, others blame the price. I look at the Surface from a market viewpoint.

I start by asking the question: Who would want a Surface?

Before I get very far, I ask another question: What are the groups who would want (or not want) a Surface tablet?

I divide the market into three groups: the fanboys, the haters, and the pragmatists.

The Microsoft fans are the people who dig in to anything that Microsoft produces. They would buy a Surface (and probably already have).

Fanboy groups are not limited to Microsoft. There are fanboys for Apple. There are fanboys for Linux (and Android, and Blackberry...).

Just as there are fans for each of the major vendors, there are also the haters. There is the "Anyone But Microsoft" crowd. They will not be buying the Surface. If anything, they will go out of their way to buy another product. (There are also "Anyone But Apple" and "Anything But Linux" crowds, too.)

In between these groups are the pragmatists. They buy technology not because they like it but because it works, it is popular, and it is low-risk. For desktops and servers, they have purchased Microsoft technologies over other technologies -- by large margins.

The pragmatists are the majority. The fanboys and the haters are fringe groups. Vocal, perhaps, but small populations within the larger set.

It was not always this way.

In the pre-PC days, people were fanboys for hardware: the Radio Shack TRS-80, the Apple II, the Commodore 64... even the Timex Sinclair had fans. Microsoft was hardware-neutral: Microsoft BASIC ran on just about everything. Microsoft was part of the "rebel alliance" against big, expensive mainframe computers.

This loyalty continued in the PC-DOS era. With the PC, the empire of IBM was clearly present in the market. Microsoft was still viewed as "on our side".

Things changed with Windows and Microsoft's expansion into the software market. After Microsoft split Windows from OS/2 and started developing primary applications for Windows, it was Microsoft that became the empire. Microsoft's grinding competition destroyed Digital Research, Borland, Wordperfect, Netscape, and countless other companies -- and we saw Microsoft as the new evil. Microsoft was no longer one of "us".

Fanboys care if a vendor is one of "us"; pragmatists don't. Microsoft worked very hard to please the pragmatists, focussing on enterprise software and corporate customers. The result was that the pragmatist market share increased at the expense of the fanboys. (The "Anyone But Microsoft" crowd picked up some share, too.)

Over the years the pragmatists have served Microsoft well. Microsoft dominated the desktop market and had a large share of the server market. While Microsoft danced with the pragmatists, the fanboys migrated to other markets: Blackberry, Apple, Linux. Talk with Microsoft users and they generally fall into three categories: people who pick Microsoft products for corporate use, people who use Microsoft products because the job forces them to, or people who use Microsoft products at home because that is what came with the computer. Very few people go out of their way to purchase Microsoft products. (No one is erasing Linux and installing Windows.)

Microsoft's market base is pragmatists.

Pragmatists are a problem for Microsoft: they are only weakly loyal. Pragmatists are, well, pragmatic. They don't buy a vendors technology because they like the vendor. They buy technology to achieve specific goals (perhaps running a company). They tend to follow the herd and buy what other folks buy. The herd is not buying Surface tablets, especially Surface RT tablets.

Microsoft destroyed the fanboy market base. Or perhaps I should say "their fanboy market base", as Apple has retained (and grown) theirs.

Without a sufficiently large set of people willing to take chances with new technologies, a vendor is condemned to their existing product designs (or mild changes).

For Microsoft to sell tablets, they need fanboys.

Tablet fever? Take two tablets and call me in the morning

Microsoft announced their first tablet offerings, and the response has been positive. Enough people have submitted orders for the low-end model to sell out.

This shows two things:

First, it puts Microsoft in the top tier for the tablet market, and shows that people take Microsoft seriously. A number of manufacturers have produced tablets (Motorola, Acer, Dell, and even HP) the sales of non-Apple tablets have been tepid. By providing a tablet that sells out (even before it is for sale), Microsoft joins Apple and Google in the ranks of "suppliers of desired devices".

Second, that the interest in tablets is not an Apple phenomenon. Apple fanboys may lead the way for iPad sell-outs, but they had nothing to do with the Microsoft Surface sales. That interest is coming from a different part of the market.

Perhaps I am putting too much weight on this one event. It may be that Microsoft produced a small number of the low-end Surface tablets (the higher-end Surface tablets are still available). It may be that people are buying the Surface tablets as an experiment, or for corporate pilot projects, and the initial demand is higher than the "true market".

People (rightfully) point out the failures of Microsoft's phones, Zune, and Kin offerings. But those products never gained traction in the market, and none sold out -- much less prior to shipping.

There is interest in the Microsoft Surface tablets, and I believe all tablets. Apple and Microsoft get a lot of attention from brand recognition. Google does too, when it ships devices.

I think we are about to undergo a case of "tablet fever", with tablets becoming the most desired device. It should make for an interesting ride.