Microsoft... Still Doesn't Get It

A Microsoft executive, Frank Shaw's, attempt to poke Apple has gained some attention,

Note: If you are the TL;DR type, let me cut to the chase. Surface and Surface 2 both include Office, the world’s most popular, most powerful productivity software for free and are priced below both the iPad 2 and iPad Air respectively. Making Apple’s decision to build the price of their less popular and less powerful iWork into their tablets not a very big (or very good) deal.

Since we launched the Surface line of tablets last year, one of the themes we’ve consistently used to talk about them is that they are a terrific blend of productivity and entertainment in one lightweight, affordable package. In fact, we’re confident that they offer the best combination of those capabilities available on the market today.

Wait a second... then why did Shaw just say this?

I have to say, I’m really excited for a 1080p Lumia with a third column on my start screen so I can keep a close eye on more people, more news, more stuff.

That is, if Microsoft's tablets are the best combination of productivity and entertainment on the market, why is Shaw excited about buying a Nokia, even if Microsoft is in the process of acquiring that company? Shaw leaves me with the impression that his blog post is less about touting his company's great product than it is an attempt to promote Windows tablets, generally, by taking digs at Apple. Microsoft was very late to recognize the market for the tablet computer, and continues to withhold Office from competing platforms as it has scrambled to develop its own tablets. On top of that, part of the reason that Microsoft's tablets are "affordable" is that they aren't selling, and as a result prices have been slashed... now twice. I don't want to diminish the Surface as a product, and I suspect that it would have been more successful had it been released two years earlier, but as with the Zune there's a significant price for coming late to market with a product that doesn't capture the imagination of your market.

What strike me most about the piece is how the Surface is, in essence, touted as a laptop. Microsoft, we're told, is the expert in how real people work. Real people want keyboards, trackpads, multiple windows open on their displays, a full version of Office. (Real people also apparently want an obnoxious, in-your-face tile interface shoved in their faces when they boot up a Windows 8 computer, and want touch screens on their portable computers.) And yet real people demonstrate Microsoft's skill in assessing their needs by buying Apple and Android tablets in huge numbers, while largely ignoring the Surface.

If you're typing or editing large documents, are creating spreadsheets, or working with other complex documents, you probably do want a keyboard and mouse or trackpad, but... you probably already have a desktop computer, a portable computer, or both upon which to perform those tasks. If you have a notebook computer that runs Windows, what's the advantage of toting around a Surface tablet with a keyboard cover when you can simply use your computer? The power of Surface has given Windows tablets about 5% of the market, which is enough to keep your toes in the water. Apple has about 5% of the global PC market, so in a sense Microsoft is in good company.

Shaw declares that by offering so much productivity Microsoft is leading the market (from behind)....

And so it’s not surprising that we see other folks now talking about how much “work” you can get done on their devices. Adding watered down productivity apps. Bolting on aftermarket input devices. All in an effort to convince people that their entertainment devices are really work machines.

In that spirit, Apple announced yesterday that they were dropping their fees on their “iWork” suite of apps. Now, since iWork has never gotten much traction, and was already priced like an afterthought, it’s hardly that surprising or significant a move. And it doesn’t change the fact that it’s much harder to get work done on a device that lacks precision input and a desktop for true side-by-side multitasking.

I think Shaw is onto something when he describes how Microsoft is in touch with what people want, if we define "people" as the population that is already predisposed to buy a Surface. The problem is, he is touting solutions that have absolutely nothing to do with how most people use tablet computers. The tablet is largely a product for consumption of media and entertainment, not for productivity. To the extent that you can add on productivity, about 90% of tablet users are going to find all of the power they need (and perhaps more) in the free apps that Apple is offering, and those apps will get better over time.

Perhaps what Shaw is displaying is discomfort at seeing his company's business model increasingly threatened by free software. Sure, the competing software may be less powerful than Office suite, but... free, and good enough for a significant majority of users. It's part of an expectation Microsoft helped create when it launched its browser war against Netscape, and even before that with its controversial bundling practices: the idea that you pay for your computer hardware, and that the software you need for basic functions (an ever-expanding category) should be free. Your Surface tablet runs Windows 8 and Office, but will upgrades to either be free? I doubt that's what Microsoft has in mind.

Apple seems to be taking the position that software is a commodity product that is best used to sell hardware, and by expanding the sphere of what its customers get for free - and how well its products play together - they want to keep customers in the Apple ecosystem. I can see merit in Microsoft's vision of the future, with people having full capacity to do whatever it is that they want to do on whatever device they have with them, but I'm not sure that the vision is compatible with Microsoft's business model - at least not in the mass market. If expensive software upgrades are required for any product running Windows, that cost will quickly undermine Microsoft's claim that its products are more affordable than those that offer free upgrades. Apple's vision of the future seems to be to allow users of its products to transition from one device to another, phone, tablet, computer, Apple TV, while having each device know exactly where you left off on the other. Continue your movie from where you paused, continue editing your document from where you stopped.... That vision seems to be more viable, and is unquestionably consistent with Apple's business model and - despite Mr. Shaw's claims - seems to be more consistent with how people in the mass market are using their devices.

So, when I see Apple drop the price of their struggling, lightweight productivity apps, I don’t see a shot across our bow, I see an attempt to play catch up.

Whereas I see Apple as obviating the need for 90+% of its customers to ever purchase "Office for IOS", should Microsoft ever muster enough courage to release such a product.

I think they, like others, are waking up to the fact that we’ve built a better solution for people everywhere, who are getting things done from anywhere, and who don’t have hard lines between their personal and professional lives. People who want a single, simple, affordable device with the power and flexibility to enhance and support their whole day. :)

I admit it. If I had to choose between doing my professional work, or even blogging, on a tablet or a notebook computer, I would pick the notebook computer as the "single, simple, affordable device with the power and flexibility to enhance and support their whole day". But I don't have to choose, and thus can use my smartphone or tablet for the functions they provides extremely well - basic communication, media consumption, web browsing, simple games, demonstrations, and online reference materials - and switch to my notebook computer (or go to my desk) for more complex tasks. To look at it another way, the fact that I have a Swiss Army knife and thus can sometimes avoid using a more specialized tool doesn't mean I'm going to throw away my saws, knives, screwdrivers and scissors. If your vision of a typical tablet user is somebody typing away on a keyboard using a fully featured windows OS, you're not looking at how people interact with their tablets.