Surface: Because Microsoft does so well making hardware?

Perhaps they'll really imitate Apple and go to Foxconn

Build a business case: developing custom apps

Analysis If you want a job done right, do it yourself: that’s the consensus on the Windows 8 Surface tablets. Or, put another way: “OEMs, please pay attention. This is how you build a PC.”

It’s easy to draw this conclusion given the world’s largest maker of software has bothered spending money – something it has been cutting back on in non-core areas – as well as its time designing and building its ideal Windows tablet to take on the iPad.

Microsoft has been banging on about the user “experience” for years, and now it’s putting into practice some of its ideas, without compromise.

In its Surface release, Microsoft boasted that the tablet had been conceived, designed and engineered entirely by Microsoft and built on the company’s 30-year history of “manufacturing hardware”.

Though when you think 30 years and Microsoft history, you don’t think hardware. You might think mice. Or Xbox – though that’s just over 10 years old. Or Windows drivers. But not bottom-to-top PCs.

Surface machines will be built by somebody else – unnamed – and branded as Microsoft, for sale by Microsoft through its US and selected online outlets.

But what if there were another, less idealist strategy afoot? What if Microsoft built Surface not as an object lesson to Luddite PC makers but as a proof-of-concept to convince makers of x86 PCs to buy into the Windows 8 form factor and touch UI as much as Microsoft has?

Certainly, as The Reg has noted earlier, the PC makers which Microsoft has traditionally relied upon needed to be taught a thing or two when it comes to tablets.

Dell and Hewlett-Packard, for example, put ego ahead of good thought and product design on their recent tablet efforts, having gone with Google’s Android or webOS. Their products were hailed during their run-up and launch by the gadget press – which is now excitedly salivating over Surface – but left Dell and HP with expensive backlogs of unsold inventory.

Dell and HP weren’t alone; Motorola and RIM also blundered badly – criminally badly for operations that pride themselves as being pioneers.

PC makers have been caught on the back foot, and if Microsoft were going to strike with a version of what it thinks PC makers should be doing, then now is certainly the time. And Microsoft is taking tough line on Surface.

Monday’s announcement set the rules as follows: “OEMS will have cost and feature parity on Windows 8 and Windows RT.” There will be two Surface machines, one for x86 and the other for ARM-based Windows RT - you can read the specs here (PDF).

Chief executive Steve Ballmer said Surface “sort of primes the pump for more innovation around Windows 8 (and) brings new technology to the Windows PC platform”.

But while the PC makers are weakened, Microsoft is not in a strong position to dictate terms and it must convince PC manufacturers to buy into the tablet as a mass-market device, rather than simply reverting to type and slapping a new version of Windows on the same old desktops and laptops once Windows 8 is released later this year.

Proof Win8 isn't another Vista?

The problem is Windows 8 isn’t just new, or unproven: it’s actually proving unpopular among those used to the desktop – or “classic” use and design environments.

Microsoft is throwing everything into convincing users to abandon the existing desktop UI experience and app development model for touch, with apps delivered to the device only online. Existing x86 apps on Windows 8 look like second-class citizens compared to those for Metro while Internet Explorer on the Metro side doesn’t talk to IE on the classic desktop side, making seamless web browsing impossible.

Despite this, Metro is in full swing inside Microsoft. PC makers, however, have been burned by Microsoft’s vision before: Windows Vista left makers and sellers with unsold stock. They would be wise to be skeptical of buying in to another big Microsoft vision, especially coming off the back of their own tablet disasters and in the midst of layoffs – at HP.

Surface as a proof-of-concept theory is a strong idea. PC makers have screwed up, and HP, Dell and Asus have promised Windows 8 on a variety of machines. What Microsoft must demonstrate, however, is that its idea for a Windows tablet is a commercially viable concept.

Microsoft will hope applications on the Windows Marketplace will fuel customer adoption of Surface and vice versa in a virtuous circle that builds market that proves to PC makers that the Windows 8 form factor is both growing and viable. That form factor will, of course, be based on the ideal Microsoft design.

If Surface is anything other than a proof of concept then it breaks the raison d'etre of the decades' old PC-Windows model: openness of architecture and freedom to customize. It was sold as being the opposite to Apple. Now Microsoft sees value in controlling the architecture, just like Apple, to produce what it hopes will be a stable and liked device, like the iPad.

In going it alone on design, manufacture and sale that’s what Microsoft would be doing, bringing it closer to the Apple model.

But hardware for Microsoft is a means to an end rather than a destination, plus there's that history with the PC makers. The Xbox, now being cited at the moment as the closest comparable to Surface, has been a market and brand share success for Microsoft but it’s a commercial wash.

Eleven years after the first Xboxes were built and assembled, the business still bumps along the bottom of Microsoft’s balance sheet: in the most recent quarter the Xbox unit reported revenue of $1.6bn and loss of $229m. Along with its Online unit, home to MS search engine Bing, Xbox is Microsoft’s only loss-maker.

Based on the experience of Xbox, Microsoft is likely hoping that Surface is right on the money and that partners are desperate enough to quickly buy into its idealised Windows 8 tablet vision. ®

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