Microsoft Surface:
A Calculated Gamble?
In typical Microsoft fashion, Microsoft is late to
the tablet party. However, this is not
due to lack of competence, it is Microsoft’s way of doing business. In all aspects of the word, Microsoft is an
analyzer firm. They sit back, watch and analyze
new markets, find the deficiencies in them, and then make and sell a better
product that what is currently being offered in the market. So the
timing of Microsoft’s announcement for the launch of the Surface tablet should
come as no surprise; however, what is a surprise, is that Microsoft is not only
creating the OS for the tablet, but the hardware as well.
Why did Microsoft, a software giant, decide to build
the hardware for its tablet when this move could upset Microsoft’s current
hardware partners? Wilson Rothman of MSNBC has an interesting
take; “because they had to”. Another reason could be that Microsoft’s
hardware partners could not build a tablet on the quality level of Apple, which
is using high-quality aluminum from Australia.
Lastly, as
Horace Dediu says, “The Windows you-sell-the-hardware-we-sell-the-software“ business model is outdated and not profitable anymore. Whatever the case, much of Microsoft’s success will
depend on the quality and style of the tablet.
The other ingredient for success for the Surface
tablet, will come in the form of its operating system. Microsoft plans on installing Windows 8 to
operate and run the tablet, which unlike Apple’s IPAD, will make it more of a business tool than an entertainment device. Microsoft’s vision is for the Surface to replace the PC and become the new norm
for business.
So the successfulness of the Surface tablet will
come down to the quality and style of the hardware and the quality of the
software. If businessmen and women take
to Surface like they did to the PC, then Microsoft could be changing the
business world, leading to another great product from one of the world’s most
profitable companies.
Microsoft has had a very long run as the top
software developing firm in the world and has used its many partnerships to
gain control of the market, but now that they have decided to bypass their OEM
partners and build their own tablet, practicing managers should take note. Sometimes in business, you have to make hard
decisions and if that means bypassing some partners to better your firm, you
have to make that decision.
Also, managers should take note of how Microsoft
analyzes markets before they enter them.
Microsoft does not develop a product and take it to the market without
having done its research on the market first.
This studying of the market allows Microsoft to see what deficiencies
other products have created for the customers and then develop a product to
fill those gaps. To me, it’s brilliant!
Interesting article! Microsoft is working on its sustainability. The company is using core competencies to make improvements in the tablet market, but waiting until after they analyzed the imperfections in other tablets to improve theirs. I'm impressed with their thinking. I wonder how much this tablet will cost. If it has great quality in its hard and software and is priced competitively and marketed correctly, I can see this product overtaking the iPads for use in businesses, in homes, and in schools. My daughter may be using these instead of the PCs at her school in a year or two. It will be interesting to see the features of this product and how it stacks up against Apple.
ReplyDeleteThis is a great strategic move for Microsoft. By developing their own hardware for the new tablet, Microsoft will have more control over their final product. They will be able to reduce costs by making complementary parts that work well with their products. Even though Microsoft's move might break ties with current partners, it might help Microsoft by reducing their reliance on other companies. In addition, because Microsoft already has a competitive advantage with their OS systems, the move to the tablet will give Microsoft expansion into a new customer segment where a new audience will benefit from these systems. Since Microsoft is a very successful analyzer firm and has a high breadth of experience developing better versions of existing products, I have full faith that Microsoft's efforts will be a home run.
ReplyDeleteI completely agree that sometimes for sustaining the success of an organization, the management has to take decisions which changes or sometimes adversely affects the relations with the organization’s business partners. But, such strategically decisions need in-depth research and study to attain an appropriate strategy, leading to gain more customer satisfaction, and finally, benefit the organization in terms of increased market share and long term profitability of an organization. Microsoft, being an analyzer firm is using its competencies to sustain its success in the market, by waiting and watching to understand the exact demands of consumers in an analytical way. The firm aims to make available improved products in the market at competitive prices.
ReplyDeleteEhric, I too see how the Microsoft Surface could eventually become the norm for business use. As someone who owns an iPad, there are many times where I wish I could use it for more business like activities. But the fact is, the I-pad is more of a toy than a business tool.
ReplyDeleteOnce the Surface comes out, I will consider buying one to replace my I-pad, assuming that the surface is as functional as the I-pad and can do the business activities that I need to do.
I agree Kim, Microsoft's decision to build their own tablet allows Microsoft to have control over the entire manufacturing process of the tablet. If there is something they don't like about the design, they can fix it house. It will save them time, money and probably make the final product a hit with consumers.
ReplyDeleteGood comment Shivani. I am pretty sure that Microsoft did all kinds of analyses to see what the effects of manufacturing their own tablet would cause. By the looks of it, the analyses told Microsoft that it would be more profitable to design, manufacture and sell their own product as opposed to having someone else do the work. We'll see if their decision will work or not later this year.
ReplyDeleteMicrosoft and Toyota seems to have similar strategy. Both companies are not focused to be the first in the market with their product but they both wait and watch their competitor and revamp that product for customers to get the bigger bang for their buck.
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