Debating the Microsoft Tablet (Part II): Does Microsoft need to step into Tablet space?

Ballmer has promised that a Windows 7 tablet is on the horizon. Maybe that is a plan in action, may be its just a pipedream.

However, does Microsoft need to focus on developing a Windows 7.0 tablet? Instead what Microsoft needs is to focus on having the relevant and adequate strategy in place for taking advantage of the changing mobile computing market. Ballmer’s reaction to the Apple and Google tablet party can just be not stepping into the Tablet space without having a clear ability in the space. Microsoft has strengths, and it has weaknesses. Rather than trying to overcome its weaknesses to flounder about in a futile attempt to compete in markets that aren’t its core business, Microsoft should focus on its strengths, and how to continue to evolve and adapt them to meet the changing needs of its customers.At one point, mobility was about putting a Windows desktop into a more portable form factor, and supplying the world with Windows laptops, but the game has changed. That means that Microsoft does need to recognize that mobility is rapidly changing and determine where it fits in the new equation, but it doesn’t need to build the mobile platforms.

The rise of increasingly powerful and capable smartphones, and the introduction of the tablet revolution have shifted mobility away from Windows. The next generation of mobile computing relies on a mobile OS that is uniquely suited for mobile devices. Microsoft will shoot itself in the foot if it continues to try to make mobile computing about putting its Windows desktop operating system into new gadgets. Apple and Google have their assets build ground-up for touch based devices which is the key leverage. Windows 7.0, however is not ideally build for a touch screen internet interface,

Most of the world relies on Microsoft Office for essential productivity software. Microsoft’s customers are heavily invested in Microsoft server technologies like Exchange, SharePoint, and Office Communications Server, and they want tools to allow them to access the Microsoft backend while on the go.Rather than wasting time and money pursuing a Microsoft-centric platform that would probably only capture 10 percent of the market anyway, Microsoft should be building its mobility strategy on developing cross-platform solutions, or platform-specific apps that enable the 90 percent of the market to continue using Microsoft software no matter what smartphone or tablet they choose.

Debating the Microsoft Tablet (Part I):Is there a strategy in the first place?

The Apple iPad has sold of 3.3 million units and the party for Apple has just begun. ABI research forecasts Apple to sell as many as 11 million iPads this year.

The iPad has opened a huge new market and the Tablets are billed to be one of the fastest growing segments of this decade, beside smartphones. Apple has taken a pole position which would be difficult to better, but competition from other OEMs and Android 3.0 Gingerbread will only kick in late this year or early next year Apple a huge first mover advantage.

While one Steve (Jobs) delivers products extraordinaire and is taking his company (Apple Inc.) to hitherto unknown levels, the other Steve (Ballmer) frets, stabs, promises, commits, flounders and makes a mockery of his company (Microsoft).

Steve Ballmer admits that a Tablet is “job one” at Microsoft. Steve Ballmer is confident about Microsoft’s future in the tablet market, and goes as far as to take a stab at the iPad by pointing out that the Microsoft tablet will be able to print documents. Even as Microsoft can’t give an estimate as to when we can expect to see a tablet from their company, Ballmer has stated that the tablet will be ready “as soon as they’re ready”, and “it ain’t a long time from now.” Ballmer claims that Microsoft must take its time to get the product just right which is a subtle indication that Microsoft is nowhere close to producing a tablet. Even the new Intel processor, “Oak Trail” that is supposed to power the Windows tablet, isn’t expected to hit the production line until next year.

Given Mr. Ballmer own outline strategy for the tablet, it’s apparent that Microsoft has no set strategy. As it is, Microsoft will face numerous issues adapting Windows 7 for tablets. Apple’s iOS was designed from the ground up with touch screen devices in mind, while Windows 7 was conceived as an OS for a keyboard-and-mouse equipped PC. Even while Windows 7 is a vast improvement over the disaster that was Vista, but given Microsoft’s recent track record (think…Kin) it is difficult to imagine an outstanding Windows 7 tablet debuting in the near future. Microsoft may take a leaf or two from its Microsoft Surface project and NUI thoughts. But presently it is extremely unclear how mature are these two platforms to support a product of the scope and scale of an iPad.

Kin is Dead. Long Live the Kin. (Part II)

Continued from an earlier post

The Kin as a product was also a victim of muted interest in the Microsoft services platform. Windows Live, Bing and Zune are major Microsoft service elements which however have not been able to entice the American audiences. This actually underlines an ongoing problem for Microsoft in its efforts to use its services to drive adoption of its mobile platforms and vice versa. This would be a problem that would continually haunt WinMo and as per early indications, the Windows Phone 7 may also be limited to its “island” of Microsoft approved services.

However, what looks like the biggest factor in Kin’s failure was possibly Verizon’s service pricing. Bothe devices came with two year contracts with a minimum monthly voice tariff of $40 and data tariff of $30. This meant that despite Microsoft’s intention to position Kin below Windows 7 and other high end devices, the Kin One and Two were competing with devices such as iPhone in terms of monthly service cost. Interestingly Kin’s most innovative and differentiated aspect: The Kin Studio which was a digital diary and content aggregation point from which users could populate other services. The drawback of this service was that it needed to constantly synch data with cloud based servers and thus Verizon wireless had very limited flexibility when pricing its data tariff.

So while Microsoft correctly identified an opportunity for an inherent social networking experience, it failed to recognize that a cloud based push infrastructure would lead to exorbitant service prices that took the product out of the reach of its target audience.

The termination of Kin could also have been a fall out of regime change within Microsoft. The technology team backing Kin departed a few weeks after its launch and there apparently were no backers. Also Microsoft is possibly trying not to de-focus from its Windows Phone 7 given its strategic criticality.

The decision to close down Kin while hasty and premature could still yield some results for Microsoft in terms of borrowing Kin’s associated infrastructure and merging Kin’s elements into Windows 7 from the start. With the failure of Kin, the pressure builds on Microsoft to ensure the 100% successful delivery of Windows 7.

Steve Ballmer’s paints Microsoft’s future in Cloud

Cloud computing continues to be big business. Cloud-based offerings pulled in $46.4 billion in 2008, a number that was projected to increase to $56.3 billion in 2009 and $150.1 billion by 2013. Thus the technology is slated to have a 21% CAGR over the near horizon.

Steve Ballmer is busy directing the resources of Microsoft to build its future in the cloud. Quoting Ballmer:
“The cloud fuels Microsoft, and Microsoft fuels the cloud. About 70 percent of the folks that work for us today are either doing something exclusively for the cloud or is inspired to serve the five dimensions that I talked about today. A year from now, that will be 90 percent.”

Ballmer is buoyant with the fresh success of Office 2010. Microsoft Office 2010, due in June, will is optimized for the cloud. Ballmer said. “We’re having some success. For the parts of our Office product that are already in the cloud, about 90 percent of the customers – at least institutions that we work with – choose us.”

Microsoft is moving toward storing data in the cloud as much, or more, than on a user’s hard drive – whether it be the movies that users can download via Xbox Live or TellMe, a voice-driven service that will handle about 10 billion spoken commands this year. The Windows 7.0 will also have the plug inns that will enable it to connect to the cloud. Windows Azure, SQL Azure, Microsoft SharePoint, and Exchange – lie on top of data services and use the smartphones and enterprise computing devices as input. Microsoft is also launching an ad campaign focused on its commercial and government businesses, which stand to benefit from cloud services.

So, then that is about Microsoft’s effort to move and centralize its business around cloud computing. Reproduced below is Steve Ballmer’s memo to the Microsoft group employees which places emphasis on cloud computing as the future for Microsoft. For once Mr.Ballmer you are so right and spot on.

The Body copy of the memo:

Today, I spoke to a group of students and faculty at the University of Washington to discuss how cloud computing will change the way people and businesses use technology.

My goal was to challenge people to look at the cloud more broadly and understand the multidimensional nature of the cloud transformation happening today. Other companies have defined the cloud in a narrow, one-dimensional way. Although these companies provide some interesting components, Microsoft is uniquely delivering on a wide range of cloud capabilities that bring increasingly more value to our customers.

In my speech, I outlined the five dimensions that define the way people use and realize value in the cloud:

• The cloud creates opportunities and responsibilities
• The cloud learns and helps you learn, decide and take action
• The cloud enhances your social and professional interactions
• The cloud wants smarter devices
• The cloud drives server advances that drive the cloud

This view fuels our investments across the entire company, from datacenters to cloud platform technologies to cloud-based development tools and applications. Today, nearly every one of our products has, or is developing, features or services that support the cloud. As I said today, when it comes to the cloud, we are all in. We are all in across every product line we have and across every dimension of the cloud.

Of course, this is not news to any of you. We have been making huge investments in the cloud for the past decade. Nearly five years ago, Ray’s “Services Disruption” memo provided the outline for what we needed to do as a company, and with the delivery of Windows Azure at the recent PDC, we have made huge strides in making this vision real.

To keep our momentum, it is critical that every Microsoft employee works to deliver the full benefits of the cloud to our customers.

As a part of this, I request that you do the following:

• Watch the speech on demand here
• Learn more about our cloud offerings and how they relate to our overarching software plus services strategy here
• Review your commitments to ensure you are landing our vision with customers and partners.

Of course, there is more work to do. We have strong competitors. We need to be (and are) willing to change our business models to take advantage of the cloud. We must move at “cloud speed,” especially in our consumer offerings. And we need to be crystal clear about the value we provide to all our customers.

To drive our message home even further, today you will see an ad campaign in the U.S. focused on our commercial and government businesses, a new website with consolidated content and case studies, and ongoing emphasis on the cloud from me and other members of the SLT in our upcoming speeches and presentations.

We have an enormous opportunity in front of us. We have great products and services in the market today and a range
of new ones on their way.

All of our products make the cloud better, and the cloud makes our products better.

Thanks,
Steve