Microsoft’s mid-life crisis

It’s a well-known trope of many Hollywood movies: the former high school champions marries the prom queen, who also happens to be the daughter of the richest man in town, and several decades down the road, now middle-aged, has a new girlfriend he can’t tell anyone about because that would force a divorce from his wife that could leave him destitute.

And sadly, this week, Microsoft seem to put a similar scenario on display as it organized a lukewarm launch of Windows 8 highlighting what its OEM (Original Equipment Manufacturers, the folks like HP, Dell, ASUS, Sony and others who make PCs) did with the new operating system, followed by a passionate plea for Microsoft Surface, the piece of hardware and software integration designed by the company to outshine its partners.

It was a tale of two events, packed on the same day for the same audience and presented with radically different vibes.

Windows 8: The PC revolution will be underhyped

Windows 8 Start screen

By the time Microsoft launched Windows 8, there was little it could say that had not been presented at length already. Whether it was the fact that they were looking to put this on the next 1 billion machines or the fact that 1,000s of PC would come out with an operating system that looked radically different from anything the company had done before, few morsels of news were made at launch time.

And the scripted event was delivered in the kind of monotone mode that is best left for incremental updates. Steven Sinofsky highlighted how the company found itself in an evolved world that was radically different from that of 1995 when the Redmond giant launch its last major rework of the Windows interface. He presented a case that integrated Microsoft services with its software and mentioned hardware in passing. This was followed by a demo of what hardware vendors had done with the new operating system.

What the PC industry has done is nothing short of a revolution. With only a few exceptions, PCs running Windows 8 look radically different from what we’ve come to think of as a PC. In fact, they look radically different from what anyone, including Apple, the design darling of the industry, has done. And while many of the experiments around new form factors for something that sits in a space between a PC and a tablet, or merges the two into a single device, a re-imagining of what a computer looks like is currently under way. The new devices are mostly portable, mostly without CD or DVD drives (long live the cloud and streaming) and mostly without a computer mouse attached to it.

There is an interesting irony in the fact that the oldest looking form-factor for a computer, after this week’s announcement comes from Apple: Their desktop computers don’t have touch-screen, do not include augmented reality (think of it as a Kinect-like interface to operate a computer), still rely on a computer mouse to do anything and still sport slots to insert CDs in: The iMac looks almost retro compared to what the PC industry is currently coming up with and a new era of industrial design is under ways for computers.

Dell XPS12

The new PCs twist and fold (to be honest, many of them in a not-so-convincing way, letting a few analysts to wonder about how easily a lot of this stuff will break) and present an exciting set of new approaches to what a computer could be.

Windows 8 new interface (don’t call it Metro as Microsoft doesn’t like that name anymore) takes the tile approach the company has developed for mobile phones and brings it to the desktop and tablets, with some refinements. Once again, this is radically different and takes some time to get used to but it’s an approach that is meant for a world of touch-screen, leaving behind the windows-icons-mouse-pointer interface that existed on previous versions of Windows and still graces OSX. It’s also an approach that moves away from the inert icons and touch model that exists on iOS and Android to bring forth an age of smart icons, where the screen vibrates with new information.

But the OS is also one that has learned new tricks from its competitors. Whether it is the integrated search that makes it easy to find anything on the device and on the internet with no boundaries between the two or the integrated sharing features, which borrow heavily from Android (and were also borrowed by iOS), Windows 8 is an operating system that’s been built for the always connected, always-on age of computing.

Sony Vaio Duo 11

It’s the kind of OS that should get Microsoft to scream loudly from every rooftops: “We have reimagined the PC and moved the dialogue about the next generation of computing interfaces forward; We have forced our partners to evolve the computer for the next generation of challenges.”

Instead Microsoft launched Windows almost timidly, speaking not of Microsoft launching Windows but of the industry launching Windows. At no time during either Steven Sinofsky’s speech nor Steve Ballmer’s one did the company mention its own name and presented the image of a giant reborn. Both seemed worried, concerned that they might offend, and with many partners in the room, the whole affair felt uneasy as they presented something that just didn’t seem terribly exciting to them.

The performance of Microsoft’s management was not too far from the performance of president Obama during the first presidential debate: somnolent, and somewhat withdrawn.

¬†Surface: Microsoft’s new mistress

Microsoft SurfaceBut the launch of Windows 8 was only part 1 of a double feature. The day had been broken down in two, with the launch of Microsoft Surface reserved for a smaller crowd, one that did not include partners and that presented a radically different view of Microsoft. If the company looked like it was sleeping through its Windows 8 launch, the Surface launch presented the alpha male version of Microsoft. From the start of that second leg, with its heavy-bass dubstep commercial, and through the rest of the presentation, one was left to wonder if the presentation was made by the same company.

Steve Sinofsky, who earlier that morning had robotically run through the Windows 8 scripts seemed to go off script, talking about passion and truly excited about this new device. Panos Panay, the man behind the Surface tablet, seemed to have had a double dose of expresso, presenting the Surface in a way that channeled the presentation genius of Steve Jobs and combined it with a little Oprah Winfrey thrown in. Whether it was when talking about the hardware, the software, the way this helped him be a better dad, the going into the crowd and handing out devices to be tested, or throwing a tablet on the ground to show how sturdy it was, we were presented with a man who knows what showmanship is about.

Panos Panay unveiling the Microsoft Surface

While Panay played the lead role, Sinofsky was dropping in, with amusing quips and a sense that this, the first computer built by the company (if you assume that Xbox is not a computer) was the truly exciting thing. But at the same time, there was some tension in the air: it was almost as if Microsoft had a hard time containing its excitement but also wanted to keep it all secret in order to not annoy its OEM partners.

Surface is a tight-rope act for Microsoft, as it tries to compete with its business partners while saying it doesn’t compete with its business partners. The company’s level of care in attempting to create a unique device clearly points to how much it believes that this is the future of the company but at the same time, the company is wary of telling PC manufacturers that it wants to eat their lunch. And so there’s this weird uneasiness where the company appears to want to promote Surface but at the same time is wary of over-promoting Surface.

Of course, the device is not perfect (in my own test with it, I found that sound was anemic and integration with some USB devices was still a bit of a challenge) but Microsoft appears to have so much riding on this horse that there is a sense of uneasiness about the whole affair.

And an affair it is: Microsoft is hiding its new mistress (Surface) from the rich wife (the OEM partners) all the while claiming that it loves both but, in its heart, truly more enthused by the new girlfriend. Microsoft marriage of convenience is something that sustains it today but it yearns to elope with the new thing in town and build a new life with it.

And at the source of it all, that may be why the company is under-hyping Surface and Windows 8. Microsoft is having a mid-life crisis and after a 30+ year marriage with its OEMs, the company is plotting a future that looks radically different, one where it is single and gets to choose what its product/mate looks like. It’s the future it really wants but it’s also a future the company is not willing to admit to. All its insecurities are tied into its relationship with the OEMs and the company fears that if it makes the jump, it will have a chance to fail and that’s truly scary.

So the company is doing everything to undermine its own hopes. Looking at the Surface is facing a true tragedy due to poor pricing: The Surface retails at $499 without the keyboard (you’ll have to pay $100 extra for that) and thus finds itself in a space where it is too expensive to compete in the tablet space and not feature-rich enough to compete in the PC space. It’s the kind of device that would have been perfect at a $399 price point with the keyboard included, the kind of device that could have stolen millions of hearts away from the iPad; It’s the kind of device that could still have been a successful contender at $329 without its keyboard; It’s the kind of device that seems to exist to prove Apple’s superiority in squeezing every dollar out of its production line to deliver products that are relatively inexpensive while getting decent enough margins for the company.

And the truly sad part is that Microsoft will look at this failure in selling more of those devices as confirmation that it should have stuck with its partners in the first place (no matter what I, or any other pundit, say, there will be hundreds of millions of copies of Windows 8 sold, as the industry as a whole loads it up on new machines that will get upgraded to eventually).

Winbook Air

But maybe there’s hope. I was recently talking to a longtime Apple user (the kind of person that was there with the early macs, the kind of person who stuck by Apple’s side through the lean years; the kind of person who’s never own anything but a mac) and she told me that Surface was the first time she thought of a Microsoft product as a decent alternatives. The live tiles, in particular, were part of the attraction.

I’ve also carried a Windows phone for a few weeks and there is something interesting happening there: when normal people (ie. people who do not live and breathe tech) look at it, they like it. They instinctively get what tiles are about and see a lot of the small things in Microsoft’s new user interface that they enjoy.

The challenge for Microsoft has been in reinserting itself into the conversation. In a world where Apple and Android dominate the dialogue of what a mobile OS should look like, Microsoft is having a hard time getting a word in edge-wise. With Windows 8, the company is now sitting by a loudspeaker, using the biggest piece in its sound equipment to make its argument.

And when it does make that argument, it needs to do so forcefully and with confidence: Microsoft needs to realize that while the Surface is an interesting device, it is but one of the channels of distribution of the new Windows look. The company needs to see that while Apple is much bigger than they are today, Microsoft still has to learn how to manufacture efficiently at scale (Apple’s advantage didn’t come overnight: they’ve been churning out iPods for over a decade, figuring out how to do hardware in the most cost-and-quality-efficient way through multiple iterations)

The battle will be long and Surface may fail right now but Microsoft needs to keep its balancing act of supporting its OEM partners so they can attack the market as part of a united front while at the same time iterating Surface so it can become what Microsoft hopes it to be.

Will they be able to do it? Only the future can tell us but one thing is clear: failure is not an option because failure would mean that Microsoft is out of the game altogether.

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