I’m bullish on Redmond again.
Don’t call me a Microsoft fanboy, though. If anything, it would be easier to accuse me of Apple fanboy-ism. I own an iPhone, an iPad, an iPod, and a second iPad for family use. I even have a company-issued iPad for mobile-related projects at work. I just want the best technology products available, and right now — at least in my opinion — those all come from Apple. Though, to be fair, Android-based smartphones — across of a variety of hardware manufacturers — have a larger share of the smartphone market.
Regardless of your preference for Apple or Android, however, it’s clear that Microsoft — along with Research in Motion (RIM) — has a lot to lose as consumer preferences influence enterprise buying decisions. A Cisco study, in fact, reported that 88% of IT leaders are seeing increased growth of Bring Your Own Device (BYOD ) policies, which allow employees to choose their own work-related computer hardware. A lot of this is driven by intense consumer demand for Apple products, and to some extent higher-end Android smartphones from Samsung and other manufacturers.
Standard-issue BlackBerrys and cheap laptops are under attack. This situation is problematic for organizations concerned with cost containment and data security, however, as IT begins to lose oversight of the devices that employees connect to company networks.
Enter the Microsoft Surface tablet.
It runs Windows, with all the familiar Office applications (at least the Pro version does). It has a keyboard. It’s secure. Essentially, the device is a touch-screen laptop in a tablet’s clothing. Some commentators have gone so far as to say that the Surface isn’t even truly competing with the iPad.
From a perception standpoint, then, the Surface tablet is poised to solve a huge issue that CIOs and other executives have with BYOD, and more specifically, with the invasion of iPads into their previously tightly-controlled environments.
The problem: CIOs are deeply concerned with controlling their device footprints.
As companies deploy mobile devices (especially tablets) to mobile workers in sales, event management, on-site tech support and other functions, the number of devices that require IT oversight begins to creep uncomfortably upward. Each incremental device on a company network increases the cost to serve an employee base, and the last time I checked, CIOs weren’t complaining about budget surpluses.
CIOs want to keep the ratio of devices per employee at 2:1, or lower, in order to control costs. Consequently, the refrain that I’ve started to hear from IT leadership, then, goes (facetiously) something like this, “Sure, I’ll grant your request for an iPad. Just let me know which device you’ll give up in return — your laptop, or your phone.”
The tablet-for-a-laptop trade-off just isn’t a legitimate option for most employees. Let’s face it: the iPad is better-suited for consuming information, rather than creating it. For browsing the web, checking email, watching videos and using apps, the iPad is a great device. It just works. However, specialized apps and hardware (e.g. keywords) are often needed for content creation, data security, enterprise email access, and integration with Office applications. Microsoft’s Surface tablet won’t come with these issues, thereby enabling IT leaders to meet the increasing mobility needs of workers while simultaneously controlling costs (by replacing laptops).
Microsoft has an enormous opportunity to disrupt tablet use within enterprises.
While many analysts are focused on comparing the Microsoft Surface to the iPad as a consumer device, Microsoft’s best opportunity to gain early traction with the Surface is likely the enterprise market, a segment in which 80% of the Fortune 100 have deployed iPads for productivity purposes.
But Microsoft has to nail this opportunity out of the gate. A good comparison is RIM, which rushed its highly-anticipated BlackBerry PlayBook tablet to market out of desperation. The PlayBook has been an unmitigated disaster, and has contributed to RIM’s stock price free fall since its release (see chart).
Here’s how Microsoft can get the Surface right, the first time:
1. Make it easy for application developers to build apps that run on one operating system, across smartphones, tablets and laptops/desktops. This is key, and Microsoft is already taking this step.
2. Continue paying app developers to build top apps for Windows devices. Microsoft has been footing the bill for companies such as foursquare to bring versions of popular apps to Windows phone. While this is a highly unusual and expensive approach, it’s strategically brilliant. If Windows devices support most of the top mobile apps, this reduces switching costs for iPhone, iPad, and Android users. Microsoft needs to continue financing app development for makers of popular apps, and sell their accessibility across devices.
3. Get the messaging right. Is the Windows RT model a toy for consumers who want to play with apps? Is the Surface for Windows 8 Pro model aimed toward making workers more productive? There is already confusion regarding the two devices. Microsoft’s Marketing Communications team will need to work hard to market the RT and Pro tablets differently, especially given that many business executives still scoff at iPhones and iPads as “toys.”
4. Leverage its best assets, such as Xbox and Skype. This is a no-brainer. The Surface must — and undoubtedly will — come with seamless Skype integration at launch. What is less clear, however, is how the Surface will connect to the Xbox ecosystem (e.g. Will the Surface eventually double as an Xbox controller?). The Xbox is a unique competitive advantage among players in the tablet space, and Microsoft should play up future connectivity between the two systems.
5. Beat competing devices on price. Microsoft didn’t announce pricing for its two Surface models during its much-ballyhooed launch event. But make no mistake: pricing is critical for the Surface. The Windows RT model should be priced well below the iPad, and the Windows 8 Pro Surface should be priced somewhere between an iPad and a mid-tier laptop. These price points will position the Surface to siphon away market share from iPads and laptops. Pricing is especially important for the Surface’s Pro model, as Microsoft will seek to familiarize business users with its tablets in order to change consumer preferences.
In summary, Microsoft has a better chance at tablet success than many are predicting.
Granted, Microsoft has to get a lot of steps right in order to make a dent in Apple’s dominance of the market for tablets. And there is very little room for error. The first generation of the product has to be amazing in order to convince a skeptical public:
Here’s the how the story ends with the Microsoft Surface: “Zune.”
— Joseph Manna (Joe) (@JoeManna) June 19, 2012
Remember the Microsoft Kin? lol… Remember the Microsoft Zune? lol… Remember the Microsoft Surface? #exactly
— Skylor (@skylor) June 23, 2012
— Eric Y Lai (@ericylai) June 19, 2012
But it’s because of this skepticism that there’s reason to believe that Microsoft will be successful with the Surface. Unlike RIM’s rushed attempt to build a tablet for enterprise buyers, Microsoft has taken a slow, almost plodding, approach. And now the business case for its resulting product is clear. With a device that enables mobile workers while controlling costs, there is evident ROI for IT departments to justify investing in the Surface.
And I believe they will. So despite what you might think, it’s time to be bullish on Microsoft again. Are you bullish or bearish? Let me know with a comment below.
Like a lot of other people — about 4 million, to be precise — I’ve recently upgraded my mobile phone to an iPhone 4S and started enjoying Siri, the personal assistant that is perhaps the smartphone’s most talked-about new feature. Siri has garnered attention for several reasons, including:
- Siri’s ability to understand and translate natural language into useful responses. Limited commands, such as “Get Weather Report” aren’t required. Instead, Siri does an admirable job of interpreting regular speech, such as, “Is it going to cool off next week?”
- The potential for integrating Siri with a wide array of apps once developers are given greater access to Siri’s API. Imagine being able to use Siri to compose tweets, check in to venues, and buy movie tickets — all through natural language as opposed to a limited set of commands. This will happen, and it will be incredibly powerful.
- The application’s human-like sense of humor, which has spawned websites such as Shit That Siri Says. Apple’s engineers have apparently had a lot of fun enhancing Siri after Apple’s 2010 acquisition of Siri Inc.
Clearly, consumers are captivated not only by Siri’s current capabilities, but also by its potential to tie apps together through voice. And after several days of using Siri, I am too.
But do you know what data point jumps out to me as a far more important fact? The number of times I’ve used Google search since my first use of Siri = Zero.
That’s right. The idea of launching my mobile web browser, typing words into a text box (on a small screen, no less), and clicking a button to initiate a search suddenly feels about as antiquated as file/folder structures do in Microsoft Windows in comparison with touch-based app experiences. Just as Apple took on Microsoft by re-inventing (or at least perfecting) the process for storing and retrieving data, they’re taking on Google by attacking the search giant’s bread and butter. Why type the words “Best Mexican food Phoenix” into a text box when I can simply say, “Siri, I want a burrito?”
A few caveats that favor Android
If a humble end user like me can recognize this potential disruption to Google’s crown jewel, then Larry Page and company almost certainly do. They’ll counterpunch, and in fact, may have an upper hand for a few reasons:
- From a growth perspective, Android is far outpacing the iPhone (which you can learn more about in Mary Meeker’s amazing Presentation on Internet Trends, which I’ve embedded below). This may blunt the impact of Apple’s attack on Google Search.
- Android phones have had solid, if unspectacular, voice-based functionality for years now.
- Competitors (which can be acquired) will undoubtedly emerge to offer a competing level of Artificial Intelligence. For example, Iris (yes, that’s “Siri” spelled backwards) has already sprung up — with similar functionality — as the result of a mere eight-hour hackathon project.
Undoubtedly, however, Apple has changed the future of search with Siri. And if one company has proved that it can re-imagine an existing process, provide a user experience that promotes its rapid adoption, and turn the process into “the new normal,” it’s Apple. Siri is an outright assault on Google’s position as the dominant player in search, and this assault will become even more effective when Siri’s API permits interactivity with popular apps such as Yelp and foursquare.
So sorry Andy Rubin, but you’re wrong.
Lately, I’ve become deeply troubled when I pay for items at most stores. And no, it’s not because I’ve run out of money due to poor budgeting. Nor am I suffering from kleptomania. Instead, I’ve simply grown tired of the ridiculous process that accompanies most in-store payments.
I mean seriously, what’s the deal with having to play a game of 20 Questions when making credit/debit transactions at most stores, gas stations and other venues? Are all of those questions necessary in return for the privilege of spending my hard-earned money? For example:
- Debit or credit?
- Would I like cash back?
- Do I want the entire transaction on one card, or do I want to split it among multiple cards (ahem, Target)?
- Will I confirm the total amount?
- Would I like a receipt for my transaction?
All I want to do is swipe my card. That’s it. No additional steps required. At worst, I’d like to make a quick card swipe and then answer one prompt to confirm the payment, similar to the process that Starbucks has put in place for its payment solution for mobile devices, Starbucks Card Mobile. Of course, the payment scenarios covered in the questions above need to be accounted for, but they should be subordinate to a quick-pay process.
Hopefully, the hour of a less-maddening, wide-scale payment process is at hand. Major players — from credit card companies like Visa and MasterCard, to mobile operating system manufacturers like Apple, Google and Microsoft — are all building solutions using Near Field Communication technology that will position mobile smartphones to someday replace wallets for many consumers. If you’re not familiar with NFC, then you can check out quick primers on how it can change our daily lives and why you should care about it.
But while I’m excited about NFC (which I’ve written about before), I’m left to wonder about whether it will truly ease my pain. Porting the standard payment process from wallets to mobile phones won’t cut it. Instead, for NFC to gain quick traction as a mainstream payment option, it needs to improve the payment experience for consumers through:
- Simplicity. See above. Hint: No more games of 20 Questions.
- Password flexibility. Entering a password for every payment is untenable. Consumers should be able to choose from a range of timeout intervals to prevent frequent password re-entry (though Apple recently tightened controls in this area).
- E-receipts. If you’ve bought anything at an Apple Store lately, you’re familiar with the standard — and wonderfully convenient — option of receiving a purchase receipt by email instead of in paper form. Manufacturers of NFC hardware and software should relegate paper receipts to a secondary, optional function, requiring an extra 1-2 screen taps.
- Security. Consumer confidence will be a key driver of NFC adoption. Scare tactics — such as Verifone’s alarmist letter demanding a recall of Square credit card readers — are are almost inevitable as companies battle for share in the emerging mobile payments market. But these tactics won’t slow NFC adoption if the payment options from the top providers prove stable and secure early on.
- Multi-Account Support. I’m not backtracking from my assertion that a quick-pay process is a matter of paramount importance, but NFC payment services need to support multiple bank, credit and online (i.e. PayPal) accounts.
Are these things really too much too ask? If anyone from Visa, Apple, Google, etc. needs help understanding the key requirements for NFC payments, then I’ll be happy to answer their questions. By now I’m used to answering a lot of them. I have tolerance for about 20.
What do you think it will take for NFC to gain acceptance as a mainstream payment option? Let me know with a comment below!