In the wake of the Surface announcement, a lot of attention has focused on Microsoft’s ability – or inability, depending on how you see it – to pull off a radically new product aiming for the most successful consumer electronics device in history, the iPad.
But beyond the question about the product itself is a potentially bigger one: Is Microsoft making a mistake with Surface by trespassing the boundaries around its traditional business, as well as the lines that separate it from its traditional channel partners? It’s a bigger question because the viability of the product will be known relatively quickly, it will either succeed or fail in short order. But the risks Microsoft is taking to evolve its company into the future with this move should outlast the product itself.
From that perspective, I believe that diving into the conflicts and contradictions of the Surface business is the right move for Microsoft, for one major reason: Consumers are increasingly in charge. Not Original Equipment Manufacturer (OEM) partners. Not chipmakers. Not content companies. Not Apple, and certainly not Microsoft.
Consumers are in charge because they have adopted technology platforms that make them dramatically better at everything they do. They shop more effectively, they can make better choices when they want to, they can switch among competitors with relative ease. They can even waste time more effectively than before, thanks to these platforms. And when you want to offer them a new product or service, it can’t be good by historic standards, it has to be good by their newly empowered standards. (See RIM and HP for what happens if you don’t.)
That means taking what are considered historically untenable moves like: making your own products while partnering with OEMs to help them make competing ones, selling through long-established channels while building a new retail arm, and building a customer relationship into the PC OS which has historically been an anonymous affair. Someone in the crosshairs of each of these moves will be offended. That’s why old Microsoft would not have attempted this, instead preferring to rely on locked-in consumers, enterprises, and channel partners. But the locks are coming off and Surface is Microsoft’s first product that acknowledges that the price of doing business in the future will require risk-laden strategic moves.
In this, Microsoft is following other platform leaders. Apple, famously closed in its approach to ecosystem management, is nonetheless open to a wide variety of developers – even those that compete with it, like Amazon, which with its Kindle for iPad app owns one of the top five most downloaded iPad apps of all time. Amazon is the poster child of this approach, becoming a publisher itself while promoting bestsellers from other publishers, selling a Kindle Fire tablet that competes with the tablets others are selling through it, and enabling partners and competitors alike to reduce digital costs through Amazon Web Services. These seemingly contradictory and potentially confrontational strategies are now standard operating procedure for companies with platform ambitions, each of them obsessed with collaborating with the consumer of the future.
That’s why, despite the anger and skepticism being directed at Microsoft, I applaud the effort. This is a risk the company has to take now, to give the company a shot at pivoting away from its longstanding model before that model is made irrelevant by someone else’s even riskier model.