Should Microsoft's Partners Fear Surface Tablets?

Apple CEO Tim Cook for consumers, as they are products "that converge a toaster with a refrigerator." He believes tablets are powerful in their own right and don't need integrated keyboards to work. Well, we are about to see if he is right as Microsoft's new computing concept challenges that notion.

By , Microsoft is taking a step toward the future of computing. The form factor is nothing novel; it's similar to the and the that run Android. At Computex, Asus unveiled a comparable design running Windows 8 with a detachable keyboard. (Some in the industry call these devices convertibles but I refer to them as hybrids.)

Rather, it is the flexibility of the hybrid concept that is promising: the device is primarily used as a tablet, yet it can be used as a notebook when a keyboard accessory is attached.

Microsoft believes Windows 8 RT is uniquely suited for this particular form factor because Windows 8 is designed to use both touch and mouse and keyboard computing. And it may be right. Apple is keeping mouse and keyboard computing separate from touch computing platforms. If there is a sweet spot in the market for a product that blends a tablet with a notebook, Windows 8 is positioned to meet the needs of that segment.

The Impact of Surface on Microsoft Partners
While Microsoft is no stranger to the hardware business, this is the first time it has created a product that directly competes with its partners' products. Microsoft's decision to own the tablet hardware experience could have profound impact on the technology industry going forward. For one, if Microsoft's partners feel that Microsoft is directly competing with them in the tablet segment, they may very well back off their initiatives and focus more on notebooks and desktops. In this case, Microsoft will be left alone to wage the war against iPads, and I don't believe Microsoft can win single-handedly, if at all.

Microsoft clearly made this move because it felt it needed to put something fresh on the market that that showcases Windows 8. Maybe it thought that its partners have not been aggressive enough with their tablet designs to compete with the iPad so it took matters into its own hands. This move demonstrates how vital Microsoft believes tablets are to the future of computing and I tend to agree.

For Microsoft to compete with Apple holistically, and specifically in the tablet segment, it will need the help of its partners, which it won't get if it creates competing hardware. However, there is another scenario that could play out.

Let Partners Make Surface PCs
In light of this announcement, I think that Microsoft is presenting an opportunity to license the Surface brand. OEMs could benefit from Microsoft's Surface reference model as well as its engineering with the keyboard accessory and other chief Surface features. OEMs could then focus on the hardware with some added software value, but not have to worry about the keyboard attachment mechanism.

In this situation, could be to Microsoft what Ultrabooks are to Intel. Microsoft can feed into the specifics of the hardware and allow OEMs to use its keyboard accessory port solution. This would also let Microsoft sell the computing accessory hardware, like the TouchCover and TypeCover, which is a model it has proved successful.

Microsoft could thus build the Surface brand and keep all Windows 8 tablets related. It's a good positioning strategy, ensuring that consumers are not confused when they see an OEM tablet that is not a Surface device but is akin. Given the youthfulness of the tablet category and the challenge of a horizontal platform in a maturing market, the simpler the better. Ultimately, this would mean that all Windows 8 tablets or hybrids are Surface computers.

From what I have seen so far, there are enough alluring features to generate interest in Surface devices. The bottom line is that many professionals and some consumers are looking to unite a tablet with a keyboard. For those, a Surface tablet may be a viable option. But even though the hardware is compelling, I doubt it will change the fact that to be successful, customers must want more than the Microsoft hardware; they must want Windows 8.