Microsoft Becomes a Big Player in the Hardware Market
It may seem strange, but with the Surface range of devices, Microsoft is becoming a competitive and compelling supplier of hardware devices to the public and commercial sectors
How Did We Get Here? The Evolution of a New Category of Mobile Device
Microsoft is the world’s largest software company by some distance, with annual revenues of some $93.58 million in 2015, according to Forbes magazine. But Microsoft is now also becoming a respected and significant player in the hardware market and is putting mobile devices at the front and centre of its strategy.
Microsoft CEO, Satya Nadella, has said that with its Surface range the company has created a whole new category of mobile device. Few would dispute that contention. The Surface has been a success due to its unique design, ultra-mobility and convenience. Microsoft cleverly caught the wave of enthusiasm for tablet devices. But instead of creating a slate-like device that was designed principally to access content, it provided a detachable keyboard that made it possible to use the Surface as either a tablet or a notebook PC.
When it launched in 2012, the Surface set the tone for a new kind of convertible with its innovative ‘kickstand’ that slides out to support the display unit, and a detachable magnetic keyboard, which also acted as a protective screen cover. This made the Surface look very distinctive. Even so, it was not a huge success at first. Microsoft also limited where it could be sold and kept production levels relatively small as it found its way in the devices market.
But it has since caught on in a very big way and the Surface range is now one of the most popular in what might be called the ‘premium’ two-in-one category. According to IDC, Microsoft products running on Windows 10 devices such as Surface Pro 4 and Surface Book constitute 53.3 percent of the ‘detachable’ tablet market share. They are expected to gain a market share of 74.6 percent by 2020. (See https://www.ibtimes.com/microsoft-surface-pro-4-book-beating-apple-ipad-pro-detachable-tablet-market-2333745).
Interestingly, other mainstream vendors are now releasing designs that are very similar, both in the way they look and the way they can be used, (i.e. with the kickstand and a magnetic detachable keyboard), to Surface Pro devices. While it has taken four years for Microsoft to turn itself into a really credible hardware provider, it looks like the Surface will become yet another major Microsoft success story.
Why Did Microsoft Enter the Hardware Market?
To understand why Microsoft entered this sector in the first place you have to look at the broader market context. Microsoft’s traditional income from software licensing revenues was under threat. Key competitors, Google in particular, were offering free productivity software along with cloud storage that you could access anytime and anywhere that you had Internet connection.
Google was also encouraging hardware device manufacturers to adopt the Chromebook form factor. If it could convince enough buyers to use these very affordable client access devices, it would also compel them to use Chrome, rather than Windows. Microsoft responded by launching leaner, touch-enabled versions of its Windows operating system, culminating in the current Windows 10 release, adoption of which is now growing very rapidly.
Another key competitor, Apple, had taken control of the tablet market with the iPad. Many other vendors, Samsung in particular, were building on their success with smartphones by bringing forward Android-based tablet devices.
Microsoft needed to counter these moves or face a potential erosion of Windows’ dominance on client devices. The Surface was part of the answer. If Google and Apple were providing both the operating system and the devices, Microsoft surely needed to do the same.
The company was also addressing a good opportunity to diversify and grow its business. As software sales shift to a cloud-based subscription model, the Surface provides Microsoft with an excellent source of revenue growth potential and one that now looks to be coming to fruition.
You may also have noticed that, following its takeover of Nokia some time ago, Microsoft has entered the smartphone market with the Lumia range. It now has the capability to deliver one Microsoft environment and experience, right across the IT infrastructure – from Windows Server in the data centre, to Windows 10 on desktop and client PC devices, to Windows Mobile on smartphone devices, all with access to applications and data in the cloud.
The Surface Range Today
The two devices Microsoft is focused on at present are the Surface Pro 4 and the Surface Book.
The Surface Pro 4 follows the successful designs of the previous Surface Pro models and is marketed as tablet with a detachable keyboard. The Surface Book is a relatively new addition and is presented as more of a conventional two-in-one, notebook replacement device.
Both of them offer tremendously powerful features and easy mobility. With their magnesium casing, they look modern and professional. They have generally had excellent reviews and are selling extremely well, to commercial, public sector and consumer buyers.
The Surface Pro 4 is a large tablet device with a 12.3-inch display and features the now familiar detachable – but entirely optional – magnetic keyboard. It is very lightweight, at just 766 grams (1.7lbs).
The PixelTouch display offers a very high resolution of 2736 x 1824, which is high for a display of this size. Models are available with a choice of the latest Intel Core i5 and i7 processors and 4GB, 8GB or 16GB of memory. The SSD storage options go from 128GB to 1TB SSD. RRPs range from £749 to £1799.
The Surface Book is essentially a laptop PC with a detachable 13.5-inch display. It has a higher 3000 x 2000 resolution, giving it the equivalent , ultra-sharp pixel density to the Surface Pro. Processor options are Intel i5 or i7 and an optimised Nvidia GeForce graphics processor is also built in, boosting performance considerably.
The device comes with 8GB or 16GB of RAM and the same storage capacity options as the Surface Pro 4. As it designed more for everyday use, the keyboard is sturdier and the curved hinge on the device is also robust and effective. Including keyboard, it weighs 1.516 kg (3.34 lbs). RRPs range between £1,299 and £2,249.
Docking options are available and both devices can support dual displays.
Surface in the Public Sector
Surface Pro devices are very well suited to deployment in public sector IT environments, especially where Microsoft Windows and Office are the standard. They are, as you’d expect, designed to run Microsoft’s own software perfectly and will fit straight into the existing Windows infrastructure.
The research firm Govini recently reported that Surface is gaining ground in the US government procurement market, as it is easy to integrate into established, PC-based workflows and to adapt to customer requirements. The strong mobility and security credentials of Windows 10 are an important factor here as well. Many government departments are already taking advantage of these critical features within the new operating system and Surface is seen as a very safe platform.
It is worth noting that Microsoft has carefully build and a whole support and development ecosystem around the Surface devices. It has also been meticulous in making sure that its reseller partners understand how Surface devices can be deployed within the customer’s infrastructures to deliver the benefits of mobility and cloud-based services. Microsoft offers specific training and support to these partners to ensure they can meet customer needs with respect to needs assessment and migration to new platforms and hybrid infrastructures. Customers can expect Microsoft partners to understand Surface and how it fits into the Microsoft solutions stack.
The innovative tablet design of the Surface is also significant for the public sector, especially where there is a desire to use touch capabilities for enhanced ease-of-use, either in the workplace or for interaction with users of public services. One of the most valued in-use benefits of the Surface Pro is the ease and speed at which the keyboard can be detached so that the device can be used as a tablet. All Surface devices come with a Microsoft pen of course, and can be operated by touch as well.
The keyboard is optional too remember; this means that the Surface Pro 4 can be used for vertical or bespoke applications, such as data collection. There are many specialist independent software vendors (ISVs) working with Microsoft on specific software applications for the public sector. Most of these are ‘born-in-the-cloud’ solutions and are therefore, ideal for use in modern, hybrid infrastructures that make use of both on-premises and cloud-based infrastructure and services.
The arrival of the Surface Book has added greatly to the appeal of the Surface family. Previously, if the requirement was for a sturdier device that leaned more towards content creation than mobility, the Surface Pro might have lost out to other Windows two-in-one devices that were already on the market. The Surface Book however, fulfils this particular requirement very well indeed.
With these qualities, and the reassurance that always comes with the Microsoft brand, the Surface looks set to continue its success in the wider market and to become a popular choice within central and local government departments. There is no question that Microsoft, having only entered the hardware arena four years ago, is now a major innovator and pace-setter in for mobile device development.