Do you hear that? It's the sound of church bells chiming to commemorate the death of Microsoft and its so-called unpopular tablet, the Surface. Hear that, too? That's Bill Gates weeping in the corner and Steve Ballmer wailing on the side of the Surface's casket.
OK, so maybe none of that is true. But if you listen to the media, analysts, shareholders, and just about everyone else who can’t stand Microsoft, you’ll realize that most of them believe that’s how things will go. Microsoft and the Surface are downright dead, they say and there’s nothing that Ballmer and Company can do about it.
But perhaps all of those critics have jumped the gun. Yes, the Surface is in trouble - the software company was forced to write off $900 million in Surface RT units due to poor sales - but that’s just one piece of a much broader puzzle. And it’s high time we stop judging Microsoft and its tablet future on initial sales.
1. There's always that cash
Like it or not, Microsoft has enough cash on hand to do just about anything it wants. So, if that means acquiring some better tablet makers, it can do that. If Microsoft decides instead to put hundreds of millions of dollars into tablet investments to deliver products that other companies can’t match, it can do that, too.
If Microsoft were a smaller company with less cash in reserves, it’d be easy to count it out. But let’s not forget that this is a company that generates billions of dollars every quarter and is just looking for ways to spend it. If that means Ballmer needs to invest tons of cash into tablets to get things right, he’ll do it.
Over the years, Microsoft has faced its fair share of issues. In the gaming space, for example, it entered the console fray against long-time incumbents. And although the Xbox didn’t get off to the best of starts, Microsoft kept plugging away and investing cash in the gaming division. Before long, it established itself. And now, the Xbox is a force to be reckoned with.
Given that, why can’t the Surface follow the same path? Microsoft has forced its way into markets by using its cash before, and succeeded. There’s no reason to suggest it can’t do the same this time around.
2: There’s no telling where Windows 8 will go
OK, so Windows 8 is currently an issue for Microsoft. Consumers around the globe don’t quite understand the operating system and PC sales are on the decline. On the enterprise side, IT decision-makers are deciding that the learning curve of the touchscreen operating system is reducing productivity and therefore, lacks overall value.
But again, we’ve been here before with Microsoft. Do you remember Vista? Windows Vista was supposed to be the operating system snafu destined to cripple Microsoft. Then Microsoft launched Windows 7 and that quickly became one of its most popular launches ever.
Microsoft is again trying to repeat history with the upcoming launch of Windows 8.1. Granted, the software market is different now and attitudes have changed, but we can’t discount the fact that in most places in the world, and especially in the enterprise, Windows is very, very important. And Microsoft, unlike Apple, can bundle Windows on a tablet and deliver full, desktop-like functionality.
Don’t think that matters? Think again.
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3: A tablet from a big name cannot be tossed out
I think it’s important that we separate Microsoft from most other companies in the tablet market. I would agree that a company like BlackBerry or LG or HTC could be counted out at this point. But Microsoft isn’t anything like those companies. And although it’s gone through its ups and downs, Microsoft is still a big, powerful brand that millions of people trust.
The media and others like to pick on Microsoft because it did plenty of bullying when the desktop PC ruled, but Microsoft also has lots and lots of supporters. Plus, there are people buying products today that see a big company name they know and buy their devices simply because of it.
Don’t think that’s happening? OK, let me ask you this question: where would Sony be today if not for its brand? For years, as Sony was pumping out one sub-par television, sound system, and accessory after another, consumers continued to buy them up. Why, you ask? Because the devices were made by Sony. And once upon a time, that brand mattered.
The same holds true for Microsoft. Even with its trials and tribulations, Microsoft is a trusted brand that everyone knows. And while buying an iPad might be preferable, if the software giant can deliver a high-quality product that can match any other device on the market, there’s a solid chance that non-iPad customers will eventually opt for the Surface.
Simply put, I just don’t think there’s much to get too worked up about with the Surface. Microsoft has made several missteps and the company’s tablet isn’t performing all that well at retail. But this is only the beginning. The recent discounts came later than they should have, but they’re getting plenty of buzz now, thanks in no small part to Microsoft’s aggressive marketing.
Microsoft has the tools and the revenue war chest to turn things around and I certainly would not be surprised if it did just that.