Monday Note

Once upon a time, IBM was The Company, computers had “spindles” and Big Blue salesmen (no females allowed) got fresh collars and cuffs delivered to their desks each morning.

When a pesky innovator came up with an interesting idea, The Company had a response at the ready: You Don’t Need This…We Know What’s Good For You. And when misguided customers were seduced by the heretical product, IBM moved to the next couplet in the hymn book: We’ve been working on this for six years and you’ll have it in six months.

First, deny. Then, embrace.

Microsoft, The Great Learner, sat at IBM’s knee and came up with a similar playbook, their own way to deal with annoying competitors. See, for example, the notorious Embrace, Extend and Extinguish.

Let’s skip forward a few decades.

In 2007, we have Steve Ballmer’s infamous “It’s a passing fad” reply when asked about the iPhone. Then he tells us Windows Mobile would own 40% of the smartphone market by 2012. Windows Mobile ended up being kicked to the curb.
We know what happens with rebounds, they don’t always lead to good decisions. Microsoft’s relationship with Danger (I’m not making up the company name) begat the remarkably short-lived Kin, a strangephone that disappeared from carriers’ shelves in a matter of weeks.

Microsoft sobered up in 2010 and finally announced a serious smartphone platform: Windows Phone 7. But while Google and Apple gathered momentum with their Android and iOS platforms, Microsoft had to buy developer and handset maker adoption. Nothing as untoward as free OS licenses to manufacturers, of course, nor did they pay developers to port/write apps…just big $$ marketing support, you see.

It quickly became obvious that Windows Phone 7 wasn’t a contender, so Microsoft bought Nokia. Sorry, wrong phrasing…they bought “Nokia’s full and sincere commitment” to Win Ph 7. The next chapters of that love story won’t be boring.

In parallel, the iPad happened.

Chef Jobs, in one stroke of his whisk, got the tablet mayonnaise to take, after three decades of clotted failures by the best and the brightest in the computer industry, Apple included.

For years, ever faithful to its Embrace and Extend credo, Microsoft has been going after the tablet market. In 2001, Bill Gates himself made a lofty prediction: “The tablet takes cutting-edge PC technology and makes it available whenever you want it…It’s a PC that is virtually without limits — and within five years I predict it will be the most popular form of PC sold in America.”

As we know, the Tablet PC never took of, it stayed within the narrow confines of highly specialized applications, but this didn’t quench Microsoft’s enthusiasm. In September 2009, Microsoft opened its kimono one more time, probably forgetting repetition kills titillation, and let the world know about its Courier “project”. In January 2010, at CES, Steve Ballmer was no longer touting the Courier tablet but praising the upcoming Slate from HP.

We’re now in June 2010, at D8, the yearly Wall Street Journal’s high-tech conference. On stage with Ray Ozzie, his future ex-Software Architect, Steve Ballmer intones a modified version of the It’s Nothing refrain: The iPad is just a PC — minus a few important organs.
That line didn’t last: the 15 million iPads sold in 9 months, added to a few Macs here and there (about 14 million in 2010) would catapult Apple to the top of PC manufacturers. (Note the conditional, these rankings fluctuate, see the latest Asus news.)
Breaking from their past treatment of Tablet PC devices, market research firms are careful not to bundle the iPad with PCs, they have a media tablet category now.

At Ballmer’s January 2011 CES keynote, not a word of tablets. It’s Kinect and Windows Phone 7. And, in February, the MicroNokia deal already mentioned. Still no word of tablets, but for the relegation of MeeGo, Nokia’s hope for a tablet OS, to the hazy role of a research project.
Our wait for Microsoft’s new and improved take on tablets ended last week. Craig Mundie, Microsoft’s head of Research, told us he wasn’t sure whether tablets “would remain with us or not”. Conversely, he displays a clear faith in smartphones, “our most personal computers” and believes the future of desktop computers is “the room”.

Pure coincidence, that same week, we hear a Dell exec telling the world an iPad costs “$1,500 or $1,600” and doesn’t stand a chance to make gains in the Enterprise. NetworkWorld disagrees and gives us reports of large corporations deploying tablets, iPads for the time being, writing applications, supporting users. In a break from its past indifference, if not disdain of Enterprise customers, Apple now offers tools and developer programs specifically designed for the development and deployment of custom Enterprise apps.
And now Microsoft decides to support iPads (iPhones and Android devices as well). Its next System Center Configuration Manager 2012 Beta 2 will indeed support, manage, push updates to current and future tablets.

What to make of these contradictory messages?

First, Microsoft needs to downplay tablets — for the time being: “These annoying devices can’t be ignored, we need to offer support to better keep an eye on them, but we must damn with faint praise, and keep them in the media consumption category. By the way, we need to talk to the Adobe folks. Last week they were demoing a prototype of a “Photoshop concept” for iPad. What are they thinking?”

Second, for their tablets, Google and Apple have both decided to rely on their smartphone platform and its touch-based UI. Microsoft doesn’t appear to be inclined to rely on Windows Phone 7 for tablets. It’s in the process of modifying Windows so the next version, Windows 8, works on ARM-based hardware and will include tablet-oriented UI extensions and options. This is another chapter of the Tablet PC saga: We need access to the new world of Tablet Computing, but we can’t let go of compatibility with “classic” desktop apps. No wonder Craig Mundie sounds a bit hesitant about tablets and prefers smartphones. The latter are free from the burden of supporting “legacy apps”. Windows 8 tablets won’t be, resulting in another case of bloatware.

What really agitates Microsoft is that PCs are no longer the only incarnation of personal computing. In the MicroNokia deal, Microsoft sees an opportunity to be a player in the new personal computing incarnation, a willful answer to its competition. But for tablets they’re left with wishful rhetoric.

—JLG@mondaynote.com

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