Microsoft's announcement that they will ship an iPad rival demonstrates the frequent inability of larger companies to read and interpret history or to believe that their size exempts them from the rules.
The first-look overviews I've read of the Surface have been uniformly positive, even enthusiastic. It sounds like Microsoft has addressed some issues that will place it, for now at least, slightly ahead of the iPad in many consumers' eyes. Some have suggested that the price points at which MS hinted (no announced pricing yet) is too high in a competitive market where Apple's iPad is so utterly dominant.
But I think Microsoft has made a longer-term strategic error. By placing itself in direct competition with many of its biggest customers (Dell, HP, and their ilk), it has created (or expanded) an aura of suspicion that its customers have long harbored that MS cares less about them and more about their bottom line. Competitors who have to pay Microsoft something like a reported $100 per machine in licensing fees to use Windows 8 will almost certainly begin to ask themselves:
- How can I stay competitive with Microsoft on price if they don't have to pay for the OS?
- What's to prevent Microsoft from using hidden or undocumented features of the OS to compete unfairly? (They've done this before with Internet Explorer, just in case you've forgotten.)
- How much marketing support at events and trade shows can I expect from a competitor?
- How will this move affect my ability to be sure I have the latest and greatest OS release on my machines?
Borland Software (if you remember them, I hope you've applied for Social Security!) is the classic case of a company that sold programming tools, then got into the application business and basically ate its own market. A number of software companies in the AI/expert systems world did themselves in with similarly stupid moves.
Add to this concern the fact that MS has a pretty dismal track record building complex hardware (the XBox is an exception but a tablet or laptop is an order of magnitude greater manufacturing challenge), and you have the makings for another Zune.