Why Microsoft Surface is Critically Important to PC Market

eWEEK NEW-PRODUCT ANALYSIS: The Surface project has fixed some operational problems regarding both Microsoft and Intel, which should result in better products going forward. New versions of the Surface were launched this week.

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Microsoft Surface seemed to start much like the Microsoft Xbox did: as a response to a threat that never emerged. For the Xbox, its reason for being was a concern that Sony was going to turn the PlayStation into a powerful PC alternative, but Sony never did that. Surface came in response to the concern that Apple was going to do to the PC market what they did to the smartphone market--but using the iPad rather than the iPhone.

Now that could have happened, but with Steve Jobs gone in late 2006, Apple couldn’t execute properly, so that threat didn’t emerge, either. But Surface has two other critical reasons for being: It focuses Microsoft on a complete integrated solution, and most recently, it fixed a problem in which Intel had too much power (in effect the tail was wagging the dog).

Let me explain.

The PC’s Critical Problems

When you build something, be it a product or a building, the firm defining the product typically specifies the parts, assigns functions and drives the process. But in the PC market, Intel and Microsoft were far more powerful than their OEM customers, which resulted in a power imbalance. This imbalance meant that rather than the OEMs defining their products, effectively Microsoft and Intel did, and neither firm coordinated well; both had times where their behavior was considered arrogant, and the end results were products that were far more difficult to sell than they should have been.

Now there needed to be a fix to this, and Surface addresses it in two very different ways.

Surface Fixing Microsoft

With Microsoft, it forces the company to think about the parts of the solution it typically doesn’t touch. It must think about design; it must think about customer satisfaction; it must think like Apple should think (but increasingly doesn’t) and put the customer first. What Microsoft develops for the Surface line typically migrates over to their Windows offering and can be used by the OEMs. It makes them think about the complete product, not just the OS and helps prevent them making disconnected mistakes, such as Windows ME, Windows Vista and Windows 8, which all showcased a sharp disconnect between Microsoft and its end-user customer.

Microsoft also set a hardware example; for instance, they shared that its Surface Notebook had the highest customer satisfaction of any product in market, including anything from Apple. The OEMs are largely free to emulate what Microsoft has done to gain similar benefits, and that helps, significantly, the health of the overall segment.

Now it doesn’t subordinate Microsoft to the OEMs, but rather than them using their power in a fashion that has little to do with end users, if it focuses them more tightly on those users and turns them more into a force for good than a force for … well, you know.

In effect, Surface raises all boats because it creates a better example of excellence, as Apple once did.

Surface Fixing Intel

There where three huge advancements announced at the launch. The 15-inch, no-compromise performance notebook using AMD technology, the 13-inch Surface ProX using Qualcomm Technology, and the Surface Neo using Intel technology.

Not only were each of these custom solutions driven in partnership with the vendors, each showcased both the power of processor diversity, with each optimized for its specific use, but it also subordinated the chip vendor to the OEM--in this case Microsoft.

Now AMD has largely led with the concept of semi-custom parts, but not with PCs, and Intel, which defined the market, up until now, has avoided this like the plague. Folks that wanted a custom ARM solution often just did it themselves, but then they had to recreate what Qualcomm has done, and that hasn’t been working out that well for Apple. So even Microsoft’s approach with Qualcomm was relatively unique.

Wrapping Up: Better PCs

When Surface began as a line, I was one of the folks that thought Microsoft had lost its mind because competing with its large OEMs seemed brain-dead stupid, regardless of the Apple threat. It looked like yet another Ballmer mistake. But it didn’t turn out that way and, instead, it has fixed some operational problems regarding both Microsoft and Intel, which should result in better products going forward. Granted, some of the OEMs still tell me that Microsoft comes up with some incredibly foolish ideas, but now they have the Surface development team to back them up, and that seems to be having a positive impact on the final products.

So, Surface has a solid reason for being, and it will most certainly help drive needed advancement and innovation into the segment.

Rob Enderle is a principal at Enderle Group. He is a nationally recognized analyst and a longtime contributor to QuinStreet publications and Pund-IT.