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Has Microsoft Finally Got It Right?



June 18, 2012 – Comments (0) | RELATED TICKERS: AAPL , MSFT

Board: Apple

Author: Goofyhoofy

So Microsoft is making some mysterious (but BIG) announcement on Monday, and the tech writers and trades are all aTwitter that it must be a TABLET! Could be, how would I know otherwise?

All of the articles I have read, and there have been a dozen or more, seem surprised that Microsoft might actually make the tablet themselves. Well, not that they would "make it" any more than Apple actually manufactures the iPad, but you know what I mean.

For years, and I think increasingly incorrectly, everyone thought the better model was that somebody (with expertise) makes the software, and then somebody else (with different expertise) makes the hardware. Marriage, competition, heaven.

That's certainly the way it worked for Microsoft, didn't it? Yes, it did, but I am more and more convinced that it was an anomaly, born of the fact that Microsoft got into the business via IBM, that Microsoft had no expertise (indeed, were exceptionally unqualified) in producing hardware, and that IBM was on the tail end of a DoJ complaint about tying their software and hardware purchases together for their big iron, and were casting about for a way to avoid a repeat performance in court. (Some sources I have read say that was a misinterpretation on the part of upper IBM managers; whether true or not, it's obviously true that they commissioned someone else to write the operating system, and it turned out to be that geeky little Gates fellow and his buddies in New Mexico (at the time.)

And it came to pass that Microsoft did very well, and that IBM did very well, except that Microsoft licensed the software to others and did extremely well, while IBM found itself in a race to the hardware bottom, and eventually exited the business.

Still, memes die hard, and everybody assumed that "make the software, let others make the hardware" was the way to go.

For a while it worked for Microsoft in phones, too, as Verizon and others used various flavors of Microsoft systems in those. But then came RIM, and Palm, with entirely proprietary software and hardware systems, and great success, while Microsoft floundered.

When it came time for Microsoft to enter the game world, they could have written just the software, but who would produce the actual units? HP? Dell? Some never-before-heard-of Chinese outfit? Certainly not Sony or Nintendo. And who would make sure it was a superior gaming experience if something went bad - as it did with the first Xboxes? It took Microsoft a billion bucks to recover. Would Lenovo have dropped a cool billion to make things right?

So Google is about to be in the hardware business (technically already is, I guess.) And Microsoft, apparently, too.

Maybe the Xbox wasn't the exception and maybe people's idea of the business model has been all wrong all this time, and maybe Steve Jobs had it right even back in 1979 and again in 1984, but got crushed because of a funny wormhole in the universe which hasn't been repeated since. Maybe all those other hardware manufacturers, you know, the ones licensing 14 flavors of Android, or like Nokia, staking their lives on Microsoftware, are about to find out that all their assumptions are wrong, and they can't prosper for long with only half a solution.

Microsoft making tablets! Quell surprise!!!

No, not really. It was probably the right way to do it all along, it just wasn't so obvious until Apple did it. (][) Then again. (Mac) And then again again (iPod). And then again again again (Touch). And then again again again again (iPhone). And then again again again again again (iPad).

Maybe they're on to something, and maybe Redmond has finally figured it out. Tech writers are soon to follow.

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