Microsoft Admits: Own-Brand Surface Tablets May Impact Relationships with Partners

Microsoft Confesses that Surface Puts Relationships at Risks

by Anton Shilov
07/27/2012 | 05:20 AM

Microsoft Corp. has admitted in a filing with the Securities and Exchange commission (SEC) that its forthcoming Surface media and productivity tablets will compete against third-party slate-type products that use Windows 8 operating system, which may lower the commitment of the company's partners to the platform.

 

"Our Surface devices will compete with products made by our OEM partners, which may affect their commitment to our platform," a statement by Microsoft reads.

Partners of Microsoft Corp. believe that considering the company's heritage and orientation, it will not be able to make its own-brand Surface tablets a strong success since it lacks retail presence comparable to Apple's and will compete not on its own field. To make the matter worse, it will compete against its hardware partners, which is hardly good for business in general. According to Microsoft partners among solution providers and the channel resellers, Microsoft will not be able to convince business customers to buy Surface tablets directly from them hoping that they [clients] will customize the tablets later on themselves. Meanwhile, eliminating partners by selling Surface only in Microsoft's own retail and select online stores, means that the slates will not be tailored for particular deployments in general.

Bill Gates, a co-founder of Microsoft and the former chief executive officer of the company, said in an interview that Surface would not rival products from other makers of hardware and therefore would not impact value added resellers as well as distributors.

"I actually believe you can have the best of both worlds. You can have a rich eco-system of manufacturers and you can have a few signature devices that show off, wow, what is the difference between a tablet and a PC," said Bill Gates.

One of the reasons why Microsoft intends to release Surface is to set up a benchmark for Windows RT/8-based slates, something that hardware makers will have to look at and something that will be clearly competitive against products like Apple iPad. Many hardware makers will now have to reconsider their designs in order to make their devices on par with "reference" tablets from Microsoft. From this point of view, Microsoft's move with Surface is completely justified as it will ensure that Windows 8/RT-powered tablets will be rather good. On the other hand, some partners may decide to utilize other operating systems in order not to compete against Microsoft directly.