Dell's Surface Pro wannabe: Threat or proof Microsoft's strategy works?
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Computerworld - Microsoft faces competition for its Surface Pro 2 tablet, and it's from an expected source: One of its own hardware partners.
A week ago, Dell introduced the Venue 11 Pro, a tablet-slash-notebook slated to go on sale next month. The 10.8-in. tablet, which will run Windows 8.1 and is powered by an Intel Atom quad-core processor code-named "Bay Trail," will be priced starting at $499 -- less than half the price of the entry-level Surface Pro 2, the Microsoft-designed and -made tablet set to launch Oct. 22.
Like the Surface Pro 2, Dell's Venue 11 Pro can be partnered with an optional keyboard that doubles as a cover, a different keyboard that features a built-in battery for longer life away from an electrical socket, a stylus, and a docking station that sports multiple USB 3.0 ports and a display-out jack for transforming the tablet into the engine of a desktop system.
There are differences, certainly: Microsoft's Surface Pro 2 runs an Intel i5 dual-core processor that's considerably faster than the Atom CPU in Dell's tablet, for instance.
But the rival tablet didn't come out of left field: Microsoft, in fact, has been encouraging its OEM (original equipment manufacturers) partners to step up their design game, and has, at times, positioned its own Surface line as more of a benchmark, an aspirational target, than devices it plans to sell in volume.
Talk of that purpose for the Surface has been more muted this year, however, as Microsoft swivels its strategy from being a software seller to one that envisions itself as a "devices-and-services" company, with as much emphasis on the first half as the second. Microsoft wants to sell Surface tablets -- and any other hardware it ends up making, including smartphones next year -- and turn a profit. And not necessarily a small profit.
Is there tension between Microsoft and its partners, or one between the camps within Microsoft that on one hand want to keep OEMs selling devices while on the other hope to maximize its own hardware sales?
One analyst thought so.
"Microsoft is a threat to OEMs, particularly because it has a subsidized business model," said Patrick Moorhead, principal analyst at Moor Insights & Strategy, referring to Microsoft's ability to eat the cost of the Windows license if it wanted. "Originally, Microsoft said they weren't going to directly target business, but they've actually engaged their enterprise sales force to sell the Surface Pro. And at the end, enterprise is what the OEMs care about."
Yet Moorhead qualified his commentary. "Strategically, I think they're only doing hardware because they have to," Moorhead said, echoing analysis that harks back more than a year to the launch of Surface, when analysts accepted the theme that OEMs were not up to the task of design and form innovation as the traditional PC waned. "They can point to the Dell product [the Venue 11 Pro] and say, 'We've raised the bar. And because the Venue includes a Windows license, we can feel good about that, too.'"
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