Can Microsoft survive the iPad?

Yes: By leveraging its strengths, Microsoft can keep Apple from stealing the future

You've heard all the lame attempts to categorize the Apple iPad. It's a "netbook with no keyboard." It's a "giant iPhone." It's a "media appliance." It's "magical."

Although all but the last one are more-or-less true, those categorizations miss the mark. The iPad is nothing less than the future of computing. Touch-screen interfaces that take "gestures" as commands and simulate physical properties for on-screen elements -- not the iPad specifically -- will replace today's windows, icons, menus and mice.

Fifteen years ago, Microsoft launched Windows 95. Back then, it was the only operating system that mattered. Mac OS was, as always, a cult favorite but an also-ran with a one-digit market share.

Windows 95 ruled because it had the most innovative user interface, by far the most application support and total dominance of key markets like PC games. Desktop PCs drove innovation in the industry, and mobile devices were merely super-expensive mini versions of desktop PCs.

Today, mobile drives innovation. Apple has the most important platform and by far the most app support, and has inherited the most active games market from the iPhone. The iPad is small now (compared to, say, Windows), but if left unchecked, it and its descendants will gobble market share until Apple dominates PCs the way Microsoft does today.

I addressed the coming war for the future of computing three years ago. [See "Why the iPhone will change the (PC) world" and "Will Microsoft beat Apple with its 'giant iPhone'?."] Back then, Apple and Microsoft had announced the iPhone and Surface, but nobody was shipping anything yet. Fast-forward three years, and Apple has the biggest handset model in history and a killer tablet that's creating a new and massive computing category. Meanwhile, Surface is still irrelevant.

The strategies are clear: Apple is starting small and getting big. The company acclimated us all to very rudimentary multi-touch computing and lowered our expectations about the use of an on-screen keyboard. Now the iPad already feels familiar, and its on-screen keyboard, still small and limited, feels expansive.

I'm convinced that Apple will ship increasingly larger "iPads," and that sometime soon, the underlying iPhone operating system will be replaced by the Mac OS.

Microsoft is taking the opposite approach. Its first multi-touch product was huge. Microsoft Surface is both a platform and a physical computerized coffee table.

Microsoft CEO Steve Ballmer promised a consumer version of Surface, which would presumably be smaller than the current Surface devices. And they'd get smaller and smaller until a full range of Surface-like computers were available, including mobile, tablet and cell-phone versions.

The company has also let slip that it's at least thinking about a two-screen tablet called Courier. And recently, its horribly named Windows Phone 7 Series wowed reviewers.

Unlike Apple, which has gone for the jugular with the iPhone and now the iPad, Microsoft is dabbling around on the periphery with its multi-touch initiatives. Surface was designed for casinos and retail marketing. Courier, if it exists at all, uses both pen and touch and is narrowly focused on specific uses. The Windows Phone 7 Series is vaguely promising, but it will have to compete not with the iPhone, which has been dominating the market for three years, but with a future iPhone, which may not be easy to compete with.

Microsoft's initiatives strike me as projects designed above all to avoid the cannibalization of existing products. Neither Surface nor Courier gets anywhere near Microsoft's PC or Tablet PC businesses. And that's the problem.

Microsoft: Beat your own products (or Apple will)

If Microsoft works too hard to protect its past, the company will lose the future.

The reason new versions of Windows take so long is that Microsoft feels it's necessary to offer one operating system for everything from tiny tablets to enterprise servers, and an operating system that's backward-compatible with every hardware and software product created for Windows in the past decade or more.

This is a losing strategy. Instead, Microsoft needs to build a new operating system from the ground up optimized for the new generation of touch computers. And it needs to fork Windows. The existing Windows line should continue to evolve as a business and enterprise operating system. But the new multi-touch version should be for consumers only, at first.

Instead of building a platform that doesn't steal customers from Windows, Windows Mobile, Xbox and the Tablet PC people, Microsoft should instead target these very markets. In fact, the teams who build these products need to be retasked for the new world of computing.

The touch OS needs the mainstream appeal of Windows, the gaming awesomeness of Xbox, and the developer support and processing power of the Tablet PC market.

This is very hard to do in a giant company like Microsoft. The people who champion existing winners, including the Windows team, have all the power because they make all the money. You'll notice that Windows Phone 7 shocked everyone with its innovation. How is it that the Windows Phone 7 team was able to do that? The reason is probably that the Windows Mobile people have little power within Microsoft because their product is a market failure.

If Microsoft is to succeed or even survive as the world's largest software maker, it's going to have to figure out how to cannibalize its own cash cows, piss off its partners and anger some customers who want backward compatibility.

Microsoft needs a new consumer touch computer, or Apple will own the PC market within five years.

Can Microsoft do it? Can the software maker muster the vision to build a new consumer touch computer in time to survive? Yes, it can.

Will Microsoft do it? Well, probably not.

Mike Elgan writes about technology and global tech culture. Contact Mike at, follow him on Twitter or his blog, The Raw Feed.

Copyright © 2010 IDG Communications, Inc.

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