Will Microsoft's Surface storm the workplace?June 20, 2012: 10:00 AM ET
IT managers have been flummoxed by an influx of iPads into the enterprise. This is Microsoft's chance to change that.
FORTUNE -- The secret to making a tablet that sells well in the enterprise is creating a device that's a hit with ... consumers. Can Microsoft pull off such a feat? The past provides a murky prologue at best. The company failed repeatedly in phones and music players but has succeeded wildly with its Xbox and Kinect game systems. Now Microsoft is trying again.
In case you haven't heard, Microsoft (MSFT) unveiled its new "Surface" line of tablets at a press event in Los Angeles on Monday afternoon. Surface tablets come in two flavors: consumer and enterprise. The latter is powered by an Intel Core processor and runs on the full-blown Microsoft Windows 8 Pro operating system. More importantly, both versions of the tablet feature an innovative cover that doubles as a keyboard and a built-in kickstand -- which is why Surface actually stands a shot in the enterprise.
With an increasing number of employees bringing their devices of choice to work, smartphone and tablet manufacturers now have to cater to consumers, not IT managers. Focusing on innovative hardware is a good strategy for Microsoft. Unlike most other iPad challengers, the company's Surface tablets actually attempt to bring some new design elements to the market. Microsoft says its 3mm touch cover "senses keystrokes as gestures," enabling users to "type significantly faster than with an on-screen keyboard." The cover comes in five colors and clicks onto the tablet via a magnetic connector.
Attachable keyboards aren't a new invention, but the integrated peripheral (and magnesium casing) gives the Surface tablets a different look and feel. That's more than other iPad challengers have managed to come out with. That's why Microsoft has a better shot at making a dent in the iPad's popularity (both in and out of the workplace) than devices like Research in Motion's (RIMM) BlackBerry PlayBook or the now-defunct TouchPad by Hewlett-Packard (HPQ) ever had.
Both versions of the Surface tablet will be available for sale online and in Microsoft stores. Pricing has yet to be announced, but the company says the first version, which features an ARM processor and runs on Windows RT, is expected to be "competitive with a comparable ARM tablet." The "Pro" version, geared at enterprise customers, will launch 90 days later and should cost about as much as an Intel (INTC) Ultrabook. But it's the lighter, cheaper version aimed at everyday users that could end up having the most success in the workplace. With many employees now buying their own tablets, chances are they'll go for the less expensive device unless the pricier version is provided for them.
Of course, the Surface tablet is far from a home run. The jury's still out on whether typing with the new ultrathin keyboards will be a good experience. And going at it alone won't be easy—Microsoft runs the risk of pissing off its OEM partners, many of which like Dell (DELL) and HP (HPQ) have sizable interests in selling hardware to businesses. It's not the first time the tech giant has tried to bundle its software and hardware in one package. It did so with the Zune MP3 player and the Kin smartphone. Both flopped.
Microsoft also has to prove its ecosystem is attractive to consumers and developers, the programmers responsible for developing all sorts of time-sucking apps for people to play with. More importantly, Microsoft not only has Apple's (AAPL) iPad to contend with. An increasing number of Google-powered (GOOG) Android tablets are expected to enter the workplace, and manufacturers like Samsung are doing their best to woo consumers and appease IT managers at the same time.
Still, Surface is a step in the right direction. Microsoft chief executive Steve Ballmer may have been stretching it when he said the company's new tablets are "a tool to surface your passions." But he has the right approach—delight consumers with innovative hardware first, then appeal to IT. That secret sauce has certainly worked for its main rival.