Time To Cut Microsoft Some Slack, Surface 2 Shows They Understand Mobile

Let's stop harping on it. We've already discussed Microsoft's failures and shortcomings with their first generation of Surface and Surface RT devices. The company's $900 million dollar mistake has been bounced around along with Steve Ballmer's tenure ad nauseam and so it's probably no surprise that more than a few pundits and analysts are sounding off so negatively regarding Microsoft's recent Surface 2 and Surface Pro 2 unveiling earlier this week.  They're too big, too expensive, not retina, too "Windows RT," whatever.  What is it about Microsoft that seemingly draws such a critical eye these days, especially when it comes to mobile?

Let's all take a deep breath and analyze the Microsoft offering a little bit.  Here's a bit more information to help with the digestion.

Let's see, a 32GB Surface 2 with Windows RT 8.1 that has WiFi, USB 3.0, a microSD card slot and HD video out, for $449.  It's expensive!  Perhaps, and so is the 4th generation iPad, which sells like hotcakes at $599 for a 32GB model that doesn't have an easy expansion microSD memory card slot or ubiquitous USB 3.0 connectivity.  That's $150 more; and let's not get into the apples and oranges comparison of bundled software and cloud storage - not yet anyway.  But it's Windows RT and it's only compatible with Microsoft stuff!  Yes, the iPad only works with Apple compatible software and the same goes for Android, for all intents and purposes.  And yes, Microsoft still has some work to do on the app store front but momentum is building there too.

What does occur to me here is that Microsoft's 10.6-inch premium tablet offering is very competitive with current market-leading products, from a price standpoint.  If they threw in Touch Cover 2 for $449 it would have been a serious head-turner, in my humble opinion. But let's look at the bigger picture.

On Monday, Microsoft Corporate VP of Surface, Panos Panay gave a passionate pitch, as expected, about the company's new tablet offering. His tech demos underscored not only performance of the product and the fact that Microsoft is beginning to understand the white-hot tablet market but also that they're starting to leverage their internal resources and still-developing ecosystem to compete.

Here's Mr. Panay demonstrating the Surface 2's front-facing web camera in a very low light Skype video chat session and the performance is impressive...

Did you see how dark it got in the room?  Did you see how well-lit Panos' face was and the quality of the video feed?  That's Microsoft leveraging not only better camera technology with a 1/3rd-inch, 3.5MP front-facing camera sensor but also tight integration with Skype. And they throw in free Skype calling to landlines and unlimited Skype WiFi at hot spots worldwide for one year, to boot.

Now let's look at a raw performance demo, but there are claims here that you might quickly dismiss as well.  Here's Panos demonstrating the multitasking and gaming capabilities of their new Surface 2 tablet...

Okay, so besides the fact that Surface 2 was running Halo: Spartan Assault along side several Microsoft Office apps at the same time, (with the ability to actively switch between them or run them side-by-side), there's another message here beyond how well-optimized Windows 8.1 is for mobile and multi-threaded processing.  Microsoft throws in MS Office RT 2013 with the Surface 2 bundle and then showcases Halo: Spartan Assault in their demo for good reason.  There's an ecosystem synergy here that is beginning to flesh out well for Microsoft - Xbox, Windows Store, Office, Skype, and the sleeper that not many are talking about -- 200GB of Microsoft SkyDrive for the first 2 years, free.  "New every two" types might be on to their next tablet then anyway, or not, but either way, all of this software and service adds up to significant value.

Apple and Google get accolades for the wealth of app software available on their platforms and there's no question that Microsoft is still playing catch-up with the Windows Store. They need to work on that for sure but Microsoft at its roots is a software company. I'm willing to bet they figure it out. I like what we're seeing from Microsoft with the new Surface 2 and Surface Pro 2.  The company clearly is beginning to understand that a tablet needs to have more than just a high-res screen and a slick UI.  It's about the total package, the ecosystem, and experience.  More importantly, in my opinion, they're also beginning to execute based on that reality as well.