Watch out for Microsoft's combo power

It was a pretty sight last week when I landed towards the close of the Windows 8 launch party to find sleek machines from Microsoft partners resembling Apple's Mac range - in their thin, cool looks, and more important now, their touchscreen ability.

Microsoft's tablet competitor to Apple's iPad, Surface, has also hit US stores and should hopefully land in India soon enough.

Here's the catch: Surface and other desktops/laptops cost around the same as the Apple devices, and we wonder why. A late me-too product, howsoever good, does raise eyebrows when it costs the same.

In the US, Surface starts a $499 (about R26,800) for a 32 GB version, the base model, the same as the latest iPad. You can separately buy a cover with an integrated keyboard that sets Surface apart.

If we look back to the 1990s, we would say Microsoft's great contribution was in offering much the stuff that Apple did at cheaper rates - with all the graphic software. It is a different game now. So what is going on?

My guess is that Microsoft has some aces up its sleeve that are not seen now.

Here is the deal: Microsoft is a software company. Windows 8 in India starts at ₹ 23,500. Microsoft also has its Office suite that by far remains the most popular.

It is also offering Internet-based 'cloud' versions of its e-mail software Outlook as well as Office, besides online storage. This is a game in which Apple has to lag behind at some point.

Apple has its iCloud offerings and sure has thousands of iPad apps on which Windows is yet to catch up. But when Microsoft starts bundling platform as well as productivity software and 'cloud' features to small businesses and corporates worldwide, the tablet (with a useful keyboard that makes it a hybrid laptop) could become part of the overall deal in which the Seattle-based giant would be in a position to offer 'combo packs' that are a lure on the prices. Its power lies in software.

So, Microsoft may carry a simple message: 'We are as cool as them, and come at an overall rate that is highly affordable.'

In fact, Microsoft had its total cost of ownership (TCO) argument to woo big corporates about a decade ago. I am expecting a repeat.

N Madhavan, Associate Editor