In an epic battle shaping up between Microsoft and Apple, played out over a 10-inch touchscreen, one question rises above all others: Will Microsoft CEO Steve Ballmer put to bear enough resources and aggression to win this one?
For all his sound and fury on the stage, Ballmer often doesn't take the high-risk, high-reward chances necessary to become a star. If he assumes his conservative stance this time, Microsoft's newly announced Surface tablet will likely suffer the same fate as the lackluster Bing, Zune, Origami, Mira, Portable Media Center and, most devastatingly, Windows Phone.
"Ballmer has a tendency with money to underfund everything, taking a required launch budget and cutting it by two-thirds," says tech analyst Rob Enderle. "I am worried that he's going to repeat this mistake of being cheap, and being cheap won't get this done."
This week, Microsoft announced Surface, a Windows tablet with a 10.6-inch screen, that will come in a version running Windows RT and a business-oriented version running Windows 8 Pro. It will be a premium product likely cost compatible with the iPad and sold concierge-style at Microsoft retail stores starting in the fall.
Surface just may be Microsoft's defining moment-for good or ill.
Microsoft has already taken a huge risk with Surface by breaking from tradition and melding software and hardware. By getting into the hardware side of a product that competes with PCs, Microsoft alienates its PC partners. When AllThingsD's Ina Fried asked Ballmer how Microsoft's PC partners felt about the Surface, Ballmer responded, "No comment."
The risk to Microsoft cannot be understated.
"They clearly slapped the OEMs upside the head," Enderle says. "There's a good chance a number of these OEMs are going to leave the PC business. They're not going to buy software from someone that they're competing with. HP and Dell can follow IBM and exit."
Internal strife is bad enough, but Surface is also taking on the hottest tech gadget in the world. By the time the first Surface hits stores, the iPad will have had a two-and-a-half year head start. The iPad clearly holds the high ground with an awesome app ecosystem and millions of adoring fans from the consumer and business ranks.
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Surface, though, does have a key advantage.
Surface will come to market as a fully functioning productivity tool, which stands in stark contrast to the toy-like, media-consumption iPad. With Surface, you'll be able to get stuff done right away using a physical keyboard built into the cover and a kickstand to prop up the screen. More importantly, Surface wields the Excalibur of productivity apps: Microsoft Office.
"With Office alone, it could make the iPad look crippled," Enderle says.
But Office alone won't win the tablet wars; consumers will tally the final decision. Think I'm wrong? RIM tried to court the enterprise with PlayBook and that didn't turn out too well. In order for Microsoft to woo consumers, though, the company will have to embrace a no-holds-barred advertising campaign. Cute, aimless commercials such as the one with Bill Gates and Jerry Seinfeld won't cut it.
This means spending the necessary funds to run compelling, creative attack ads on the iPad. Surface ads should call out the iPad as a beta product. Ads should point out that iCloud is simply a means of locking in users. Ads should aim to be revolutionary, much like Apple's famous "1984" television commercial promoted the Macintosh against Microsoft.
While comparative ads might be frowned upon in some countries and downright illegal in others, Microsoft will need to go on the offensive with the kind of hard-hitting comparative ads used by politicians in a pitched election battle. Microsoft went on the offensive against Macs a few years ago with its 'Laptop Hunters' TV spots, but will have to be tougher against the mighty iPad.
"Microsoft needs to pound Apple," Enderle says. "The iPad is still a pretty limited product, a netbook without a keyboard. If Microsoft can get people to see it that way, then the iPad can go the way of the [ill-fated] netbook."
Apple won't be watching passively from its newly planned spaceship campus in Cupertino. In fact, Microsoft gave Apple good lead time - perhaps too much lead time - by spacing Surface's announcement this week with shipments in the fall. Apple, of course, doesn't extend rivals such courtesy; availability of new Apple products comes within 30 days, sometimes 24 hours, of the time of announcement.
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In Surface's favor, the iPad isn't as entrenched as most people think. Early adopters who tend to buy tablets love to chase the latest shiny gadget-and Surface is just that. Also, PC users sitting on the fence with tablets might be more inclined to purchase Surface because of its strong similarities to laptops.
All of this will depend largely on a well-executed, well-funded marketing blitz.
Make no mistake, Microsoft is at a turning point with Surface. "This has got to work," Enderle says. "If it doesn't work to a very high degree, Microsoft ends up with a very smaller company or certainly one with a lot less influence."
Tom Kaneshige covers Apple and Consumerization of IT for CIO.com. Follow Tom on Twitter @kaneshige. Follow everything from CIO.com on Twitter @CIOonline and on Facebook. Email Tom at email@example.com
Read more about tablet pcs in CIO's Tablet PCs Drilldown.