Microsoft betrays the trust of customers and partners in the name of progress

It’s been a big week for Microsoft: The company surprised everyone by announcing the Surface tablet, a product that finally gets Microsoft into the computing hardware business. And yesterday, Microsoft finally lifted the curtain on Windows Phone 8, which aims to further marry its mobile ambitions with Windows 8.

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Microsoft is for once the cool kid in the technology world, like a beaten-down nerd who inexplicably becomes Prom King (there’s a John Hughes movie in there, somewhere). But while much of Microsoft’s new-found popularity is deserved, it’s also become increasingly clear that the company is willing to betray the trust of consumers and its partners to get its way.

The trouble with Windows Phone 8

Microsoft confirmed yesterday that existing Windows Phone devices won’t get upgraded to Windows Phone 8. That includes the Nokia Lumia 900, which launched just two months ago. Microsoft is releasing an update, Windows Phone 7.8, which will have many WP8 features, but that may not be enough to satisfy early adopters.

Windows Phone is still a fledgling platform, even though it’s been out since the Fall of 2010. Consumers who decided to buy a Lumia 900 over the far more mature iPhone or Android phones put a certain amount of faith in Microsoft and Nokia. Now that faith has been betrayed. Losing the love of a handful of users is no sweat for Microsoft, but for Nokia it could be disastrous.

What’s even worse, it seems that Nokia knew it was building obsolete devices when it joined up with Microsoft last year, sources tell TechCrunch. At that point, Nokia had no choice but to agree to Microsoft’s terms: It desperately needed a new mobile OS. But if true, the arrangement would validate the greatest fears Nokia’s fans had about the Microsoft deal. Nokia effectively sold its soul to build the Lumia phones.

The far bigger problem for both Nokia and Microsoft now is that they’ve triggered the Osborne effect. Now that every knows that Windows Phone 8 will only be available on new devices this Fall, who’s going to buy a Windows Phone before then? Chumps, that’s who.

Both Nokia and Microsoft are obviously aware of the potential issues following the Windows 8 announcement, though that doesn’t seem to mean much. In response to a pleading letter from a Lumia buyer (via Engadget), Nokia CEO Stephen Elop wrote:

As we showed today, we have a lot of exciting capabilities coming as part of a pattern of updates for the existing Lumia products. This includes some of the most significant visual elements of WP8 – for example, the new start screen. As we have always been, Nokia is committed to delivering a long-term experience to any purchasers of our products.

Apparently, a long-term experience to Elop means a phone that’s made obsolete in less than a year.

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Looking below the Surface

Then there’s Surface, Microsoft’s bold attempt to finally build its own PC hardware. Like many, I was intrigued by the tablet (though not as much as VentureBeat’s John Koetsier, who went ga-ga for it). The Surface’s design is slick, the accessories are actually innovative, I can’t wait to touch-type the heck out of that keyboard cover, and in many ways, it offers a glimpse at the future of computing. Check out our hands-on with the Surface for more details on how amazing-looking this device is.

The Surface with Windows 8 Pro, for example, is no different than a standard Windows laptop. You’re not compromising productivity like you do with the iPad or Android tablets.

Microsoft is obviously trying to kick-start the Windows 8 ecosystem with a bang. All future Windows 8 devices will be judged against the Surface’s elegant design, much as Google’s Nexus family of devices sets the standard for Android. The company isn’t just aiming at tablets either. Eventually, all Windows PCs will resemble the Surface.

You could look at the Surface as a middle finger from Microsoft to lazy OEM partners, but there are still plenty of Windows PC makers that have stepped up their game with the recent Ultrabook trend (specifically, Samsung, Dell and HP).

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While a noble goal, the way the software giant went about it seemed crass, as many partners reportedly didn’t even know about the Surface until it was announced (or at the very least, they were given very short notice).

The Surface announcement felt rushed from the get-go: Invites went out a week before the LA unveiling and attendees didn’t know where to go until the day of the event. I have a sneaking feeling that Microsoft didn’t plan to unveil the Surface so soon, and it was forced to do so to preempt an expected Nexus tablet announcement at Google’s I/O conference.

Microsoft holds all the cards with Windows 8. It’s not as if its partners are going to abandon the platform. But I can’t imagine that PC manufacturers are happy about the Surface, especially the ones who have actually been trying to build better machines.

With the Surface, Microsoft has opened itself up to an eventual day of reckoning from PC makers.

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Fear leads to anger

Look beyond the hype from this week and you’ll see a company that’s unquestionably afraid: afraid of losing out on the tablet and smartphone market; afraid of the death of the traditional PC; and ultimately, afraid of no longer being relevant.

While I’m optimistic of Microsoft’s chances to succeed with Windows Phone and Windows 8, I’m worried about what it’s taking for the company to actually get there. Microsoft has plenty of users, but fewer outright fans. The company needs to support those true believers, not betray them with obsolete software. And when it comes to OEMs, Microsoft shouldn’t forget that it also needs to support those same companies that it’s now abruptly competing against.

What’s sad is that Microsoft isn’t a company that needs to be desperate. With Windows Phone and Windows 8, it has great platforms that offer quite a bit to consumers. Microsoft doesn’t need to be anxious about how far along Apple and Google are in market share.

It just needs to do three things: Be confident. Be cool. Be Microsoft.

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Ballmer & Surface photos by James Pikover/VentureBeat