Microsoft needs a Kindle-killer

Microsoft may have revealed its iPad killer but what is the software giant cooking up to beat Amazon's Kindle?

Microsoft has announced a new entry into the tablet parade, dubbed Surface, which is hardly a major revelation given the rumor Red Carpet that now precedes any such tech announcement. It’s a purty-lookin device with the sorts of lines and angles reserved for roadsters and remodeled Craftsman homes. The slick cover-cum-keyboard is yet another tool to enhance our productivity during our  18 waking hours and the Gorilla glass screen is ideal for watching  HD reruns  of “The Suite Life of Zach and Cody” on Netflix.

But where are the books, magazines and other publisher content? And while Microsoft didn’t play many of its content/app cards, the Microsoft-Barnes & Noble-Nokia ménage à trios demand some explanation or at least speculation.

Let’s start with the facts: In April, Microsoft invested $US300 million in a joint venture with B&N which may represent a spinoff of the Nook business. Despite rumors that B&N would be front and centre in the Surface announcement, no such news was shared other than B&N reiterating it was building a reading app for Windows 8. Things get messy when you recall that earlier this year, Nokia and Microsoft announced an alliance in Nokia Reading, a platform for the distribution of e-books on Lumia Smartphones. What’s the old saying: Two’s company, three’s a lawsuit?

While a Google of permutations lay on the horizon, two make the most sense. One thing they have in common is that Nokia is the odd man out, at least as far as US consumers are concerned. One vision has B&N as the baked-in/embedded e-bookstore on Surface devices, probably called Nook. That would replicate somewhat the Apple model in which iBookstore is the default but Amazon, Kobo, B&N and others are accessible via cloud-based apps. Microsoft would have to offer marketplace entry to competitors to avoid governmental intervention (ala the browser wars) all the while providing some subtle (and legal) advantage to the incumbent bookseller.

Footnote to scenario one takes us down the path of what B&N will do with its Nook e-reader and tablet business. The tablet devices are most in question given they are built of a proprietary flavor of Android which, as any schoolchild knows does now match any known version (past, present or future) of Windows.  One option is to maintain its Nook tablet business in some fashion but place an increased focus on its educational content (B&N is in the process of spinning off its substantial college book business) which is well suited for the Surface device.

Scenario two has Microsoft expanding its Zune music/movies/TV show brand to published content and using a publishing service provider such as Overdrive or Ingram to handle the messy ingest-transcode part of the publishing workflow.

There certainly are other possibilities and the future is even more opaque when you add newspapers and magazines to the mix. App development for published content remains a mystery other than the fact that Microsoft will likely want lots of it.

Biggest issue of all is Microsoft’s lack of emphasis (read: interest) in the publishing business. The Redmond company lacks a competitive vertical content management-based publishing solution and has not publicly made mention of publishing as an area of interest. Partnerships with key players such as Adobe are certainly a possibility or developing a cloud-based CMS offering via acquisition.

Sure would be fun to by a fly on the wall across the lake from Microsoft at Amazon HQ. Let the fun begin.

Allen Weiner is a research vice president for Gartner's Media IAS service. You can read more of  his blog posts here.

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