Device as a Service: MSFT & Amazon

“You’ll probably think of us more as a devices-and-services company. ” – Ballmer to Seattle Times

“Kindle Fire is a service.” – Bezos launching Kindle Fire HD

Here’s the thing though, despite MSFT’s attempt to make Surface into a device as a service (DaaS?), Microsoft is less likely to make as much money as Amazon. Microsoft’s two key products that will be pushed through Surface are Windows and Office, now since Office will be a part of Surface RT, MSFT won’t be making any money there; they will however strengthen Office’s relevance on tablets. On Surface Pro, MSFT will make money through Office and make a stronger case for Office on tablets.

Content is where MSFT’s DaaS is weaker than Amazon’s. Prime include free 2-day shipping, movies, music, cloud sync, books. Compare MSFT, and all we have is music & movies–with Xbox LIVE. Amazon has content to offer on a content consumption device. MSFT doesn’t have content but has content creation tools. Surface is a very tricky proposition for MSFT.