Microsoft's Sneaky Tablet Tax

steve ballmerMicrosoft CEO Steve Ballmer has a tablet dilemma.

Photo: Screenshot

Here’s a great example of how Microsoft’s huge, profitable enterprise business is hobbling it in new areas like tablets.Microsoft has finally revealed how enterprises will be able to take care of Windows RT tablets, should they want to buy a fleet of the new touchscreen devices for their employees.

It’s a smart plan, but it won’t be cheap.

Microsoft had previously said that Windows RT tablets would not be managed the same way as Windows PCs.

Corporate IT departments regularly push software upgrades and security updates to massive numbers of employee PCs through automated means.

One key Microsoft technology they use to do that is called Active Directory, which tracks passwords, users, and policies. Windows RT tablets don’t work with it.

Yesterday, Microsoft said that it is updating a cloud service, Intune, to cover Windows RT tablets and Windows 8 phones. Intune is Microsoft’s way of managing mobile devices like Windows Phone 7, iOS, and Android devices.

Most enterprises prefer to use a software product called Microsoft System centre Configuration Manager instead of Intune. It’s for Windows PCs. Microsoft said it will link Intune and SCCM together.

This is good news so far.

BUT there is one big gotcha for enterprises: cost. Even though Microsoft will offer a discount on Intune to those that also buy SCCM, they still have to buy another service.

UPDATED: Plus, Microsoft essentially requires Intune customers to also buy its on-premises email product, Exchange in order to use it to manage mobile devices. says Don Retallack, research vice president with independent analysts Directions On Microsoft. “To use Intune for managing mobile devices, customers need an on-premises Exchange installation: Exchange Online (which can be subscribed to with Office 365 or separately) cannot be used,” he told BI.

That’s another hidden cost, and a big one, particularly for businesses that are using a separate email service.

Even though Windows RT tablets will likely cost less than Windows 8 tablets, Microsoft is basically charging what amounts to a software tax to enterprises who buy a lot of them. 

Enterprises have other choices, like buying device-management software from somone other than Microsoft. Or they can skip Windows RT and buy a fleet of Intel-based Windows 8 tablets instead. Those are expected to cost more than Windows RT tablets.

Microsft is stuck between a rock and a hard place with its Windows tablet strategy. On the one side, its biggest, most profitable customers are enterprises who use Windows PCs. If it offers them a cheaper alternative in the form of Windows RT tablets, that will hurt Microsoft and its PC partners like HP and Dell. And if it doesn’t, it will watch Apple and Google continue to control the lion’s share of post-PC devices.

We asked Microsoft whether the policy amounts to a software tax. Microsoft didn’t address that. Here’s what they said instead:

“Windows RT will be fully manageable through the next release of Windows Intune.  organisations which already use System centre Configuration Manager to manage their PC environment will be able to administer the next release of Windows Intune—and the Windows RT devices—through the Configuration Manager 2012 SP1 console.  This enables organisations to manage all the connected devices—their corporate-owned, on-premise PCs as well as their user’s personal-owned, non-corporate-connected devices—from a single location.”

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