back to article Microsoft: Surface a failure? No, it made us STRONGER

Microsoft's Surface fondleslabs haven't been selling as well as it or its retail partners would have liked, but top execs say that building hardware in-house is an essential part of Redmond's strategy, and one that has already paid off. Speaking at a meeting with financial analysts on Thursday, Microsoft chief operating …


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  1. Azzy

    We alienated our partners, wrote off $900m, and were the laughingstock of the industry...

    We plan to do more of this in the future!

    For example, we're buying Nokia...

    1. asdf

      Re: We alienated our partners, wrote off $900m, and were the laughingstock of the industry...

      Based on BB quarterly results they may even double down before too long since they seem to have a boner for phone manufacturers that are a shell of their former selves.

    2. Anonymous Coward
      Anonymous Coward

      Watch out

      Blackberry are announcing nearly 5000 job losses and a financial loss greater than the number of Z handsets it hoped to build.

      The company is heading for junk status and may well want to sell to the highest bidder.

      Who will get in first? MS, Apple, Samsung?

      History is littered with 'Great Businesses' that take a wrong turn and then fall and end up as footnotes in the mists of time..............

      1 October 2030 "A look back at technology, was the Surface and Win 8 the precursor for the decline of Microsoft?"

      1. Anonymous Coward
        Anonymous Coward

        Re: Watch out

        "1 October 2030 "A look back at technology, was the Surface and Win 8 the precursor for the decline of Microsoft?""

        Er, no, more like "was the iPhone 5 the precursor for the decline of Apple?"

    3. Anonymous Coward
      Anonymous Coward

      Re: We alienated our partners, wrote off $900m, and were the laughingstock of the industry...

      Guess most of you didn't read the article about the Newton and how Apple burned money for a device which didn't catch the market and was axed. Later Apple was able to deliver the iPhone and iPad.

      It looks most of you are really worried MS could fight back and deliver some good devices - which would make your hate for MS burn your brain.

      1. regorama

        Re: We alienated our partners, wrote off $900m, and were the laughingstock of the industry...

        i don't hate them , i just wish they would get their act together , if anything i feel sorry for them being unable to dig their way out of the sizable hole they have made for themselves Maybe now they have ditched that prick Ballmer they may have a chance provided they also give windows 8 the boot as well.

      2. Anonymous Coward
        Anonymous Coward

        Re: We alienated our partners, wrote off $900m, and were the laughingstock of the industry...

        Exactly, Linux needs some competition.

        Choice is good.

      3. Avatar of They

        Re: We alienated our partners, wrote off $900m, and were the laughingstock of the industry...

        No, My fear is that MS will still make enough money to spin successive pieces of crap and will remain a player in the market.

        Meaning they won't return to what works like windows 7 and will continue to try and flog windows 8 style rubbish.

        I have no fear in them making good products, it won't happen.

    4. Bob Vistakin

      Re: We alienated our partners, wrote off $900m, and were the laughingstock of the industry...

      Here's some illuminating commentary on Windows 8.

  2. Will Godfrey Silver badge

    If your at the bottom they are assuming the only way is up. Well, no. You could easily stay there.

    1. Captain DaFt

      "If your at the bottom they are assuming the only way is up. Well, no. You could easily stay there."*

      Not in this case.

      After all, Ballmer just announced the cunning plan to get them out of the hole they dug: "Keep digging!"

      *Tsk, your-you're... there is a difference, folks!

    2. Anonymous Coward
      Anonymous Coward

      Sounds like

      they think they can dig themselves out of the hole by digging harder.

    3. Anonymous Coward
      Anonymous Coward

      @Will Godfrey

      You're not your please!

      1. Will Godfrey Silver badge

        Re: @Will Godfrey

        Gimme a break guys! It's not often I make a mistake like that. It's this new keebord wot dunnit innit A.

        1. Anonymous Coward
          Anonymous Coward

          Re: @Will Godfrey

          Upvoted for honesty and humbleness.

          1. wowfood

            Re: @Will Godfrey

            They may be in a hole now, but if the keep digging eventually they'll wind up out of that hole on the other side of the planet.

            If you follow cartoon logic... which I do.

  3. Anonymous Coward
    Anonymous Coward

    they must be doing something wrong....

    to make huge profits. I would love to be as big a failure as Microsoft apparently is....

    Let's see YOU dweebs run a company......

    1. asdf

      Re: they must be doing something wrong....

      The edge to that desktop monopoly is that can it pay off years later in ways you don't expect such as when even Android phone manufacturers are forced to pay for patents so their phone memory (fat32) can interact with customer computers. Microsoft has ridden that beast about as far as they can though and my guess they are nearing their peak in profit unless the new CEO turns out having the gold touch. But hey keep posting as an AC as it really shows your faith in your employer and/or stock holdings.

      1. Anonymous Coward
        Anonymous Coward

        Re: they must be doing something wrong....

        Google can write an ext4 driver for Windows anytime it likes and avoid FAT32 and exFAT wholly. No one is forced to use such MS patents. Can't really see why MS should not protect its R&D investments and give them away for free to competitor. Does Google open source its search engine algorithms?

        1. asdf

          Re: they must be doing something wrong....

          Well besides the fact I find almost all software patents to be morally wrong, yes Microsoft is playing by the rules of game. All I am saying is Microsoft is still making the vast majority of its money in the same markets it was making it a decade ago and the only time it makes money in new markets at all is when it can leverage it already ruled illegal monopoly. This is getting harder and harder for them to do. Yes they will stay profitable for a long time but unless things change radically internally I believe very shortly they will reach peak profit and slowly decline.

        2. Richard 22

          Re: they must be doing something wrong....

          I assume that the reason why the Nexus4 doesn't mount as a drive and only supports MTP transfer is that it can then use ext3 internally and not require paying FAT32 patent fees to Microsoft. That would also give them a reason for not supporting microSD cards, since those would need to use FAT32 otherwise they would be unreadable on most PCs. Anyone know if this is true?

          1. Solmyr ibn Wali Barad

            Re: they must be doing something wrong....

            Avoidance of the patent is somewhat plausible. Although big players tend to license the whole dump (pun fully intended), so one patent does not matter very much.

            It may also be a matter of control - to prevent raw access to storage.

      2. Alan Johnson

        Re: they must be doing something wrong....

        Even if you think SW patents are acceptable FAT32 is an issue.

        The problem with the FAT32 patent is that it is a stunningly obvious solution to a problem that only existed because of the pathetic design of FAT. The value of FAT32 patent is only FAT32's status as a de facto standard. Nobody designing a new filesytem would do anything as broken as FAT32. Patents that reward obvious solutions are bad because they inhibit innovation and competition. Patents whose only value is to allow implementation of a de facto standard and have no independant technical worth are very worrying especially when they are not offered under RAND terms.

    2. Richard 12 Silver badge

      Re: they must be doing something wrong....

      Most of that is "automatic", like the banks "borrow at 0.5%, lend at 6-20%".

      In other words, if you do nothing at all you continue to make large profits, and you have to try really hard to lose money.

      Eg by writing off multiple billions on failed projects.

      Like Mr B has done several times.

  4. ecofeco Silver badge

    Doubleplus good

    No really, chocolate production is up 20%.

  5. Quxy

    "superior hardware-software integration"?

    Gah... What about USER-software integration?

    1. Euripides Pants

      Re: "superior hardware-software integration"?

      "What about USER-software integration?"

      I would not like to be integrated with Microsoft software. See what happened to this woman --->

  6. Nick Thompson

    The surface RT had little chance of being successful, underpowered and with few apps there was little reason to buy it over an ipad. The surface pro on the other hand is pretty good, I bought one a few weeks ago with the £80 discount and I've got few complaints. The intel HD4000 graphics could be better, although if you turn the resolution down to 720p it'll play modern games at a decent framerate. The built in audio drivers are crap and have no noise cancellation on the microphone, so I had to install the realtek ones to avoid pissing people off on skype. Other than that I'm very happy with it.

    1. asdf

      Intel graphics - hahahahahahahaha, GMA = games my ass

      1. Steve Knox

        Intel graphics - hahahahahahahaha, GMA = games my ass

        That's what I thought, too -- last year.

        Now I've got a laptop with HD4000 graphics which handily beats AMD's equivalently priced integrated graphics.

        I can play Diablo3, for example, or Skyrim on high settings.

        Sure, you can get better nVidia or AMD GPUs, but you're going to pay half again as much for marginal improvement, twice as much for significant improvement.

        I really hate to say this, but Intel's graphics are finally somewhat respectable.

        1. Charlie Clark Silver badge

          Re: Intel graphics - hahahahahahahaha, GMA = games my ass

          Yes, by all accounts Intel now has integrated graphics comparable with AMD or nVidia. You're still paying a premium for the chips but they're much cheaper than the full-fat ones which is why Intel is working hard (partly by crippling the graphics) to keep the market segmented.

        2. fishman

          Re: Intel graphics - hahahahahahahaha, GMA = games my ass

          <<Now I've got a laptop with HD4000 graphics which handily beats AMD's equivalently priced integrated graphics.>>

          Every graphics benchmark I've seen has the AMD graphics superior to the HD4000.

      2. Anonymous Coward
        Anonymous Coward

        Do you buy an i5 to play high-end games? My FSX PC runs on Intel Extreme processors and two high-end nVidia cards powering three monitors. Not exactly what you can fit in a tablet.

        Surface was never designed as a game console - it was designed for people actually needing to perform some real task on a tablet device - like running Windows business software - not games.

        If you look for a games console, get a Nintendo Game Boy - which looks the reference device most of you "learned" IT from.

        1. asdf

          LDS is that your church? Your lame put downs and love all of all things boring and Microsoft sure seem to point that way. Then again Microsoft is the greatest thing ever and the consumer only rejects their mobile offerings because they don't understand.

  7. the old rang

    What is a stronger not smarter less than wise company called?

    They say that Balmer is not responsible for the sad state of economics at Redmond...

    And their phones and slabs will change the world...

    They will eventually be able to fix errors, instead of poorly patching (and ticking off users)...

    AAAAAND they are not stronger....

    (Keep in mind all the above are very recent, except for the patching fiasco, which is becoming constant...)

    Stronger but no wiser.

  8. joed

    a case of fanaticism?

    every failure brings members of fanatical groups closer together, stronger united to fight to the bitter end, there's no room for rational decisions

  9. Fihart

    What doesn't kill you.....

    ...only makes you stronger.

    Is this their business plan ?

    1. Tom 7

      Re: What doesn't kill you.....

      My ex-rugby playing paraplegic mate seems to think this phrase is a bit shit.

      MS are getting a bit Black Night.

  10. Glostermeteor

    Still too expensive and not enough storage

    I would only buy a surface style device if it can replace my laptop, so that means more storage, full Windows 8 and a cheaper price. I findit very difficult to justify 700gbp+ on a device that is inferior to a laptop, when I can get a kick ass ultrabook for less money. Laptops and tablets are going to merge which means prices must come down.

    1. Charlie Clark Silver badge

      Re: Still too expensive and not enough storage

      Not if Intel and Microsoft have anything to say about it.

  11. Anonymous Coward
    Anonymous Coward

    More devices eh, Microsoft?

    Get ready to start a huge bonfire, because that's what you need to burn all that money.

  12. Infernoz Bronze badge

    Microsoft quite obviously is or is well on the way to being a zombie entity.

    I think I'll look at filtering out all Microsoft 'stories' because it is a complete waste of time to read about or deal with zombie, or zombie to be, corporations like this; it really doesn't matter if it has cash, because you can see the rotting and stinking. I'll consider filtering out Apple too, because it is boring, so could become a zombie too.

    I'll get off the dated Windows family as soon as I see options which are good enough; I don't consider OS-X good enough, and see it is poisoned by stupid legacy baggage too.

  13. RobHib
    Thumb Down

    Ultimately a worry.

    Until now, hardware design has been done outside Microsoft, theoretically at least most software companies get equal access to the hardware specs.

    If MS ever gains sufficient market share to dominate hardware design, then hidden HW APIs might become the order of the day as MS apps do within Windows. Remember, the old MS strategy v1.0 never works well but v3 usually does through persistence and time.

    Ultimately, Microsoft's domination over integrated HW/SW designs will be of great concern for everyone.

    1. Tufty Squirrel

      Re: Ultimately a worry.

      >> Microsoft's domination over integrated HW/SW designs will be of great concern for everyone.


      Look what happened with XBox.

      V1 was pretty much a PC in a funky case, and worked better as a PVR than a games console. It tanked compared to the PS2.

      V2, the original 360, was awesome, modulo the odd hardware issue. It kicked the PS3's ass so hard MS thought they had won, and started fscking with the interface, making it an ad delivery platform, etc. Result - PS3 is winning again.

      V3, the Xbox "one", is dead in the water compared to the PS4. MS have backtracked and u-turned on their plans so often I doubt even they know what their plans are.

      Sony are evil, arguably more evil than MS, but they aren't incompetent. MS have both in spades.

  14. Don Jefe

    Shame Really

    Microsoft are one of the few companies that can spend this kind of money to learn about building a new (to them) product category and getting it through the channel and to consumers. Losing the money sucks, but the loss is easily absorbed; especially if they take what they learned and apply it.

    It is a shame they won't apply it. They'll march on with their own ideas and forcefully ignore what their partners and customer base say. Alienating even more people along the way. I say it is a shame because most companies would kill for well over $1B for a trial balloon. A lot of no name business numpties could make a successful product if they had that kind money even without holding all the other cards.

  15. Bladeforce

    Thanks for this story i needed a good laugh :) All Microsoft are good (evil?) at is buying companies that have the patents so they can troll them for years. Innovate? Dont make me laugh they have NEVER innovated

    1. Don Jefe

      None MS question: What is the difference between innovation and invention?

  16. Tomato42

    "Your arms off!"

    "This is but a scratch!"

    The reality distortion field generators must be doing overtime lately in Redmond

  17. skuzzzy

    "But I'm an optimistic guy. Anywhere we have low market share, I see an upside down chair opportunity."

    - Maybe what he actually meant?

    1. Don Jefe

      You can still sit on an upside down chair; even if uncomfortably. You can't do shit with a Surface.

  18. Arctic fox

    Do try not to laugh or howl (as some here have a tendency to do)......

    "By building its own hardware, Turner said, Microsoft has gained a far better insight into what he described as the "seams" between hardware and software, which have often been a weakness for PC makers when compared to more tightly integrated vendors, such as Apple.e"

    ...........but what he is saying (plus Ballmer's pretty objective assessment of where MS are in mobile) may indicate they have learnt something. Hmm? Although I realise of course that is the last thing that some here want to hear. Icon? Chosen deliberately, I do assure you.

  19. Frank N. Stein

    It doesn't matter what's in the Surface Tablets if they screw up the price point. That's the primary reason why they didn't sell. No one is willing to over pay for a Microsoft Surface Tablets. By pricing them above Apple iPads, this guaranteed no one would buy them. Even without a bluetooth keyboard, the iPad mini sells. Surface needs to be priced lower than Apple in order to even attract interest, much less sell in any quantities. Why do you think Microsoft finally started ad campaigns comparing the price of Acer Windows 8 Tablets to iPad minis? They need to lower the price of the Surface from the start, or they will not sell.

    1. Don Jefe

      There was no primary reason they didn't sell. Surface is a textbook example of design by committee where everyone on the committee has different and opposing views. They tried to create a new product category, a new operating system and to develop an ecosystem around it all. The result is a steamy pile of shit that can't do anything well. You can see this in their App system where there's no core driver (iTunes for example and the delivery system for apps are built around music, and expanded from there) with MS it's just blarrrrgh everywhere. They attempted to create a new planet and populate it without first building houses or even determining if those houses would be suitable for occupation.

      The whole thing was fucking stupid. Price isn't a good thing to manage too and is easily overcome if the product delivers what customers want. A retail price of $100 is too much for these things. The two Surfaces we got for spec are now the official bathroom readers here. I got tired of people taking good, and expensive, tablets into the shitter at the office.

  20. regorama

    yes we cant possibly admit we fxxxxxx up so we will carry on , stiff upper lip old chap.

  21. Hungry Sean

    brand identity

    I think the problem MS seem to have in the mobile space is the same issue my mildly creepy uncle has. MS seem unable to understand the market's perception and expectation of them and continue trying to be "down with the kids" (the ads for Kin are a great example). I'm sorry, but no one under 30 wants an MS device unless it's Xbox branded. Now, if they targeted business users that might be a different story. The world sees MS as boring, but that can also be written "a known quantity" and "trusted". MS should stop worrying about the kids, get over their midlife crisis, and embrace their status as an established member of the business community.

    1. Don Jefe

      Re: brand identity

      That happens in most gigantic organizations, private sector and government. The decision makers are so incredibly removed from their customers that by the time information gets to them it has been twisted, spindled, folded and urine soaked by all the people in between that it is useless.

      Business leader meetings are like those of Congresspeople or Parliament. They (honestly I think) believe that what they're discussing is the view of the masses. In reality their idea of 'the masses' are people who are their social equals or betters. The closest decision makers of any large body come to the masses is when someone throws a bag of shit at them in protest or breaks into their house. They're pretty disconnected from their bases.

  22. Zot

    Maybe they're betting on the XBone to fill the coffers... they can flood the market with Win8 based fondle-bricks. But no-one's told them they're not the only brand out there.

    Plus, they've got a public image problem, which is somewhere around - 'out of touch bearded nerd that likes to confuse ordinary people.' Microsoft's scary and cryptic error messages are a great topic for some stand-up comics.

    "There are 2 error(s)" was always a pet hate for me, I'm mean, how lazy is that?!? :) But that's OT.

  23. izntmac

    All companies go through ups and downs. I give Microsoft credit for trying with Windows 8 and the Surface. Apple back in 1990s tried with the Newton Message Pad and that failed too. Microsoft was on a run in the 1990s with Office and Windows 95, 98, and 2000. Now the situation is somewhat reversed with Apple dominating tablets and their computers being used by many more people. Microsoft has had a lot of flops lately in my opinion such as the TIFKAM user interface and also the "fluent user interface" aka tabbed interface of Office. Microsoft still sets the standards for which most desktop software is measured and still has enough of a cash cow to make mistakes like the Surface. The idea of a computer, phone, and tablet all working the same isn't a bad one but Microsoft could have implemented it better and instead of shoving it down people's throats could have had a more gradual implementation or offered users a choice.

  24. Mr. Peterson

    That which doesn't make you stronger kills you.

  25. localzuk

    Simple failure

    To me, Microsoft's failure is very simple to explain - they tried to enter a market that has a premium product with a mass device at premium prices.

    Microsoft are big enough to run a division at a loss; they even did this once already with their Xbox division. So why did they not do this with their tablets?

    The Surface RT is massively popular in one segment now - the education market, as they reduced the price so much that you can get a class set of their tablets for the same price as half a dozen iPads!

    Imagine how well they'd be doing if their RT had been sold at £199 or less. They'd get a decent marketshare, people would be creating apps for them, and they'd be able to increase prices in the future when people are willing to pay for them.

  26. Number6

    Hardware is good

    The sad thing is that Microsoft's hardware is usually of a very high standard. Think of the mice and keyboards that just worked and still work, and the game consoles. Had they not locked in the RT tablets with this secure boot nonsense, they'd probably have sold a lot more of them, even if most people removed Windows and installed Android or Linux instead.

  27. Pat 4

    We know what they haven't learned.

    Well, they say they learned about hardware and software integration, and they learned they have some things to improve with that... Fine.

    From the article, it would seem that they haven't learned that it's Windows8 itself. They hardware was fantastic... Windows... Not so much.

    Will they learn to respect developers?

    Have they learned that they can't build an app store by themselves?


    1. RyokuMas

      Re: We know what they haven't learned.

      "Will they learn to respect developers?"

      Not if Pubcenter is anything to go by...

  28. Sheep!


    "they would tell you the progress we've made in [Windows] 8.1 – because we have a first-party product at Microsoft – is far superior to anything we've ever delivered"

    No. They wouldn't. They would tell you that the market wants Windows 7 with a touch screen overlay. I've got Windows 8, I've even tried convincing myself to like it, but after nearly a year of using it I have to say it's crap. It's Windows trying to be Android and ending up as neither with a closed eco system with bugger all worthwhile apps and could very well be the last, broad-reach OS they ever produce.

    Not to mention they have vendors putting Windows 8 on non-touchscreen devices! You have to SERIOUSLY have a screw loose to buy one of these products (I seem to be doing a lot of "downgrades" to Windows 7 for people at the moment who have bought new laptops that have come with Win 8 and can't wait to get it off). It's like buying a non-touch screen phone and putting Android on it and then wondering why it's difficult to use. Windows 8 is a non-starter, and instead of listening to the people who actually buy and use it they are listening to their own marketing bullshit and developing business strategy on the back of that. Doomed to failure, it will just take a long time due to thier massive bank balance and patent trolling, which is about the only profitable part of the business they have left for the future.

  29. Zot

    Some specs:

    1. Zot

      Re: Some specs:

      Better specs:

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