Microsoft announced Surface last summer to great fanfare. It was, after all, historic and surprising for the company to get into the computer device business, especially for Microsoft OEMs whose longtime partner suddenly became a competitor. Microsoft rolled out the Surface RT tablet, running on ARM chips, last fall and the more powerful Surface Pro followed in February.
But the devices have fallen flat, even with relentless advertising. Consumers, already comfortable with myriad tablet options from Apple, Google and Amazon, were confused by Windows 8's tile interface and had trouble discerning the difference between Surface RT and Surface Pro. Meantime, enterprises were already reluctant to move to Windows 8, as many had taken Windows 7 as the natural upgrade path following the Vista debacle.
A May report from IDC reveals that Surface shipments totaled 900,000 units (700,000 Surface Pros and a meager 200,000 Surface RTs) in the first quarter, capturing only 1.8% of the tablet market. When measured by operating system, only 3.7% of the tablet market went to Windows 8/RT tablets, a distant third place behind Android (56.5%) and iOS (39.6%).
[ What could Microsoft do to boost Surface sales? See 10 Ways Microsoft Could Improve Surface Tablets. ]
Surveys about enterprise adoption of Windows 8 don't provide any better news for Microsoft. In a Forrester survey in May of more than 1,200 enterprise and small and midsize business (SMB) IT decision-makers, only 7% said Windows 8's Metro interface is an improvement over Windows 7, and only 17% said Windows 8 will be a good PC operating system for their companies' users.
When asked in the Forrester survey "Which mobile operating system (tablet or smartphone) do you most associate with the following attributes?" only 3% of the 1,200-plus respondents ticked off that Windows 8/Phone is "preferred by employees." Says Forrester principal analyst David Johnson: "Windows 8 is not going to be adopted as the enterprise IT standard, so any hardware designed for Windows 8 faces an uphill battle."
Surface tablets will still find their way into businesses, Johnson says, mostly as bring your own device (BYOD) stragglers and secondary issued devices. Microsoft, for its part, is doing all it can to get application developers and enterprise IT decision-makers excited about Surface.
The company announced last week that it's extending Surface Pro and Surface RT to its U.S. business channel, letting resellers sell the devices. It also announced Apps for Surface, a program that provides tools and funding to developers for Surface-specific business applications.
Meanwhile, Surface tablets could capitalize on the iPad's shortcomings. The Surface Pro may have shorter battery life than an iPad and a higher price tag ($899 compared with $699 for 64-GB models), but its screen is an inch bigger, it has four times the RAM (4 GB vs. 1 GB) and it runs a powerful Intel i5 chip. Surface Pro can also run a full version of Office, an important feature for nearly all information workers. Furthermore, Surface tablets are more easily managed and secured by the Windows Intune or Microsoft System Center tools commonplace in IT shops.
All of this makes Surface appealing to the enterprise, in theory. But is it enough to rise above the Windows 7 comfort zone and increasing customer loyalty to Android and iOS devices? iPads, for instance, are making enterprise headway in the medical, retail and restaurant industries, either as company issued or through BYOD programs.
The upcoming Windows 8.1 update aims to reduce UI confusion by bringing back the Start button and letting users boot directly into desktop mode. This change may please purists who want Windows 8 to be like Windows 7, but it contradicts Microsoft's vision of a touch-based, tablet-friendly Windows brimming with mobile apps.
The Surface may ultimately stand as proof that you can't please everybody with one device. In trying to serve two masters, Microsoft ended up designing a device that's neither a great laptop (flimsy keyboard, a screen still too small for prolonged use) nor a great tablet (awkward UI, lacking in quality apps compared with Android and iOS).
It's also possible that Microsoft knew all along that Surface is just an experiment -- a sly way to motivate its hardware partners -- and if it goes the way of the Zune, Microsoft will carry on.
"Microsoft created the Surface Pro for two reasons," Forrester's Johnson says. "To express its vision for what having the elusive 'tablet and PC in one' should look like, and to push skeptical OEMs to innovate on tablet hardware for Windows 8. I doubt they ever saw it as a major revenue stream or to try to take significant business away from their OEMs."