Microsoft Surface Membership Plan Targets Businesses - InformationWeek
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6/8/2016
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Microsoft Surface Membership Plan Targets Businesses

Microsoft has subtly launched a Surface Membership Program to let small businesses purchase devices on a payment plan.

Microsoft HoloLens: 10 Ways It Has Evolved
Microsoft HoloLens: 10 Ways It Has Evolved
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Microsoft has quietly begun to offer a Surface Membership plan to small business customers. The company is giving organizations the option of financing new devices through a monthly payment plan.

The plan applies to current models of the Surface Book, Surface Pro 4, and Surface 3 hybrids. Subscribers can upgrade to new devices, free, as Microsoft puts them on the market. This option is exclusive to business customers rather than individuals, Thurrott.com reports.

Monthly fees vary depending on the type of plan you choose. Customers can select to spread their payments over 18, 24, or 30 months.

[Read: Office 365 welcomes the Microsoft Planner app.]

Prices for the Surface plan start at $33 per month for the Surface 3 device and Type Cover keyboard for a 30-month plan. Higher-end devices cost more. For example, a Core i5 Surface Pro 4 with 8GB RAM and 256GB storage will cost $80 per month for a 24-month plan or $98 per month on an 18-month plan.

Surface Book is the most expensive device available. The cheapest model, which comes with a Core i5 processor, 8GB RAM, 128GB of storage, and no GPU, costs $80 per month for a 30-month plan. It's worth noting the Surface Pro 4 comes with a black Type Cover and pen, and the Surface Book also comes with a pen.

The application and financing for Surface Membership plans are handled by LiftForward.

In addition to new devices, subscribers have access to Microsoft support and services. The membership comes with seven-day phone and in-store tech support; one-on-one personal training; in-store discounts for future purchases on hardware, software, and other items; and the Microsoft Complete for Business extended service plan with accidental damage protection.

It wouldn't be surprising to see more enterprise customers adopting hybrids like Microsoft's Surface Pro 4 and Surface Book. Two-in-one devices are growing in popularity as the PC market continues to shrink and tablet sales plummet.

Hybrid shipments grew a little over 13% during the first quarter of 2016, reported market research firm Canalys. Data from IDC reflects a similar pattern: Detachables have seen triple-digit year-over-year growth, and increased to 4.9 million units, which amounts to 12.4% of the market.

Microsoft's pricing strategy could easily appeal to small business customers seeking an affordable means of providing employees with the latest mobile PCs.

(Image: InformationWeek)

(Image: InformationWeek)

"The introduction of detachables from traditional smartphone vendors is only beginning, and poses a real threat to traditional PC manufacturers," Jean Philippe Bouchard, research director for tablets at IDC, wrote in the report.

How long will it be before Surface subscribers can access a new device? Sources are split. Some claim Microsoft will launch the Surface Book 2 and Surface Pro 5 later this year; others report we'll have to wait until 2017 for the upgraded hybrids.

The availability of Intel's upcoming 7th Generation i5 and i7 processors, or "Kaby Lake" chips, could be behind the delay of Surface Book. Analysts claim the Skylake processor is interfering with battery life, leading many users to complain about the device's lasting power.

Unfortunately, reports claim the Kaby Lake processor won't be ready until year's end. If that's the case, Surface Membership plan subscribers may be waiting until 2017 for new devices to launch.

Kelly Sheridan is the Staff Editor at Dark Reading, where she focuses on cybersecurity news and analysis. She is a business technology journalist who previously reported for InformationWeek, where she covered Microsoft, and Insurance & Technology, where she covered financial ... View Full Bio

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SaneIT
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SaneIT,
User Rank: Ninja
6/13/2016 | 7:57:07 AM
Re: Old models meet new products
@Technocrati, I agree with you on every point here.  I'd prefer not to lease, but look at the cellular phone market, as the prices of smart phones increased we started leasing them through the service plans.  The public in general doesn't have a problem with financing their toys this way.  

I also have to agree with you that the Surface line is expensive and with competition coming from manufacturers who have a large manufacturing presence Microsoft needs to get the prices down.  You're right that Microsoft hasn't had the best track record with Microsoft branded devices sticking around.  Honesty the only hardware device that has had continued success that I can think of is the Xbox.  I'm glad that Microsoft pushed the Surface concept and would gladly keep buying Surface products but they have to stay competitive in the market.  If this is how Microsoft sees them remaining competitive I think it's a misstep but only time will tell. 

 
Joe Stanganelli
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Joe Stanganelli,
User Rank: Author
6/12/2016 | 12:37:16 AM
On the Surface
On the one hand, I'd love a new Surface Pro or two for my business -- and these new financing plans make them more accessible. On the other hand, there's really not a compelling enough reason for me to upgrade just yet. Guess I'll wait for the new models and see how I feel then.
Technocrati
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Technocrati,
User Rank: Ninja
6/10/2016 | 1:52:02 PM
Re: Old models meet new products

@SaneIT       Sure it is but as you can probably tell, I personally do not like leasing.   I have always purchased my equipment, now the enterprise might think differently but I question how good a business practice leasing actually is.   Do you really need the latest hardware ?   Often the answer is no, but manufacturers would love you to believe you do.   And of course it is in their best interest for you to do so as well. 

I have seen a few people with Surfaces and anyone who owns one that I have met loves them, but the real issue is that the Surface is overpriced and instead of lowering the price to gain market share MSFT would rather sign you up for a gift that keeps on giving - to them.

The Surface actually has potential and MSFT doesn't want to subsidize the cost in order to gain market share ?   How many products and initiatives have they conducted over the years where millions have been lost ?   

But they don't want to lose a penny now, for a sizable benefit down the road ?    With the resources of MSFT, this seems to me to be a poor strategy.  

SaneIT
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SaneIT,
User Rank: Ninja
6/10/2016 | 7:45:03 AM
Re: Old models meet new products
"Though by the time you pay it off, they will have a new model to push to which you can sign up again."

This has always been the way leases work, you get to hedge your bets a little on new technologies.  I haven't seen Microsoft's projected sales numbers so I don't know if they are anywhere close but I keep running into people who have new Surfaces and talk about them like a kid with a shiny new bike.  There are still some very rough edges in the product line but overall the people I run into who are using them love them.  I think the form factor is here to stay but the Surface product itself is starting to face very stiff competition. 

 
Technocrati
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Technocrati,
User Rank: Ninja
6/9/2016 | 6:48:40 PM
Re: Old models meet new products

@vnewman2     I would agree.  Though by the time you pay it off, they will have a new model to push to which you can sign up again. 

The program will start to resemble those shady "Payday Loan" programs but at least you will have a shiny Surface to check your payment date on.

vnewman2
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vnewman2,
User Rank: Ninja
6/9/2016 | 3:46:24 PM
Re: Old models meet new products
@Sane IT -  "Are they doing this because they feel like the Surface is lagging and needs a push?"

That would be my guess, knowing MSFT.  
SaneIT
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SaneIT,
User Rank: Ninja
6/9/2016 | 9:22:12 AM
Old models meet new products
This isn't a new concept for hardware manufacturers.  I did this with laptops a decade or more ago through a different hardware manufacturer.  We "leased" the laptops for what we considered the useful lifetime and paid over time.  This sounds like a similar plan and should be useful for small companies who want new flashy hardware but swallowing the cost in one big bite is problematic.  It does make me wonder though is Microsoft doing this with the Surface because it's one of the few hardware pieces they can do this with?  Are they doing it because the Surface has the draw to allow them to do this? Are they doing this because they feel like the Surface is lagging and needs a push?  I know that a lot of copycat products are popping up now and I'll be looking at them when my Surface is ready for replacement but until now it was a niche that everyone else was ignoring. 
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