back to article Scratch the Surface: Slabtop sales slump takes the shine off Microsoft's 2017 so far

Microsoft has reported strong results in its latest quarter, pulling in nearly $5bn in profits and showing good cloud revenue growth. Just don't mention the sagging Surface fondleslab sales. Still, CEO Satya Nadella was in ebullient form on a conference call Thursday with investors and analysts, saying the Windows giant was …

  1. Steve Davies 3 Silver badge

    Organizations are turning to Microsoft as a partner they can trust.

    ROFL.

    nowt more needs to be said.

    1. Jonathan 27 Bronze badge

      Re: Organizations are turning to Microsoft as a partner they can trust.

      Most companies use Microsoft for a wide array of things. Have you never worked in IT? Or do you work for the very small percentage of companies that use Linux or Mac workstations?

      1. Nolveys Silver badge

        Re: Organizations are turning to Microsoft as a partner they can trust.

        Most companies use Microsoft for a wide array of things.

        What does that have to do with trust? I have several clients who extensively use MS products who absolutely loathe the company.

        I don't trust my ISP, I don't trust the government, I don't trust my bank. That doesn't mean that I don't use their services.

        1. Jonathan 27 Bronze badge

          Re: Organizations are turning to Microsoft as a partner they can trust.

          Buying software from someone denotes a certain level of trust. OS software can literally do anything with your hardware, it has full rights to everything. If you really didn't trust it, you'd not install it.

      2. Steve Davies 3 Silver badge

        Re: Organizations are turning to Microsoft as a partner they can trust.

        Have I ever worked in IT? Yes, yes and yes. Wrote my first program in 1972 and been in the business ever since.

        Worked for a variety of companies in that time and did stuff ranging from building hardware and writing device drivers to architecting systems that ran industrial plant 24/7. Oh, yes I had to build systems that only used Windows. Server 2008R2 was IMHO the best release. Subsequent releases went downhill fast as far as I'm concerned.

        As for the Desktop Windows 7 was as good as it got IMHO.

        Luckily in all cases where we hit major snags, someone else had found the problem and a work around ALL without involving MS Support which frankly when compared to many other companies is a joke.

        Does that answer your question and why I said ROFL?

        1. Jonathan 27 Bronze badge

          Re: Organizations are turning to Microsoft as a partner they can trust.

          No, because you demonstrated the point I was making, not your point. Your organization used\uses has put their trust in a variety of Microsoft products, that you mentioned. You personally may hate them, but that's not relevant to organizational trust is it? It's the stuffed shirts at the top that make that decision.

        2. LionelHutz

          Re: Organizations are turning to Microsoft as a partner they can trust.

          Server 2008 R2, Windows 7, Office 2010. The trifecta. I think that era was the climax of Microsoft. It's been rapidly downhill ever since, indeed.

      3. Doctor Syntax Silver badge

        Re: Organizations are turning to Microsoft as a partner they can trust.

        "Have you never worked in IT?"

        Have you worked in IT long enough to remember life before Microsoft?

    2. Anonymous Coward
      Anonymous Coward

      Re: Organizations are turning to Microsoft as a partner they can trust.

      Interesting that Google sales hit $25bn for the current quarter compared with Microsoft's $22bn which is the first time Google has ever overtaken Microsoft's in the first quarter.

      Also, $1bn of Microsoft's sales came from the recently acquired LinkedIn acquisition, so if you exclude that, the sales growth was less than 3%.

      Whereas Google's sales growth was 22%.

      1. Anonymous Coward
        Anonymous Coward

        Re: Organizations are turning to Microsoft as a partner they can trust.

        "Whereas Google's sales growth was 22%."

        So most people don't care that Slurp reads everything they do and sells it to advertisers...

        1. Richard Plinston Silver badge

          Re: Organizations are turning to Microsoft as a partner they can trust.

          > So most people don't care that Slurp/Microsoft/Facebook/Tinder/eBay/Linkedin/,,,* reads everything they do and sells it to advertisers...

          FTFY

          * plus, in USA thanks to Trump, all the ISPs.

  2. a_yank_lurker Silver badge

    Doing better the little blue

    So Slurp's hardware sales are in the toilet at best. Not surprising, they never understood hardware. Software and services are doing well but probably will be facing stiff pricing competition in the cloud and online SaaS in the future. One issue Slurp and other IT companies have never faced is a competitor who is used to low margins in their primary business. Amazon is used to retail margins which in many areas are surprising low. It is ingrained in Amazon's DNA to be cost conscious as all successful retailers are. I doubt Slurp, Itsy Bitsy Moron, Leisure Larry are used to the those margins and how to successfully run a business with those types of margins.

    1. Anonymous Coward
      Anonymous Coward

      Re: Doing better the little blue

      It's very cruel to call Microsoft Slurp, and in any case, you cannot have read their EULA properly which since 1981 plainly states that "All your data are belong to us"...

  3. Jason Hindle

    Mine's the one with Chinese knock off written on it

    Actually damned good for the money, at least for something to muck about with*. Reminds me of that car from Good Omens (the Wasab?).

    * Core M Surface 4 look-a-like, newer processor, 8GB/256GB, half the price/twice the weight.

  4. Uberseehandel

    Old Tech

    The Surface 4, Surface Book and Surface Studio were launched using old technology.

    Microsoft did not plan for what would be mainstream when they launched the products, and even the revised versions are off the pace. Not only do they choose the wrong chip sets, but the wrong processors and the wrong memory. And no Thunderbolt 3.

    The Surface Studio is promising, what happened to the second screen? Without it is not functional. Hybrid drives in a premium product c'mon!

    Even at the eye-watering prices, I'd love to have a dual screen Studio, or even a properly equipped Surface Book or Surface 4. But paying way over the odds for yesterday's bargain bin parts, is not going to happen. Microsoft has achieved the impossible, they have made everything else look affordable, and often faster.

    1. gv

      Re: Old Tech

      It's unclear what problem this hardware is looking to solve. Clearly the insipid, cliched ad campaign did nothing to inspire the hipsters.

      1. AMBxx Silver badge

        Re: Old Tech

        I love my Surface Pro 4, but I did only pay £500 for it (demo unit). If I need an upgrade in a year or two, I doubt very much I'd spend £1300 on it.

        MS seem to be more concerned about matching Apple price points than releasing well priced hardware. Good news is that Lenovo et al are finally upping their game.

    2. bombastic bob Silver badge
      Linux

      Re: Old Tech

      Surface is REALLY failing because it's all Win-10-nic. And "Ape" before that.

      Now, if it could (easily) run LINUX...

      1. Anonymous Coward
        Anonymous Coward

        Re: Old Tech

        If you're buying hardware, you generally want it to 'open' so that you can re-purpose it if/when the time comes.

      2. Kristian Walsh Silver badge

        Re: Old Tech

        Here, with pictures, is how you get Ubuntu to run on Surface Book: https://askubuntu.com/questions/741851/using-ubuntu-on-microsoft-surface-book

        That's pretty easy.

        Now, I'll grant that some input device features don't work, but that's nothing to do with Microsoft: it's a lack of driver support in the Linux kernel for the hardware used in Surface Book. The touchscreen is a new part, as is the pen interface, and the higher-spec Books' detachable GPU is something that hasn't had to be supported before in Linux...

        People are working on these drivers (with varying levels of support from the component makers, as is always the case), but as they're a work-in-progress you won't find them in the stock Debian/RedHat/Ubuntu/etc kernel, so you'll need to patch your kernel and live with the shortcomings until the hardware support gets good enough to ship by default.

        That, to me seems no different from the situation for any other new device... unless you somehow expected Microsoft to spend its development budget writing device drivers for Linux, when this is something they don't even do for Windows (most of the driver work is done by the device manufacturers)

      3. Naselus

        Re: Old Tech

        Not a Windows 10 bitch thread. And yes, it's not actually hard to put Linux on a Surface, as long as you disable secure boot. Drivers can be a pain, but for Linux they're a pain on most proprietary devices.

        As for 'old hardware'... It wasn't actually that old at release, but after two years it's starting to look long in the tooth. The main problems have always been the rotten heat management, though. It's certainly aimed more at the Shoreditch Hipster market than anyone who knows how a computer actually works, but that's where the margins are these days; actual performance computing has razor thin margins.

        1. discalced

          Re: Old Tech

          I'm still using my Surface Pro 3 in a docking station with a DELL touchscreen 1020p. Battery life is still good when I undock it... I can sign PDF forms with the pen thingy.

          My better half has a Surface Pro 4... any upgrade of either will wait til they fail or the Surface Pro 5 is launched... not holding my breath on either, to be honest.

        2. bombastic bob Silver badge
          Linux

          Re: Old Tech

          well, the last couple of responses hit on what I mean by 'easily install Linux' - in essence, you want it to have hardware that has Linux drivers available, or at least a high level of compatibility. Maybe not every button or enhancement/feature is supported, but the basic functionality would be there. That kind of thing.

          Everything I read about Surface (including comments on this article) suggest that putting Linux on a Surface is still potentially problematic, and not something that can be done without effort/hacking/tweeking/etc.

          That being said, I think Micro-shaft could improve their sales by MAKING IT support Linux more easily, even shipping them with Linux pre-installed. Or, perhaps, Windows 7...

          (but THAT would mean 'admitting defeat' with the post-Sinofsky stuff, and they don't wanna do that, REGARDLESS of the potential profitability!!!)

          1. Doctor Syntax Silver badge

            Re: Old Tech

            "putting Linux on a Surface is still potentially problematic"

            Maybe Linux devs consider they've better things to do.

          2. Anonymous Coward
            Anonymous Coward

            Re: Old Tech

            "That being said, I think Micro-shaft could improve their sales by MAKING IT support Linux more easily"

            Probably not worth the effort for a few dozen more sales though.

  5. Flakk Silver badge

    Gaming revenues ... to increase significantly next year with the launch of Project Scorpio

    That depends entirely on the price point.

    Microsoft's botched messaging for Xbox One put the console at a significant disadvantage to PlayStation 4. To keep their first-party studios alive, Microsoft made the strategic decision to make their games available on Windows PCs as well. That's fine, but it undermined the Xbox console since gamers no longer needed it to access Microsoft-exclusive titles.

    If the launch cost of Scorpio is too high, it will fail. If it comes out any higher than $499, I have the feeling that most gamers would rather sink that kind of cash into parts for a gaming PC. Launching at $399 would represent a big loss per unit, but it would give Microsoft's mid-cycle refresh a reasonable shot at crushing PlayStation 4 Pro.

  6. Howard Hanek Bronze badge
    Happy

    Surface

    .....now resembles an impact crater.

  7. Ilsa Loving

    Trust? Really?

    > "I'm proud of the progress this quarter," he said. "Organizations are turning to Microsoft as a partner they can trust."

    As usual, Microsoft is copying Apple and as usual, they screw up the job. Hey Nutella, the Reality Distortion Field is supposed to point towards your customers. You're not supposed to suntan yourself with it!

  8. Anonymous Coward
    Anonymous Coward

    The whole point of the Surface Range...

    The Surface was developed by Microsoft to show off the capabilities of Windows 8/10 + special features like Windows Hello, Pen Input/Windows Ink. It's achieved that goal.

    The range of competiting models available by OEM-Lenovo/HP/Dell etc now, shows they have upped their game considerably. For Microsoft, this means there is no need to manufacture its own new designs of Surface Devices anymore.

    Satya Nadella seems to have one clear strategy that stands out above all, everything must stand on its own two feet and survive. Each group within Microsoft must be revenue generating and if not, have a very short term specific objective, else it will be culled/mothballed.

    The current Surface Range will continue, as the design work has been done. Orders will continue through Foxconn. The problem is Windows 10 Mobile is dead, UWP is pretty much dead, Continuum is dead and so there is a big part of the Surface strategy that is also dead.

    And while all this has been happening-attempting these strategies, tidying up the size of "Clunky" Windows Updates/Issuing re-issues of patches of patches, Google Chromebooks go from strength to strength in Education.

    (You can bet somewhat sidelined Joe Belfiore was testing Chromebooks on his 1 year educational Cruise, aswell as his iPhone, during his sebbatical).

    Microsoft do have another potential growth platform in Education (raspberryPI), but that platform also has Linux and Chrome OS, allowing the raspberryPI to act as a Chromebox.

    Microsoft are starting to wane/stagnate in the desktop market. Software as a Service is just not seamless enough, the strategy is not working. Windows 10 Creators Update is/was just far too big and bulky, with far too little visible features for the end user, to be seen as "software as a seamless service". Users give up an hour+ of install/rebooting/productivity time per PC for what exactly?

    Microsoft are hitting the right nails, they just aren't getting hammered into the wood, so strategies stick. If I was Satya Nadella, I'd be looking to hire Scott Forstall from Apple. Forstall was someone who always found that last 10% , when things keep only seeming to reach 90% complete.

    Attention to detail is severely lacking at Microsoft in terms of Software / Windows Update / and especially Marketing. Nadella has been throwing mud, aka "nailing jelly to the hot house wall" to see what sticks. Now is the time to focus.

    "Surface has done its job".

    1. Anonymous Coward
      Anonymous Coward

      Re: The whole point of the Surface Range...

      "Microsoft are starting to wane/stagnate in the desktop market"

      Windows sales are up 6%. Some people might not like Windows 10, but the corporates are heading for it like flies to shit...

      1. Richard Plinston Silver badge

        Re: The whole point of the Surface Range...

        > Some people might not like Windows 10, but the corporates are heading for it like flies to shit...

        That is a really appropriate analogy.

  9. Christian Berger Silver badge

    The problem is that the "laptop with keyboard falling off" market is crowded

    I mean I've just bought a 100 Euro one, and added a 10 Euro case with keyboard for it. In the eyes of most remaining Windows users with a choice, that's essentially as useful as a device with Windows 10.

    Microsoft it trying to complete in fields it cannot win. What they should do instead, is to go back to what their users like.

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