Microsoft’s Surface Pro “Sold Out”

Microsoft made its new member of the Surface family, Surface Windows 8 Pro, available for sale starting February 9, 2013. The Surface Pro, as I would like to call it, is being sold via Microsoft’s online store, their few retail stores and Best Buy and Staples retail stores.

Within hours, news started rolling in of the 128GB model going “out of stock”. The 64GB was available in most places, but the higher-end model was showing no stock at most of the retailers.

What does it mean? Unfortunately, besides the simple math of demand being more than the supply, nothing. The supply was not enough to keep up with the demand, which for a robust manufacturing organization means a supply chain disaster. How can a company botch supply on launch day? It is the one day the company gets to be in the press more than any other day, at least from that product’s standpoint, and they are unable to fulfil demand.

However, despite their keyboards and mice, as well as their Xbox and now Surface RT, I don’t consider Microsoft a “robust manufacturing company”. Also, the Surface Pro is not a run-of-the-mill product, or an iteration of an existing product. It has a complex screen and specialized materials. There very well could be issues in larger scale manufacturing of those components. In fact, after promising that the Surface Pro would be released about 90 days after the Surface RT, Microsoft ended up releasing the former about 2 weeks later. That hints at a possible issue (or a set of issues) they may have faced during the manufacturing.

There were also anecdotes from individuals going to or calling retail stores in their area and finding out that the stock at these stores was in many cases in single digits. While those are still anecdotes, it is worthwhile to remember that the stock is ordered by the store, and not by Microsoft. Regardless, the customer experience ended up being bad because they could not buy the product they wanted to.

However, not all is lost as long as Microsoft can ramp up quickly. If they replenish stocks quick enough and take advantage of the momentum they have unexpectedly received, it may end up working in their favour. These enthusiastic customers will show off their shiny new toy to their friends and family and perhaps create a few more customers out of them.

Here is where Microsoft will have to learn what Apple has mastered — pre-production capital expenses to fulfil the demand expected at launch, accurately predicting launch day demand, and most importantly, making sure more markets are served at launch and soon after, than the previous launches.

In some ways, this situation is better than the opposite situation, which is Microsoft and its retail partners stock a ton of units and no one wants to buy them. At least at this point it does seem like there is unmet demand for the product. It is for Microsoft to ramp up and ensure that their next Surface family member has even better launch day balance between supply and demand.

Who is the Target Customer for Surface Windows 8 Pro?

The embargo lifted on Surface Windows 8 Pro or as I will call it, Surface Pro, reviews and out of the gate, most tech news sites had a “meh” conclusion. The device, they claimed, is neither a great tablet nor a great Ultrabook. Hence, their take away was that it is not a good device for either use case. A few sites mentioned that it is not for all, but for those who need such a device, it is a great one for them.

Who is the target customer for such a device? Is it a big enough market for Microsoft to pursue, or is it a niche that may explode in the future?

First, let’s remove the obvious non-market. This device is not for those who have truly moved into the “post-PC era” and are ok using just a tablet for their computing needs. It means they either don’t need programs that need a “computer”, or they have decent alternatives available in the tablet’s app marketplace to accomplish all their computing on the tablet. For such a market (many of the tech writers may be in this category, since most of their work is writing and with decent keyboard attachments, they can somehow make it work), a tablet like the iPad with a much lower cost and a much better battery life may easily be a better choice than the Surface Pro.

Surface Pro is also not for those who don’t mind carrying two devices around, or having two devices in general. They have a computer, perhaps even an actual desktop PC, where they do all their work. In addition, they have a tablet where they do most of their “play”, and have some sort of connectivity established to their workplace email so they can keep on top of email while they are away from the office. These folks are perfectly ok with two separate devices because they may not be carrying both around much.

There is an important market though, which many/most of the reviewers failed to recognize, either due to ignorance or oversight. The typical office worker. Millions of employees around the world are handed a laptop when they join a company. Earlier, it used to be dull Windows PCs from a single supplier. Nowadays the choice has expanded to include Macs as well. However, many of these office workers also carry tablets around the office because they don’t want to or they don’t need to carry their PCs around to conference rooms and to meetings. These folks will absolutely love the Surface Pro (especially the ones who did not choose a Mac :-)).

For the office worker, the Surface Pro provides a powerful PC for all they do at their desk, but instead of leaving the PC at the desk and carrying a separate tablet to meetings, or to use at home for “play”, they can have the same device for both those purposes. Since the “work PC” is normally plugged in, the lower battery life of Surface Pro compared to the iPad would not be a big factor. Also, since the device won’t be used purely as a tablet, the slightly higher weight compared to most tablets would also not be a concern.

On the other hand, having one device instead of two would be a benefit in favor of the Surface Pro. The Surface Pro would weigh less than the combined weight of a PC and a tablet, and because it is one machine, the office worker would not need to keep shuttling files between the two devices with or without the cloud. Also, there would be no issues about apps and application compatibility and maintaining document fidelity. All these are important considerations for many, many employees around the world.  Needless to say, there were many on the Surface Pro team’s Reddit Ask Me Anything thread who claimed that they would be getting a Surface Pro (or their company is testing the device for mass deployment, or as one person said, it would be great to load Linux and use it!).

From the CIO’s perspective, the Surface Pro offers an ideal solution to the BYOD movement. Since it runs Windows, it is a highly manageable device, and it would work with all the existing management infrastructure. The CIO gets to sleep at night, and the employees get something that is thin, light and works for work and works for play.

There may be other scenarios too, where the Surface Pro may work quite well, but I focused mostly on the biggest piece of the pie, the enterprise worker.

What’s your take? Let me know in the comments!