Surface future comes under question

A leading channel analyst has predicted that Microsoft will pull the plug on its Surface product

The long term future of the Microsoft Surface gas been questioned by a leading channel analyst who expects the vendor to pull the plug on the hardware in the next couple of years.

Steve Brazier, president and CEO of Canalys, wrapped up his keynote at the firm's Channels Forum event in Venice making a few predictions.

Most were fairly innocuous, with recycling expected to become a more lucrative channel sideline and that the attending distributors and resellers would grow by at least 5% in the next three years.

But it was the prediction that Microsoft would dump Surface by 2019 that attracted the most interest.

Brazier argued that the hardware did not have a long term future and had been an odd fit in a business increasingly focused on cloud and software.

"The Surface performance is choppy, overall they are not making money," he said.

He added that Microsoft was committed to developing its cloud business andf that would become an increasing strain on finances.

"When the capital expenditure challenge that Satya Nadella has taken Microsoft down become visible to Wall Street everyone will ask why they have gone to a low margin business. he will have a lot of cost cutting to do and Surface will be the first target," he said.

That view was endorsed by Gianfranco Lanci, corporate president and COO at Lenovo, who joked that the firm could dump the Surface even earlier.

"It is making a lot of money on Windows and a lot of money on cloud but losing a lot of money on devices," he said.

It is a very difficult exercise to run hardware, it is a very tight business. You need to be careful with every detail as the margins are so thin," he added.  

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