Surface Creator Terms The $900 Million Writedown A Valuable Lesson

Panos Panay Lesson

So this happened. Microsoft unexpectedly announced a new Surface tablet, the Surface 3, earlier today. And this successor to the Surface 2 is set to be available in early May.

You can read up on all these juicy details here.

The company, obviously, launched the Surface series back in 2012, with the original Surface RT. However, that venture was met with mixed reviews and lukewarm sales — ultimately resulting in a massive but expected $900 million writedown.

And now Panos Panay, head of the Surface line has touched upon this, labeling this failure as an unbelievably valuable lesson. One that was humbling, yet rewarding.

In an interview with CNN Money, he said that former CEO Steve Ballmer and current CEO Satya Nadella both knew that success in the hardware business will not come easily or quickly. Both executives had clear long term visions for where they wanted to take the tablet line, and were prepared to wait.

This is what he said:

“It’s going to take time – these businesses are big investments and take a lot of time. And now we’ve seen a bit of a turn. That’s important, let’s be clear. Like, there’s no doubt. Having a product that people love is the most important thing, and do you believe that you can get there.

And the answer was always yes.”

He further notes that while the writedown will never go away, but the team learned valuable lessons from the initial response to their products.

Lessons that have been put to use in the next set of products that Microsoft is bringing to the table.

The Surface business has, however, seen a bit of a turnaround, becoming another $1 billion business for Redmond according to their most recent financial results. This success largely came via the positive response the Surface Pro 3 received from power users and businesses users alike.

Remains to be seen just how the Surface 3 is received, but things, so far, are looking up.

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