Company / division: Microsoft
In the second somewhat controversial decision by Consumer Reports in the past year, it has withdrawn its recommendations from several of the Microsoft Surface hardware products for reasons of projected reliability. Though it rated those products highly in its reviews and recommended both a couple of Surface Laptop and a couple of Surface Book models, a recent survey among owners of older Surface products suggested a 25% hardware fault rate within two years of purchase and that’s what led to the yanked recommendations. Last year, Consumer Reports somewhat controversially failed to recommend Apple’s new MacBook Pros over battery life issues that turned out to be caused by somewhat unusual testing conditions combined with a rogue script, something that it eventually reversed itself on, but there’s little prospect of a similar reversal here.
Though Consumer Reports has long used reliability of past car models in projecting the same for newer models on the basis that they often share platforms and components, that approach feels flimsy when applied to consumer electronics, and especially different models from the same company, given the frequent changes in components. If past reliability took a hit from a single component and that component isn’t present in the new devices, it would be completely irrelevant, but the lack of transparency here from Consumer Reports makes it impossible to know what’s really going on. Given the small share of the total PC market Surface captures, I also wonder just how much data CR has and how representative it really is. Overall, this feels rather like Consumer Reports trying to get attention for itself much as it did with the MacBook Pro issue, where it failed to provide adequate insight into its testing process until pressed by Apple. It’s clearly bad news for Microsoft, whose Surface hardware has generally been very well reviewed in the last couple of years, though most corporate buyers won’t be checking Consumer Reports for reliability ratings and will instead go by their own experiences, which as far as I can tell have generally been fine. Consumers, on the other hand, might lean more heavily on these ratings.
Update: Also worth noting are the overall reliability numbers for PCs, which are available within CR’s laptop ratings section: there, Microsoft comes last of all, but only by one percentage point, while it says differences of five points or less are not meaningful, and that spread covers six PC vendors including market leaders HP, Lenovo, and Dell. So it’s not that Microsoft’s reliability is massively worse than other PCs, but that there’s now enough evidence (by CR’s reckoning) to indicate it isn’t as good as it appeared to be.
via USA Today
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Microsoft has today announced a leasing and upgrade program for its Surface line, offering a 24-month payment plan for the devices, and an option to trade in for a new device after 18 months rather than paying it off over the full 24 months. The program is called Surface Plus and there’s also a version for business customers, though it seems like a missed opportunity not to call it Surface as a Service… We’ve obviously seen the installment and leasing models become the default for smartphones on US carriers over the past few years, and there are already examples of hardware vendors getting into the game directly, notably Apple’s iPhone Upgrade Program. So this is both a familiar model and a smart move for Microsoft, which recently began to offer bundled Windows and Office subscriptions to business customers and can now offer a single bundle of Surface hardware and those two software packages for businesses. But it’s also a great way to lower the barriers to entry for what are fairly pricey machines for the most part, as Microsoft has stayed firmly above the fray with its Surface line, in contrast to the much lower overall average selling prices of Windows PCs. The Surface Pro starts at $799 (or $33.29 per month over 24 months), while most of the models are over $1000. Reducing that to $40-60 per month for many models should make it much more affordable and predictable as a cost for both individuals and businesses. We’re going to see lots more of this, with hardware vendors packaging up access to one or more devices on a subscription basis with additional subscriptions to software, content, or other services layered on top.
Microsoft is adding some clever AI-powered image recognition, search, and automation features to the latest version of its Windows Photos app. It doesn’t sound like there’s anything here that will exceed the functionality of existing apps from Google or Apple, but just achieving parity would be a big step forward for Microsoft, which has always been bafflingly slow in addressing people’s needs to manage their photo libraries. Given how many people must store their photos on Windows computers, this is something Microsoft should have addressed long ago. Nokia was another company that always emphasized photography and yet never gave people a great way to manage the pictures they took on their phones, so the fact that Microsoft didn’t jump on the opportunity when it acquired the devices business from Nokia was another odd omission. At any rate, Microsoft now seems to be taking some of these advanced consumer features more seriously, as evidenced by the fantastic video creation tools in the forthcoming version of Windows, and these Photos changes are another positive move in this direction. This is low-hanging fruit as Microsoft looks to burnish its consumer and creativity credentials.
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Microsoft has now confirmed the layoffs which have been rumored for the last week or so, and which are the second part of the announcement made earlier this week regarding the restructuring of the company’s sales organization. CNBC says 3,000 jobs will go, while Mary Jo Foley at ZDNet, who I’m more inclined to trust with this stuff, says only that there will be “several thousand” cuts, with some of those losing jobs found roles elsewhere in the company. This is a relatively small round of layoffs for Microsoft given recent history, as the company’s core workforce excluding LinkedIn has fallen from a peak of around 128,000 in 2014 to just over 110,000 at the end of March already. The layoffs are likely to impact the sales team reorganized earlier this week, reflecting an ongoing shift away from legacy products towards cloud services. Over the last few years, Microsoft has been beefing up its support and consulting staff while reducing its engineering numbers considerably and keeping its overall sales and marketing staff roughly constant at around 50,000. Interestingly, Microsoft’s US/international employee split is now back at nearly 60/40, roughly where it was before the Nokia devices acquisition pushed it to about 48/52. The vast majority of the employees taken on during that period have now either been eliminated or moved to other roles in the company, though Microsoft currently has around 10,000 more core employees (and around 20,000 more including LinkedIn) than it did in mid-2013. Therefore, although this stinks for those being laid off, it’s not an enormous reorg by Microsoft standards, and mostly reflects subtler shifts in the emphasis of the sales and marketing teams and other effects from Microsoft’s ongoing move from legacy to cloud services, in what’s now become almost an annual ritual at the company.