Panos Panay did not present at Microsoft’s recent Windows event in New York City—his departure from the titanic technology corporation was announced on September 18; so only three days before an official unveiling of new Surface products. Panay and his (now former) executive colleagues painted a positive picture regarding the move onto pastures new. News reports emerged about an alleged high level hiring by Amazon, with Panay overseeing Alexa and Echo divisions—replacing Dave Limp, SVP of Amazon Devices & Services. A Business Insider report suggests that Microsoft’s former chief product officer was unhappy about budget cuts affecting his Surface division—certain insiders were not surprised when Panay announced his retirement from the big M.
The transfer to Amazon was in the works for a while, according to cited inside sources—Microsoft reportedly implemented a round of major budget cuts and product cancellations that did not sit well with Panay. The Surface department experienced “significant” downscaling, and plans for next-generation Surface Headphones were jettisoned. Business Insider proposed that funds had been reassigned to more important internal ventures—mainly artificial intelligence. Many folks were looking forward to Panay taking the stage in NYC earlier this week, but Brett Ostrum (Corporate Vice President of Surface Devices) ultimately acted as his replacement—with a showcasing of the company’s latest portable Windows devices. Attendees were somewhat surprised to see Microsoft CEO Satya Nadella turn up as well—it is possible that he was added to the roster for “some extra firepower.”
It’s valuable for Microsoft to have their own line of hardware to help push new software features that require different hardware. They have tried with other OEMs in the past and it hasn’t worked that well. The Surface was their effort to show the industry what direction they had in mind for hardware when they were designing new versions of Windows. If AI will require, or enable, new hardware, having their own hardware division is important.
The article mentioned them cutting the Surface headphones. It doesn’t seem that out there to utilize some AI/ML into headphones, Apple is already doing this with AirPods.
While they may feel they missed the wave of mobile devices, if AI is going to enable new types of devices, Microsoft’s position with OpenAI could give them a huge competitive advantage, but they need an established product line to tie it too. Android is now bigger than Windows. Microsoft365 is primarily used by business users. There is a massive market they’re going to miss, or they will need to partner with someone else to bring things to life. If/when that happens, I can only assume the hardware OEM will be what everyone associates the tech with, not Microsoft… unless the make the branding really obnoxious to the point everyone hates it.
Microsoft is notoriously bad at building brands. The Surface line was one people actually seemed to respect. It’s sad to see they’re going to pull the rug out from under it, but not that surprising.