Surface Pro 3 may stop IT from writing off Microsoft mobile devices

The Surface Pro 3 is a return to Microsoft's PC roots with a larger screen, digital pen and the ability to run enterprise apps.

IT pros wondering whether Microsoft will return to its PC roots with its mobile devices have their answer with the launch of the latest Surface Pro tablet.

The new Surface Pro 3 is an Intel-based 12-inch 2-in-1 device with a digital pen and the potential to entice IT pros into adopting the new device for mobile end users.

"It's classic Microsoft [that] gets everything right on the third try," said Bob O'Donnell, founder and chief analyst for TECHnalysis Research LLC, of Foster City, California He sees the Surface Pro 3 as a PC taken to the most modern extreme. "It's better as a tablet [than previous versions] but also acknowledges people use [the Surface Pros] as a PC."

The sweet spot for Surface Pro 3 is for users that need a full screen but want something more portable, said Jack Gold, president and principal analyst for J. Gold Associates LLC, an IT strategy firm based in Northborough, Massachusetts.

"[Enterprises] will be happy with this kind of device because it looks like a PC," Gold said. "It runs the same apps and infrastructure, and [you can] load it up with images. So for those that are not absolutely tied to an iPad, Windows becomes an option."

Third time's a charm?

IT administrators have not been particularly keen on Microsoft's mobile devices but cautiously view the new product in a more favorable light

It's classic Microsoft [that] gets everything right on the third try.

Bob O'Donnell, founder and chief analyst for TECHnalysis Research

For some IT professionals the most important advantage the Surface Pro offers over Apple iOS tablets is that the Surface product line uses Intel processors. Some say the chips give them options to run a much wider selection of both internally developed and off the shelf applications.

“If they know they could use some internally developed apps on a Surface Pro 3 with no questions asked, some IT buyers would be more inclined to put in a volume purchase order for Surface Pro 3s instead of iPads," said Mike Drips, a solutions architect with WiPro based in Houston. “Now Microsoft can say, ‘We have a tablet like [Apple] has a tablet, plus Intel chips, USB ports and hardwired Ethernet support.’"

While the new version has some technical capabilities its predecessors lacked, Microsoft continues to price the Surface upwards of $799 -- out of reach for many IT shops.Some suggest Microsoft bundle in the price of unit’s keyboard-cover and not charge the extra $129.

“[Surface 3] continues to be a tough sell because it is at a price point where you say, well it is not cheap but it is not crazy expensive either," Drips said. "It is mezza-mezza. If you were thinking of buying one, the price could make you think a little longer.”

Slow market adoption

Microsoft must claw its way to make a mark in an industry that has dramatically slowed due to the entry of larger screen smart phones and end users holding onto tablets for a greater length of time.

Worldwide shipments for tablets and 2-in-1 devices dropped to 50.4 million units during the first quarter of 2014, according to recently published data from IDC, based in Framingham, Massachusetts. The shipment represent a sequential drop of 35.7% but was up 3.9% compared with the same quarter in 2013, the company said.

How Microsoft will continue to sustain the Surface business still has the industry scratching their heads. The company has been repeatedly slammed for losing money on the product and competing with OEMs, but that perspective may change. Observers said it is more about Microsoft leveraging sales of other products in the Windows ecosystem rather than the hardware alone.

"The money to be made is not specifically in the device," Gold said. "The money to be made is making sure that Microsoft and the Windows ecosystem [on the back end] remains in place. Anything they can do there is good news."

Microsoft partners have seen a shift in how the company sells its Surface to customers.

"Microsoft is less concerned about [customers] adopting Surface versus adopting innovative devices," said Chris Hertz, CEO and founder for  New Signature, an IT system integrator  based in Washington, D.C. "It's not just about market share. Microsoft has dedicated mid-market sellers around devices and they talk about Surface and OEMs with equal weight. [Those sellers] say [you] should buy a device that fits your business."

Microsoft's CEO, Satya Nadella, claims the company is not competing with OEM partners.. "Our goal is to create new categories and that is what inspires us with what we are doing with our devices and hardware," he said during the Surface Pro 3 launch this week.

What about Windows RT?

Microsoft did not address its commitment to Windows RT. Although the Windows RT-based Surface devices have enjoyed some success with large customers such as Delta Airlines, it is clear Microsoft has not been able to compete with the iPad and Android-based tablets. Businesses would rather gravitate toward the full-fledged Windows device.

"RT was a reaction to Android and iPad," Gold said. "Microsoft had to get something out cheap on ARM and with decent battery life." As newer technology such as Intel's Haswell chip provide more computing power combined with long battery life, there is less need for a Windows RT unit, especially since  it's a "decapitated OS," said Gold.

Microsoft declined to comment on any changes to its Windows RT strategy and said it will keep Surface RT.

Surface Pro 3 specs

The Surface Pro 3 has a 12-inch diagonal screen, 38% bigger than the Surface Pro 2, clear type HD resolution of 2160 x 1440 pixels, a hinge that goes from zero to 150 degree angle, and support for a new Type Cover that sports a larger track pad. The product will include either an Intel Core i3, Core i5, or Core i7 Haswell chip and comes with flash storage ranging from 64 GB to 512 GB and 4GB or 8 GB of RAM.

The device weighs 1.76 lbs. and is 0.36 inches thick, with nine hours of battery life.

Microsoft also incorporated more accurate digital pen technology. The aluminum pen's functionality is not only used as a writing tool on the tablet, but also acts like a remote control. The company showed how a click of the pen can turn the Surface Pro 3 on or take pictures.

"It's the kind of thing that allows them to really do touch-based apps," said O'Donnell.

Microsoft also demonstrated the tight integration of OneNote with the pen on the Surface Pro 3, providing end users with a pen and paper-like feel combined with computing technology.

Pricing for the Surface Pro 3 starts at $799 for a 64GB Intel i3version to $1,949 for the high-end 512GB Intel i7 device. Shipments begin on June 20.

Senior Executive Editor Ed Scannell and Executive Editor Jamison Cush contributed to this story.

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