Bloomberg News

Microsoft to Sell Surface to Businesses in Bid to Revive Demand

July 01, 2013

Microsoft Corp. (MSFT:US), facing lackluster sales of its Surface tablet, will begin selling the devices to large businesses through resellers like CDW Corp. in a bid to improve sales by targeting corporate customers.

The company will also start a new program called AppsForSurface to provide corporate software makers with devices and funding to get them to adapt their programs to Surface. Citrix Systems Inc. (CTXS:US) and Houghton Mifflin Harcourt Publishing Co. are among those who have signed up, Microsoft said in a blog post today.

Microsoft is trying to broaden the audience for Surface to corporate and education customers after the tablet, released in October, met poor demand from consumers. The company sold 900,000 Surfaces in each of the fourth and first quarters, according to researcher IDC. Brent Thill, an analyst at UBS AG, had initially projected Redmond, Washington-based Microsoft would sell 2 million units in the December quarter alone.

The company had expected greater initial sales as well. While Microsoft didn’t give a forecast and hasn’t disclosed how many Surface units have been sold, the company placed an initial order for 3 million devices from the manufacturer, people familiar with the matter said in March.

That’s left Microsoft struggling to find groups and types of customer who may be ripe targets for Surface. Last month the company announced a price cut to $199 from a $499 starting price for schools purchasing the Surface RT model directly from Microsoft. That offer runs until the end of August and is available in 26 countries.

Until now Surface has been sold only in retail stores and apps have focused on consumers and individual business users rather than corporate programs, making the device less appealing for wide-scale company use and harder to purchase if a corporation wanted a large number.

To contact the reporter on this story: Dina Bass in Seattle at dbass2@bloomberg.net

To contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net;


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Companies Mentioned

  • MSFT
    (Microsoft Corp)
    • $47.52 USD
    • 0.84
    • 1.77%
  • CTXS
    (Citrix Systems Inc)
    • $71.64 USD
    • -1.04
    • -1.45%
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