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Microsoft's surprise hardware hit: The Surface Hub - Average Deal Size in Pipeline is 50 Systems

December 13, 2016 | Telepresence Options

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Story and images by Ars Technica

Microsoft has hit a hardware home run that surprised even the people in Redmond. The Surface Hub conference room PC turns out to be selling like hotcakes, surpassing everyone's expectations.

When Microsoft launched its Surface Hub conference room computers about a year and a half ago, we weren't entirely sure what to make of them. On the one hand, they offered a smart mix of video conferencing, digital whiteboarding, and collaborative working with a price that felt surprisingly low--$6,999 for the 55-inch version and $19,999 for the 84-inch version. On the other hand, meeting rooms are where old technology clings on to the bitter end; VGA ports are still abundant, clunky video conferencing systems are the norm, and for many companies a whiteboard is as high-tech as it gets.

There were initial signs of strong demand. Microsoft delayed the release, from September 2015 to January 2016, claiming that higher than expected demand (in particular of the 84-inch version) meant the company needed to change its manufacturing capabilities. The company also hiked the price of both models by $2,000, to $8,999 and $21,999--another move suggesting that demand was healthy. We expected companies would buy a couple of the Surface Hub systems to see if they fit into their workflows. If organizations were ready to make the leap to Skype for Business, Exchange integration, a custom version of Windows 10, and more, we figured maybe a handful more sales would follow from this trial. Microsoft tells us that it expected the same, predicting that companies adopting Surface Hub would buy five to 20 of the machines. Now, after almost a year of real availability, we've learned that's not what happened.

The average Surface Hub customer is buying about 50 devices for each deployment, and the company has achieved more than 2,000 customers. One (unnamed) car manufacturer bought 1,500 of the things. Though Microsoft didn't reveal the exact mix between sizes, Surface Hub looks like it's another billion-dollar-a-year business for the software giant--to boot, it's a piece of hardware that it got right even in version one. In a Forrester report commissioned by Microsoft, it's claimed that meetings start more promptly--less faffing about to get remote attendees dialed in or computers hooked up to the projector--saving 15 to 23 minutes per meeting. Less measurable, Microsoft claims that Surface Hub is also driving greater meeting engagement, with people standing up and engaging with each other and the screen rather than hiding behind their laptop screens around a conference table or quietly playing games on their phones.

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