What lies beneath the surface? Profitability.

What's the deal with Surface? It's about the business model...

A bit partisan (as usual for Gruber) but insightful none the less. The money quote actually comes from Horace Dediu:

“Microsoft faces a dilemma. Their business model of expensive software on cheap hardware is not sustainable. The future is nearly free software integrated into moderately priced hardware.” Horace Dediu

Bottom line, Windows isn’t going anywhere… but it may not be the profit center it once was. Microsoft is smart to adapt in the direction of hedging on the hardware side. The Surface was a risky move on the surface, but in the end it would have been more risky to stick with the status quo of hardware OEMs controlling the pace of advancement and adoption of new features.