Microsoft’s Panos Panay is known as the executive responsible for the company’s Surface lineup, which has expanded this year with the introduction of the Surface Book laptop. But since earlier this year, he has also taken on a broader role overseeing the company’s devices, including the Microsoft Band, the company’s smartphone lineup and the HoloLens blended reality device.
We interviewed Panay on Thursday during a special recording of our GeekWire podcast and radio show at the Microsoft Store in Bellevue Square, along with Stevie Bathiche, distinguished scientist in Microsoft’s hardware group, a longtime Microsoft researcher who has played a key role in the engineering and design of Surface and other consumer devices from the company. The event and this week’s GeekWire podcast are sponsored by the Microsoft Store.
We covered a range of topics — including the design decisions that went into the Surface Book, the challenges and opportunities in Microsoft Surface’s deal with the NFL, and aspirations for Microsoft hardware business over the next few years.
Despite our best efforts, Panay didn’t reveal any plans for a Surface Phone — this is a man with a lot of secrets to keep — and he was polite in his response to Apple CEO Tim Cook’s criticism of the Surface Book. However, the conversation provides a window into Microsoft’s overall hardware strategy from one of the most influential and closely watched executives at the Redmond tech giant.
Listen to the conversation here, continue reading below for edited excerpts, and listen for the full podcast and radio show this weekend on GeekWire and KIRO Radio in Seattle.
Todd Bishop: Let me tell you what my external perception of Microsoft’s hardware strategy is these days, and I want to get a sense for whether this is correct.
Panos Panay: Let me write it down so I have one, too.
TB: Microsoft’s hardware strategy now is not to be comprehensive. You’re not trying to make every single type of device. The strategy is to look at the landscape of devices, and say, hey, what is not being done that should be done, and how can Microsoft do something that solves a customer need and, by the way, plays to the strengths of Windows, and your own strengths as a company.
Panay: Yeah, I think it’s close. It is about customers. It’s about people and what they need, what they can do. And it is about Windows, but not just Windows. It’s all across Microsoft. That’s a big deal. How do we bring everything across Microsoft together to create these experiences that people would love, and want to use every day to make their lives richer and better. We put our energy there, and you are right, we don’t play everywhere. I don’t think we intend to. We really think and focus on the premium aspects of products and making sure what we’re giving people is delightful in that sense, as well.
TB: You have had a change in your role in just the past few months. It’s gone from just the Surface and the Surface Book to also include the phone hardware. As you look at the market for smartphones, thinking about that approach, that strategy that you’re taking, what needs to be done in smartphones, that isn’t being done now? Where’s your opportunity?
Panay: (Laughs.) The leading question. I’ll tell you right now, it starts with making sure we’re putting products in people’s hands that people love. You see that today with what we’re doing with our Surface devices, you see that today with the new Lumia products for sure. People are pretty excited about it. We have a lot to offer and a lot to do, but I don’t want to get trapped into, here’s what the next thing is, because that’s not exactly where I’ll go.
TB: Trap? What trap? (Laughter.) Just a question. Stevie, you can weigh in.
Bathiche: Panos is doing just fine.
TB: OK, so I’ll just ask it. Are you working on a Surface Phone?
Panay: People love asking that. Again, nice try. I think you have to continuously check the landscape of what needs to happen next in all our device categories. We’re working on a lot of stuff.
TB: But you do oversee phones now, so does that mean you’re overseeing the Lumia line, or something else?
Panay: Yeah, right now, the Lumia line is exactly what it is. We have the Surface line, and we have every other device that the company makes. It really is about bringing them all together with a consistent feeling and making sure the experiences across Microsoft come to our customers.
TB: John and I left our MacBooks at home — out of respect! I’ve got my Surface 2 here, and we can talk about that later on. But there’s lots of other folks out there using other types of Windows PCs, Windows notebooks. What would be your pitch to them on the Surface Book? Why should somebody really look at the Surface Book?
Panay: First off, if somebody is using a Windows PC, I’m super happy. I think that’s a great thing. They’re using it for a reason, and there’s a great experience that comes with it, and I think that’s important.
I think if you’re looking at Surface Book, it’s just pushing it a little further. If you’re a creator and you want to create something with a pen, where you want to be able to walk away from the entire experience of a laptop and encompass yourself in a different environment, whether it be physical or emotional, I think that detach moment is an important one. And then being able to put ink to that pixel has become so important for us. We’ve watched it, man. We’ve seen people who didn’t believe in writing on screens, and now it’s becoming more ubiquitous. If that’s what you want to do, I think you’re going to find the best experience possible to drive emotion into your product.
John Cook: So what’s been the reaction by other hardware makers to your introduction of the Surface Book, your first real attempt at a laptop.
Panay: I don’t know. I’ve seen quotes. It’s not like my head’s in the sand or anything, but at the same time, I’m not seeking it out. I will tell you, we’ve gotten a lot of compliments; we’ve gotten a lot of love for doing what we did, and you have no idea how flattering that is, because we took a product that we didn’t actually think we could make when we started three years ago, and we looked hard at it and said, this is a huge leap with what we’re trying to accomplish.
TB: Why was it so hard?
Panay: There were so many things to make sure it was a full laptop first, and nobody was confused about that, and that we didn’t end up with what we called a “clickety-clack” mechanism — that’s the way our team talks — or something where it was an obvious tradeoff that had to be made, where it wasn’t this full “lapability” experience or this full laptop feel. As we looked at that, going through, and how we would separate out the GPU if we wanted to go for that for performance, that took a while. It took Windows 10 to get us there, and it took a lot of hardware innovation. You’re looking at wall thicknesses on a product that have never really been achieved before with the materials that we used, ever. And that takes evolution and time.
It is this spirit of relentlessness. You hear Satya talk about growth hacking. I think that’s in our DNA, where we literally go after it, and if we can’t see the end, we keep going until we can. I think that came to life pretty quick.
Bathiche: One of the things that we are really excited about and proud of in the Surface Book is the screen. 1800:1 contrast ratio, super high, beautiful colors. Sometimes when we look at the book, we’re not sure if it’s a prototype or a real unit. That’s how beautiful the picture looks. Is this a piece of paper that you printed out and stuck it on the book, or is this actually the screen that you’re looking at live? That’s very rewarding to build a product like that, in that form factor, that has such a high performance screen, which demands space, power and performance, yet we didn’t compromise the product.
TB: When you look at the Surface Book from the front, when it’s open, it looks great, but when you look at it from the side, the hinge is articulated, and then there’s a gap when the notebook is closed. How did you end up with that, and what do you say to people who might be wary of the Surface Book because of that.
Panay: Early on, it depends on who you asked about it, and how you told the story of the Surface Book and what it did. We don’t design products for just pure aesthetic purpose, like this will look beautiful and look awesome, and so what’s the product that it should be. We won’t do that. In other words, we have these conversations in our labs, continuously, which is, what is the purpose of this, and if the purpose is there, and the person using it appreciates the purpose, then the question goes away very quickly.
TB: Microsoft did a large sponsorship deal with the NFL — $400 million for Surface, including Surface on the sidelines. It has been a bit of a mixed blessing, because you’ve got all the advertising there. It says Microsoft Surface right in front of everybody on the sidelines, and then the announcers have taken to calling them things like, “iPad-like devices.”
Panay: Oh, man. (Laughter.)
TB: It seems like you can’t catch a break.
Panay: Look, it takes time. People are learning this brand, and it’s starting to really pop now. It’s fun, and of course the iPad is out there. It’s full speed, and a wonderful device for many people, and when they say it, that’s alright, we correct it as best we can, of course, and you don’t hear that much any more. You don’t hear it at all, really. You hear people understanding, this is Surface, and it’s more productive, and it does more, and it allows you to get more done, and I think people are starting to see it, including the NFL. We have it on the sidelines, and it is such a joy to watch the players use it. It’s unbelievable.
TB: So what do you think of the iPad Pro?
Panay: I think … what am I supposed to tell you about the iPad Pro? (Laughter.) Yeah, it’s an interesting product for sure.
TB: There are a lot of similarities, you might say, to the Surface.
Panay: Yeah, sure, there are. I think a lot of people have called that out. I think people love to talk about it. I haven’t used one.
TB: You’re kidding me. Stevie, have you used one?
TB: What does that mean, you went into a store and tried one out?
Panay: The comparisons are flattering in some sense. There’s a lot of products out there that are happening similar to Surface. I think there’s a category that’s been created here. It’s fun to acknowledge that and see others acknowledging it as opposed to just us saying it. We’ve seen a lot of that, and it’s good.
JC: So what is the strategy for trying to catch up to the iPad and Apple, with their big lead in the device market, and specifically in tablets.
Panay: I think our focus is not about anything there. It’s more about making sure people can be productive and that they can buy a premium device that lets them do that. And bringing Microsoft assets and experiences together. That’s huge for us. Ultimately we do have these wonderful experiences across Microsoft that come together on these devices, so that part is in tune and defined. Feels good.
TB: Apple CEO Tim Cook called the Surface Book “diluted.” Originally the report was “deluded,” but then Apple issued a correction, saying, no he didn’t say it was deluded, he said it was diluted. In other words, it’s trying to be too much, both tablet and laptop, and it’s not the best of either. So what’s your response to Tim Cook?
Panay: I think Tim’s a great leader. Everyone has an opinion, of course. You can argue about any product, I suppose.
TB: How about that, in terms of the idea of combining a tablet with a laptop. I think that’s the point that Tim Cook was trying to make — that it was trying to do too much. Do you think it’s successful in terms of being a great laptop and a great tablet.
Panay: Yeah. I think it does both extremely well. If you pick up this device, you feel good using it. The feedback so far has been off-the-charts fun. And you do have that opportunity to really remove it and immerse yourself. Stevie, in designing the screen at 3×2 and being able to hold it, it’s not unwieldy at all. It feels great. It’s a 13.5-inch screen, and yet when you’re holding it, it feels so comfortable and natural. It’s that shape of a piece of paper. I know that sounds like jargon, but it’s not, man, it’s what we designed and it’s familiar. I think we captured both. … So far we’re seeing very positive results there.
TB: Who’s the tougher boss, Steve Ballmer or Satya Nadella?
Panay: Oh man, I’m absolutely not going to answer that question. (Laughter.) They’re both special to me. They’re both very different They’re such great leaders, I will tell you, they have very different attributes, as you well know, they speak differently, but I will tell you they’re both inspiring. If you get five minutes with either one of them, they blow your mind. We’ve watched the company grow through all these years, and now we have Satya who’s leading us. He’s so elegant and thoughtful, and when we get to walk through the labs together and he puts his hands on the products and he has opinions and he helps form these things, it’s really delightful and inspiring.
Bathiche: I would answer Panos Panay for the tougher boss.
TB: What kind of boss is Panos? Let’s hear this, Stevie.
Bathiche: A tough boss. Being with Panos is being with family for me. I’ve been working with Panos since the day he walked into Microsoft. It’s been a beautiful journey and I’ve been lucky along with other people that we’ve been on that ride together.
TB: This is going to sound like I’m still trying to get you to talk about future product plans, but I’m not. If you were to look two or three years out, at Microsoft’s hardware business, what would success look like to you? What would be the measure of really turning things around and making Microsoft hardware relevant across the culture?
Panay: First off, people loving the devices is everything. It fuels so much when people love your devices. Just like the people who make them have to love making them, and put all their love into them, we want people to get all the love out of them when they use them. This is such a big deal. I think that fuels everything. What does that look like? It looks like growth in the categories we’re creating. And that’s it, and that’s what we talk about. We’re going to create categories, we want these categories to grow, and we’re going to see them grow, and we’re going to keep investing to make that happen.
Bathiche: Every new computing form factor is preceded by a new human-computer interaction model. It’s one of the things that we invest extremely heavily in, from MSR to the hardware groups to Windows, to our Application Services Group. And to me the success is innovating and creating those new categories using that new interaction modality. That’s one of the things we were really excited about with Surface, by incorporating the keyboard, the mouse and the touchscreen all together in a device that allows and adapts to the user, rather than the other way around. In the future, we hope to see more devices — new computing form factors that are unlocked by a new way of interacting with the machine.
TB: Like what?
Bathiche: Hard to be very specific, but there are obviously things that are on the horizon like HoloLens. Obviously Band is helping to create a new category. You have Cortana being a huge technology bet for the company. That’s voice-enabled. So there are a lot of things here that are very natural and intuitive ways that people already know how to do, and computers are becoming more smart and more aware.
Listen to the full interview above — including questions about Android apps on Windows, and what I should do with my old Surface 2 — and catch the GeekWire radio show and podcast this weekend.