Microsoft’s Panos Panay discusses the past and future of Surface

In the earliest days of the Surface, it was hard to shake the notion that the line was something of a reference design for Windows 8. Of course, things have evolved quite a bit in the half-decade since the first Surface launched. The line has grown to include two convertible tablets, a pair of laptops, a 28-inch all-in-one and a high-tech whiteboard, while the devices themselves have become some of the most capable and compelling in their respective spaces.

Microsoft is pushing to make Surface a catch-all for consumer hardware, hybrid devices designed to appeal to practically anything life throws at them. There’s no better distillation than the Surface Book 2, the “most powerful Surface yet,” which was launched alongside the latest version of the company’s Creators Update Windows 10 software. The detachable screen device is being positioned as a portable capable of everything from CAD development to serious gaming.

The line has also found itself a compelling evangelist in the form of Panos Panay, corporate vice president, Microsoft Devices. He has a somewhat divisive presentation style, but few in this world are capable of talking up a laptop hinge with the same level of passion. Panay has been a member of the Surface team since its earliest days and is better positioned to talk about the line’s past and future than anyone, save, perhaps for CEO Satya Nadella. Perhaps.

Panay spoke to TechCrunch about the new additions to the line and what Surface means for Microsoft’s aspirations as a hardware company.

TC: We tend to view the creator category as a bit niche. Do you see it becoming more mainstream moving forward?

PP: I do. You can get super niche on this, but in general, this is a very important concept. Where your hardware and software are getting out of the way of your ideas is critical. Sometimes you dismiss it because you’re not a designer in CAD or Maya. I don’t work in CAD, but I consider myself a core creator, because the thoughts I have at three in the morning are my most important thoughts, I write them down and create something from them.

TC: Is this push toward 3D content creation an attempt to set people up for the future of AR/VR/MR?

PP: It’s as much setting people up as ushering them through it. Because there’s this opportunity for the next generation of computing. The [Surface Book 2] has a dual mic on it. The idea that I can talk to my computer, touch it, use a mouse, use a dial — all of those are seamless modes of interaction. If that turns into a 3D opportunity, I think that’s real. Virtual reality and mixed reality are coming. If I’m a customer who’s going to invest in a device like this, let’s make sure the future is part of it.

TC: How serious is Microsoft about voice computing? Cortana is in PCs and there’s an Echo competitor coming out in the near future. At what point does that start moving off the computer and becoming a more integral part of the home?

PP: I don’t know what point that is, but we’re very serious [about it]. Artificial intelligence is core. Satya believes that.

TC: But it has to start moving off the desktop [for Microsoft].

PP: Definitely the desktop and laptop have to complement it. As I move from device to device and room to room, you have to make sure that they’re all connected through Cortana. We believe in that.

TC: Did the Surface line start life as a reference design for hardware partners?

PP: It never did. It actually started as “what is the best device we can make for the operating system?” The goal was to create the best stage we can for the Windows 10 operating system. There was some debate on how big a business it should become, but the truth is, if you don’t get to scale, it’s not a product. Millions of people have to use it. Now it’s foundational to the development of the software. But it’s also a business that’s growing and we’re pushing.

TC: How did Microsoft approach the product differently than failed hardware of the past? Satya seems to have played a large role in that push.

PP: He played a massive role. One of the bets Satya made was on hardware. Satya came on as CEO right before Pro 3. He made that decision. He said, “If we’re going to ship this product, it has to be a hit. To have permission to be a hardware player, we need a hit.” We bet on Pro 3. We went for it.

TC: How was the approach different than what came prior?

PP: Fundamental integration of software. That was critical.

TC: Wasn’t that part of the DNA from the beginning? You’re Microsoft. Software is what you do.

PP: No, it wasn’t. It wasn’t that easy. For the first couple of generations, it was more about wrapping hardware around the software that was created. And then Pro 3 became the first integration with Office and One Note, where it was, how do we bring this pen to life? What about the 2:3 aspect ratio? How do we scale Windows to that? These were real decisions that were made. From there that DNA started, and now we’re in this place where these products were built together, and the beauty of the tech comes out. It blows my mind the see people put a finger and a pen down and create any way they want to.

That transformative moment started when we really got into how to create the software with the hardware, instead of starting in two different places.

TC: In a sense, you’re competing with all of these partners who have been working with Microsoft and Windows all along. When you make that transition into a serious hardware company, you need to be aware of that potential cannibalization.

PP: Let me qualify it a little bit. I think of our partners as partners and not competitors at all. As we create the technology and are able to make those investments in innovation, we’re not keeping it to ourselves. We’re pushing it to our partners as fast as we can. Including the Pen IP itself. How do we raise the tide?

TC: When the Surface Laptop launched, it did so with Windows 10S. Was that the right move? In a sense, you were kind of crippling a very nice piece of hardware. Did positioning it as a very expensive piece of educational equipment give the wrong impression?

PP: Fair. I don’t regret it. I love this value prop of getting the most secure product with the best battery life within this envelope. But if you want out of it, just click and go. That was such an important element. My daughter is using 10S and I feel great. It’s safer and that’s important to me. My son needed to get out and he clicked and went. He’s a STEM student and he has some applications he needed. If it wasn’t as seamless, maybe. But the fact that customers have a choice, that’s important. Maybe you can look at it and ask if we could market it different. That’s not one of the things we’re worried about. We wanted the foundation of that experience.

TC: It wasn’t a byproduct of timing? That you were already working on this education play, so you launched the Surface Laptop at the same time?

PP: No. When you talk about leading with hardware and software, we were optimizing it for Windows 10S. Within the environment there’s a pretty concrete value to a lot of users. It doesn’t work perfectly in some environments, but it works pretty well.

TC: Are you concerned with consumer confusion when you have so many overlapping products in the space?

PP: I think the storytelling, the marketing and the sales have to be aligned with the products. If you’re able to do that, you’re in pretty good shape. If you start with the product and don’t just add a feature in the end for a story, you’ll be just fine.

TC: Taking a look at Apple’s offerings — the MacBook with Touchbar and the iMac Pro — what are your thoughts on the current line?

PP: I think they make great products. But the new Surface Books are tremendous relative to their great products. I don’t know what they go for customer-wise right now, because I don’t speak for them, but we’re going for creators. If you compared the low-end MacBook Pro to the Surface Laptop, it feels pretty good. You look at the Surface Pro versus the high-end MacBook, and you go, “oof.”

TC: The Surface line is relatively young compared to them. Is there a sense that they’ve stagnated?

PP: Hardware comes with its own line of challenges. Products take years to develop. I think they’ve developed some great products, but we’ve also had some innovation leaps with our hardware and software that’s making a difference in the industry right now, especially with that combination of Office and Windows.