Panos Panay has always been the force behind Microsoft’s Surface line. He helped bring Surface to life as a secret project more than 10 years ago. Introduced new devices on stage at events, appeared in malls to promote the Surface hardware and in the following years made Microsoft’s Surface tablets a success.
Now he’s leaving in a surprise departure announced just days before Microsoft’s next big Surface event. Panay will no longer present at Microsoft’s showcase on Thursday, but will remain with the company for the next few weeks as part of the transition process. He is reportedly joining Amazon to replace Dave Limp and lead Amazon’s Echo and Alexa push. Amazon is also holding its own hardware event on Wednesday.
Panay has spent the past decade mostly focusing on Surface devices after Microsoft first developed the tablet as a Windows-based rival to Apple’s iPad. Beginning as a string and plastic concept, the Surface Pro tablet had a lasting impact on Windows laptops, prompting Microsoft’s OEM partners and competitors to focus on quality and 2-in-1 devices. The success of the line brought Panay into the role of Microsoft’s chief product officer.
Thanks to Panay’s shock resignation, Microsoft’s New York event will now offer a first look at the future of Windows and Surface under new leadership. Microsoft is expected to introduce three new Surface devices, but will also focus on AI-based features for Surface, Windows, Office, Bing and more.
Yusuf Mehdi, head of consumer marketing at Microsoft, will now assume responsibility for the external leadership of the Windows and Surface businesses and products. Significantly, Mehdi’s job title has not changed here since Panay’s departure, so Microsoft no longer has a chief product officer.
With no clear replacement for Panay’s unique role at Microsoft, Mehdi looks set to take on the responsibility of becoming the face of Windows and Surface devices. While Panay is a product maker, Mehdi has more often been the marketing guy for Microsoft’s various consumer efforts.
He first joined Microsoft in 1992, working in product management for Internet Explorer and Windows before helping lead Microsoft’s entry into search with Bing. His career at Microsoft spanned three different CEOs—Bill Gates, Steve Ballmer, and Satya Nadella—and a number of different launches. He was involved in the Surface, the launch of Windows 10 and the HoloLens headset.
Mehdi was also at the center of Microsoft’s failed Xbox TV efforts and the launch of the Xbox One console. He was later in charge of the “modern life” initiative, which sought to win back consumers let down by Microsoft after the company decided to cancel its Groove Music service, discontinue Kinect, retire the Microsoft Band fitness device, and even go out of business. Windows Phone. Microsoft finally laid off its Modern Life team during last year’s cutbacks.
Microsoft is splitting some of Panay’s other responsibilities. Pavan Davuluri, who leads the silicon, systems and devices team across Windows and cloud, will now report directly to Rajesh Jha, Microsoft’s vice president of experience and devices. This team includes key Surface talents such as Ralf Groene, Stevie Bathiche and Robin Seiler. Pavan will also take responsibility for planning and managing Windows releases.
Interestingly, Microsoft is also building a new “Windows and Web Experiences” team. Microsoft often creates these types of teams when it wants to tackle a specific new area for Windows, and this time it’s building AI-based web services for Windows. We’ve already seen Microsoft pivot towards web features in Windows 11 with essentials like a search interface dynamically updated from the web, a widget system, and more. So expect to see a lot more of this in the future.
Mikhail Parakhin, who has been focused on Bing Chat in recent months, leads this new experience team and will include executives with a history in product management, engineering and Microsoft’s work with Android across devices.
These leaders Windows and Surface will now point Microsoft’s operating system and hardware towards AI. That’s what Microsoft wants people to get excited about right now, and something we’ll likely see a lot of at the company’s event on Thursday. Microsoft is increasingly looking to use Windows as a vehicle for its AI efforts, or trying to push Bing and Edge to both consumers and businesses.
Last year, I interviewed key members of Surface for the 10 Years of Surface story, and it was clear from talking to them that AI will have a big impact on Windows and Surface over the next decade. There’s constant talk of the company making its own Arm chips for servers and Surface PCs, and even competing AI chips to avoid costly reliance on Nvidia.
“AI is going to reinvent how you do everything in Windows,” Panay said earlier this year. Panay will no longer be at Microsoft to lead this renaissance of how you use Windows. But his resignation didn’t signal a strategic shift or change in direction for Windows at Microsoft, as far as I can tell.
The question right now is how Microsoft continues to innovate on the hardware side. Panay has always been a fan of the device, having led the development of the Surface Pro, which saw companies like Apple, Dell and Asus produce their own Surface-like devices. But Microsoft signaled changes to its hardware portfolio amid layoffs earlier this year. Is there still room for innovative laptop and tablet design for Surface, as we’ve seen over the last decade, or is Microsoft’s AI push overshadowing risky hardware bets?
Microsoft is said to have scrapped plans for a dual-screen Surface Duo 3, years after it effectively scrapped its dual-screen Windows-based Surface Neo device. It’s unclear what the future holds for Microsoft’s own Android efforts. The original Surface Duo just reached the end of its life with only two Android version updates. Microsoft’s mice, keyboards, and webcams have also been discontinued in favor of Surface accessories.
Microsoft also invested heavily in Windows 11 during the pandemic and PC sales boom, but Surface and device revenue took a beating this year as PC shipments fell sharply. Before the boom of the PC pandemic, Nadella was also looking at the future beyond Windows, iOS and Android. In January 2020, he joked that Windows might be called “Azure Edge” in the future to make it clear that cloud services are the biggest hardware business at Microsoft.
During FTC v. Microsoft we’ve heard that Microsoft wants to move Windows fully into the cloud on the consumer side, something it’s increasingly doing on the commercial side with Windows 365. The creation of a new Windows team focused on the web suggests that this effort is very important. movement.
Perhaps this uncertainty surrounding the PC business after the big sales boom led Panay back to just wanting to build devices, rather than the complex task of running Windows and preparing them for AI and a cloud future.
All of this will be top of mind when watching Microsoft discuss Windows and Surface at its event on Thursday. We’re entering a new era of artificial intelligence for Windows and many of Microsoft’s services, and it will be crucial to see exactly how Surface plays its part without one of its key inventors at the helm.
