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Microsoft's new Surface Membership is an unbelievably bad deal

By Shawn Knight
Jun 8, 2016
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  1. Microsoft has quietly launched what it is calling Surface Membership, a plan that allows small businesses to stay up-to-date on the latest Surface hardware and accessories for a monthly fee.

    The program gives businesses the option of purchasing a single Surface 3, Surface Pro 4 or Surface Book – or any combination of the three, or multiples of each for an entire fleet – without having to pay the full price up front.

    Pricing starts at $32.99 per month for an entry-level Surface 3 and tops out at $220.99 a month for a Surface Book with all the bells and whistles (Core i7 chip, 16GB of RAM and 1TB of storage).

    Note that Microsoft is offering three payment plans – 18 months, 24 months and 30 months. The $32.99 Surface 3 price is for a 30-month plan while the $220.99 monthly rate is for the Surface Book on an 18-month plan.

    A Surface Membership also includes phone and in-store tech support, seven days a week, one-on-one personal training, in-store discounts on future purchases of hardware and software and Microsoft Complete for Business Extended Service Plan with Accidental Damage Protection. There's also the option to trade in your gear at any time although an upgrade fee may apply and you might have to sign a new lease.

    While this may seem like a good deal initially, taking a look at what you’re actually paying over the course of the plan certainly changes its tone. In fact, it is an incredibly bad idea no matter how you slice it. Here’s why.

    A fully decked out Surface Book sells for $3,199 through the Microsoft Store plus another $249 for a two-year accidental coverage plan, bringing the total to $3,448 out the door. If you finance through the new membership plan for 18 months, you’ll end up paying $3,977.82. Stretching it out over 24 payments results in a total cost of $4,319.76 while the 30-month plan is the worst as you would have spent $4,829.70.

    With the 30-month plan, you will have paid an additional $1,381.70 more than you would have if you’d bought the system outright. Even with the personal training and tech support, there’s no way this makes any financial sense. Oh, and if you want to execrise your right to purchase at the end of the lease, you'll be charged an additional fee of $99 which brings the total to $1,480.70.

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  2. ikesmasher

    ikesmasher TS Evangelist Posts: 2,561   +862

    This is like literally anything where you arent paying for it entirely up front. Of course its a bad deal...so is car payments, phone leasing, and everything else, but its all alot of people can afford. why are you acting like its only microsoft trying to rip people off?
     
  3. yRaz

    yRaz TS Evangelist Posts: 1,906   +954

    So what you're saying is that with the interest on the lease, Microsoft products are now priced similarly to Apple products?
     
  4. Bao Nguyen

    Bao Nguyen TS Enthusiast Posts: 33   +24

    Do a little bit more calculation and you'll see the author is correct, MS interest rate is over 20%, for the same amount of $220.99 per month I could have bought a car up to $12-15000 value with fixed interest rate. Even Apple give 0% interest repayment (6, 12, 24 months) buying on their store, so MS is certainly a rip off.

    But it's not like you can't buy the Surface products somewhere else with 0% repayment with retailers though.
     
    ziffel66, psycros and Reehahs like this.
  5. ikesmasher

    ikesmasher TS Evangelist Posts: 2,561   +862

    youre also not considering the other apparent benefits of the surface membership.
     
  6. Bao Nguyen

    Bao Nguyen TS Enthusiast Posts: 33   +24

    Even if you consider that it would still be a bad deal. When I want to buy a fridge, I do not want to have to also buy a chair and an oven for extra prices now do I? In truth is that the retailers sell MS products better than MS themselves.
     
    psycros likes this.
  7. Shawn Knight

    Shawn Knight TechSpot Staff Topic Starter Posts: 8,102   +96

    I'm not, I'm simply pointing it out. And I agree completely, car payments, phone leasing and so on do factor into people not being able to "get ahead." People by and large only ask if they can make the payment each month, not how much something actually costs.
     
    ziffel66, cliffordcooley and HemiHalo like this.
  8. ikesmasher

    ikesmasher TS Evangelist Posts: 2,561   +862

    youre not buying a fridge and a chair and an oven. this is for people who want a fridge with lifetime tech support and accidental damage protection for many fridges used by many employees.
     
    Chazz likes this.
  9. Bao Nguyen

    Bao Nguyen TS Enthusiast Posts: 33   +24

    Oh come on why are you still defending this is beyond me. Look, more than 20% interest rate is already well into cash loan territory and borderline illegal (in some countries, at least). These days and age when you buy appliances and technology items you should expect 0% interest rate no less. Even at 0% interest rate + monthly account holding fee, you're already buying at lost because these items are depreciation assets.

    It would be hard pressed for MS to find customers that will find this deal appealing really.
     
    ziffel66 and psycros like this.
  10. Chazz

    Chazz TS Evangelist Posts: 671   +73

    Business customers love support, they got other **** to do.
     
  11. bmw95

    bmw95 TS Addict Posts: 106   +58

    Take a look at the article here:
    http://www.digitaltrends.com/comput...ble-via-monthly-subscription/#:fT3DgakN4EqG7A

    As you can see there is quite a bit added to the membership subscription that would be of interest to a business with a busy IT department. Microsoft products are notorious for requiring ongoing, lengthy amounts of training (grumble grumble), and this whole membership basically highlights that shortcoming. If we sort of overlook that though, the membership actually seems pretty decent for a larger company. Yes, it definitely is absolutely horrible for a consumer, but that's not who it's really directed at. Would be nice to see another membership release for consumers where all the extra crap is axed. If it were a decent price with 2 year warranty, I'd definitely be interested.
     
    Teko03 and darkzelda like this.
  12. Bao Nguyen

    Bao Nguyen TS Enthusiast Posts: 33   +24

    That's not equal to business customers love being ripped off. Also buying traditional ways (or just find a regular financial institute e.g a bank with 4-8% interest rate for business loan), you would still get support from MS buying MS products.
     
    psycros likes this.
  13. ikesmasher

    ikesmasher TS Evangelist Posts: 2,561   +862

    its not about individual price. its about businesses not having to worry about providing their own IT or buying new surface products every single time one breaks. Paying that extra fee prevents you from having to hire more people or buy a surface every month because someone inevitably drops it and breaks the screen.
     
  14. Chazz

    Chazz TS Evangelist Posts: 671   +73

    Business prices are usually always a rip off, look at software prices, compute gpus and much more. It's a rip off to us all but if it saves them(the business) money then it's a bargain for them.
     
  15. cliffordcooley

    cliffordcooley TS Guardian Fighter Posts: 8,559   +2,900

    I gotta jump in and say it is not a high interest rate. There are high priced services included into the deal. You can call the services interest rates if you want, but you would be wrong in doing so.
     
    AvalonMD and darkzelda like this.
  16. AvalonMD

    AvalonMD TS Enthusiast Posts: 36   +42

    ...and this articles title is unbelievably short sighted!!

    This is aimed at businesses, not individuals. There are other services included in the price which would be of interest to a... you guessed it... business trying to save money in other areas. Of course it's a bad deal for an individual, but then this wasn't aimed at the consumer market now was it?

    I'll tell you what this is, this is another case where the guy saw Microsoft related news and said, "this must be bad news. Oh look, lets take a totally non comparable offer by saint Apple and make sensationalist clickbait news, because... um... REASONS. I mean it's Microsoft right, I'll just write up an article and end it off by saying Microsoft is screwing over consumers even though they aren't the target market".

    Even if that wasn't his intention, the thinking behind this article and why this would be a bad deal is incredibly flawed that didn't get the attention it deserved. I read about this deal from Microsoft on other tech news sites, and all of them spoke about this positively and thought it was an interesting move.
     
    cliffordcooley likes this.
  17. Theinsanegamer

    Theinsanegamer TS Guru Posts: 382   +340

    Except, for the cost of a fleet of these things, you could easily pay the salary of a dedicated IT guy from the surface purchase alone.
     
    psycros likes this.
  18. misor

    misor TS Evangelist Posts: 1,163   +197

    if you are only factoring the cost of the hardware, then you are right. but how about the cost of customer support and other things?
     
  19. Misagt

    Misagt TS Booster Posts: 100   +43

    I can see why people would jump on this as a bad deal and yes they are right from a personal standpoint. But when we are talking a company things change dramatically. From leases are usually 100% right off at tax time, to deferred cost when cash flow is restricted. Is it the best option overall for most people/companies, no probably not. But there will be some that find value in it.
     
  20. Teko03

    Teko03 TS Maniac Posts: 318   +117

    [QUOTE="Theinsanegamer, post: 1546227, member: 359276]Except, for the cost of a fleet of these things, you could easily pay the salary of a dedicated IT guy from the surface purchase alone.[/QUOTE]

    A dedicated IT guy isn't going to get you up to 4 years of Microsoft Complete Coverage. This is probably the biggest part of the increased pricing. The same type of coverage through Dell would tag on another $450+ --- but in this case Microsoft hardware exists in more compact (non-replaceable) builds which require a new/refurbished device be provided versus a replaceable refurbished part.

    Point is, these devices aren't really repairable and employees on the move are going to damage these things eventually.
     
  21. Saher Ahwal

    Saher Ahwal TS Rookie

    I agree. I can't believe articles like these make it to the news...This is also a surface membership which includes other benefits and not simply a payment plan. Not to mention the obvious that every plan where you don't pay upfront, you end up paying more...
     
  22. Uncle Al

    Uncle Al TS Evangelist Posts: 1,684   +790

    Sadly, it's very simple. Microsoft has gotten to the point that their bloated overhead is preventing them from being competitive. If they reduced the size of the company by 50-75%, keeping only those that are making significant contributions, they could once again be a world shaker ..... now, they are just another pathetic example of one that is sucking the life out of it's host. Sadly, their death could be the best thing to happen to the computer industry.
     
  23. whoflung dung

    whoflung dung TS Rookie

     
  24. Businessman

    Businessman TS Rookie

    It is getting sad to see these clikbait stories now all the time. Where its more important to get clicks from sensationalist headlines on a poorly structured story. Businesses are not charities, for Microsoft or anybody to put up billions of dollars worth of stock and backup resources, of cause you have to pay. This is a BUSINESS plan and even if you were an individual who use one of these devices for work, you can claim them off your tax. The net result is business or individuals who claim these as a legitimate business expense, actually only pays half its original cost, the rest is tax write off. Please stop these nonsensical articles and childish responses about ripoff. I depreciate my Surface PC and Phone off my tax over three years and end up paying a pittance for them because I use them for work.
     
    misor and AvalonMD like this.
  25. Puiu

    Puiu TS Evangelist Posts: 1,915   +537

    please don't compare regular loans for consumers with long term business support. you don't even know what the membership does. it is indeed expensive, but many companies will find the extra cost acceptable if they factor in all of the benefits of the membership.
    you are not just buying a product, you are buying business services together with those products. do you even understand just how expensive training is? (especially one on one training) the same for 24/7 tech support.
     

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