Steven Sinofsky saw it coming. Nine days before leaving Microsoft in November 2012, the Windows division chief warned CEO Steve Ballmer that Surface RT was "about to catastrophically fail in a very public way," with sales tracking at one-tenth of projections.
The warning appears in newly released Department of Justice files linked to Jeffrey Epstein. The documents show Sinofsky forwarding internal Microsoft emails to Epstein months after his departure, seeking advice on his exit strategy and what to do next.
The numbers told the story
Surface RT launched as Microsoft's answer to the iPad. It wasn't. The device shipped with Windows 8's controversial Metro interface, which enterprise buyers largely rejected. Microsoft eventually wrote off $900 million in unsold inventory - more than the device's original development budget.
For IT leaders managing Surface fleets today, the failure offers a useful case study in execution risk. The hardware was fine. The software strategy was confused. The market timing was wrong. All three problems showed up in deployment.
The exit negotiation
After forwarding his retirement agreement to Epstein, Sinofsky complained about restrictive non-competes and unvested stock. Epstein's advice was direct: "Ask for $20 million and don't budge." Sinofsky settled for $14 million in stock.
The emails also reveal Sinofsky's concern about Microsoft's litigation history. He noted the company routinely sued former executives who joined competitors, citing "inevitable leakage of trade secrets." The cases were public, bruising, and professionally damaging - even when defendants won.
What this means for enterprise tech
Surface eventually found its footing. Today's Surface devices are genuinely competitive in enterprise deployments, particularly Surface Pro models running full Windows. The turnaround took nearly a decade and multiple hardware generations.
The real lesson isn't about Surface. It's about how Microsoft approaches platform transitions. Windows 8's failure to bridge desktop and tablet computing cost the company years of momentum. Windows 11's gradual enterprise adoption suggests they learned something.
Worth noting: There's no suggestion of criminal behavior by Sinofsky. The exchanges simply show how a senior executive sized up failure and negotiated his exit. The advice came from Epstein. The decision to leave came earlier.