yes, mine failed too. And Microsoft failed the update as users experienced issues with it (meaning they canceled it). They will ship it back out fixed, either in full or in pieces (for instance I got an update yesterday for my wired LAN device in my docking station).
I just installed mine. I did notice after the first reboot and going back to check the history it said it was asking for a reboot which I did. It was successful. I have a SP3. Came with windows 10 pre-installed if that helps.
Sane problem several times on i7 upgraded Win10. Charging over 50% removed one error. Second error needed the update process to be checked and fixed and a reboot.
Tried to do it manually from the MS download center and most of the firmware downloads worked except for Surface Pro 3 Driver Set.ppkg which gave a error of Provisioning failure - error code:0x800710d2. Aside from that the Surface Pro 3 seems to be working fine.
I've got the same problem! Windows Update (11/25/2015) seems to fix the problem. but after rebooting the surface the installation of systemhardwareupdate 26.10.2015 started again! I found no possibility to remove only the buggy Update (10/26/2015). It doesn't appear in the list "deinstalling updates")