Microsoft's Surface strategy for the channel could backfire as solution providers blocked from selling the tablet seek to fill the void with products from other vendors, according to Microsoft partners.
Many solution providers were fuming the news that Microsoft is authorizing only 10 large account reseller (LAR) partners to sell Surface tablets to commercial customers. Several partners said the new Microsoft Devices Program, unveiled Monday, puts them at a deeper disadvantage in the Surface game by tilting the field in favor of the larger players that smaller solution providers often compete against.
The 10 LARs authorized under the Microsoft Devices Program include CDW, CompuCom Systems, En Pointe Technologies, Insight Enterprises, PC Connection, PCM, Softchoice, Softmart, SHI International and Zones.
"It's very frustrating," said Iris Sepulveda, sales and marketing director for PR Computer, a major Microsoft partner in Puerto Rico. "First, we had to compete against Microsoft itself, which was selling Surface to our clients directly. And now we have to compete against these 10 other companies, too. It's not fair to partners."
[Related: Microsoft Partners Fuming At Surface Slight]
Under the Microsoft Devices Program, the company's 10 top LAR partners are now Authorized Surface Resellers. The Redmond, Wash., software giant also is partnering with top IT distributors Ingram Micro, Tech Data and Synnex to provide the tablets to those authorized resellers.
Jude Daigle, president and owner of Computer Connections, Greensburg, Pa., said Microsoft's go-to-market strategy for Surface is mystifying. "Microsoft just doesn't get it. It's foolish to not allow your distribution partners to authorize resellers for Surface," he said. "What's so hard about selling Surface? Why are they only authorizing a select few?"
In a statement issued to CRN, Microsoft said the 10 LAR partners "were selected because of their extensive knowledge, services and support they're able to bring to the Surface family." Microsoft also said this is just the first phase of Surface's channel rollout and that the company plans to have more partners signed up for the Microsoft Devices Program in the "coming months" but did not provide details on the types or numbers of partners it plans to authorize or the precise timetable for bringing solution providers into the program.
Todd Swank, senior director of product marketing at Equus Computer Systems, Minnetonka, Minn., said that while the Microsoft Devices Program was a step in the right direction, the fact that Microsoft is playing favorites with LAR partners hurts the rest of the Microsoft channel.
"It's definitely frustrating," Swank said. "You're trying to do business with Microsoft and they're stacking the deck against you."
The situation also could force Microsoft partners to buy Surface products directly from companies such as CDW and PC Mall. "I've heard of resellers buying Surface tablets from Microsoft directly and then turning around and selling them at cost to customers to just get the account," Swank said. "So I won't be surprised if that happens."
Even if Microsoft authorizes additional partners, it may have a tough time competing against other, more channel-friendly tablet makers.
PR Computer sells Windows 8 tablets from other vendors, including Lenovo, and the company is perfectly happy with those offerings, Sepulveda said.
"We're getting great feedback from customers on Lenovo tablets," Sepulveda said. "We're open to any offerings and if we get authorized to sell Surface, we'll carry it. But there are a lot of other tablet choices out, not just for the hardware but for the OS as well. If you buy a new PC, you have to move to Windows 8. But with tablets that's not the case."
Computer Connections also carries a variety of tablets, including Android devices, and has seen strong interest in those offerings. "It looks like we'll be selling more Android [tablets]," said Daigle.
Still, Daigle is incensed by Microsoft's strategy, which he says benefits less than the top 1 percent of Microsoft partners while leaving the rest at a huge disadvantage. "You can't be selective," he said. "Either you're in the channel or you're not. And they're not."
PUBLISHED JULY 2, 2013