VARs See Low Surface Demand, Windows 8 Issues Behind Microsoft's Channel Restrictions


Microsoft may be limiting the availability of Surface tablets in the channel because of low demand, according to some solution providers.

While Microsoft partners are frustrated by the restrictions to resell Surface, there is mounting evidence that Microsoft's homegrown tablet series is suffering from a lack of interest. Microsoft on Sunday lowered the price of the original Windows RT-based Surface tablets to $349, while market research firm IDC said Microsoft shipped less than 900,000 Surface and Surface Pro units in the first quarter this year.

"We're not seeing a lot of Surface demand," said Michael Pilling, director of corporate accounts at Lowery's, an SMB-focused solution provider in Thunder Bay, Ontario. "There's been some superficial interest in Surface, but we're selling other devices and tablets."

[Related: Tablet Tease: Microsoft Surface Channel Debut Bypasses Bulk Of Partners]

Microsoft has yet to roll out its Devices Program for Surface in Canada. And that's okay, Pilling said; even if Lowery's were eligible to become an Authorized Surface Reseller, Pilling said he's not sure the company would actually take that step because the demand just isn't there yet.

Microsoft has previously said it plans to take a phased approach to Surface distribution without providing additional details on plans to make the product widely available to U.S. partners.

Pilling said Lowery's has seen demand pick up for Windows 8 tablets and touchscreen-based notebooks this year. "In the long run I think Windows 8 will prevail," he said. "But if Microsoft starts seriously squeezing out VARs in the sales ecosystem, well, that dominance could slip away in a hurry."

Mike Ritsema, president of i3 Technologies, a Microsoft partner based in Grand Rapids, Mich., also said Surface demand among commercial clients isn't high. Ritsema believes part of the issue for Surface is its operating systems. "We can't really recommend Windows 8 right now based on all the issues customers have been having with it," he said. "I hope Windows 8.1 will improve things, but right now it's not something that customers want, and for now it's not one of our best practices for clients."

Ritsema also said Surface tablets aren't viewed as business devices, either. "Can they make customers more productive and profitable and help them get things done fast? Maybe in a small number of instances, but in general, no," he said.

Bill Hair, president of My Computer Guy in Rockwall, Texas, said he is starting to see interest in Surface pick up, thanks to Microsoft's advertising push. So why, then, is Microsoft holding Surface back from general availability to partners? Hair said perhaps Microsoft is trying to mend fences with OEM partners that were upset by Microsoft's move into the tablet hardware market.

"Maybe they're limiting the availability to appease their hardware partners," Hair said. "Whatever the case, it's an odd strategy. And I think the longer Microsoft waits, the more of an uphill battle it will have in the Windows 8 tablet market competing against Lenovo, HP, Dell and others."

PUBLISHED JULY 15, 2013