Microsoft channel partners want to sell the Surface 2, but they've been left on the sidelines once again.
On Monday, Microsoft announced new Surface 2 tablets that run faster, have longer battery life and support new business-friendly accessories such as a docking station. But despite a stronger appeal to the enterprise, Microsoft said Monday it has no new policy when it comes to playing ball with resellers that have been champing at the bit to sell Surface tablets since they were released last October.
Sources close to Microsoft said, however, an announcement regarding an update to its channel program is coming within weeks. No further details were provided. For partners, an update to its Surface channel policy couldn't come soon enough.
"Microsoft needs to find better ways to engage us," said Majdi "Mike" Daher, co-founder and CEO of Denali Advanced Integration of Redmond, Wash. "We continue to be challenged by not having a channel advocate. We are seeing a lot of changes at Microsoft lately, but the one thing that doesn't change is its channel partnership with tablets. What we are saying is 'come talk to us.'"
Todd Swank, senior director of product marketing at Equus Computer Systems, a Microsoft partner based in Minnetonka, Minn., said he hopes Microsoft will announce a new channel strategy following the Surface 2 unveiling. "That's still the biggest issue. Microsoft has thousands and thousands of partners out there ready to sell these tablets," he said. "The channel is one of the biggest advantages Microsoft has over Google and Apple, and they're not using it."
Since the Surface went on sale in October 2012, Microsoft has only authorized 10 large account reseller (LAR) partners to actually sell the devices. Adding insult to injury, Microsoft COO Kevin Turner told channel solution providers in July to bring customers to Microsoft retail stores, where Surface Tablets are sold direct.
Unlike its first-generation of failed Surface tablets that were marketed to consumers and suffered from poor battery life and performance, Microsoft's Surface 2 and Surface Pro 2 have a stronger business appeal. Both support a new $200 docking station and benefit from significantly improved battery life, faster performance and expanded Type Covers selection.
Swank said he likes the improved battery life and performance for Surface Pro 2, but said Microsoft still hasn't addressed what he believes is the biggest issue for the original Surface Pro.
"The biggest problem for Surface Pro, other than the fact that partners couldn't sell it, was the price point," Swank said. "Surface Pro 2 looks nice, but it's still very expensive. And it's more expensive than a lot of competing devices." The Surface Pro 2 is priced at $900, and the Surface 2 tablet starts at $450.
NEXT: VARs Cautiously Optimistic On Surface Success, Potential For Channel To SellEquus' Swank and other partners said Microsoft is shooting itself in the foot if it wants a toehold in the enterprise. "It needs to work with solution providers," Denali's Daher said.
"Partners are the ones that talk to customers," Daher said. "If Microsoft can't be bothered with the channel, that's to their own detriment. Apple and Samsung welcome the fact they don't have Microsoft to compete with in the channel." By locking partners out of a Surface 2 program, Microsoft has shut itself out of the conversation with customers, he said.
The $1 million question is whether or not the majority of Microsoft partners will get a chance to add Surface tablets and accessories to their catalog, and, if so, when. "I'm not holding my breath," said Bob Nitrio, president of Ranvest Associates, Sacramento, Calif. A lack of access to Surface has been "a really big bur under the saddle," Nitrio said.
VARs are cautiously optimistic on the Surface 2's success. In July, Microsoft took a $900 million charge in its fiscal fourth quarter from what it described as "inventory adjustments" for a backlog of unsold Surface RT tablets. The original Surface RT tablet is considered among industry pundits as one of the company's biggest product failures.
"People take for granted how hard it is to succeed in this market and how easy it would be to quit," Daher said. "Microsoft is proving it's willing to work hard at this market. That means a lot to enterprise buyers looking for a longtime commitment."
Daher said the Surface 2 fits nicely into the larger Microsoft ecosystem and shows a clear path on how the tablet might someday best the iPad in the workplace and prove to be a viable alternative to a laptop.
"I'm not saying I'm sold on Surface or the market is ready to shift," Daher said. "I'm just saying Microsoft's Surface 2 is promising."
CRN Managing Editor Robert Wright contributed to this report.
PUBLISHED SEPT. 23, 2013