Has Microsoft Lost Faith In Digital Integrators?
At this year's Consumer Electronics Show in Las Vegas, several long-standing home integration partners complained that Microsoft has been conspicuously absent from their business planning process and has not provided them with market development funds or marching orders for selling systems based on its newly released Windows Vista Home Premium and Windows Vista Ultimate, which integrate the Media Center.
The signs at CES indicated to partners that Microsoft may have lost faith in the channel—or its product strategy—for pushing Media Center, and has decided to partner with top retailers to drive sales and services to the home.
"I don't think it was a slip. The budgeting disappeared," said one digital integrator as he looked out of the Las Vegas Convention Center onto Microsoft's Connected Home Pavilion, sponsored this year with Best Buy. "Last year there was no Best Buy. It was all about getting digital integrators. Best Buy is their channel now."
Partners acknowledge that they might be feeling the effects of the recent transition of responsibility for Windows Media Center to the Entertainment and Devices Division, led by the division president, Robbie Bach. But they are discouraged that Microsoft's absence comes as Vista Home Premium and Vista Ultimate hit the market last month.
"It is looking more and more that way, but I can't say with 100 percent certainty that Microsoft has abandoned integrators," said David Josephson, CEO of New York-based GVP.DSJ.
The GVP executive said Microsoft, Redmond, Wash., is taking a big risk alienating digital integrators, especially as Apple is gearing up to release a home server. "Everybody is talking Apple, Apple TV, saying that it works."
Observers say Microsoft is experimenting with other channels and products for delivering digital media to the home, such as Xbox. But it is beginning to drive digital integration efforts under the leadership of Todd Rutherford, home control program manager in the eHome division, Joe Belfiore, corporate vice president, entertainment and devices in the eHome division, and, on the OEM side, John Ball.
Bill Booth, director of strategic relationships at NASBA, an association of channel integrators that is funded by Microsoft, claims that in recent weeks Microsoft's top brass has decided to fund a bigger push into the digital integration channel.
"It's a fair statement that we haven't heard much leadership from Microsoft, but that has changed at high levels. I think in the near future, you'll start seeing resources and technology road maps and partnering benefits you haven't seen before," Booth said. "There will be a bigger commitment to help digital home integrators succeed."
Booth said adoption of Media Center and IP solutions in the home "is stalled horribly by channel dysfunction" and that all CE vendors should invest more in IT VARs to bring convergence to the home. Microsoft, he said, plans to recruit digital integrators and system builders in its effort to gain share in the home entertainment market.
According to sources, what is most significant is that Microsoft is preparing to extend authorization for CableCard licenses to a broad spectrum of partners. This will ensure that many partners can deploy Vista systems with support for high-definition TV and video streams through the cable box.
On the OEM side, on Jan. 30 Microsoft launched four new promotions on Vista and Office that will enable system builders to add value to and differentiate new PCs from offerings from large OEMs such as Hewlett-Packard and Dell.
Three of the promotions, which are open only to local system builders, are aimed at selling Vista Home Premium, Vista Ultimate and Vista Business PCs, said Ball, general manager of U.S. local OEM business for Microsoft.