Windows of opportunity

Despite grim adoption reports and some negative analyst predictions for several of its key products, Microsoft is striking a chord with channel players and its 2013 line-up.

The slower than expected uptake of Windows 8 at enterprise and consumer levels plus doubts about the competitiveness of Windows Surface tablet and the impact of its decision to lend Dell $US2 billion for its move to privatisation seem to have hardly dented the enthusiasm of local industry experts who claim its new bunch of solutions offer big opportunities for the channel.

Let’s take stock: Within the last 12 months, the company has launched its Surface tablet, Windows 8 and Windows 8 Pro operating systems, the Office 365 Open program and Word 2013. It also recently unveiled the Surface tablet with Windows 8 Pro.

Our experts, almost to a person, claim Microsoft’s evolved strategy is to capitalise on the requirement to refresh and broaden antiquated ways of doing business in advanced and emerging technologies, as well as to focus on software and services instead of just PCs. They said its approach has resulted in a stronger uptake of its products than 18 months ago.

The only question some posed was the lack of a definitive channel platform while underscoring the need for channel players to understand the new solutions and adapt to the changing nature of Microsoft’s push.

Strong contender

Distribution Central managing director, Nick Verykios, said Microsoft’s move had made it a strong contender in markets that it was previously weak in.

“Where Microsoft was once ‘soft’ in any of the advanced and emerging technologies that are associated with strategies around unified communications, Cloud, or Big Data storage, they are becoming a more serious player,” he said.

But Verykios has noticed an absence of Microsoft’s strategic work in the channel around technology it's promoting. “I guess that’s yet to come or in play. It won’t be ignored.”

Verykios also pointed to Microsoft’s $US2 billion loan to Dell and said the venture was a smart move on Microsoft’s part: “Keeping a company like Dell investing while they use Microsoft’s platform will be a good return on their investment.”

NewLease CEO, Doug Tutus, claimed the investment will not impact Microsoft’s channel but, instead, provides opportunities from the Dell end. “I anticipate Dell will transform itself into a datacentre provider with services attached to it, rather than just depending on their PCs, widening the scope for the channel,” he said.

Thomas Duryea NSW state manager, Luke McLean, said the move will impact on Microsoft’s other OEM partners. “They will be saying ‘Microsoft is investing in one of our competitors what does that mean?’ $2 billion is a lot of money and they have got a lot of publicity,” he said.

According to Channel Dynamics co-founder and director, Cam Wayland, Microsoft is more focused on the consumer at the moment, with the Surface tablet going direct to the consumer and cutting out the channel.

“Consumer habits are growing in sophistication and their buying habits are changing; they’re increasingly moving to an online platform and having direct relations with key vendors,” he said. Ensyst general manager, Nick Sone, said even though the Surface tablet is marketed directly to consumers, it has profited the channel by further increasing the focus on tablets.

“It has created massive demand in tablets and, as resellers, we have to figure out how to position our other branded Windows 8 devices in the market,” he said.

Slow adoption

Ovum consumer IT and integrated media principal analyst, Richard Edwards, said, “Enterprises are rolling out Windows 7 fairly aggressively, and will continue to do so,” he said. “Those that want to have an integrated tablet experience will turn to Windows 8.”

Sone claimed the adoption of Windows 8 was initially slow, but is picking up as more devices are released with the OS. “Am I seeing enterprises doing mass deployments with Windows 8? Slowly. That did not happen as quickly as expected but it’s still fairly new,” he said.

According to Tutus, the reason behind the slow adoption is the lack of necessity for consumers to upgrade operating systems.

McLean said the release of Windows 8 Pro solved the issues its clients were having with BYOD and mobility strategies.

“Many employees were bringing their own devices to work and clients were struggling with how to manage that,” he said. “They want to give end users flexibility but it doesn’t fit in to their existing processes and technologies.

”Windows 8 Pro has that tablet form factor that can be managed the same way as other corporate assets.”

In the case of Office 365, Microsoft is pushing its concept of the connected enterprise bundling messaging, unified communications, collaboration and documents into an online productivity suite to take direct aim at Google, IDC Australia senior market analyst, Shayum Rahim, said.

Sone claimed Office 365 has been a positive move for Ensyst as the Cloud is an important tool for integrators and resellers.

But Rahim claimed the subscription model of Office 365 has been a bone of contention among Microsoft’s partner community as it directly bills customers for the service, cutting the partner out of any financial interaction. The Office 365 Open program allows partners to resell office 365 at a higher margin, as well as bundle in value-added services.

Channel challenges

Microsoft’s relationship with the channel is undergoing significant change, according to Ovum’s Richard Edwards, and the channel has to find some way of adding value to its ongoing subscriptions of an end user organisation.

“As Microsoft pushes from a software license sales model to a subscription-based model, it is restructuring its financial model to cope but many of the channel partners have to do it too,” he said.

Many of the experts said it was vital channel players familiarised themselves with the changes quickly or be left behind.

“If you look at the impact Cloud is having on traditional business models, we’re only in the infancy of that. For most businesses, if they are not looking at some component of Cloud, they aren’t going to scale to the same levels as they are used to,” NewLease’s Doug Tutus said.

Distribution Central’s Nick Verykios claimed resellers who are not traditionally Microsoft resellers have to become aware of the opportunities available. “They have to start talking to the vendors they represent and get involved. The opportunities for all IT avenues are indirect. They have to work out their role in the bizarre triangle,” he said.

Ensyst's Nick Sone advised resellers to understand their customer, know what they are trying to achieve, and offer the right solutions tailored to their needs. The majority of experts said Microsoft is creating plenty of avenues in the market that resellers can explore and make a play in.