Microsoft, don’t forget us: channel

Australian resellers have told CRN that Microsoft needs the channel to make its Nokia acquisition a success.

Microsoft bought the phone maker for $8 billion earlier this week, giving it an Apple-like grasp over both operating system and hardware.

But Microsoft should try to differentiate its approach and not duplicate Apple's strategy, while learning from its mistakes with Surface, resellers have said.

Brendan Redpath, managing director of Melbourne-based Source Central Partners, told CRN: "If they intend to differentiate, they can't do what they have done with the Surface, by limiting the reseller channels access to the product.

"They will need to push the product through the channel as it will enable them with a go-to-market that Apple does not supply to its channel: which is B2B sales of mobile devices."

Ian Hurley, business development manager at Toowoomba-based Downs Micro Systems, agreed that Microsoft needs the channel to succeed with its Nokia acquisition, and the channel needs Microsoft.

"While it was nice to put the Surface out there, it lost traction because they did it themselves. There is a massive business market that is not direct and they have focused on the consumer.

"Microsoft may have the consumer on Xbox, but their market dominance is in business and that market is not going direct," added Hurley.

Downs Micro Systems is also an Apple authorised service provider, but the company pushes Windows phones because Hurley "was that impressed" with the Microsoft-Nokia combination.

"I use the Windows Lumia myself and it is the first time in the history of the smartphone, for me at least, that I have not been looking around for the next phone option."

Hurley does not want to see Microsoft ignore the channel. He told CRN: "We are a Nokia reseller by choice. We want them to stay part of the channel and not be sold direct like the [Surface] tablets. It would be a blow for us if we saw it disappear.

"A lot of our Nokia purchases are via the carrier. If they pulled the Nokia away from that, they would see a reduction in sales."

Phil Patelis, director at XCentral in the Sydney suburb of Chatswood, put it plainly: "Microsoft has a loyal channel already and our opinion is that the demand will be there from the channel to sell these devices.

"We have heard rumours that the Surface Pro will start coming through the channel soon. Our hope would be that [Nokia phones] would also come through the channel.

"Microsoft already sells Office direct, for example, but our customers continue to buy from us. We want to be able to provide total sourcing for our customers, so if Microsoft adopts the channel model allowing us to resell the devices and make a margin at the same time, we will be happy."

Patelis said reselling a smartphone wouldn’t be a route to success on its own, but there were major wins by combining a phone as part of a wider package spanning the ecosystem of PCs, tablets, software and services.

"Few people will do business dealing hardware alone. You go into business to sell your services. The phone is a complementary device to that ecosystem."

Making a bundle

David Markus, managing director of Melbourne-based Combo, expected Microsoft to sell bundles via the channel; he cited changes to its finance packages as evidence of this.

"Microsoft has revamped Microsoft Finance to allow finance packages down to $1,000, which sounds to me like it is planning to do bundles with phones."

For Markus, the addition of a phone could signal a winning offer for business customers.

"When you are converting a business to Windows 8 as a platform, with a new handset that works with Office 365, that bundle is a compelling package as a reseller," said Markus.

"If Microsoft can do Office 365, a tablet, a PC and a phone on a bundle for a monthly fee, that will be a winning formula."

Emma Trueman, marketing manager of North Sydney-based Hands-on Systems, agreed: "With Microsoft now having greater control over smartphones, the experience and benefits that Microsoft technologies can provide will be even greater, and enabling the channel to sell both hardware and smartphone software provides Microsoft partners like us with greater opportunities to provide value to customers."

Daniel Lage, national purchasing manager at Sydney's ASI Solutions, told CRN: "Microsoft have the channel model down pat. If they can figure out the channel model for the Surface – if they can do that right – they can get the Nokia deal right."

He was wary of Microsoft choosing to go direct or via a limited retail channel as it has with the Surface,

"Schools can buy the Surface RT on the website – that’s the beginning of it. We've lost deals because we had plenty of end users in education who wanted quotes on Surface RTs but we couldn't do the deal," said Lage.

He would like to see Microsoft develop a personal development system around its smartphones and tablets, so resellers could offer education services to customers.