New Surface, same complaints from Microsoft's Aussie channel

The launch of Microsoft’s new Surface 3 has been accompanied by renewed calls from the Australian channel to open up sales to more partners.

While the new Surface 3 is generating interest for its cheaper $699 selling price, various resellers remain frustrated about not being able to sell the device, especially the more expensive, enterprise-focused Surface Pro 3.

Praised by many members of the channel, the Surface Pro 3 has generated plenty of interest, with CompNow and Ethan Group the latest to join the exclusive club of Authorised Surface Resellers in Australia.

However, those left out in the cold are not so happy. CRN has spoken to several resellers whose feedback ranged from disappointment to anger over the restricted policy.

While several say they view the Surface 3 as a consumer device and aren’t interested in selling it, many are still very interested in offering the Surface Pro 3, which runs Intel Core CPUs instead of the Atom chip.

This includes HubOne’s Nick Beaugeard, who said the Surface Pro 3 would be perfect for his business, which sells Office 365 to accounting customers.

Beaugeard holds the Surface in such high regard that he decided not to resell another vendors’ tablet. Instead, he has been sending customers to JB Hi-Fi and Harvey Norman to buy it.

“That’s an area of our business we haven’t grown or invested or looked at. We’ve kind of given that away and that’s a real shame because we’re in the business of doing end to end solutions for our customers.”

Ideally, he said he’d like to offer a Surface with a subscription for accounting firms.

Also disappointed is Dennis Evans, owner of Dennis' Computers and Backup Service in Queensland, who has just put in place a BYOD program for a school, for which he said the Surface would have been “perfect”.

Evans said he’s made several complaints about the Surface channel program. “It’s not open to us, I’ve asked."

Evans is particularly frustrated given his decades of involvement in the Microsoft channel. “We opened in 1996. That’s 19 years we’ve been a Microsoft partner at various levels. I think it’s really a smack in the face to launch a product and not offer it to resellers that have looked after them.”

One reseller told CRN the frustration has led to it pursuing new revenue sources as a Google Apps reseller.

Greg Williams has a 30-year history in the channel as owner of South Australia’s Lincoln Computer Centre.

“Microsoft have built their business on the back of resellers,” he said .”When we finally get to a point where they’ve got a hardware device, they have not allowed us to participate.

"I would have though the volume they could get through Ingram let alone the other disites would be significant. So it’s unexplained why resellers can’t sell it.”

Williams is much happier to talk about Google Apps, where his company is investing energy in developing a services revenue stream. Mac servicing is another priority.

Williams argued the Surface was just one example where small independent resellers, not part of larger buying groups, are finding it more difficult to source hardware.

It’s a problem not confined to the Surface or Microsoft channel, Williams argued.

“The reseller channel is doomed. In the end it will be big stores with lots of stock, and small nimble service based business like us.”

While Ian Hurley, national sales manager at VTS IT Group, was making a “song and dance” about the issue six months ago, he now sees it in a different light.

VTS IT no longer focuses on hardware sales as it score business but instead is running some “pretty big initiatives” with Microsoft around the Surface, despite the firm not supplying the hardware directly.

He said Microsoft had listened to his feedback, eventually offering an opportunity to become a Surface provider – ultimately the provider turned the opportunity down as the company was no longer focussing on hardware sales as its core business.

“Based on the changes in our business it was wrong to take them up on it, because the kpis for a Surface reseller don’t line up with our core business focus [which is services].”

Still, he said he understands the frustration for hardware sellers - especially now that the Surface Pro 3 is available, which he describes as a “fantastic” device.

“I’m seeing CEOs and general managers and senior board executives on large companies saying I want to replace my desktop with a Surface Pro fleet. I now see the frustration if I was still in the situation [of selling hardware].”

Asked about these frustrations, a Microsoft spokesperson stated: “We are constantly evaluating our market place to ensure we are meeting the needs of our customers.  We have nothing further to share at this time.”