Surface prohibition still frustrates Microsoft Australia channel

Microsoft announced in its latest performance update that the Pro 3 model released in June has rejuvenated Surface's fortunes, with tablet sales hitting the A$1 billion mark in just the latest quarter.

However, the limited channel means resellers can't share in this success, and their disappointment was borne out by a CRN online poll, with 81 percent of the 325 respondents saying Microsoft was wrong to restrict the Surface reseller channel.

"I think the restriction of the channel has negatively affected Microsoft's numbers on Surface sales," said Glenn Nanda, director of Open Systems Technology, an Adelaide Microsoft partner. "While this model has worked for Apple, it hasn’t worked for Microsoft."

Nanda said that Apple is a "lifestyle brand", while Microsoft doesn't have the same cachet. "Apple's branding and followers will seek out the product however they can access it. Microsoft's reasoning to restrict access to number of select partners doesn't make a lot of sense."

OST refers so many budding Surface customers to retailers that "JB Hi-Fi and Myer should give us commission", joked Nanda.

"One of our local government clients cleaned out a couple JB Hi-Fi stores of their Surface stock recently," he said.

Sydney-based HubOne also refers Surface-seeking customers onto retail outlets currently, but founder and CTO Nick Beaugeard told CRN that this practice is under review.

"We 'shift' quite a lot of Surfaces – by sending our SMB clients to Harvey Norman or JB Hi-Fi," said Beaugeard. "It's such a fantastic product for our customers. [But] we may even be looking at selling a different tablet because of the restricted channel."

JB Hi-Fi's marketing director, Steve Browning, declined to reveal any figures around its Surface sales, claiming the data was "commercially sensitive".

"However, we have been delighted by the success of Surface 3," said Browning. "Sales are meeting our expectations [although] those expectations are ambitious."

For anyone scratching their head as to why Microsoft – a technology vendor with an unparalleled partner channel – would circumvent most of these resellers, theories abound.

There's suggestion that Microsoft doesn't want to sour relationships with its OEM partners, for which Microsoft's foray into hardware created a level of competition that didn’t previously exist.

It seems one of Microsoft's objective with Surface was to motivate these OEMs to innovate and improve Windows PC and tablet design.

During a panel discussion during World Partner Conference in May, Brendon Ford, chief operating officer of New Zealand-based partner Provoke, said: "After the Surface, we’re seeing great technology out of other OEM vendors."

A Microsoft Australia spokesperson told CRN this week that the vendor had sought to "expand commercial distribution for Surface in a thoughtful way".

He said that the "select ecosystem of established channel partners" was chosen on their ability to offer "Microsoft’s extended warranty and accidental damage" and value-add services like "asset tagging, custom imaging, on-site service and support and data protection".

Next: Authorised resellers seeing "explosive" demand