In-Depth
What Microsoft Partners Think of Windows Phone: The Survey Results
A visitor to the Los Angeles Convention Center in July could have been forgiven for thinking that the Windows Phone share of the smartphone market was pretty large.
In every direction at the Microsoft Worldwide Partner Conference (WPC), there was someone looking at a small screen filled with the signature Windows Phone 7 tiles and hubs.
An important leg of Microsoft's strategy for breaking out of its tiny bubble of market share among smartphone users is to get its partners excited about the possibilities for devices running the OS. Microsoft's hope is that those partners, as trusted advisors to their customers, will help spread the OS into the broader market. In other words, fill the partner bubble with Windows Phones and watch the devices spread into the connected bubble of companies that each of Microsoft's 640,000 partners touches.
Early indications, from anecdotal evidence and from an informal survey of Redmond Channel Partner readers, suggest that partners are adopting Microsoft's devices at a much greater rate than the overall smartphone user base. But will their customers follow them?
The Overall Market
Against the backdrop of the overall smartphone market, the performance of Windows Phone looks bleak -- by some measures bleaker every day. While there were Windows Phones all over the WPC, inside the Staples Center where the keynotes took place, Microsoft CEO Steve Ballmer offered a dose of external reality with his laugh line: "Phone: We've gone from very small to very small, but it's been a heck of a year."
A widely held view of the smartphone market is that it's a two-horse race between the Apple iPhone and Google Android-based devices. That conventional wisdom considers Windows Phone, BlackBerry and others as hopelessly far behind.
On the surface, the numbers support that view. Gartner Inc. in August released its worldwide sales estimates for smartphones in the second quarter of 2011. The overall market was up 74 percent, year-over-year. All Android-based devices had 43 percent of the market. Apple iPhones had 18 percent. Nokia Symbian was at 22 percent, down from 40 percent a year earlier -- on its way to oblivion due to the company's plan to switch to Windows Phone as its flagship OS. Research In Motion Ltd. (RIM) BlackBerry devices were down to 12 percent from 19 percent the year before. Microsoft mobile OSes? At just 1.6 percent versus the nearly 5 percent the year before. A proprietary OS, Samsung Bada, had even passed Microsoft at 1.9 percent down in the noise level at the bottom of the market.
Nielsen, which looks at what consumers own rather than sales figures, released data in September showing that of U.S. smartphone users, 40 percent were on Android, 28 percent were on iPhones, 19 percent were on BlackBerry, 7 percent were on Windows Mobile and 1 percent were on Windows Phone.
Asking about future purchase plans, Nielsen's data shows Microsoft has a long way to go. "Among those who say they are likely to get a new smartphone in the next year, approximately one-third say they want their next smartphone to be an iPhone and one-third say they want an Android device," Don Kellogg, director of telecom research and insights for Nielsen, wrote in a blog entry.
Compared to its market share, though, Nielsen's findings for purchase plans were fairly promising for Windows Phone 7. In a table on likely smartphone upgrades, 7 percent of innovators, 6 percent of early adopters, 4 percent of early majority, 6 percent of late majority and 4 percent of late adopters reported that Windows Phone 7 was their "next desired operating system." For comparison, RIM BlackBerry did slightly better among each of the demographics, but the platforms are coming from opposite positions (BlackBerry headed down, Windows Phone headed up).
Digging deeper into buying-intention surveys, another market research firm finds nuggets of good news for Windows Phone, as well. Ross Rubin, executive director of industry analysis at NPD Group Inc., wrote on his CNET blog that in recent NPD surveys, "Eleven percent of those planning to purchase a smartphone said they are most interested in Windows Phone 7. If they follow through, that could result in a jump in Windows Phone 7's market share."
Rubin also noted that Windows Phone is firmly establishing itself in the decision process. "The survey also found 44 percent of those who planned to purchase a smartphone in the next six months had Windows Phone 7 in their consideration set, which is markedly larger than the 33 [percent] who say that they were considering a BlackBerry," he wrote.
Microsoft's Strategy
It's not just Microsoft executives, though, who contend that Redmond will be a major player in the smartphone market despite the apparently insurmountable lead of Apple Inc. and Google Inc. In April, Gartner issued a forecast that Microsoft will have 19.5 percent of the smartphone market in 2015. Two months later, IDC projected Microsoft's 2015 market share at 20.3 percent. (Microsoft, of course, pegs its own prospects higher. Achim Berg, head of Windows Phone marketing, said at the IFA consumer electronics show in Berlin in September that the Gartner and IDC forecasts were conservative.)
Getting partners to use the phone is one -- and by no means the most important -- of several strategies Microsoft is pursuing to radically increase Windows Phone market share.
First, Microsoft has been working diligently to improve the fledgling mobile OS, evident in the "Mango" update of Windows Phone that came out in late September. Mango includes more than 500 new features, some bringing parity on certain functions to Android and iOS, others delivering innovative capabilities or improving on the existing advantages of Windows Phone.
Simultaneously, Microsoft has been working with OEMs on new devices that leverage the software improvements. Fujitsu and HTC both already unveiled new handsets that will ship with Mango, including the waterproof and brightly colored Fujitsu IS12T and the HTC Titan, which boasts a gigantic 4.7-inch display.
However, the most important partnership -- and the one upon which the bullish IDC and Gartner forecasts appear to rest -- is with Nokia. Under the leadership of former Microsoft executive Stephen Elop, Nokia has switched from Symbian to Windows Phone as its device OS. Nokia plans to release Mango-based phones this fall. If the company can switch gears from one OS to the other without losing too much more of its global market share, Windows Phone will get a huge boost.
Other parts of Microsoft's strategy include broad market advertising, efforts to attract more developers to build on the 30,000-app Windows Phone Marketplace and a major investment in training mobile carrier store employees on Windows Phone.
Not quite rising to the level of strategy, but important nonetheless, is counting on competitors to slip. If Apple and Google continue to execute brilliantly, Microsoft's best-laid plans will come to nothing. But cracks are appearing. Steve Jobs' decision to step down as CEO of Apple leaves huge questions about whether Apple can continue to deliver pitch-perfect consumer devices without his extremely close involvement. Google, meanwhile, has gone into direct competition with its ecosystem partners with the pending acquisition of Motorola Mobility. Google executives have downplayed the potential conflict, but already a senior executive at Android handset-maker Acer Inc., Walter Deppeler, told Reuters at IFA, "It was a good gift to Microsoft."
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Partner Adoption
Among all those initiatives, encouraging partner adoption is clearly important to Microsoft. Redmond put money behind its intention to create partner ambassadors for its platform in July with the launch of a discount program for partners with any competency in the Microsoft Partner Network (MPN). Under the program, partners are eligible for offers for unlocked Windows Phone devices and savings on voice and data service plans.
For a snapshot of partner adoption of and attitudes about Windows Phone and other smartphone platforms, Redmond Channel Partner fielded an informal reader survey in July and August.
Predictably, the 54 partner respondents -- ranging from Action Pack subscribers to partners with gold competencies -- were much more heavily invested in Microsoft's mobile platforms than the public at large.
Half (51 percent) were using some form of Windows on their phones. Windows Phone 7 was the leading platform at 36 percent, Windows Mobile came in second at 11 percent and the beta version of Windows Phone "Mango" was third with 4 percent.
With the 36 percent on Windows Phone 7 making up the leading single platform, Google Android was next at 25 percent, the Apple iPhone was third at 13 percent and RIM BlackBerry came in at 8 percent.
Windows Phone/Mobile users who responded to the survey were likely the most committed to Microsoft platforms within their companies, and their usage didn't always translate into company-wide use of Microsoft-based smartphones. When asked what smartphone platform most of their coworkers used, Android was first at 26 percent, the iPhone was second at 24 percent, the Windows Phone/Mobile platform was third at 17 percent and BlackBerry was fourth at 9 percent.
Some Partners Are Fans
According to verbatim comments in the RCP survey, the Windows Phone platform has its converts among partners, who are looking at it both from the perspective of their own needs and the needs of their customers.
Some find a natural fit with Windows Phone due to their business affinity with Microsoft products. Said one Action Pack subscriber to explain why he recommends Windows Phone 7 to customers, "All of our customers run pure Microsoft solutions." Another partner explained, "We feel Windows [Phone] 7 is the easiest platform to use." A third cited the "ease of use and business focus" of Windows Phone 7. A gold competency partner in Oregon summed up the fit and momentum this way: "Windows [Phone] 7 because it's much improved, Microsoft-developed and moving to Mango."
A silver competency partner in California found value despite Microsoft's timing. "Windows Phone 7 is late to the mobile platforms, but has great potential for integration," he said. Several partners cited the smartphones' tight integration with Exchange, SharePoint, Lync, Outlook and Office 365.
Diving deeper into the Microsoft stack advantages, a Microsoft Small Business Specialist in Oregon said, "Windows Mobile/Windows Phone 7 is the most compatible platform with network-integration needs. Windows Phone 7 has the ability to sync multiple Exchange accounts. It doesn't require additional application layers. It doesn't expose individuals and companies to a certain vendor's poor privacy practices and licensing that indicates they own your data. This also reduces support costs."
After experimenting with different smartphone platforms, some partners are finding Windows Phone superior from a usage standpoint. "Windows 7 optimizes information exchange and [let's you] stay current when mobile regardless of business or private use. The new UI concept and live tiles are awesome once you get used to them. The ease of integration into social media apps like Facebook and Windows Live is great," a U.S.-based Small Business Specialist said.
Another Small Business Specialist had a Droid and an iPhone before turning to a Windows Phone device. "I didn't want a phone to be cool. I wanted one to get out of my way and let me do my work. Windows Phone 7 does that," the specialist said. "Also, I have 15 e-mail inboxes I need to manage. That just doesn't work on [an Android] or iPhone."
Several partners reported plans to go with Windows Phone because they see it as the future. "I'm looking forward to growing with Windows Phone 7," said one. Another said he'd recommend the platform to customers, but he'd tell them to "ideally, wait for Mango."
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Some Partners Say "Show Me"
Not all Microsoft partners who have taken a good look at Microsoft's platform have come away converted. "People I talk to just do not believe that Microsoft is a phone company," noted one gold competency partner from Canada. Said a California-based Small Business Specialist, "My Windows Mobile 6 phone is getting old. I've held off hoping that Windows Phone 7/Mango would do what's needed, but they don't. I'll likely replace the phone with Android soon."
Microsoft's launch of the platform last October was not only late, but it has been uneven. A failure to steadily build market share, convert its Windows Mobile user base and excite carriers has frustrated some partners. "[I'd recommend] Windows Phone 7 [to customers], if we ever get any choices in phones. Verizon has one choice, six months late. We shouldn't need to change carriers to have choice," said an Action Pack subscriber from California. "I'm starting to lean toward Android. It's unbelievable a company the size of Microsoft can't launch Windows Phone 7 any better than they have."
Another Action Pack subscriber admitted reluctance to push Microsoft's platform. "As a Microsoft partner, I would love to recommend Windows Phone, but the app pool is too small and not varied enough. The devices are also somewhat limited in options, and there are no real glitzy phones for the execs," the subscriber said.
Android and iOS have plenty of fans among Microsoft partners. On why Android was his recommendation to customers, one partner said simply, "Droid, cost!!!" Explaining his recommendation of Android to customers, another said, "The majority of popular apps are available, and there are a large variety of devices to meet the company's and individual's needs."
Taking up the theme of Microsoft's tardiness in the market, the partner planning to switch from Windows Mobile to Android explained why he recommends Android to his customers: "Microsoft has not kept up and Windows Phone 7 'Mango' is too little too late. Application developers are concentrating on iPhone and Android. Many apps are not available on Windows Phone 7." While that California-based partner also felt that iPhone is too limiting because of its lack of Flash support, other partners are recommending Apple's platform to customers.
"[Apple's] hardware is so much more predictable than Android. Also, the iPhone has good battery life, you have the flexibility of iPhone or iPad -- plus users love them," said a silver competency partner in the United Kingdom.
One of the key selling points for Windows Phone for many partners is a selling point for the iPhone for an Action Pack subscriber in Massachusetts: "Ease of Exchange integration and functionality."
The Apple App Store is an overwhelming advantage for the customers of another Small Business Specialist. "I recommend iPhone because of the available applications selection. This is customer driven for the most part," the specialist said.
RIM may be losing market share, but it also has some fans among the Microsoft partner community. "I used to love BlackBerry and hope they get it together," said one Action Pack subscriber and Android user.
Will Customers Follow?
Partners are coming around to the platform faster than the overall market. Whether those partners who are interested in pulling customers along to the Windows Phone platform will succeed, though, is an open question. For some partners, the platform decision already comes down to market share. The same basic economics that drove solution providers to the Microsoft platform on desktops and servers -- market dominance and resulting customer demand -- are driving them away from Microsoft on the smartphone.
A Small Business Specialist reported recommending the iPhone "due to the popularity and the market share." Another development partner put it equally bluntly: "With Android and iOS now controlling [a large majority] of the world market, I'm devoting all my resources to [Android] and iOS development."
Part of the consumerization of IT also means that a partner's recommendation will carry less weight on the smartphone side than it did with PC or server purchases. "I think for many clients, the days of forcing staff to use a particular mobile platform are over. Users want to use their own kit, so when developing you can target the most popular one or two platforms and do a mobile Web app for the rest," said the U.K.-based silver competency partner.
Many partners may be fans of Microsoft's efforts, but ultimately they realize that Microsoft has to move the market itself before they can have a meaningful impact on customers. "How many people, other than Microsoft representatives, have you had spontaneously talk about how great some feature of Windows Phone 7 is? Or some app?" asked one Small Business Specialist. "In my experience: zero. iPhone: several. Android: many."
As another gold competency partner and Windows Phone 7 user put it, "The Mango release will be important, but Microsoft also needs to go a long way to generate 'buzz' about the benefits of its platform. The efforts to date have been lackluster insofar as showing the value of the platform to non-technical users."
By all appearances, Microsoft has created a strong community of Windows Phone enthusiasts within the bubble of the MPN. Whether those partners can spread their enthusiasm outward to their customers seems to depend largely on how successful -- and lucky -- Microsoft is in building broad consumer demand for Windows Phone. As Microsoft executives surely understand, the investment in partners will only pay off if Microsoft can show the world that the smartphone platform market has more competitors than just Apple and Google.
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