News

Microsoft Surface Sales Expanded to Channel in 17 Countries

• By Scott Bekker
• August 15, 2013

Microsoft on Thursday pressed ahead with efforts to expand sales of its struggling Microsoft Surface PC hardware line through the channel.

Ever since Microsoft launched the Surface RT on Oct. 26, the channel has been clamoring for the opportunity to sell that device and the Surface Pro, which launched Feb. 9. Microsoft, however, chose initially to sell the devices only in its limited number of Microsoft Stores and online, and later extended Surface sales to some major retail chains, such as Best Buy and Staples.

On July 1, Microsoft made one of its first big moves to broaden availability to more of the channel by naming three distributors and 10 authorized resellers who could resell the devices in the United States. On Thursday, Microsoft expanded that type of channel reach with similar arrangements in 17 additional geographies.

The new geographies are Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom.

As with the U.S. version of the program, Microsoft expects that authorized resellers will offer extended warranties and bring additional services, such as asset tagging, custom imaging, kitting, on-site service and support, device recycling, and data protection.

While Microsoft partners who were named distributors and authorized resellers for Surface were pleased with the status, there's still demand for broader involvement of solution providers and other types of partners in the program.

In a blog post Thursday announcing the additional geographies, Cyril Belikoff, director for Microsoft Surface, hinted that next steps might not just include other countries but also more types of partners in those countries.

"But we're not stopping here. We're committed to authorizing a select set of additional partners in these markets in the coming weeks," Belikoff wrote.

Expansion is in line with the recent recommendations of Forrester Research analyst Tirthankar Sen. Although Sen wrote in a July 31 blog post that Microsoft is probably doing the right thing in limiting channel availability, he also argued that the company will need to bring more of its channel to bear on Surface sales soon.

"Microsoft will eventually need to open the market to a larger base of partners, including its solution providers. This is critical for expanding geographic reach and targeting the enormous base of mid-market and SMBs while also driving increased value by bundling the Surface with business solutions," he wrote.

Microsoft took a $900 million charge against its fourth-quarter earnings due to excess inventory of the Surface RT -- an amount that is higher than the $853 million in total revenues for both the Surface RT and Surface Pro models to date. Microsoft and some of its senior officers are also facing a class-action lawsuit claiming that investors were misled about the company's problems with excess Surface inventory.