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Ingram Micro To Buy Odin Service Automation Platform

Ingram Micro is buying the Odin Service Automation platform from Parallels Holdings Ltd. in a deal announced Wednesday that will shake up the cloud services provider market.

Distribution giant Ingram Micro is one of the most important players in the emerging cloud services provider market, including Microsoft's Cloud Solution Provider (CSP) program. In Microsoft's strategic CSP model, Ingram is one of the handful of 2-Tier distributors that serve as intermediaries for cloud service subscriptions between Microsoft and thousands of Microsoft partner resellers in each geographic market.

With Odin, Parallels developed a cloud marketplace technology infrastructure that provides APIs and storefronts to enable the provisioning, billing and managing of hundreds of cloud products by individual distributors, telcos and cloud services providers. In Microsoft's CSP ecosystem, Odin, AppDirect and Ensim Corp. had emerged to fill this technology niche.

The move toward vertical integration by Ingram Micro raises the stakes for other distributors, such as other U.S. Microsoft CSP 2-Tier distributors AppRiver, Intermedia, SherWeb, Synnex Corp. and Tech Data.

Ingram Micro expects to retain about 500 Odin employees when the deal closes later this month, assuming it meets closing conditions. Ingram Micro plans to keep using the Odin brand and to run the business as its own division led by executive vice president Nimesh Dave.

With the Odin business sold, Parallels will restructure itself as three business units owned by Parallels Holdings Ltd -- Parallels, Plesk and Virtuozzo. Parallels will be the name for the cross-platform solutions business unit, Plesk is the business unit for Parallel's Web management solutions for small businesses and hosters, and Virtuozzo will be the name for the unit for the container virtualization technology.

Posted by Scott Bekker on December 02, 2015 at 12:36 PM0 comments

Top-Tier Office 365 Subscription Pricing Set at $420 per Year

The top-tier SKU of Office 365, which Microsoft executives have estimated will open up tens of billions of dollars in greenfield opportunities, will cost $420 per user per year when it goes on sale Dec. 1.

Microsoft released pricing Monday on Office 365 E5, which replaces E4 as the top suite, with significantly more capability and a price tag nearly 60 percent higher than E4 (see the chart below). The new E5 suite also costs 75 percent more than the Office 365 suite's workhorse enterprise SKU, E3. On a per-user per-month basis, E5 costs $35, E4 is $22 and E3 is $20. E4 will continue to be available until the end of Microsoft's fiscal year in June 2016.

[Click on image for larger view.] Source: Microsoft

With the Dec. 1 availability, Microsoft squeaks by on a promise to offer E5 in calendar year 2015. Unveiled at the Microsoft Worldwide Partner Conference in July, E5 adds cloud-based calling and conferencing, business analytics and advanced security capabilities to Office 365.

"We think what that does is more than double the available market for Office 365," said John Case, corporate vice president of Office Marketing for Microsoft, in an interview at WPC. "The number that I put on the slide [in a WPC keynote] was a $56 billion addressable market. We think we're less than half that today with services like e-mail and the Office client."

Microsoft CEO Satya Nadella also used a $50-billion-plus figure in a call with financial analysts in describing the E5 opportunity a week later.

Case at the time promised E5's pricing would be aggressive relative to individual components. He cited Power BI as a $10 per user per month product, while arguing that Advanced Threat Protection, Lockbox and Web conferencing will compete with products that other vendors charge a lot of money for.

"When you add all that up, we'll be able to give a significant advantage to those that buy from one vendor for something like E5," Case said in the interview.

Exclusive to E5 among the Office 365 subscriptions are Equivio Analytics for eDiscovery, secure attachments and URLs, access control, Power BI Pro, Delve Analytics, and, via Skype for Business, both Cloud PBX and PSTN Conferencing.

A new feature set that E5 and E3 now share is archiving, rights management, data loss prevention and encryption. Meanwhile, E1, E3 and E5 all now have several new social and collaborative features, including Skype Meeting Broadcast, which allows virtual meetings via browsers and devices for up to 10,000 attendees.

Microsoft is also now offering PSTN calling as an enterprise plan add-on for $12 per user per month for domestic-only calling plans or $24 per user per month for domestic plus international calling.

Posted by Scott Bekker on November 30, 2015 at 1:53 PM0 comments

Gartner: Windows 10 Migration on Track To Be Fastest Yet

All that consumer activity around free upgrades will prime the pump for Windows 10 to become the most widely installed version of Windows ever, according to analysts at Gartner.

"In the consumer market, a free upgrade coupled with broad legacy device support and automatic over-the-air upgrades ensures that there will be tens of millions of users familiar with the operating system (OS) before the end of 2015," said Steve Kleynhans, research vice president at Gartner, in a statement Monday. "For enterprises, we expect that implementation will be significantly more rapid than that seen with Windows 7 six years ago."

Gartner's current prediction is that many enterprises will begin pilots in the first half of 2016 and half of enterprises will start their Windows 10 deployments by January 2017, with a goal of completing migrations in 2019, just ahead of the January 2020 end of extended support for Windows 7.

In a separate endpoint prediction, Gartner said touch will become much more price-competitive in the second half of 2016, and touchscreens will ship on a third of all notebooks by 2018.

Platform tracker StatCounter's Global Stats in September reported that in its first full month on the market Windows 10 had jumped out to a much faster start than Windows 8 had and a slightly faster start than Windows 7 had.

Windows 10 Windows 8 Windows 7
Worldwide 4.88% 1% 4.05%
United States 5.64% 1.16% 4.3%
United Kingdom 8.45% 1.17% 4.34%

Internet usage share for first calendar month since launch. (Source: StatCounter)

Posted by Scott Bekker on November 23, 2015 at 10:49 AM0 comments

Microsoft CFO: Undersupply, not Oversupply, the Concern for Surface Book

Microsoft CFO Amy Hood is not worried about "cannon balling" into the high-end laptop market. In fact, she's concerned about the reverse -- of not having enough supply.

Hood, executive vice president and chief financial officer, was responding to a question from Brent Thill, managing director at UBS, during the UBS Global Technology Conference in San Francisco. Thill wanted to know how Microsoft would avoid cannon balling into the market and instead go in gradually enough.

"Most of the feedback I'm getting now is, 'Where is the supply?' So it's funny that you ask about cannon balling anywhere. Currently the feedback is, 'I'd love to see the Surface Book terabyte in stock for holiday, or I'd love to see the i7,'" Hood said, according to a transcript of the conversation posted on Microsoft's Web site.

The Surface Book is Microsoft's inaugural first-party laptop, featuring a unique hinge and a detachable screen that becomes a "clipboard" -- a tablet with a pen for input.

The Surface Book entered general availability in Microsoft Stores and online on Oct. 26. However, limited quantities are shipping to the stores. According to the online store, none are currently available for immediate shipment. Three models are supposed to ship on Dec. 4 -- the Intel Core i5 with 128GB of storage and 8GB of RAM, the i5/256GB/8GB and the i7/512GB/16GB, which has a discrete GPU (dGPU) built into the keyboard. Models not shipping until Dec. 18, according to the online store, are the i5/256GB/8GB and the i7/256GB/8GB, both with dGPUs. The heavy hitter of the Surface Book line, both in price at $3,199 and in capability at i7/1TB/16GB with a dGPU, isn't listed to ship until Jan. 22.

While Hood essentially laughed off the "cannon ball" question, the question is a legitimate one for Thill to put to Microsoft, which is still getting its bearings in the computer hardware manufacturing market. Early oversupply issues with the first-generation Surface tablets led to fire sales of the devices at Microsoft conferences and a write-down of nearly $1 billion.

Hood did say Microsoft is working to improve the efficiency of its supply chain, which it has been honing now through four generations of the related Surface and Surface Pro tablets.

"You make progress to get more funding. You don't make progress, there's no need to have more funding," she said.

Hood also addressed the point of Microsoft developing the Surface Book, which competes more squarely with OEM partners than did the Surface and Surface Pro. Those business tablets were more of a category-creating device that other vendors have begun to follow. "We've got a lot of demand for high-end Windows machines from creatives and it's a good product to do it," she said of the Surface Book.

Posted by Scott Bekker on November 18, 2015 at 11:35 AM0 comments

Microsoft Points to Windows as a Service Opportunity with 'Threshold 2'

The free upgrade approach Microsoft took with Windows 10 may not be doing much for OEM partners in the way of PC sales yet, but Microsoft is trying to point the rest of the channel toward new opportunities with the OS.

In a blog post Sunday, Microsoft Worldwide Partner Group General Manager Gavriella Schuster used the occasion of the code-named "Threshold 2" update to Windows 10 to highlight opportunities created by the new Windows business model, which involves no cost for updating many versions of Windows 7/8/8.1 and involves regular updates for years to come.

Schuster highlighted three opportunities for partners to help customers with the transition to the Windows as a Service delivery model:

Ensure they have the infrastructure in place to handle these updates across all of their employees, devices, and circumstances. ...

Help your customers decide how a particular update could impact their business, which critical apps will need to be tested, and how updates will be deployed among departments. ...

For every app and device that walks in the door, you can help your customers create a plan for how it will be updated and when it gets retired.

Threshold 2, which began rolling out on Thursday, is the first major update of Windows 10. For that reason, it's the first opportunity partners have to get involved with customers' ongoing Windows 10 update cycle.

Also known as the November Update, Threshold 2 includes performance improvements, usability improvements and enhancements to Cortana and the Edge browser, among other features.

For business-focused partners, Schuster emphasized elements such as Windows Update for Business, Windows Store for Business, mobile device management, and updates to Azure Active Directory.

Posted by Scott Bekker on November 16, 2015 at 12:30 PM0 comments

The RCP CSP Directory is Complete for the U.S.

The new Microsoft Cloud Solution Provider (CSP) program is a complex piece of machinery, as we detailed in our feature about the ecosystem last month.

One of the most important elements of that ecosystem is the 2-Tier distributors, a.k.a. cloud distis. In most cases, Microsoft partners will be working through those 2-Tier distributors rather than directly with Microsoft to sell and support Office 365 and Microsoft's other cloud products through CSP.

We started an online directory of the 2-Tier distributors in the United States last month to accompany our print magazine package about CSP. Included were Q&As with the first five cloud distis -- AppRiver, Ingram Micro, Intermedia, SYNNEX Corp. and Tech Data Corp.

About mid-October, SherWeb, which was already a 2-Tier distributor in Canada, got accepted into the U.S. program, as well. We covered the news here.

Jason Brown, director of product management for SherWeb, just got back to us on our Q&A with details about the program, such as costs, white-label options, additional services and differentiators.

Check out the full directory to compare your CSP options.

Posted by Scott Bekker on November 12, 2015 at 11:18 AM0 comments

AVG Restructuring SMB Business, Laying Off 35

AVG Technologies is restructuring its managed service provider-centric SMB business division and laying off 35 employees as the unit struggles to meet the company's overall growth goals.

"As we discussed in the last earnings call, our expectation of the uptake of our cloud-based services was not where we wanted it to be as a result of our existing customers' commitment to our traditional on-premise product," said Gary Kovacs, CEO and managing director, according to a Seeking Alpha transcript of AVG's third-quarter earnings call Wednesday.

"To fix this, we have taken specific actions to improve our go-to-market strategy, including a significant restructuring and streamlining of the business and further simplification of our products to make it even easier for our resellers to go out with our products to serve their end customers' needs. These restructuring and leadership changes, we believe, will put us in the right position to capitalize on a large and growing opportunity," he said.

CFO John Little explained the restructuring would include "releasing approximately 35 employees," outsourcing a portion of the help desk and restructuring the management of the division. Little said the moves would save about $3 million over the next 12 months.

The SMB segment contributed $16.6 million of AVG's $108 million in revenues in the quarter, an increase of 13 percent for the SMB side. Part of the pressure for faster performance from the SMB unit comes from AVG's strategic exit from the third-party search business, which is dramatically reducing the company's revenues.

Despite the cuts, Kovacs said SMB remains a key focus area and pointed to the September release of AVG Business Managed Workplace Version 9.2 as evidence of AVG's ongoing efforts. "We believe strongly in this market, and we'll continue to invest as we have been in anticipation of accelerated growth in the future," Kovacs said.

AVG made a big move in the MSP market in 2013 with the acquisition of Level Platforms and made a major effort to expand the opportunity for those partners and its existing base of partners selling its cloud-based security solutions in the last year. However, the last two earnings cycles have revealed the company's challenges in the SMB market.

Posted by Scott Bekker on November 05, 2015 at 12:11 PM0 comments

BitTitan Packages Cloud Transition 'in a Box' for Microsoft Partners

One of the great challenges of the cloud transition for Microsoft partners is turning businesses that have been focused on server upgrade projects into recurring revenue-focused selling machines. Would it be possible to bundle that process into an in-a-box solution?

BitTitan is trying with a pair of Microsoft-focused offerings released this month called MSPComplete and a specialized version called CSPComplete, which is for the elite new group of Microsoft Cloud Service Provider (CSP) 1-Tier resellers.

"We provide the end-to-end solution to take someone from a systems integrator to a managed service provider," said Geeman Yip, CEO of BitTitan.

To date, BitTitan has been known for its Office 365 migration automation tools, which many Microsoft partners use to move customers from on-premises servers or from competing cloud services to the Microsoft cloud. Those tools, like MigrationWiz and DesktopWiz, are a part of the new MSPComplete offering.

Arguably more important in the partner transition to cloud than technical tools is the business process-related side, and Yip believes there's a role for BitTitan there, as well.

"I think there are people who will give you education around each one of these things, but education, as we know, over the last five years is not enough. We feel we can automate a good amount of this lifecycle so you only need to put in human intervention when necessary," he said.

Now BitTitan is putting its existing tools in an "onboard" pillar of MSPComplete and surrounding that pillar with two new sets of offerings -- one grouped in a "sell" pillar and another in a "service" pillar.

On the sell side, BitTitan has an internally developed SalesAutomation platform that consists of leads and scripts and an Estimator tool for up-selling/cross-selling, quotes, statements of work, and incentives and promotions.

On the service side, BitTitan is creating a HealthCheck tool with up-sell/cross-sell opportunities and is rolling out complementary products, such as e-mail archiving, data encryption and cloud management.

For the sales leads, BitTitan is using Microsoft's Azure Machine Learning to build out customer lists. "It's basically internal data mining," Yip said. "We crawl the Internet. We mine people's Web sites, we mine records, everything that's accessible from the Internet. We try to gather information from social media, et cetera, build a business profile about [a customer]. Discover what services that you advertise on the Internet."

Early efforts, both in scripts and in customer leads, are focused on the Microsoft Exchange migration opportunity. "The initial lowest hanging fruit is going to be around e-mail," Yip said. "We're currently working with Microsoft to load in scripts around CRM and Lync...and on OneDrive, competing with Box and Dropbox."

BitTitan's Estimator tool will pull in data from the Microsoft's incentives system to allow the partner sales team to give customers the best available offers and prices.

Jeffrey Tinnea, a technical program manager at BitTitan, said automatically pulling incentives will help many more partners use them. Tinnea, a former Microsoft employee, says many partners currently fail to take advantage of incentives. "It's not because partners don't qualify; it's because they don't know."

One of BitTitan's early MSPComplete partner/customers is ZAG Technical Services, a multi-competency Microsoft partner headquartered in San Jose, Calif. In an e-mail interview, Joe Foos, director of sales and marketing at ZAG, said, "The new MSPComplete enablement platform offers experienced Microsoft Office 365 migration service providers the opportunity to shorten the sales cycle significantly. It also works to accelerate the on-boarding, migration and Microsoft license usage activities that help customers start seeing real value from their investment right away."

Posted by Scott Bekker on October 28, 2015 at 12:23 PM0 comments

Third-Party Cloud Backup Now Included in Microsoft IUR

Microsoft partners with competencies or Action Pack subscriptions have access to a new internal use rights (IUR) benefit that allows free access to a third-party cloud backup solution.

SkyKick, the Seattle-based cloud migration and management company specializing in Microsoft Office 365 tools for partners, will provide its Cloud Backup application on a free trial basis through the IUR benefit of the Microsoft Partner Network (MPN).

Generally, IURs apply to Microsoft's own products that fully registered partners get to use on a not-for-resale basis in order to run their businesses and simultaneously get more familiar with the products those partners are helping sell to customers. Earlier this year, Microsoft entered an unusual relationship with SkyKick when it added the third-party SkyKick Migration Suite to the IUR program.

The addition of the SkyKick Cloud Backup product expands that relationship with another product that is thoroughly enmeshed in the Microsoft cloud stack. SkyKick Cloud Backup is designed to back up Office 365 data from Exchange, SharePoint and OneDrive for Business to the Microsoft Azure cloud.

"Backing up data can be a slow, clumsy, and risky process, so many organizations choose not to perform back-ups as often as they know they should. This offer provides you with a great opportunity to back up your Exchange, SharePoint, or OneDrive for Business data and increase familiarity with Microsoft Azure, the simple, trusted, and reliable cloud platform," wrote Gavriella Schuster, general manager of the Microsoft Worldwide Partner Group, in a blog post to partners this week. "SkyKick's Cloud Backup is an exciting cloud service that utilizes Azure that you can use to enhance your support offerings and increase profitability."

As well as being a free benefit to partners, the IUR inclusion is a boost for SkyKick for what amounts to a new product in the crowded online backup realm. It is now immediately available to Microsoft's tens of thousands of partners in the United States, the United Kingdom, Canada, Australia and New Zealand.

"Thousands of partners around the world have used SkyKick's Migration Suites to move their customers to Office 365," said SkyKick Co-CEO Evan Richman in a statement Wednesday. "The Azure IUR Cloud Backup offer is our next step forward in delivering innovative products which enable Microsoft partners to build a more profitable, efficient and risk-free cloud business all on one unified platform."

The previous SkyKick promotion was clouded in uncertainty for partners because that migration offer was announced in March 2015 and expired at the end of Microsoft's fiscal year just three months later. Announced much earlier in Microsoft's fiscal year and running through June 2016, this offer has a much longer runway to allow partners sufficient time after setting it up to test the software.

The companies also disclosed that the SkyKick Migration Suite is available as part of the MPN IURs once again, also through June 2016.

Posted by Scott Bekker on October 28, 2015 at 1:13 PM0 comments

Hands-On with the Microsoft Surface Pro 4

The old truism that Microsoft gets a product right on its third try held for the Surface Pro 3. Not wanting to mess with a good thing, Microsoft limited itself to refinements for the new Surface Pro 4.

The fourth generation of Microsoft's category-creating productivity tablet become generally available on Monday. I spent an hour Monday morning at the Microsoft Store in Arlington, Va., getting a hands-on demo of the Surface Pro 4 and the Surface Book. (Read my Surface Book review here.)

Familiar to Surface Pro 3 users will be the magnesium alloy body, the dynamically adjustable kickstand, the microSD slot, the USB 3.0 port, and the height and width. Discerning users might notice that the tablet is slightly thinner, slightly lighter and that the picture is slightly sharper.

There are also the types of specification upgrades you'd expect from one generation to the next as underlying technology improves or gets cheaper, or both. Gone is the 64GB storage option, replaced at the high end with a new 1TB model. The battery life claim is now 9 hours of video, up from 9 hours of Web usage. The rear camera boasts 8MP now from 5MP before. The Intel Core i3 processor at the low end in the Surface Pro 3 has been replaced with a fanless model sporting an Intel Core M processor, which leads to a slightly lower overall weight than the Intel Core i5 and Intel Core i7 options for the Surface Pro 4.

Aside from specs, Microsoft is moving the ball forward in several areas. A hallmark of Surface innovation from the beginning has been the magnetically attached cover/keyboard. This time around, Microsoft is improving on the angled keyboard of the previous Surface Pro model with movable keys that are spaced wider apart in a chiclet arrangement. The typing action is smooth and less cramped than previous Surface keyboards. The other mainstream improvement in the keyboard is a glass, rather than a plastic, trackpad. Also new is an optional keyboard with a fingerprint sensor built in. The base keyboard/cover costs $130; the fingerprint ID model adds $30 to the price.

While the device dimensions haven't changed from 201mm x 292mm, thank Windows 10 in part for a bigger screen area. The capacitive Windows button, which was previously required by the Start button-free Windows 8 operating system, has been removed. That helps save some bezel space, and the new screen is 12.3 inches instead of 12 inches.

Central to the identity of the Surface Pro is the integrated pen, and Microsoft engineers iterated that input method as well for the fourth generation. According to Microsoft, the pen and tablet together now register four times as many pressure levels as the previous pen. A new eraser eliminates the need for one of the buttons on the old pen, and the other button is now hidden in the magnetic strip that attaches the pen to the edge of the Surface Pro. Additionally, Microsoft now offers interchangeable pen tips at varying thicknesses.

Outside the base package, Microsoft completely overhauled the docking system. Versions for the Surface Pro 3 consisted of a stand that the tablet plugged in to with several ports on the back. Given the adjustable kickstand that's built into the Surface Pro, the stand actually limited the tablet to only one viewing angle. The new $199 Microsoft Surface Dock is a port-filled block that's about the same size as its own power brick, which includes multiple ports and connects to the Surface Pro via the magnetic charging port.

The Surface Pro 4 comes in several configurations ranging in price from $899 to $2,699. Available now are the Intel Core m3 model with 128GB of storage and 4GB RAM, and the Intel Core i5 models with 4GB, 8GB or 16GB of RAM and 128GB to 512GB of storage. Shipping by Nov. 20 are Intel Core i7 models with 8GB or 16GB of RAM and 256GB or 512GB of storage. The top model -- an i7 with 16GB of RAM and 1TB of storage -- ships by Jan. 22.

Posted by Scott Bekker on October 26, 2015 at 3:57 PM0 comments

Hands-On with the Microsoft Surface Book

The Microsoft Surface Book is the first covet-worthy laptop of the Windows 10 era.

Microsoft's inaugural first-party hardware entry in the crowded laptop market hit general availability on Monday. I spent an hour Monday morning at the Microsoft Store in Arlington, Va., getting a hands-on demo of the Surface Book and the new Surface Pro 4. (Click here for the Surface Pro 4 article.)

The first thing you notice is the hinge. Microsoft calls it a dynamic fulcrum hinge, and the parts move to expand the hinge as the laptop opens. Closed, this laptop doesn't fold flat like almost every other notebook. Instead, it makes a wedge shape, which is wider at the hinge end. Some reviewers are concerned that the hinge makes the keyboard and screen more likely to collect dust and dirt when not in use. Still, the toothlike edges of the hinge give the closed Surface Book a snarling quality, like it's waiting impatiently for you to come back and let it spring into action.

That wild hinge isn't an extravagance -- it's a functional form designed to allow the screen to come off and become a tablet. As such, the quality is critical. Time will tell, but the hinge looks and feels like it's built to last.

Unlike some other 2-in-1 attempts at removable screens, the Surface Book has a keyboard button along the top row that releases the screen. A long press results in a green light on the key when the tablet is unlocked from the hinge. It slips out seamlessly. Reconnecting the tablet provides an onscreen prompt that it has been securely reattached. At that point, you can grab the screen and shake or grab the keyboard and shake. The connection is rock-solid.

Removed from the keyboard, the tablet itself feels nicely balanced and ridiculously lightweight for its large size (it's a 13.5-inch display). Technically, Microsoft calls the tablet a clipboard because of the magnetic pen attached to the top. Microsoft works its lightweight magic by putting the graphics processor and the bulk of the battery in the keyboard. Used as a laptop with the keyboard battery, the device is good for 12 hours of video playback, according to Microsoft. In clipboard mode, the tablet part is supposed to have about three hours of standalone battery life.

Reattaching the keyboard facing backward opens up a few more usage modes, including a folded shut mode for drawing.

As a laptop, the device is less than 3.34 pounds. Using it on your lap is a big improvement over trying to balance a Surface Pro-and-keyboard assembly, but the real parallel here is that it's the same as any other lightweight laptop.

Despite having the CPU, RAM and storage up behind the screen, the counterweight of the graphics processor and battery in the keyboard make for a balanced system. Pushing on the top of the screen doesn't tip the Surface Book over on its back.

The keyboard itself is a selling point. Microsoft engineers focused on the typing experience, emphasizing things like "travel" in the keys. I'm not sure what that means, but the keyboard was a joy to use. Microsoft may be a relative newcomer to PC manufacturing, but it's been making keyboards for decades. Some of the biggest innovations on the Surface and Surface Pro tablet lines have been in the keyboard, and the same thought and quality has gone into the Surface Book's keyboard, too.

From the hinge to the magnesium casing with its silver Microsoft logo, this is one attractive and powerful business machine. The biggest questions revolve around whether Microsoft's laptop is worth it.

From a buyer's perspective, it boils down to the price, and whether it's worth it for that individual's circumstance. The Surface Book runs from $1,499 for a 128GB, Core Intel i5 model with 8GB of RAM to $3,199 for a 1TB, Core Intel i7 with 16GB of RAM, a high price range for a business laptop.

From an industry standpoint, there's an open question as to whether the payoff will be high enough for Microsoft to justify having released this product. After all, Microsoft plays a deep game -- offering first-party products that it hopes will sell well but that it also hopes will inspire its OEM partners.

Back when Microsoft launched the original Surface, several OEMs were angry. They hadn't gotten a heads up that Microsoft was getting into hardware. Fast-forward a few years and the results are looking pretty good for Redmond. HP and Dell are reselling the Surface Pro, and the productivity tablet is spawning direct copycat models in the VAIO Canvas and the Lenovo Miix 700 and an indirect copycat model in the Apple iPad Pro.

With the Surface Pro, though, Microsoft was launching a new category of device and was willing to shell out a few billion dollars in the effort when OEMs partners weren't investing there on their own. The Surface Book isn't creating a new category. It's improving on a category OEMs have been delivering on since Windows 8 launched.

For argument's sake, let's call the Surface Book a 5 or 10 percent improvement on the next best 2-in-1 laptop.

Even if this is "the ultimate laptop," as Microsoft's Surface architect Panos Panay said repeatedly in unveiling the Surface Book, it's an incremental ultimate laptop, not a revolutionary one. It's hard to see the Surface Book spurring on Microsoft's OEM partners, as the Surface Pro did, so much as just making them grumble.

Posted by Scott Bekker on October 26, 2015 at 3:51 PM0 comments

Dell-HP Reselling Deal Doesn't Include Surface Book

The surprising Surface Enterprise Initiative, which brought Dell and HP aboard as Surface Pro resellers for Microsoft, won't include the Surface Book yet for the two OEMs.

"You can expect HP and Dell to continue to evaluate new devices as part of the partnerships announced last month, but the product was just announced, so nothing more specific at this point," a Microsoft spokesperson said in an e-mail.

Under the initiative, Dell and HP will bundle Surface Pro devices and accessories with their own service and support offerings.

The decision makes some sense for Dell and HP with the Surface Pro 3 and forthcoming Surface Pro 4. With those devices, Microsoft created a category of a productivity tablet, and it's a space where Dell and HP don't have their own products.

On the other hand, the newly announced Surface Book -- which, like the Surface Pro 4, will be available next week -- will compete directly with many of the Windows 10 laptop models HP and Dell designed themselves and already sell.

Executives for HP and Dell both reportedly said at a recent industry event that they're selling Surface Pro and related services in response to requests from large customers who want a single contract with their main IT supplier. At the same event, Lenovo revealed that it had rebuffed a Microsoft overture to take part in the Surface Enterprise Initiative.

Accenture is also part of the Surface Enterprise Initiative, but as a systems integrator rather than an OEM, it's a different type of partner.

"They are more building the solutions, not only for Surface but Surface Hub and Lumia phones," Cyril Belikoff, director of marketing for Microsoft Surface, told my colleague Jeff Schwartz in an interview. "We are working with them to engage enterprise customers around their business needs and [our] set of category-making devices."

As for Dell and HP channel partners, the Surface Enterprise Initiative is not transferable -- so Dell and HP can't deputize their substantial numbers of partners to resell Surface Pros. Instead, Microsoft recently greatly expanded its Surface reseller program through distribution to nearly 5,000 partners worldwide.

Posted by Scott Bekker on October 21, 2015 at 7:36 AM0 comments