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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

Crypto-Consolidation: Thales Buys Vormetric

Paris-based Thales SA will pad its data protection capabilities with a $400 million acquisition of enterprise encryption company Vormetric.

Thales this week announced a definitive agreement to acquire San Jose, Calif.-based Vormetric in a deal expected to close in the first quarter of 2016.

Vormetric will be a part of the e-security portion of Thales' security business. The European company also has aerospace, space, defense and transportation business lines.

"The acquisition of Vormetric is a great opportunity to accelerate the growth of our cybersecurity activities. Combining Thales' critical IT systems protection capabilities with Vormetric's know-how in data protection will create a global leader in data security, offering comprehensive solutions for protecting enterprises against cybersecurity threats," said Patrice Caine, chairman and CEO of Thales, in a statement.

The Vormetric Data Security Platform centralizes key management and offers file-level encryption, application-layer encryption, tokenization, cloud encryption gateway and security intelligence logs. Those cryptography tools complement Thales' hardware security modules, encryption technology and digital signature technology.

According to the companies, Vormetric has about 200 employees and a current fiscal year revenue runrate of $75 million. That unit will join a Thales e-security team that consists of 540 employees in the United States, the United Kingdom and Hong Kong.

In a letter about the merger, Vormetric President and CEO Alan Kessler told customers and partners that Thales' "significantly funded R&D" would enhance the Vormetric products.

"We look forward to developing even more valuable solutions for our customers and we will continue to invest in the strong partner ecosystem that has been such a core part of our success," Kessler wrote.

Posted by Scott Bekker on October 21, 2015 at 11:22 AM0 comments

Western Digital Buying SanDisk for $19 Billion

Western Digital Corp. is acquiring SanDisk Corp. in a storage hardware megadeal worth $19 billion.

The companies entered into a definitive agreement, announced Wednesday, involving cash, new debt financing and Western Digital stock. The boards of directors for both companies have approved the deal, which is expected to close in the third calendar quarter of 2016. The deal still depends on SanDisk shareholder approval, and if a pending Unisplendor Corp. investment in Western Digital falls through, Western Digital shareholders will also have to give their blessing.

According to 45-year-old, Irvine, Calif.-based Western Digital, the acquisition will double its addressable market and improve its position in higher-growth segments. The companies listed their complementary product lines as hard disk drives, solid-state drives, cloud datacenter storage solutions and flash storage solutions.

"This transformational acquisition aligns with our long-term strategy to be an innovative leader in the storage industry by providing compelling, high-quality products with leading technology," said Steve Milligan, chief executive officer of Western Digital, in a statement. "The combined company will be ideally positioned to capture the growth opportunities created by the rapidly evolving storage industry."

Milligan will be CEO of the combined company, with headquarters remaining in Irvine. SanDisk President and CEO Sanjay Mehrotra is expected to join the Western Digital board of directors when the deal closes. A long-term strategic partnership between Toshiba and SanDisk will continue, the companies said.

After closing the deal, Western Digital expects to find $500 million in synergies within 18 months and to be earnings per share accretive (non-GAAP) within a year.

Posted by Scott Bekker on October 21, 2015 at 9:43 AM0 comments

Lenovo and Microsoft: A Week of Coopetition

Lenovo and Microsoft get close, Lenovo and Microsoft push each other away.

The strains of being an operating system vendor, reliant on your OEM partners one day and then simultaneously competing with them another day, came into full view this week in the Microsoft-Lenovo relationship.

First, the happy face of the partnership.

Microsoft's Joe Belfiore (left) with Lenovo's Dilip Bhatia at the San Francisco launch event of the new Yoga devices. Source: Microsoft.

Microsoft's Joe Belfiore was on hand in San Francisco this week for Lenovo's launch of two Windows 10-optimized devices, the Lenovo YOGA 900 Convertible Laptop and the Lenovo YOGA Home 900 Portable All-in-One Desktop.

Belfiore blogged, "Windows 10 was designed to help people do great things, and these new Lenovo YOGA devices were built to maximize Windows 10's incredible features. We worked closely behind the scenes with Lenovo to ensure its new products really brought to life the best of Windows 10, and we're excited to see customers' reactions to these new YOGA PCs."

The Yoga 900 Convertible Laptop (top) and the Yoga Home 900 Portable All-in-One (bottom). Source: Microsoft.

Now, the angry face of the relationship.

At a recent Canalys Channels Forum, Lenovo COO Gianfranco Lanci reportedly told attendees that Microsoft approached Lenovo about reselling the Surface Pro, a deal that both Dell and HP accepted. "I said no to resell their product," The Register last week reported Lanci as saying. "[Microsoft] asked me more than one year ago, and I said no I don't see any reason why I should sell a product from within brackets, competition."

As Lanci reportedly put it, Lenovo views Microsoft as a "partner on certain things" and a "competitor" on others. Microsoft, with many similar relationships (see Salesforce.com, Oracle, SAP, Dell, HP, IBM, etc.), surely also views things the same way.

In light of Microsoft's surprise decision to release its own Surface Book laptop, Lanci is probably even happier about his decision to rebuff that Surface Pro resale offer.

Posted by Scott Bekker on October 20, 2015 at 4:37 PM0 comments

Microsoft Surface Ecosystem Approaching 5,000 Resellers

Microsoft executives said Tuesday that nearly 5,000 resellers have signed up worldwide to sell Microsoft Surface business tablets, but that they expect growth of this new partner ecosystem to settle down after that initial rush.

"Today we're now at nearly 5,000 resellers across Surface markets. So the interest has been tremendous," said Phil Sorgen, corporate vice president of the Microsoft Worldwide Partner Group, in a telephone interview Tuesday. "It really reflects the unprecedented response to Surface Pro 3 that we've seen from business customers."

It's a substantial bump from the controlled model of several hundred Surface Pro resellers who were authorized as recently as July, when Microsoft relaxed the rules governing which partners could sell the category-creating, Windows-optimized tablets with magnetic keyboards and integrated pens. At that time, Sorgen said publicly that the program would go from hundreds to thousands of resellers, but he said the speed at which the channel filled out took him by surprise.

Even with the interest in the new Surface Pro 4 and Surface Book that come out next week, Sorgen said he doesn't expect to see the Surface reseller community continue to expand as quickly.

"[As for] the pace to 5,000, those that were interested and knew they were interested and have been interested for some time absolutely jumped in, and it wasn't hard for them to get engaged. They already had relationships with their distributors," he said. "We don't have a target, but I wouldn't expect the continued growth of what we saw. I think that was opening the door and there was some pent-up demand and interest to participate. That's happened, and now I think we'll be in a more steady state from this point forward."

Prior to this July, authorized device resellers, such as CDW, Insight and SHI, and distributors had to meet a lot of criteria to sell the Surface.

"There is significantly less hurdle for the rest," Cyril Belikoff, a director of Surface marketing at Microsoft, explained to my colleague Jeff Schwartz in an interview. "This is really important so we can help those customers who want to buy from their resellers. We think it's important for the customers, and it's a big moment for our partners, too, as we're able to move out and broaden the reseller base and give them the opportunity to service the customers that they've been asking for. The theme here is making sure we and our partners are ready to sell Windows 10 and Surface as we move into the holiday period."

According to Sorgen, the profile of the new Surface resellers runs the gamut. "They're your classic value-added resellers that go through the distributors. Some of them sell hardware, other lines of hardware, some sell hardware and software, some do project services, and there are some examples of vertical players that are integrating Surface into their vertical solutions and going to specifically one set of customers," he said.

Citing the quiet period before Microsoft's upcoming earnings statement, Sorgen declined to say how many Surface devices the new partners have sold.

The partner momentum number came amid a number of Surface announcements Tuesday, including some customer wins and two new programs being added to the Surface Enterprise Initiative.

One program, called Microsoft Complete for Enterprise, makes changes to the warranty, service and support offerings for enterprise customers. A headline feature of that program is the ability to pool warranty claims by company rather than by individual device. So, for example, while the warranty previously limited a device to two replacements, a company can now pool warranties so that accident-prone employees can replace a system after three, four or five coffee spills and drops -- basically borrowing replacements from employees who never need a device fixed.

Another part of Microsoft Complete for Enterprise follows a new theme across Microsoft of creating on-boarding centers to take over responsibilities that were previously often handled by partners -- in this case, training. The on-boarding center will ensure "IT staff and employees have the ability to maximize productivity" and "a premium ramp-up experience to match a premium device," according to a company statement.

Posted by Scott Bekker on October 20, 2015 at 2:53 PM0 comments