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The smart choice: opportunity from uncertainty

'Microsoft will get it right by the third version and I'm sure they will. By the third version.'

To date, selling mobile devices to businesses is the preserve of specialists who focus solely on gadgets and software, and little else beyond that. Windows 8 provides a traditional reseller with an opportunity to carve out new opportunities: if customers pick up a few Windows 8 tablets and warm to the mobile-friendly OS, a door to future deals on Redmond-powered smartphones is thrown open.

As a result, some believe Microsoft's upcoming Surface Pro laptop-cum-tablet will be sold purely through the distribution channel, and thus could be an opportunity for dealers to bolster revenue streams, particularly as the hardware will run applications users are familiar with. This contrasts Microsoft's decision to sell the Surface RT itself right now.

So far existing tablets haven't cut the mustard at the enterprise level. Many users thought they could do away with their clunky laptop and just use an iPad when out and about. However, in terms of business functionality, the Apple fondleslabs are lacking and users have found themselves carrying both an iPad and a laptop.

In terms of the actual Windows 8 launch there's a perception that it's the "same old, same old" from Microsoft.

“As usual, Microsoft is concentrating on pulling in revenues first. There'll be lots of problems with Windows 8 for sure, but it will go back and deal with the issues after they arise,” said one reseller. Another added: “There's the old saying that they'll get it right by the third version and I'm sure they will. By the third version.”

This view informs an understandable reservation by some channel partners. For example, Gordon Davies, chief executive, Adepteq is guarded: “There'll be a lot of adoption on paper from existing licence customers simply because when other OS licenses are renewed Windows 8 will be part of the deal. However, in terms of actual hard adoption that will come later when hardware refreshes take place. We're expecting this later in 2013, towards the end of the year.”

By placing emphasis on consumer marketing, and ensuring the hardware meets its requirements, Microsoft aims to capitalise on the rush to new mobile form factors.

However, putting the mobile element of Windows 8 to one side, there is discontent in the channel towards Microsoft that has arguably been exacerbated by Windows 8, in part because the OS is an innovation too far.

Touch tablets are too big to swallow

One reseller pointed out that for some time it's been crystal clear that while Microsoft is saying all the right things about the importance of partners, its actions are taking it in the opposite direction. Windows 8 could actually drive an even bigger wedge between partners and the software behemoth, particularly in the small-to-medium biz market.

“You fire up Windows 7 and can quickly find your way around it. Do the same with Windows 8 and you spend two days wrestling with it in order to understand it,” said one resller. “If I send some new computers to one of my SMB clients with Windows 8 pre-loaded I know they're going to return it to me. They want a computer to work with. They don't want to spend days trying to figure out how it works. It's a disastrous product and is a really good excuse to get rid of customers.”

Resellers think it may be too optimistic to assume Windows XP users will leap to Windows 8 when XP's 2014 end-of-life deadline approaches. Microsoft appears to be pushing this line at the moment, as evidenced by its sales and business "case-by-case" advice to the channel to persuade clients to move to Windows 8.

Freeform’s Buss is in the "not sure" camp on this point: “It's a big jump from XP to Windows 8. Some people will make the leap if there is a real need but many will simply move to Windows 7. Based on past experience we would expect a slow take up of the new operating system and for a few years we'd expect adoption to be modest with many companies hanging back.”

Despite Microsoft's soothing noises to the channel, the Redmond giant is also promoting a scaled down version of Windows 8 for direct download via the cloud, underlining its aim to become a “devices and services company”. This, of course, means eating into resellers’ revenues. While resellers who operate at the enterprise level may adjust to these shifting winds, those who concentrate on the much larger SMB sector are troubled and concerned.

Direct downloads sidestepping partners

One reseller said: “This is part of a larger shift away from partners. Microsoft has been removing products that we used to sell for some time. Offering Windows 8 as a direct download is just one more step in the direction it wants to go. Of course, Windows 8 offers opportunities in mobile computing, but the company is still moving away from partners.”

However, Microsoft's success in the cloud to date is relatively modest. Canalys' Edwards pointed out there has only been a small uptake of Microsoft Office 365 via the cloud and this is symptomatic of slow uptake across the industry. SAP, for example, has attributed only two percent of sales to the cloud.

Edwards said: “The adoption of cloud-based services is around business processes such as HR and payroll and individual users accessing consumer type apps. Businesses want to leverage the benefits of the cloud but they also want users to have access to the same apps when they're not connected to the web. There's certainly not going to be 90 percent uptake in the next five years. It will be much slower than that.”

For now, the channel is aligning itself with Windows 8 due to the new mobile opportunities it promises next year and beyond. However, there's also the understanding that Microsoft, while still a big and powerful company, is no longer the sole king of the hill.

Its relationship with the channel is best summed up by the comment of a SMB reseller: “Microsoft is clearly moving towards a service model. However, so is everyone else. As it begins selling more products directly resellers will have no choice to turn to alternative products which are becoming increasingly popular. Windows 8 will keep us interested for now, but Microsoft's actions are undermining its partners which means that ultimately it will undermine itself as we go elsewhere.”

So if you do see that black double-decker bus careering along some mist-shrouded lane you may want to whip out your smart phone and take a picture for posterity - although you'd probably prefer a picture of Heidi Klum. ®

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