New Microsoft Channel Chief Says Surface Strategy Still Evolving

Phil Sorgen, new worldwide channel chief at Microsoft

, new worldwide channel chief at

Microsoft has kept its Surface tablet out of the channel because it lacked a distribution strategy. While a distribution network is now in place, new Microsoft channel chief Phil Sorgen offered no guidance on when resellers might get their hands on the increasingly popular devices.

The Surface tablet debut a little more than a year ago to much fanfare. The operating system combined with an innovative form-factor and click-on keyboard made it look like a worthy competitor to the market-leading Apple iPad and plethora of well-selling Android tablets.

What Microsoft didn’t do was release Surface to the channel for resale. Microsoft sold it direct until December 2012, when flagging sales forced it to open reseller agreements with Best Buy and Staples. It was only when Microsoft wrote off $900 million in unsold Surface units and accessories last July did it become available to a dozen direct market resellers.

Even with the launch of the improved and well-reviewed Surface Pro 2 and Surface 2 (running ), Microsoft has yet to offer any real guidance on when rank-and-file solution providers will have the ability to source and resell Surface alongside other products, such as , System Center, Lync and .

While Sorgen says a distribution strategy is now in place, he offered no guidance on when Surface would become available for resale through the general channel.

“We didn’t have a commercial distribution strategy at launch. Now with Surface 2, we have a distribution strategy; its phase 1 and not as broad as it could be. We got into this new product one year ago. We’re going to be very careful as we look forward. We are evaluating the plans for forward as we extend further. When we do, we’re able to execute and be a world-class partner for those that make the investment to sell and support that product,” Sorgen says.

The Surface tablet has been the source of tension between Microsoft and its partners – resellers and OEMs.

Solution providers and resellers say Microsoft is increasingly conflicted with its partners as it withholds products, most notably the Surface tablet, from the channel, and makes doing business with other products, such as Office 365, difficult. In a recent survey by The 2112 Group, reseller ranked Microsoft a close second only to Dell for poor management.

Reseller partners aren’t the only once feeling conflicted. Traditional OEM allies such as , Lenovo and Acer are also feeling betrayed by Microsoft’s ambitions to build devices that compete against their hardware products. Last month, CEO called out Microsoft and Intel as “competitors.”

Sorgen recognizes the strains in the Microsoft channel. While not dismissive, he says there’s always been varying levels of cooperation, collaboration and competition with device manufacturers and channel partners. What’s needed, he says, is understanding of mutual goals and benefits that can come from working together.

“Meg Whitman called us a competitor, but we will work closely with HP, Dell and Lenovo in bringing products to market,” Sorgen says.

Microsoft has never said so, but part of the reason it’s limited Surface’s availability to the channel is to give OEM partners some breathing room for their products. HP, Dell, Lenovo, Acer and Samsung have all fielded tablets and convertibles running Windows 8. Keeping Surface out of the channel could be a strategy to prevent cannibalization of other Windows tablets and conventional PCs, which continue to shrink in sales.

While that may be a strategy, it doesn’t seem to satisfy the OEMs. HP, Lenovo, Samsung and Acer have all introduce tablets and PCs running either Google’s Android or Chrome operating systems. HP made its Chromebooks immediately available to the channel, saying its saw good potential for commercials sales.

Since July, a dozen direct market resellers, such as CDW, have resold the Surface channel in the U.S. A similar strategy has been implemented in 17 countries. Sorgen offered no guidance on when Microsoft will expand the Surface channel further, saying that it will only happen when Microsoft is ready to enable a broader channel “in the right way.”

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