Microsoft Opens Surface Sales To Handful Of Resellers In Canada, Europe


Microsoft, which has taken a $900 million charge on Surface RT and cut pricing for Surface Pro, is forging ahead with plans to sell the tablet through resellers outside the U.S.

Microsoft Thursday began selling Surface RT and Surface Pro through resellers in Canada, the U.K., France, Spain and 13 other European countries, Cyril Belikoff, Microsoft's director of Surface marketing, said in a blog post.

But as was the case in the U.S., Microsoft is expanding commercial distribution for Surface tablets "in a thoughtful way," Belikoff said in the blog post. Which means just a handful of resellers in each country are being permitted to sell Surface tablets, at least for the foreseeable future.

[Related: Lawsuit Claims Microsoft Misled Investors, Calls Surface RT 'Unmitigated Disaster']

France has the most Surface resellers in the European expansion with five, while the U.K, Spain, Belgium and Austria all have four.

Canada has just two Surface resellers -- Long View Systems, based in Calgary, and Softchoice, a Toronto-based firm that also is one of the 10 large account resellers Microsoft is allowing to sell Surface in the U.S.

In July, Canadian Microsoft partners told CRN they were expecting Microsoft to authorize about five partners to sell Surface in that country.

Microsoft partners are more interested in tapping into the services opportunities around Surface tablets than they are with selling the devices and reaping what would likely be thin margins.

But it's unclear what level of interest Microsoft might see for Surface RT internationally, since the OS can't run classic Windows apps and has OEMs scrambling to distance themselves from it. Now, Microsoft is facing a class-action lawsuit for allegedly misleading investors about its Surface RT's sales.

Surface Pro is the more compelling option for the channel, but partners have told CRN its short battery life is a problem. Microsoft, Redmond, Wash., is said to be addressing this in an updated version running Intel's Haswell chips, but there is no time table for that update.

David Powell, vice president of managed services for TekLinks, a Microsoft partner in Homewood, Ala., thinks the biggest obstacle to Surface sales is not pricing, but a lack of must-have features and functionality.

"Is the Surface good enough to get people to put their $500-plus iPad in their desk drawer and not use it anymore? That answer, from Microsoft's reported sales figures, is a resounding 'no'," Powell told CRN.

In a blog post last month, Forrester analyst Tirthankar Sen suggested Microsoft is limiting channel distribution to keep Surface from becoming a commodity product.

"If Microsoft were to open up the resale market in the enterprise space to all the partners, most in the long run would start seeing shrinking margins," Sen said in the blog post. "With less competition, Microsoft's selected partners are more likely to remain both healthy and wealthy."

At its Worldwide Partner Conference last month, Microsoft said it would expand Surface distribution to 28 additional countries by the end of September.

"As we've said before, we're committed to authorizing a select set of additional partners in these markets, and in additional markets, in the coming weeks," Belikoff said in the blog post.

PUBLISHED AUG. 15, 2013