Mobile Computing: Making Dollars and 'Sense' in the ChannelBy Michael Vizard | Print
Razor-thin margins explain why Apple sells its mobile devices direct, but Microsoft is trying to side-step that issue with a controversial distribution strategy.
Mobile computing represents a tantalizing yet frustrating opportunity for the channel. Demand for mobile computing devices is off the charts, but there's not a big profit margin involved in selling these units. It's only when an organization decides to connect these devices to its corporate networks that the channel sees the potential to make real money.
Razor-thin margins explain why Apple sells its devices direct. Microsoft, with a much longer history of relying on the channel, is trying to side-step that issue with a controversial distribution strategy that funnels Microsoft Surface sales in the channel through 10 large account resellers (LARS) such an En Pointe Technologies and direct marketers such as CDW and PC Connection.
With the Microsoft Devices Program, Microsoft is trying to push more business through a small number of resellers as part of an effort to make its channel more manageable. The problem this creates, however, is that the bulk of its channel partners wind up competing with LARs for other business. That makes the resellers reluctant to expose the names of their customers to LARs or help LARs generate more revenue at their perceived expense.
On paper, it may make sense for Microsoft to rely more on LARs, but from a channel politics point of view, it may be shortsighted given how far Microsoft trails Apple and the small army of vendors selling Google Android devices.
"Microsoft isn't a big hardware company so there's no real channel precedent for them," said Beth Vanni, principal of the channel consulting firm Vanni Group International. "But you have to wonder if whatever they're making on Microsoft Surface is worth all the controversy in the channel."
In the absence of any motivation to do otherwise, most solution providers will find that the path of least mobile computing resistance is this: Let the customer decide. Most of them have already voted with their feet in overwhelming numbers for Apple—a fact that even Microsoft acknowledges.
In fact, at the recent Microsoft Worldwide Partner 2013 Conference, the company revealed two alliances designed to make it easier for non-Windows devices to access Windows applications. The longtime alliance between Microsoft and Citrix has been extended to include instances of Citrix XenDesktop 7 running on the Microsoft Azure cloud platform.
At the same time, Microsoft also partnered with Splashtop to make an alternative approach to giving uses of Apple iOS, Google Android or Windows devices access to remote instances of Windows applications running on top of Microsoft Hyper-V or Microsoft Azure.
While most channel partners are familiar with Citrix, Splashtop has developed a strong base of 14 million consumer customers. The company is trying to leverage that base to create demand for a previously announced Splashtop for Business and now Splashtop Enterprise.
According to Splashtop CEO Mark Lee, Splashtop Enterprise costs a lot less than Citrix and supports integration with Microsoft Active Directory, the core access management technology on which so many Microsoft customers already rely.
"Our software is already being used within 60 percent of the Fortune 500," he said. "What we need now are channel partners to build solutions."
Microsoft and its partners stand to make money from mobile computing regardless of whether the solution includes Microsoft Surface. In fact, Cyril Belikoff, director of Microsoft Surface marketing, acknowledges that in order for partners to make money, they need to focus on a total solution that goes well beyond the endpoint.
As an endpoint, Microsoft Surface comes with the benefit of running Windows applications. But there are so many options for accessing Windows apps from Apple and Google devices that from a partner or customer perspective, the actual endpoint may not matter all that much. In fact, the more diverse the customer environment becomes in terms of the type of endpoints involved, the more money the average solution provider is likely to make.
Michael Vizard has been covering IT issues in the enterprise for 25 years as an editor and columnist for publications such as InfoWorld, eWEEK, Baseline, CRN, ComputerWorld and Digital Review.