Microsoft WPC Reporter’s Notebook, Day Two: Dell, distributors and Queen Elizabeth II

HOUSTON – My second full day at Microsoft’s Worldwide Partner Conference is wrapping up – all that’s left for me is the infamous Canada party. Today’s main files were on the $10B opportunity around Windows XP end of support migration and Microsoft’s move into big data, but here’s some other news and notes from a rainy day in Texas.

DELL CONTINUES CHANNEL GROWTH: Dell is attending its 5th WPC since its embrace of the channel, and Michael Bradley, director of global channel marketing for Dell, hosted a break-out session on Tuesday. They also have a large booth on the show floor as a key event sponsor. Judging by the sparse turnout for the session Microsoft partners may still be skeptical, but the growth numbers don’t lie. Bradley said 37 per cent of Dell’s commercial revenue (excluding consumer and retail) is now driven by partners, having doubled over the past five years since they got serious about the indirect model. “Everyone has a war story about every vendor, but we’ve had tremendous success shifting the perspective of the channel,” said Bradley. Dell is talking-up its cloud play at WPC, which fits in nicely with what Microsoft is doing with Azure, and the vendor had several announcements relating to joint opportunities with Microsoft VDI.

TAMING THE SURFACE MEGA-LINE: While Monday the line for deeply discounted Surface tablets was stretching over two hours, by mid-day Tuesday it was down to just 45 minutes. A separate line was also created for those who want to ship their tablet rather than pick it up here, which has helped reduce the waits. Some partners were lined up at 7:00 am Tuesday morning for the line opening at 7:30 am. Partners were expressing frustration at the length of the waits, and some were heard speculating the lines were deliberately long so Microsoft could pitch them accessory upsells while they wait. Hey, gotta drive up that attach rate guys…

MICROSOFT MUST BECOME SOFTWARE+DEVICES: I was looking for the SMB value keynote Tuesday morning, but took a wrong turn and ended up in the distribution keynote instead. One point stressed was that Microsoft is committed to bringing the Surface tablet to the reseller channel through two-tier distribution. Peter Davidson, senior director of worldwide distribution for Microsoft, pleaded for patience from the disties, saying that, while they all may not get into the program right away, they eventually will. “We’re committed to growing this business in a positive way. We need to move away from thinking about ourselves as a software company to a software + devices company.” And services as well, I’m sure.

In other news, Microsoft says many of its disties are too transactional – it wants them to shift to a value and solutions model. Particularly to tap an unleveraged SMB opportunity Microsoft says is being left on the table today – SMB penetration for Microsoft is in the single digits in some markets.

And a few numbers from Terry Haggerty, general manager of Microsoft’s worldwide OEM distribution and resellers business. Some 1.1 million SMB customers worldwide are on Office 365. Windows XP migration is a $10 billion global opportunity. Over 85 per cent of SMBs have no virtualization implemented. Over $1 billion worth of Open annuities are expiring this year and need to be renewed. And 40 million tablet-style devices are expected to be sold this year, an opportunity Microsoft covets. “Devices and services is our call to action for fiscal 14,” said Haggerty.

MINTING A WIN: There were no Canadian partners at the partner award winners media breakfast on Tuesday so I figured I’d sit at the UK table – after all, we members of the Commonwealth and folks with the Queen on our money need to stick together. And, sure enough, as I chatted with Stephen Wilson from eBecs Ltd., a Microsoft Dynamics partner from Chesterfield, it turns out they had a Canadian connection. And it does have to do with money (and Her Majesty). An area of specialization for eBecs is lean manufacturing, and they’ve developed a module for dynamics that addresses that. They have an office in the U.S. and, working with Deloitte, one of their customers is the Royal Canadian Mint. Our mint doesn’t just make coins for us but is one of the largest global producers of coinage for other countries, and is a leader in souvenir coinage. It’s a big operation, and one that they manage with Microsoft Dynamics, with help from eBecs. Our mutual Queen would no doubt be pleased.

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Jeff Jedras
Jeff Jedras
A veteran technology and business journalist, Jeff Jedras began his career in technology journalism in the late 1990s, covering the booming (and later busting) Ottawa technology sector for Silicon Valley North and the Ottawa Business Journal, as well as everything from municipal politics to real estate. He later covered the technology scene in Vancouver before joining IT World Canada in Toronto in 2005, covering enterprise IT for ComputerWorld Canada. He would go on to cover the channel as an assistant editor with CDN. His writing has appeared in the Vancouver Sun, the Ottawa Citizen and a wide range of industry trade publications.

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