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Microsoft's Surface Pro 3 and 4: A business play for channel partners

Microsoft channel partners cite an uptick in Surface Pro sales in the enterprise, with healthcare, retail and law enforcement among the leading markets.

Editor's Note: This is part two of two articles exploring the evolving channel for business-class tablets, Microsoft's Surface Pro and Apple's iPad in particular. Read part one for an overview of the emerging 2-in-1 device segment and Apple's developing role.

Microsoft's Surface Pro 3 and 4 combined with the vendor's Windows 10 operating system, demonstrates a strong business market play by Microsoft with the vendor relying on its partner ecosystem to do the legwork.

That means big opportunity for Microsoft channel partners and their business customers for the Surface Pro-Windows 10 combo in both general business and vertical market applications, according to industry experts. And, while the iPad Pro and the Surface Pro will go head to head in some business application areas, the Surface Pro offers businesses a different IT proposition.

That said, the U.S. market for 2-in-1 devices, or detachables, such as the Surface Pro, iPad Pro and Microsoft Surface Book, will reach 7 million units in 2017 compared to about 5.8 million today in the commercial space, according to IDC.

With the evolution of mobile device types, expect to see detachables cannibalize the tablet market, said Jean Philippe Bouchard, research director for tablets at IDC.

Greg Parsonson, vice president of partner and product marketing at Zones Inc.Greg Parsonson

Both Keith Groom, director of Microsoft solutions at Softchoice, and Greg Parsonson, vice president of partner and product marketing at Zones Inc., reported an excellent uptake of Surface Pro devices among business customers to date. At Softchoice, the Surface Pro is the reseller's number one selling tablet in the enterprise.

"It's the leading solution that we take to market in the enterprise space for those customers who don't have specific iOS-developed applications," Groom said.

Devices like the Surface Pro are seen as multipurpose. They're used as 2-in-1s, are very popular with executives and they're also popular with enterprise applications that are touch enabled, he noted.

The Surface Pro is being used by field service technicians. "[Users] might be delivery guys or truck drivers using this device because it's very easy to create a Windows-based application," he said.

Surface Pro adoption is also popular in healthcare environments, when used by doctors doing patient rounds, for example. "It's easy to run any number of standard health care applications on the Surface Pro," Groom said. The reseller also sees the financial services industry buying Surface Pro devices.

Similarly, Parsonson has seen Surface Pro adoption across industries such as healthcare and retail, as well as being used by police departments. Police forces see the portability of the device suitable for use both in and out of vehicles.

"Previously, police departments used ruggedized laptops -- now they're using Surface Pros," he said.

Vertical play: Microsoft's Surface Pro 3 in education

And, while Apple shuts partners out of the education vertical -- Apple takes this sector direct only -- the door is open for Microsoft resellers to take the Surface Pro to the education market. In April 2015, Microsoft made a play for the education market, and digital classroom, by offering discounts on the Surface Pro 3. Parsonson reported a significant uptick in sales of Microsoft's Surface Pro 3 into the education market. "With WiDi and Miracast capabilities, it allows teachers or professors to interact on a greater basis with their students in a live environment," he said.

While Windows 10 is still playing catch-up to Apple with its vast app ecosystem, Microsoft is not sitting still.

The vendor continues to put significant focus on bringing Windows 10 to light in the developer community and, as a result, partners are seeing more business- critical applications being developed.

Last month, as part of Microsoft's Surface Enterprise Initiative, the vendor announced that it had expanded its relationship with Accenture and Avanade to develop specific business applications for the Surface Pro.

Phil Sorgen, corporate vice president, Worldwide Partner Group at MicrosoftPhil Sorgen
Photo used with permission
from Microsoft

"These efforts, however, are not limited to these two partners. And this is where our efforts focus on the broader ISV [independent software vendor] community --  and that goes beyond ISVs to companies that create IP [intellectual property] that is targeted to their customers' needs," said Phil Sorgen, corporate vice president, Worldwide Partner Group at Microsoft.

He pointed out that Microsoft partners are building applications focused on Windows 10 devices and are offering a complete package to customers in a variety of industries.

The Surface Pro trajectory

Both Zones and Softchoice reported that the adoption rate of the Surface Pro has been remarkable and expect the device to earn an even greater market share in business accounts going forward.

Groom believes that business adoption of Windows 10 will drive a greater acceptance of these 2-in-1 devices. And there's already evidence of an uptick, he noted.

The reseller recently asked its customer base about plans to deploy Windows 10 in the next 12 months and a resounding 60% responded positively. "That's an astonishing rate," he said.

Groom cited a few reasons for the uptick: Windows 10 offers backward compatibility so users don't have to buy new devices; the security of Windows 10 solves a lot of legacy issues about security and device management; and, deployment has changed -- an enterprise package can be loaded onto a device with the security and manageability that lets users have their own personal experience.

He also said that the end-user experience is amazing with Windows 10. "The touch experience has the look and feel of a tablet and the user interface has been very well received. Yet, it can be used in enterprise desktop mode too," Groom said. And then there's the optional first-party keyboard.

Previously, police departments used ruggedized laptops -- now they're using Surface Pros.
Greg Parsonsonvice president of partner and product marketing, Zones Inc.

Parsonson added that the pen functionality of the Surface Pro is unique until Apple introduces the iPad Pro. "It's part of the magic to have the [pen or stylus] capability integrated into the device. It's hugely applicable to remote workers, field sales and education," he said.

Both reseller companies sell and offer Surface Pro deployment services, in addition to consulting and professional services around Windows 10 migrations. They also offer ongoing device management services, third-party software and other software as a service applications such as Office 365 and Dynamics CRM.

"There's a lot of opportunity around deployment," said Groom.

Given that Microsoft offers a single OS that runs across a swath of devices, the Surface Pro is better positioned than the iPad as a laptop replacement -- the iPad and iPhone run iOS, while Apple Mac desktops and laptops run OS X.

Sorgen described the partner opportunity: "I think you have to start with not just the Surface, but I think you have to start with what we're trying to create around a Windows 10 environment that gives application developers the opportunity to build applications that are vertical or horizontal, and are unique to customer segments that they do business in. They can take those universal apps across all device types from a phone or a mobile device all the way up to something we announced like the Surface Hub," he said.

Next Steps

Read about the launch of Microsoft's Surface Book

Take a look at an overview of Microsoft's Surface Pro 3

Get up to speed on Windows 10

Dig Deeper on Emerging Technology Markets