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Microsoft APC 2015: How can Windows 10 be profitable for partners?

Microsoft APC 2015: How can Windows 10 be profitable for partners?

Windows 10 is a hit in the consumer market, so how can the channel make margin on a product that is basically given away for free?

Will the channel be able to sell it?

Will the channel be able to sell it?

Windows 10 is an opportunity to do a top to bottom refresh, hardware and software tied into managed service Cloud plays, claim Microsoft's key partners in the area.

Microsoft hosted a panel of experts at its Australian Partner Conference on the Gold Coast, discussing option for channel partners to deploy Windows 10, which since its launch on July 29 has seen 75 million downloads globally.

The panel consisted of: Microsoft director of partner business development, Phil Goldie; its Windows commercial lead, Jaron Cohen; Tech Research Asia executive consultant, Mark Iles, Data#3 national practice manager for Microsoft services, Scott Gosling; Thomas Duryea GM, Michael Chanter; and XCentral MD, Phil Patelis.

Goldie focused on the Cloud sell through opportunities for Windows 10 implementations.

"Yes, we are a technology company, and our partners look to benefit from technology in terms of delivering customer outcomes. But what is important right now is getting the business model changed, the impact of Cloud and how that affects our 12,000 partners. It's a big challenge," he said.

Cohen added that the company still has a goal of getting one billion users on Windows 10 within 24 months. A key part of that will be the hardware.

"A key component for us is the devices ecosystem. The majority of enterprise users are on Windows 7, a platform that was released a year before the iPad ever existed. A large percentage of the Australian business community are on a platform that fundamentally can't use those true mobility style devices - such as the Surface," he said.

Iles said that Tech Research Asia's reporting already shows that 86 per cent of partners in 2015 believe they are ready to make the transition, but just 43 per cent of their customers are ready right now.

The key opportunity, he says, is the more than 50 per cent pull through on Cloud and mobile device management services on offer.

Chanter told the table that the opportunities within the Microsoft ecosystem are now contiguous, that is, customers are now looking to "do it all at once, Cloud, Office 365, Windows 10".

"It's a conversation header to onsell other products," he said. "It has a much better mobility tie up, and that makes it a significant update."

The percentage adoption had taken Thomas Duryea by surprise, he said, and that the transition is also being driven by end users and managing directors - namely, they've installed it at home and now want the same functionality at work.

The problem for the channel and IT departments is tying that into existing processes and line of business applications.

Comparing the benefits to the spend, however, the usability and security improvements are worth it alone.

Xcentral's Patelis agrees, working at the SMB end of the market.

"These smaller companies, usually 1-100 people, the conversation is usually with the MD. MDs don't have the time to worry about this stuff," he said.

"They are looking at line of business concerns, ease of use, and worried about data theft."

Tying that into the Cloud, particularly as a managed service makes a lot more sense for these guys. The ability to drop the entire Microsoft platform at once makes it much quicker and easier, he said.

A key advantage of Windows 10 is that it can be installed straight on the top of Windows 7, and you can add the new features at your customers' leisure - such as Yammer, Sharepoint and Lync.

"It also gives you more time to make that adoption, that value add sale. It's made us more agile as a partner."

Iles describes Windows 10 as 'Windows-as-a-service'. So does that mean that partners are looking at the last SOE (standard operating environment) they'll ever do?

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"Well, yes slash no. Theoretically, yes, but some of the partners we spoke to are looking at this like this constant update as a service - it becomes a managed service. Its not a series of one off projects every time there's an OS update," he said.

"The partner will have to manage that environment for the customer. That's a huge change to the annuity model and revenue stream."

Chanter thinks the key benefit is how quickly deployments can now be done. An 800 seat client, Brookfield, put up an entire corporate environment in just eight weeks.

"We'd never done that before. That was identity, all of the corporate services you'd expect, ERP, endpoint physical devices, Office productivity, Sharepoint online - the lot," he said.

"That's just not possible in the traditional on prem model."

Gosling believes that Windows 10 has always renewed demand for hardware - the Data#3 Surface business is growing year-on-year, he said. Even the company's e-marketing has seen 50 per cent open rates "and that's just unheard of".

One of Windows 10's key features is that it allows apps to be developed that can run on every Microsoft platform, from Xbox, to laptop to Windows Phones.

This may also cause problems on launch (Windows 10 Phone launches later in the year) as the mobility/BYOD division is usually run as a separate entity in most partners operations.

Chanter said there aren't any current plans to merge those divisions together, but that it may occur further down the road. Gosling said that his company has started developing Windows 10 apps, but had no phone plans yet.

The potential for driving giant bundle sales across all hardware, the software/Cloud ecosystem and phones is a huge opportunity. Refreshes could literally be end to end, top to bottom, if the system works as Microsoft claims it will. Continuum, a Windows 10 feature, that allows phones to be docked and used as full blown computers once keyboards and mice are connected.

"Most of our partners are working through the new use cases, Continuum, for example, really represents a different device consolidation discussion with customers. It is possible for someone using a mobile device and a phone to have that shrink down into a single new device," Goldie said.

"The app dev opportunities are there, the device and deploy opportunities are there. But we will see more and more of that come to light over the coming months as the new phones and Windows 10 Phone launches."

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Tags Michael ChanterData#3Phil PatelisMicrosoftScott GoslingPhil GoldieXCentralThomas Duryea

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