Six in, one out: Microsoft extends UK Surface channel

O2, Academia, XMA, PCS, Storm and TCN certified as Microsoft authorised device resellers, while Phoenix Software exits scheme

Microsoft has reacted to rising demand for its Surface tablets by slotting another six UK resellers into its authorised device reseller (ADR) programme.

O2, Academia, XMA, PCS Business Systems, Storm and Total Computer Networks were all given the nod following a competitive tender process, bringing the number of ADRs to 14, CRN can reveal.

This gives them access to special bid pricing on volume Surface deals and the ability to provide extended warranty and a range of other value-add services around Microsoft's slow-burner of a tablet.

The first batch of nine ADRs were appointed in August 2013 in the shape of Insight, SCC, Misco, Softcat, Phoenix Software, Kelway, CCS Media, Computacenter and SoftwareOne. However, Phoenix Software exited the programme as of the start of April.

Although Surface sales got off to a lukewarm start, Peter King, director of partner sales at Microsoft, said demand had been "very strong" since the ADR scheme was launched. Surface sales grew 24 per cent in 2014 driven largely by the Surface Pro 3 (pictured) and accessories, he said.

"In light of this growth Microsoft is pleased to announce that in the UK we have expanded our line-up of ADRs," King said.

CRN understands the tender process saw candidates go head to head and pitch to Microsoft bigwigs at its Reading headquarters in February. Their contracts kicked off this month.

‎Chris McQuade, operations manager at PCS, said ADR status would complete its Microsoft offering.

"Some customers were coming to PCS wanting to purchasing a Surface and we were having to offer them an alternative that may not have been their first choice. This would at times lead to the customer purchasing from an alternative supplier," he said.

Some analysts had argued an extension of Microsoft's Surface distribution strategy after the launch of Surface 3 was likely due its popularity and McQuade said that Microsoft's tablet has become a "high-desire item".

"If you said you wanted a tablet, the desired item was the iPad," he said. "Now I think everybody in business who is saying they want a tablet immediately wants a Surface. We have seen interest in healthcare and education and across the public and private sector."

In a statement, Sam Mudd, managing director of Phoenix Software, confirmed her firm's decision to exit the ADR scheme.

"We have taken the decision to move away from this closed channel programme to allow us to keep focused on our core competencies for the resale of Microsoft software," she said. "We are one of Microsoft's leading LSPs in the UK, enjoying significant growth that is outpacing that of many of our competitors."

Mark McCormack, public sector sales director at Academia, said it had previously been difficult to supply the Surface to its education client base at a reasonable price point.

"A lot of our strategy going into our next year will be around scaling up where we've done well this year around mobile technology in the classroom," he said.

"Typically, that's led by Apple but now having the ability to offer multiple platforms within a mobile learning programme will be key to our growth next year."

Terry Betts, chief executive of existing ADR CCS Media, said: "I'm not particularly surprised by this. The new [ADRs] are all people that specialise in the public sector and the latest Surface [Surface 3] that came out is ideal for that market."