Windows 8 Sells 100 Million Licenses, But Challenges Persist For VARs

It's been six months since Microsoft Windows 8 was released and the controversial OS continues to garner both criticism and praise from both solution providers and customers.

On Tuesday, Tami Reller, chief marketing officer and chief financial officer for Windows at Microsoft, said that more than 100 million Windows 8 licenses have been sold thus far, up from 60 million in January. In January, Microsoft said about 60 million licenses were sold, so the additional 40 million have been sold over the last four to five months.

"Windows 8 is a big, ambitious change. While we realize that change takes time, we feel good about the progress since launch, including what we’ve been able to accomplish with the ecosystem, and customer reaction to the new PCs and tablets that are available now or will soon come to market," Reller said in a Q&A on Microsoft's website.

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One challenge Windows 8 has faced since its release has been the dramatic departure it was from previous versions of Windows, including the elimination of the familiar Start button. Solution providers have said that the significant training it takes to get a workforce up to speed on Windows 8 has hindered its adoption in many small businesses.

"For my corporate clients 95 percent will only buy Windows 7, even if the price is higher. They do not want to waste time on training on Windows 8," said Mark Ashe, computer manager at Mega Computers, a Portage la Prairie, Manitoba-based VAR.

With that in mind, Microsoft plans an update to Windows 8 later this year, code-named Windows Blue. That version will build on Windows 8 and include enhancements around display, battery life and performance, and also will include improvements sought by customers struggling to convert from previous versions of Windows, Reller said in the Q&A, though she did not detail specific changes.

"It will provide more options for businesses, and give consumers more options for work and play. The Windows Blue update is also an opportunity for us to respond to the customer feedback that we've been closely listening to since the launch of Windows 8 and Windows RT," Reller said.

The Windows Blue release should help quell the fears of some customers and partners, said Todd Swank, director of product marketing at Equus, a system builder based in Minnetonka, Minn.

"Microsoft is not unaware of the challenges customers are having. The company is full of very smart people. They do pay attention to what customers are asking, what the channel is asking," Swank said.

To spur growth in Windows 8, Microsoft is providing "unprecedented" investments and resources for solution providers to find, sell and reward Windows 8 sales, Cindy Bates, vice president, U.S. Small, Medium Sized Businesses, Distribution, at Microsoft, told CRN on Tuesday.

The new incentives, combined with the stat that more than 30 percent of desktops still run Windows XP, should provide ample opportunity for VARs, Bates said.

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"We see that big upgrade opportunity for Windows 8, Office 2013 and Office 365," Bates said. "We want to make sure we bring everything together to help partners find new customers, and that they are selling successfully and being rewarded for that. We want to pull everything together to make it easier to find what partners need."

Microsoft started a Beyond Easy website for partners to access resources in terms of finding, selling and getting rewarded for selling not just Windows 8, but Office 365 and more, Bates said.

"First is, what can we do to help customers start the conversation focused on the upgrade opportunity? For partners with any existing Open customers, they can request a workbook that includes what version the customers have," Bates said.

Microsoft has also started a "web syndication" program for partners, in which solution providers can obtain a code and any traffic to the solution provider's website that drives downloads for Office 365, the VAR gets registered as the partner of record.

"That's a great opportunity for partners to not only easily bring up-to-date content, but to ensure they direct customers to their site and that they're connected into that," Bates said.

Microsoft also has a promotion to send out unsolicited sales proposals to customers promoting the "modern desktop," in which VARs get the first 500 proposals for free, Bates said.

In the Q&A, Reller dismissed the idea that Windows 8 has disappointed due to "the PC's demise." In the first quarter, PC sales suffered their steepest year-over-year decline ever, according to IDC.

"The PC part of the market is rapidly evolving to include new convertible devices and amazing new touch laptops, and all-in-ones. These new PCs are hitting the market now and into the Back-to-School season, and they are more affordable than ever," Reller said.

Microsoft's Bates added that Windows 8 launched without a full complement of devices to support its features, something that is more in place today.

"There were not as many a variety of devices that we needed and wanted to show off the full capability of Win 8. That continues to march forward. In Tami's [Q&A], she talks about having 2,400 devices now certified. The opportunity for partners is there," Bates said.

PUBLISHED ON MAY 7, 2013