Microsoft Research Own Store Operation In OZ

Microsoft, who last week moved into the direct sell PC hardware market, is now looking at the prospect of opening their own retail store in Australia according to sources.Microsoft Australia executives have not denied a move into retail, with the Company choosing to not return calls to ChannelNews on the issue.

A former senior Microsoft executive who left the Company recently told ChannelNews “they are defiantly looking at the cost of opening a retail operation in Australia similar to what they have in the USA.”

Seen by many as an arrogant Company who will strip business away from long time partners in an effort to improve their own profitability, the US Company recently moved into the hardware business; a move that PC manufacturers claims is set to get very messy as they “still expect the people they are competing against to support Microsoft Windows on their hardware”.

ChannelNews has been told in the US several vendors are already backing away from openly partnering with Microsoft, who some analysts claim has created an environment with their new Windows 8 software whereby consumers will move to an Apple Mac as opposed to learning how to use the new touch capable Windows 8 OS.

The New York Times said during the weekend the delicate balancing act Microsoft must perform was apparent at two events it held on Thursday in New York to introduce two major products. At the first event, it showcased devices made by Samsung, Dell and other hardware partners that run Windows 8, a version of Microsoft’s flagship operating system redesigned to accommodate touch-based devices like tablets.

An hour later, in a different area of the same location, a pier on the Hudson River, Microsoft focused entirely on Surface, a Windows tablet of its own design and the first computer the company has made in its 37-year history.

The separate events allowed Microsoft to spotlight devices made by others without awkwardly upstaging them with Surface. But executives left little doubt as to which computer was their favorite. At the Surface event, Steven Sinofsky, president of Microsoft’s Windows division, described the product as the best tablet and laptop he had ever used.

Two years ago Microsoft was cuddling up to PC partners claiming that “We are here for the long term”. The Company who now appears to be having second thoughts about partnering with PC tablet manufacturers always said its relationship with PC vendors has been key to its market share position.

The launch of the Surface tablet has revealed the Seattle Company’s true colour claims an angry Acer official. “We have partnered with Microsoft for a long time now they want to take business away from us. This is not good for the PC industry”.

Now firms such as Acer, Toshiba Asus, Dell, HP and Lenovo have to compete head on with Microsoft who is selling their Surface tablet direct, cutting out retailers who they are asking to sell their Windows 8 OS.

Internally Microsoft rolled out the excuse that tablets made by PC manufacturers were not “exciting” enough. However the latest Windows 8 designed tablets from the likes of HP, Toshiba, ASUS and Acer as well as Samsung and Dell, have been described as “leading edge, brilliant design and as good as Microsoft’s Surface offering”.

In the past Microsoft has had some major hardware and software failures with products such as such as the Zune music player, Kin and even the Bing search engine which consumers can’t get off their PCs quick enough in favour of arch rival Google.

There are very few analysts who truly believe that Microsoft will topple Google in the browser/search market or Apple with the Surface RT, which according to several leading reviewers has its problems, such as a lack of applications and poor battery life.

Microsoft claims the reason for going direct was they saw a need for a major change in both the design of Windows and its strategy for delivering it to customers.

In other words, retailers and PC manufacturers were not doing a good enough job. When you talk to PC manufacturers such as Samsung they will tell you that the problem was not the hardware but “Microsoft’s poor Windows operating system that was running third in a race with Apple’s OS and Android from Google.

The iPad is already stealing sales from laptop computers, and Apple’s chief executive has predicted the tablet will one day outsell PCs.

The New York Times said that Microsoft’s move into hardware has perturbed many of its traditional partners, with implications that are still unclear. The company was to start selling Surface at midnight on Friday at about 60 Microsoft-operated stores in North America, a move that has annoyed retailers who will be deprived of a high-profile electronics device backed by a big marketing campaign.

We don’t know what sales of the Windows 8 OS was like over the weekend but Microsoft still has a job ahead convincing customers, including businesses, that the product is as compelling and reliable as Apple’s iPad, which has had several years to develop. 

Rich Adduci, chief information officer of Boston Scientific, a medical device company, has more than 20,000 PCs at his company using older Windows. But he has also deployed more than 5,500 iPads to sales representatives and other employees.

“Candidly, Surface is going to have a long, hard road ahead of it, given the marketplace and how it has matured with iPad and Android devices,” Mr. Adduci said. “There’s a very high bar for Surface that it’s going to have to hit initially for it to have a real chance.”