State Of The Microsoft Union, With Eddie O'Brien, VP Of US OEM Sales

When it comes to understanding Microsoft’s partner strategy, smart folks keep an eye on the company’s OEM (original equipment manufacturer ) relationships. With that thought in mind, The VAR Guy recently spoke with Eddie O’Brien, VP of US OEM Sales at Microsoft. O’Brien offered updates on Windows, Office and Windows Phone 7 partner relationships. Here’s the scoop.

O’Brien said that fiscal year 2010 was phenomenal and for Microsoft, on the consumer side, growth was encouraging. However, commercially, the same growth and refresh is slower going, with many business and enterprises dragging behind on upgrading Microsoft products, particularly Windows 7.

O’Brien said that overall, Windows 7 and Office 2010 have been big players in last 12 months, but admitted that Microsoft is seeing some intense competition. Whether it was to marginalize the risk, or evaluate it, O’Brien said that Microsoft has been looking at the iPad and asking questions as to whether it’s a “4th screen” (the first three being your TV, Computer and your Phone) or if it’s part of the PC category.

Google, too, has been a thorn in Microsoft’s side, and O’Brien said he correctly predicted that Android would take hold of a large chunk of the marketplace. But all that competition is good, and O’Brien sounded chipper over the fact that Microsoft seems to be at the helm again, full steam ahead. He gave the analogy…

Microsoft has been a few ‘launch cycles’ behind with Windows Phone 7, and O’Brien admitted to that, but he also felt Microsoft’s new foray into mobile devices was a great one, and even mentioned that Steve Ballmer sent around an internal e-mail from a Windows Phone 7 user who wants to switch all his Macs and iPhone-based business to PC’s and Win Phones.

(Yeah, okay… does one user represent the world?)

But zeal is zeal, in small amounts or not, and if Microsoft coordinates all of their device and ISV efforts, that’s a step in the right direction (but a flight of stairs behind the steps Apple has already taken).

State of Partnerships

On the OEM front, “Big Guys” (like Dell, HP, Toshiba, etc…) as O’Brien put it — are doing just fine. It’s the smaller system builders he’s worried about, but there’s been a resurgence. O’Brien says system builders represent about 5 percent of Microsoft’s OEM business. And there were concerns the figure would potentially drop to zero over time. But then Windows 7 arrived and now that 5 percent figure is steady again.

O’Brien hopes that the “small guys” will eventually find a niche in the cloud while server and virtualization demands are constantly booming. He felt that smaller OEMs would be able to tag on services or extend value onto Windows 7 platforms, even in the ‘tablet’ — or as O’Brien called it — slate arena. Quickly, O’Brien said that slate demand, especially OEM manufactures and VARs, are seeing a boost in heathcare, defense and education.

Before O’Brien signed off, he noted that Microsoft would want to hook The VAR Guy up with a Windows Phone 7 for review. He noted that Dell switched all employees to Windows Phones and ditched the Blackberry.

If a loaner unit falls into The VAR Guy’s lap he’ll be sure to give it a review.

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