Live from Amsterdam: An often irreverent look at some of the week's other news ...
As I write this, we've been in
Amsterdam for almost two weeks, and we've taken a number of day trips around the Netherlands, including such places as Alkmaar, Hoorn, Medemblik, and Enkhuizen. But our biggest side trip will come Monday, when we head to Paris for the week. We'll be staying with friends and will in fact be in the same home-swap house we visited two years ago, which will be interesting.
Before that, however, I'll be
speaking in Amsterdam Friday afternoon at a company called Wortell. My talk is going to be about how Microsoft must evolve to continue competing effectively in the upcoming cloud-computing generation. Unlike some pundits, I don't think Microsoft is doomed. But their old business model is coming to a close. The only question is how painful the transition will be.
Leo and I recorded a new episode of the
podcast this week. The new episode should be up by the weekend, as usual. I'm hoping and expecting to do the next episode next week from Paris, but I just need to sort out where that will happen.
But wait, there's more! Don't forget to follow me on
Friendfeed, and the
After Widespread Criticism, Microsoft to Give Free Copy of Windows 7 to Beta Testers
After announcing last week that beta testers wouldn't automatically get a free copy of Windows 7 for their efforts in testing the OS over the past nine months, Microsoft this week reversed course and said they would. The change comes after widespread criticism of the previous decision, which was seen as yet another slight toward a group that, frankly, had very little input into the creation of Windows 7. "To show our appreciation, members of the invitation-only Windows 7 Technical Beta Program will be eligible for a free, final copy of Windows 7 Ultimate," a Microsoft statement reads. While it's not a given, most Microsoft beta testers receive free, finalized copies of the software they test. After all, doing so costs Microsoft very little. But not doing so, as evidenced this week, just makes the company look cheap and disingenuous.
Ballmer on Yahoo! Complainers: "Nobody Gets It"
After Microsoft and Yahoo! announced their search partnership this week, Yahoo!'s stock headed south, with analysts complaining that the ailing Internet giant didn't get enough out of Microsoft. But Microsoft CEO Steve Ballmer was quick to criticize the complainers and defend the deal Yahoo! struck with his company. "Nobody gets it," Ballmer said. "It's a win-win deal." Ballmer highlighted that Yahoo! will receive 88 percent of the revenues from Bing search ads sold on Yahoo!'s sites but have none of the R&D costs associated with expanding the platform. The issue, of course, is that Yahoo! CEO Carol Bartz foolishly had said previously that she wouldn't abandon Yahoo!'s search engine unless she was given "boatloads of money." And unless I'm missing something here, there isn't even a single canvas bag with a dollar sign painted on it anywhere.
For Microsoft, 30 Is the Magic Number
The New York Times' Steve Lohr interviewed Microsoft CEO Steve Ballmer in the wake of the software giant's blockbuster deal with Yahoo! and came away with an interesting bit of insight. For Microsoft, the tipping point in any market is always 30 percent. If a company can secure 30 percent of a market, that product is something to be concerned about (if it's a competing product) or something that can be made profitable and successful (if it's Microsoft's). That 30 percent number figured strongly in the company's fight with Netscape—when Internet Explorer (IE) hit 30 percent share, Microsoft felt it was finally a credible competitor and had a chance to unseat what was then the market leader. By linking up with Yahoo!, Microsoft's Bing service will control almost 30 percent of the search market (at least in the United States), and that's exactly where it wanted to be. It could have conceivably grabbed this much share on its own, but that would have taken years.
Microsoft Financial Analysts Meeting: Not a Bad Year, When You Think About It
A lot has been made of Microsoft's quarter-over-quarter revenue shortfalls by people both qualified and idiotic, but Microsoft itself takes a more pragmatic view. "It was a reasonable year, given the context of the environment," said Microsoft CFO Chris Liddell, referring to the ongoing worldwide economic collapse. And this is a company that still posted $13.1 billion in revenues in the most recent quarter, at a time when PC sales continue to slow overall. And let's not forget that Microsoft is about to release its strongest lineup of products ever, with such standouts as Windows 7, Windows Server 2008 R2, the Zune HD, and Office 201 waiting in the wings. The next year is looking good.
Microsoft Financial Analysts Meeting: Windows Has Competition, but Still Dominates
Microsoft CEO Steve Ballmer said that his company's core product, Windows, was under attack from all sides, including contenders such as Apple Macintosh, Linux, Google Android, and, now, Google Chrome. But for the hub-bub, Windows still dominates, and nothing that's happened in the past year has changed anything. Apple, for example, gained a bit of share at the beginning of Microsoft's fiscal year but lost it again in the past two quarters. So, they're still stuck with about 3.5 percent of the worldwide PC market. Linux, with around 1 percent, is even less compelling. And Google's stuff is still in the nascent stages at best. Meanwhile, Microsoft is getting ready to ship its best version of Windows ever and, well ... you get the idea. "Windows is absolutely job one around here," Ballmer said.
Microsoft Financial Analysts Meeting: Hyper-V Stealing Market Share from VMware
Windows isn't the only Microsoft product that's rocking and rolling. Microsoft COO Kevin Turner said this week that the company's Hyper-V virtualization platform has stolen "24 points of market share" from market leader VMware since it debuted as a new Windows Server 2008 feature last October. I recall discussing the competitive threat of Microsoft with VMware executives some years ago, and they were uninterested in even considering antitrust complaints—after all, Microsoft is bundling the functionality in its server versions of Windows—but said that their product was strong enough to handle whatever Microsoft could come up with. I was unsure that was the case at the time, and this seems to indicate that VMware is going to have to do some serious rethinking now that Microsoft has a credible challenger. By the way, how close is 24 to 30?
Microsoft Financial Analysts Meeting: It's Time to Turn Around Windows Mobile
Microsoft President Robbie Bach said this week that Windows Mobile lost market share this past year and that the company was working on turning things around. The reasons for Windows Mobile's downfall are legion, but Bach owned up to one of the more obvious reasons: Most smart phone growth is coming from consumers now, and the Windows Mobile experience isn't exactly friendly, interesting, or innovative. "If I have a critique of the phones today, it's that the experiences are very good in the business case ... but if you have consumer scenarios like browsing, media, \[and\] video, our experience isn't as rich as it needs to be," he said. So, how is Microsoft going to turn things around? Surely, there is a master plan. "We have to do a better job executing and operating our business," Bach said. Um. Right.