The printed word made it all the way from one Gutenberg to another -- Johannes to Steve, although Steve picked up an extra "t" somewhere along the way -- before finally giving way to the inevitability of pixels, screens and bookmarks not made of plastic and given away for free at the local bookstore. (On a side note, the local bookstore isn't around anymore, either. But we digress.)
Kindle, Nook, iPad, HP Touchpad (hey, we are out there!) -- the age of the e-reader is not only here but has been here for a while. So it's about time Microsoft jumped into it. Late, but not fashionably, to the trendy party as usual, Microsoft took a big stake in the e-reader game this week by pumping a few hundred million dollars into Barnes & Noble's Nook device and the subsidiary-type thingy that B&N will create to produce it.
For its money, Microsoft gets a final nod to patent humility from B&N, a share in e-book revenues and somebody to actually create a reader for Microsoft mobile devices to compete with Amazon's Kindle device and app. Everything considered, given Microsoft's mounds of cash and Barnes & Noble's need for, well, cash, this actually sounds like a pretty good deal for both parties. What it does not sound like is a grand entry for Microsoft into the tablet game.
Nothing we've seen has made this out yet to be a tablet play, but reasonable questions are starting to arise about whether the Nook will eventually run Windows 8 (or, more specifically, the horribly named Windows RT) rather than the Android operating system it runs now. And it very well might. For Microsoft, that would be a nice swipe at Google, although fleecing Android device dealers with patent agreements will likely prove to be a lot more profitable.
What puzzles us is that most reports seem to place Microsoft's investment -- it's not a buyout of anything -- as a move to compete with the iPad. We don't get this at all. Competing with Amazon and the Kindle? Sure. Making some money by helping bail out a struggling company that happens to have a great product? Absolutely. Gaining a little bit of a foothold in the mobile-device space by possibly replacing Android on the Nook? Yeah, that would be a nice benefit.
But competing with the iPad? No, that's not what's happening here. First of all, the Nook, nice little machine that it is, is not an iPad, or even an HP Touchpad (still out there!). Like the Kindle Fire, it's primarily a device for consumption and not really one for creation. It's great for reading, watching videos (although we can't remember which one, the Fire or the Nook, actually supports the Netflix app) and basically staying entertained in a handheld form.
It's not meant to do everything an iPad, or even an Android tablet or Touchpad (yes!) will do. Those are devices designed to darn near replace laptops, allowing for much more creation and productivity than something like the Nook can offer. The Nook competes with the iPad only on the fringes of an almost entirely different market. (It might be overkill to have both a Nook and an iPad, but it's not unthinkable. A single consumer having, say, a Samsung Android tablet and an iPad, though, is fairly unlikely.) So, Microsoft's investment won't help Windows' standing as the bottom-of-mind OS for mobile devices, particularly tablets.
Now, will Microsoft move in further and try to turn the Nook into a full-fledged Windows tablet? Maybe...but we kind of doubt it. The Nook is great for what it is, a consumption machine. As for full-on tablets, Microsoft will have to pursue that market in some other way -- a way that will likely cost more than a few hundred million dollars. And as a competitor, the iPad might just turn out to be a little stiffer than the Kindle. If only the Gut(t)enbergs had known what they were getting us into.
Posted by Lee Pender on April 30, 2012 at 4:36 PM1 comments
Connoisseurs of great television advertising will remember the days when Smith Barney made money the old fashioned way -- they eahhhned it. And so it goes at Microsoft, which, despite being behind in every new-fangled market from tablets to smartphones (actually, pretty much just those two), continues to make money the old fashioned way -- with Windows. And, um, Office.
Last week's Microsoft earnings report was something of a throwback to the '90s, or maybe even the '80s. Entertainment stuff was weak. Nobody's buying Windows Phone. But the old stalwarts in Redmond -- Windows and Office, plus Dynamics (yes, really) and some servers and whatnot -- drove Microsoft to beat analysts' earnings expectations. OK, so Microsoft is no Apple when it comes to blockbuster numbers. So what?
Tablets -- iPads, let's face it -- have already cut into PC sales. Consumers are buying iPhones and Android devices (the latter of which actually put money in Microsoft's pocket at a pretty good clip) and maybe hanging on longer to their laptops or desktops. We're in a post-PC era, et cetera, et cetera. Except for one thing: We're not.
Just about everybody who starts a desk job still gets a laptop or PC running Windows and Office. Some get iPhones, maybe even iPads, but pretty much everybody gets Windows and Office. That's still a lot of people, jokes about the job market aside. Consumers who don't want to spend a mint on a (fantastic, we'll admit) Mac and don't want to have to goof around with Linux like some basement dweller who hasn't seen the sun in years buy PCs. And when the buy PCs, they buy Windows. And usually Office.
We should pause here to point out, too, that the business stuff -- the various server operating systems, Dynamics, SharePoint and so forth -- are raking in plenty of cash in Redmond, as well. As we've said here many times in the past, those are the areas Microsoft needs to continue to either dominate or capture apace. They're not cool, and they're not trendy -- which is why they're such good, steady sources of income.
They're boring, bland, partner-enriching bedrocks of business technology, and we're guessing that most partners care a lot more about them than they do about Windows Phone or any sort of Microsoft tablet. Pitching and defense. Run the football. Solid goaltending. Pick your sports metaphor -- you get the idea. Well done, Microsoft, for continuing to get that right while screwing up so many other things.
We seem to read a lot of speculation about how much longer Windows will be a moneymaker for Microsoft, or how long it will be before Google or somebody else starts taking chunks out of Office. Well, we figure that as long as those new employees sit down to Windows machines and those consumers buy laptops and PCs from companies not named Apple, Windows and Office will keep making money. Does anybody really see, in the near future -- say, in the next five years, minimum -- the standard office PC or the consumer laptop really going away, just ceasing to exist? Nah, we don't, either. And that's why Microsoft isn't in any sort of danger, either, even if very little that comes out of Redmond is likely to be cool.
Posted by Lee Pender on April 23, 2012 at 10:55 AM1 comments
We at RCPU don't make a habit of telling Microsoft what to do. We usually focus on what we think Microsoft is doing wrong or could be doing better. That's what bloggers do. We magnify problems without offering any solutions. We're like politicians in that sense.
Once in a while, though -- and this might actually be the first time -- an idea comes along that's so good, so smart and so seemingly simple that we just have to jump on the bandwagon and say, "Do it, Microsoft! Give Bing to Facebook in exchange for Facebook shares and some search revenue." Oh, it's not our idea, of course. Barron's explains:
"The idea, floated by a CNBC commentator last week, goes like this: Microsoft would turn Bing over to Facebook. Microsoft could receive Facebook shares, currently worth two times Bing revenues, roughly $4 billion, which [Nomura Securities analyst Rick] Sherlund posits as a 4% stake. Microsoft currently owns a 1.6% stake in Facebook, a company that is expected to be valued at as much as $100 billion after its initial public offering later this year. Of course, Facebook might want to wait until after the IPO to see what its shares are actually worth.
"The transaction would still allow Microsoft to achieve the two primary objectives behind its current ownership of Bing: making money off its Internet traffic and preventing Google from monopolizing search advertising."
So, that's an out for Microsoft from the Bing business, which never made a lot of sense in the first place, and a pretty well built-out search engine for Facebook, which the social network really seems to need. And the best part is that Microsoft could own a larger share of a huge-growth company and still make money off of a search engine -- without even having to mess with Bing anymore! Oh, and it's bad for Google!
Maybe we're just simpletons here (spare the comments, please, peanut gallery), but this Bing-Facebook thing seems so pure and so right that it almost has to happen. Of course, that pretty much guarantees that it won't happen, as Microsoft doesn't seem to do all that much that makes sense anymore. Ah, that's better. Taking random pot shots at Microsoft is so much more fun than supporting a constructive solution to a big problem. And we're back to blogging again.
What's your take on a Microsoft-Facebook Bing swap? Leave a comment below or send it to email@example.com.
Posted by Lee Pender on April 17, 2012 at 1:44 PM6 comments
Hmm, let's see here, press releases, news items, Microsoft and Ariba are collaborating on...wait. Hold on. Microsoft and who?
Honestly, on the list of companies we honestly had no idea still existed, Ariba was near the top of the list. But some semi-vague deal with Microsoft has confirmed Ariba's non-death.
What's next? Finding out that Commerce One is still alive? Nah, that's what we thought. At least something in the tech world makes sense right now.
Posted by Lee Pender on April 16, 2012 at 1:46 PM0 comments
"A billion here, a billion there, and pretty soon you're talking real money."
-- Something Sen. Everett Dirksen probably never actually said, but still a good quote.
Microsoft and AOL this week cut a deal that makes both parties look like titans of the lost 1990s compared to Facebook, which just keeps charging ahead into the 21st century.
The software giant bought a billion dollars worth of patents (more than 800 of them) from the provider of Internet service to senior citizens, giving AOL a much-needed (but one-time) financial shot in the arm and providing Microsoft's lawyers with fresh new ammunition for the company's patent-lawsuit weapons. The deal seems like a win-win, to use horrible jargon, but it's about as exciting as a "never-ending talk show" (which, terrifyingly, could actually emerge from the deal).
Meanwhile, Facebook, all youth and vigor, is buying something called Instagram for about $1 billion. Instagram must be new and hip because your editor has barely heard of it and has certainly never used it. That's a good sign that it's excellent acquisition fodder for Facebook. If your editor is actually using an application or Web site on a semi-regular basis, it's pretty certain that app is embarrassingly passé and is about to fade into oblivion (after all, we at RCPU actually own an HP Touchpad). Instagram passes the RCPU "what?" test and therefore should be a wise spend for the Facebook folks.
Although they're not related, these deals do reflect where Microsoft and Facebook are as companies. Microsoft's billion is basically going to lawyers, who will likely be able to make the company a ton of money by crushing competitors large and small in East Texas courtrooms (where patent lawsuits always seem to happen). It's also a defensive buy, covering Microsoft's considerable backside in case of legal attack from some patent troll. That's great, but it's not exactly something that's going to spur innovation or give partners a talking point for prospective clients.
Facebook, meanwhile, is off buying something it can weave into its services -- probably in some way that will end up enraging users about a lack of privacy, but still. The new paradigm for everything, social media, is swallowing up new categories of users and expanding its profile while Microsoft, a traditional software company, is digging in for legal battles and bailing out struggling, has-been tech titans. This is dining at the Ritz and embarking on a night of clubbing compared to scarfing down the 4:30 p.m. "dinner" special at the Golden Corral (we just kind of figure there is one) and going home to watch something on TV with "CSI" in the title. But, hey, that's the way it goes getting older ... right?
Posted by Lee Pender on April 09, 2012 at 11:30 AM9 comments
Does the sliver of the smartphone market that owns Windows Phone-based devices know something we don't? Maybe, as it appears as though Windows Phone is driving a high rate of satisfaction among users -- so high that it tied with the iPhone in a recent survey of customer satisfaction. That's all great news for Microsoft, we suppose, but your editor loved his Intellivision as a kid (George Plimpton did the ads!), but that still didn't stop it from being crushed by Atari. Microsoft's market share for Windows Phone is still less than 10 percent -- but at least it's a happy less than 10 percent.
Posted by Lee Pender on April 02, 2012 at 10:55 AM11 comments
Wyse Technology started as a producer of convection ovens in the 1930s before converting itself into an aircraft manufacturer during World War II. OK, not really, but the provider of thin clients does go back to 1981, when Wang was still a major name in computing and Microsoft wasn't. It has been around a while.
But no more, at least not as an independent entity. Dell announced this week that it is snapping up Wyse but didn't mention a price. What also doesn't get mentioned all that much these days is thin client computing, what with all the hype about Software as a Service and the cloud.
You know thin client computing. The OS for client machines runs on a server rather than on the machine itself. That makes the clients pretty much dumb boxes if they're not hooked up to a network. It's not totally client-server, but it's certainly not the cloud, either. It has been around for a long time.
And it's popular. Wyse itself claims more than 200 million users (individuals, not companies), according to the Wired article linked above. Although it was never a great generator of hype, the thin client model has provided cost-effective computing for companies for years, without the risks of outsourcing that the cloud presents. In fact, it sounds a lot like what folks now call the "private cloud," a phrase that still seems counterintuitive.
It's a bit surprising to us here at RCPU that Wyse sat alone at the acquisition dance for as long as it did. It's been one of the largest providers -- probably the largest -- of thin client computing for years now. The company has experienced some twists and turns in its history, but it settled well into a niche and dominated it.
Dell's acquisition is a pragmatic move, one that should bring in revenue immediately rather than merely offering the potential for a gold mine down the road. It also takes Wyse out of the hands of Dell's competitors, not that any of them seemed eager to grab it. Wyse is a great channel company, which Dell seems to want very much to be now after years of turning its back on the idea of a partner model. It couldn't hurt Dell to have a new set of resellers to cozy up to, and it couldn't hurt Wyse resellers to have the Dell name behind them from now on.
Little buys like this in established categories of the market don't get much hype, but they'll have a greater impact for most partners than yet another acquisition of a cloud startup will. We've waited all the way until the end of the post to say this, and we're regretting it already, but we do find Dell's purchase to be a Wyse move. Sorry. That was a hanging curve ball, and we just had to swing.
What's your take on thin client computing? Are you making money off of it? Sound off in the comments below or at firstname.lastname@example.org.
Posted by Lee Pender on April 02, 2012 at 12:32 PM0 comments
We literally love anything that's literal, so we couldn't let this little story pass by this week without some sort of comment. That nasty little torrent site, The Pirate Bay, has a brilliant idea for avoiding the intrusive copyright laws of planet Earth.
Put the servers in the sky, somewhere up there where Norman Greenbaum says he has reservations. That's actually what The Pirate Bay folks (apparently, "The" is part of the name) say they're going to do. They seem to be entirely serious when they say that they're going to locate servers in unmanned drone aircraft that will hover above Sweden. That way, their ostensibly illegal stuff will escape the jurisdiction of everybody but a few birds. Yes, this is literal cloud computing.
And it's brilliant, right? Forget about the illegal part. This could be the solution to the pestering problem of how to build and cool datacenters. Just launch them! Over Sweden! What could possibly go wrong, aside from the term "crash" becoming a little more literal? (And, again, we love the literal at RCPU.)
Forget about painting the roof of your datacenter white or figuring out a way to cool those burning-hot server farms. Just throw everything up in the air and let it gently float around us. You can get your kids to control your drones with remote controls.
Actually, this reminds your editor of a story. While living in France a few years back, your editor was admiring some of the military technology on display after the July 14 parade. He spotted what looked like a small airplane and, figuring it did something awesome, asked a French soldier, "What does this do? Blow things up or shoot lasers?" Befuddled, the soldier replied, "No, it takes photos." Photos. Never mind, then. Whatever.
Anyway, the server drone is brilliant. And folks at The Pirate Bay are pretty sure nobody will mess with it because they say shooting it down would be an act of war. An act of war, over Sweden, brought on by possibly illegal downloads of such oppressive mediocrities as one of the Twilight movies or a Taylor Swift album. Now just try telling us we don't live in the greatest era ever in human history.
Posted by Lee Pender on March 22, 2012 at 2:35 PM6 comments
Is it just coincidence that Microsoft's begrudging acceptance of open source, as slow, uneven and controversial as it has been, has coincided with the company's fall from its perch atop the technology mountain? Maybe, but there's no doubt that Apple, the company that has unseated Microsoft, has won its place as the world's most valuable company by also being the world's least flexible and most proprietary.
It has long been the case that a user who wants something from Apple has to get almost everything else from the company, too. Apple is about as open as a Border's bookstore. Once inside the company's gilded cage, it's hard to escape. That's fine most of the time because Apple's stuff famously just works. But there are a few exceptions, and one of them is iTunes. Great as it might be on the Mac, iTunes is an unstable and clunky resource gobbler on the PC. Still, once a user buys into iTunes -- and most have by now -- it's not usually worth the time and effort to get away from it and move to something else, even if the software does tend to crash like Duke in this year's NCAA basketball tournament.
No matter how bad iTunes might be outside its home court of the Mac, it's still the de facto organizer for most music and lots of longer videos. And of the many reasons Windows 8 might fail on tablets, it's likely near the top of the list. At this point, Apple doesn't seem interested in making a version of iTunes for Windows 8 tablets, meaning the user who's really into multimedia will either have to figure out some way to migrate (read: escape) from the software or just give up and buy an iPad.
iTunes is the one prison an outsider -- Microsoft, in this case -- would like to break into. But the guards at the gate are even tougher on visitors than they are on inmates. There seems to be no compelling reason for Apple to produce a version of iTunes for Windows 8's Metro interface, and there's little point in Microsoft trying to come up with an alternative, not matter how much better it might be. iTunes has Google-like brand recognition at this point and a fairly literal stranglehold on its user base.
All of this might sound a bit fluffy and consumer-focused, but folks who bring iPads to work are consumers, too. And while partners might -- just might -- be able to convince customers of Microsoft's tablet-readiness for the enterprise, it would be a bit like trying to sell a great car that only came with a tape deck (remember those?) or maybe with just a CD player and no iPod hookup. You see where we're going with this.
What are Microsoft and partners to do about this quandary? We have no idea. It's a bit of a chicken-and-egg scenario. It would be great if Microsoft could convince Apple that iTunes for Windows 8 Metro would be a great revenue driver (sort of like Office for Mac), but why would it? Nobody has bought a single Windows 8 tablet, while the iPad remains the Beatles circa 1964 of the technology industry. And with iTunes adding to its list of inmates all the time, where's the motivation for the industry's most closed company to suddenly open itself to a longtime competitor? We don't see it, either. Just as we don't see our music on iTunes because it just crashed again on our PC. But that doesn't really matter, does it?
What's your take on the importance of iTunes to Windows 8's tablet success? Send it to email@example.com or leave a comment below.
Posted by Lee Pender on March 19, 2012 at 1:43 PM3 comments
Frustration, from what we remember, is the experience of trying to reach a goal and then realizing that, no matter what you do, there is no way to reach it. It's also what a lot of people at Microsoft -- and Microsoft partners -- must be feeling right now with regard to Windows Phone.
No matter what Microsoft does, this anvil just keeps plunging deeper into an ocean of market share, falling further and further behind Google and Apple. Microsoft tried -- although not nearly for long enough, we'd say -- to compete straight-up with Android and iOS, but nothing has worked thus far.
Now, as we've noted before, Microsoft is taking the near-Soviet approach of dumbing down its offerings in hope of reaching a nonexistent swath of people who want cheap, crippled "smart" phones. Frustration is setting in, and desperation is creeping out.
We've gone over in this space many times the challenges Windows Phone faces, the most important being -- to us, anyway -- that despite being beautiful, it doesn't look like any other operating system that has come before it. Revolutionary change, unless Apple does it, often doesn't go over well in the technology industry, particularly with consumers. Microsoft has just started trying to launch a revolution with its new interface. Now, it's taking the battle in the wrong direction by making Windows Phone devices less capable, not more.
What that means is that Microsoft is yanking its starting quarterback in the first quarter and putting a lousy backup in to finish the game. (Yes, we're mixing metaphors today like tossing a salad, although your editor doesn't much like salad, usually.) The result is likely to be that Windows Phone will be a flop akin to the Kin, and the sad part is that it doesn't have to be that way. Instead of throwing in the towel, Microsoft should use some of its wads of cash to continue to boost Windows Phone's functionality, not cut it, and to educate consumers on why a Microsoft mobile OS that's completely new and different is worth a look.
What we're getting instead is more timidity from the new Microsoft. The company that once barreled over its competition in every market it entered is sadly gone. The new Microsoft, at least the new consumer Microsoft, flails, stumbles and waves the white flag at the first sign of trouble. That's a great way to be a loser for a very long time, and it's no way to inspire confidence in a partner base. But it's what we're seeing with Windows Phone, and we hope it won't seep into the rest of Microsoft's operation.
Continue to offer your take on dumbed-down Windows Phone devices in the comments or at firstname.lastname@example.org. And thanks.
Posted by Lee Pender on March 08, 2012 at 2:16 PM16 comments
Multiple press outlets are reporting this week that former Microsoft Chief Software Architect Ray Ozzie says that "of course," we're in the post-PC era. But who cares? There's a much more important component to this story.
Ray Ozzie's new company is called Cocomo. Either we've already made fun of this here, or we forgot to make fun of it, or we forgot about the name altogether. But let's be very clear: The name Cocomo deserves ridicule. After all, nothing says forward-looking technology like a name that brings images (backwards, perhaps appropriately, in the case of this video) of an old song sung by an even older band.
Besides, Kokomo, the tune, always reminds your editor of a friend's very Bostonian mother, who used to sing, "Aruber, Jamaicer, ooh I want to take ya to Bermuder, Bahamer ..." So, thanks for that, Ray. But, really? Cocomo? Bodies in the sand, tropical drink melting in your hand ... and world-class enterprise software! Pina colada-flavored Skittles for everybody! (Software developers just love their Skittles, in case you'd forgotten.)
Posted by Lee Pender on March 08, 2012 at 10:49 AM1 comments
You can't begin to imagine how flattered your editor felt when he saw MWC news popping up all over the Web earlier this week. Texas Christian University, your editor's alma mater, might be leaving the humble Mountain West Conference for the greener prairies of the Big 12 in the fall, but TCU does leave the MWC with four football championships in seven years in the conference. And now the worldwide press wants to write about this? That's flattering.
Of course, it wasn't really flattering because MWC in this case stands for Mobile World Congress, a name that we at RCPU find very confusing and borderline insulting. Couldn't it be the Mobile World Expo or something? Is it really a congress? We hate when real-world abbreviations copy the well-known names of college football conferences. (We're looking at you, Securities and Exchange Commission.)
In any case, this week's event in Barcelona gave Microsoft a chance to show off Windows Phone, which is kind of like showing up for a Super Bowl party when everybody else has moved on to March Madness -- a Super Bowl party in 2010, that is. But we digress. Microsoft talked up its mobile operating system in Barca and also revealed a bit about how it's going to try and actually sell it. And when we heard that part of the story, we started to wonder whether Microsoft had paella on the brain. (OK, so paella is Spanish and not really Catalan, but we couldn't come up with a famous Catalan dish. No offense intended.)
Check out this nugget from CNET:
"The software giant said today that it had lowered the minimum requirements to build a Windows Phone, a move that allows vendors to construct less-expensive devices that can appeal to more budget-conscious customers and first-time smartphone buyers."
Allow us a diversion here. It'll make sense eventually. Soccer is not a particularly popular sport in the United States for lots of reasons. One of them is that the level of the game we play here is considerably below that played in Europe and South America, for the most part. Lots of Americans -- even a lot of American soccer fans -- won't watch American soccer because it's not the best in the world, and we here in the United States tend not to like anything unless we have access to the world's greatest version of it. (That might explain why we've mostly invented our own sports and stolen hockey from Canada.)
Microsoft's ploy to sell cheaper phones to cost-conscious users might work -- and very well -- in other parts of the world. But it's not likely to work here. Microsoft is trying to sell American soccer to Americans, and we don't want it. Cost-conscious or otherwise, American consumers want iPhones. We want Android phones. We want the "latest and greatest," as the old expression goes. And if we can't afford it today, we'll wait and get it tomorrow, or we'll wait until our carrier lets us upgrade. Or we'll just put it on a credit card. What we will not do, however, is settle for second-best -- not when it comes to electronics. How'd that Kin work out, Microsoft?
Watch a friend or colleague whip out a flip-phone or some other communication fossil and see the reaction it gets. People now apologize to your editor for producing old phones from their pockets (which isn't necessary, by the way). The point here is that phones are about status now, and they're a status symbol a pretty wide swath of Americans can stretch to afford. So, maybe the data plan isn't unlimited, but, yeah, the phone's a smartphone. A real one. The best.
The notion of settling might not be a bad one for us in this country to explore, but it runs upstream against the raging river that is our consumer culture. And while not everybody can drive a Mercedes, if we can afford an iPhone, we're darn well going to buy it. And we do. Because we won't settle for anything but the best if we don't absolutely have to. And when it comes to smartphones, many of us don't have to.
So, Microsoft can take its cheap phones to the humble (or reasonable?) people of Europe and elsewhere, but that strategy isn't going to fly here in the USA. Go hard or go home, Microsoft! Compete straight up against Apple, Google and BlackBerry, or don't get into the game at all. Offering a relatively simple "starter" smartphone for a reasonable price might seem like a wise idea, but it's fundamentally un-American. We have a feeling, though, that Microsoft and its unfortunate Windows Phone partners are going to learn that the hard way.
Would you be interested in a cheaper, simpler smartphone from Microsoft? Leave a comment below or send your thoughts to email@example.com.
Posted by Lee Pender on March 01, 2012 at 2:46 PM6 comments