News

Microsoft CFO Outlines Company's Windows 8, Skype Vision

• By Kurt Mackie
• February 17, 2012

Microsoft Chief Financial Officer Peter Klein discussed the company's plans for Skype and its vision for the forthcoming Windows 8 operating system at the Goldman Sachs Technology and Internet Conference.

Klein fielded questions from Goldman Sachs financial analyst Heather Bellini, who moderated the talk on Wednesday. Mostly, he discussed Windows 8 and the Skype voice-over-IP and video integration. He said Microsoft thinks about the OS market in terms of "devices and services," which may not be too different from the "three screens and a cloud" vision heralded by Ray Ozzie, Microsoft's former chief software architect. However, Klein admitted that a fourth screen, tablets, could be added to the TV-PC-phone mix.

On the Windows 8 'Consumer Preview'
There has been some speculation over why Microsoft is calling the Windows 8 release scheduled for Feb. 29 a "consumer preview." Klein explained that the new terminology distinguishes the upcoming release from the "developer preview," which Microsoft made available at its Build conference last September. In addition, the term "consumer preview" is designed to get the public's mind engaged on the changes.

"There's a lot new, and so you have to get OEMs, chip manufacturers, and developers, and consumers along the way," he said, according to a Microsoft-produced transcript (Word .DOC).

Microsoft also uses the term "beta" to describe the consumer preview. The public likely will see just the x86/x64 version of the Windows 8 consumer preview at the end of this month, and not the ARM version, according to an explanation earlier this month by Steven Sinofsky, president of the Windows and Windows Live Division.

Klein partly addressed the Windows 8 question about running "legacy" apps, which are familiar menu-driven applications that have a "ribbon"-style user interface.

"I think there will be some cases where it will be easier for legacy applications [to be run] on x86 [hardware], at least initially, but that's more of a temporal thing than a long-term thing," he said.

Sinofsky had made much the same point, noting that "Office 15" applications will be available for Windows 8 ARM users, but they will use the classic "desktop app" user interface, rather than the new "Metro-style" one.

Klein essentially ducked a question from Bellini on whether Office 15 would be enabled on iPad tablets. He told Bellini that "people love Office and I think they are looking for a great tablet experience with Office and they will get that for sure."

The idea that Microsoft will release Office 15 for the Apple iPad is still at the rumor level, according to veteran Microsoft watcher Mary Jo Foley.

On Skype
As for Skype, Klein said the acquisition will provide a "compelling set of experiences across devices."

"We've been thinking a lot about it for mail, to messaging, to voice, to video," Klein said. "And Skype really extends that across all of our assets, whether it's with Lync in the enterprise, or with Xbox Live. I think that's something that really ties together all of our devices with a scenario that's probably as universal as any."

Lync is Microsoft's unified communications product for the enterprise. The use of Lync is confined behind the corporate firewall, whereas the consumer-oriented Skype service will extend that reach, Klein explained. He said that Microsoft hasn't talked much about the Skype integration with Lync so far, and he didn't offer any new details.

Klein added that Skype accelerates what Microsoft is doing in the cloud and helps with communications across devices. He added that "having that in voice and video is super-compelling."

Recently, Cisco challenged Microsoft's Skype acquisition, lodging an appeal with the European Commission and advocating open video standards for the industry. However, Klein wasn't asked about it.

There were also a few financial questions during the talk. For instance, Bellini noted that Microsoft has been making progress on holding back operating expense losses in its Online Services Division. Klein agreed and said that Microsoft has been focusing on is ways to increase revenue per share in search, which has been its "most leveraged" business activity. Microsoft has been trying to grow its Bing search-engine market share in pursuit of No. 1 search-advertising giant Google.