RCP Editor in Chief Scott Bekker
digs
deep into Microsoft's most recent earnings statement and uncovers some things
that the rest of us hadn't yet discovered.
Posted by Lee Pender on January 31, 20080 comments
Despite what you might have heard, nobody in France actually says "Sacre
bleu!" as an expression of surprise. Maybe people did at one time, but
they don't anymore. These days, "oh la la!" (yes, just like in the
old
Sassoon commercials) is the expression of choice. So, if you're going to
react with shock to the fact that the French national police force has
dumped
Microsoft for Ubuntu Linux, please, use the proper French expression.
Over the next few years, the gendarmerie -- remember, there's a national police
force in France, not a collection of local police entities like what we have
in the U.S. -- is going to shift its 70,000 desktops from Windows to Ubuntu,
which, incidentally, is far and away the operating system with the name that's
most fun to say.
Les flics ("the cops" in French) say that they'll save more than
$10 million a year in license fees. And they're already using OpenOffice and
Firefox, so there shouldn't be too much of an open source culture shock inside
the organization. What we're wondering, then, is whether it's really true --
as Microsoft claims -- that running Windows is actually cheaper than running
Linux despite the cost of Windows license fees. Sure, there might be some issues
with integration somewhere, and there aren't as many experts trained to service
open source applications as there are to service Windows, but still...$10 million
a year? Oh la la, that's a lot of money.
We kind of wonder, too, whether, the European Union's regulatory war on Microsoft
might be having a ripple effect on government IT departments overseas. (Oh,
by the way, the U.S. will keep an eye on Microsoft for another
18 months, too.) We've read that some major European cities have also started
to ditch Redmond's wares, and Europeans -- especially those who work in the
public sector -- are sometimes more prone to listen to their governments than
Americans are. (Actually, that's also true for people who don't work in the
public sector. Your editor distinctly remembers reading and hearing during his
time in France about how public service announcements about safe driving actually
worked over there -- and fairly quickly and impressively, too. Then again, some
of them were pretty disturbing.)
In any case, we're not going to jump on the alarmist, Microsoft-is-dying bandwagon
that probably has one or two fewer seats today. Remember RCPU's rule: No matter
what happens, Microsoft makes more money. But, the more Linux penetrates enterprise
and government settings on the desktop, the more Microsoft had better think
long and hard about what its partners and customers need Windows to be -- maybe,
to start with, lighter, cheaper, more flexible and less like Vista.
Do you run into competition from open source on the desktop? Is running Windows
really cheaper than going with Linux in the long run? Let me know at [email protected].
Posted by Lee Pender on January 31, 20081 comments
That's right -- a
mobile
thin client.
Well, sort of mobile. It's not for the road warrior with millions of frequent
flyer miles, Tad Bodeman, director of blade PC and thin client solutions for
the HP Personal Systems Group, told RCPU. It's more for folks jumping from meeting
to meeting.
"Folks that are working in a wireless campus environment -- this is targeted
at them," Bodeman said. "They want to have a mobile device because
they want to work at their desks, go from conference room to conference room
for their meetings."
Sounds useful. Tad adds: "When you're not connected, there's nothing running
on this mobile thin client," so a machine that's lost or stolen won't end
up giving, say, thousands of Social Security numbers to somebody who really
shouldn't have them.
All very good. But then, Bodeman said this of the new mobile thin client's
users: "They want to go home, have dinner, log back in and do some more
work at night or on the weekend."
Grr. Well, thank you very much, HP, for making that easier and safer
to do. There go our weekends -- and weeknights!
Posted by Lee Pender on January 30, 20080 comments
Dig the lead of
this
story:
"Cisco Systems Inc. introduced on Monday a new data-center switch
that the company says can copy all the searchable data on the Internet in
less than eight minutes, or run 5 million concurrent high-quality videoconferences
between New York and San Francisco."
Wow. That actually sounds...pretty impressive.
Posted by Lee Pender on January 30, 20080 comments
There are, to be sure, at least a couple of good reasons why virtualization
pioneer VMware
lost
about a third of the value of its stock price on Tuesday following its Monday
afternoon fourth quarter earnings report.
First of all, VMware's quarterly revenue number and its projections of revenue
growth for 2008 both missed analysts' estimates. And, even though everything
else for Q4 and 2007 actually looked
pretty good, those two numbers coming up short was enough to scare off investors.
Beyond that, with a recession possibly looming -- and maybe even already upon
us -- it doesn't take much to spook investors these days. Just ask Apple and
Google. So, despite the fact that VMware continues to rake in the dough, its
stock price is taking a hit.
Here at RCPU, we get all that, and we don't want to jump to conclusions. But,
we do sometimes speculate a bit, and we wonder whether maybe, just maybe, Microsoft's
concretization of its
own virtualization strategy might have played in the backs of investors'
minds this week. Oh, sure, Redmond has a long way to go to catch VMware technology-wise,
and VMware itself is no sputtering start up -- it's 10 years old, majority owned
by tech titan EMC and, stock-price catastrophe aside, still very, very profitable.
Still, we all know that unless it's consumer search or personal music players
-- neither of which represents an enterprise-focused market -- Microsoft, when
it gets good and ready, tends to make room for itself in new markets at the
expense of incumbents. Obviously, that's not happening in virtualization...yet.
It's the "yet," though, that intrigues us and might have given investors
pause, as well, this week.
Or maybe not. In the current parlance of America's youth, we're not sayin'
anything...we're just sayin'.
What's your take on VMware's stock-price tank? Let 'er rip at [email protected].
Posted by Lee Pender on January 30, 20080 comments
It's looking more like
late-2008
than mid-2008 for SQL Server 2008, which might have a branding crisis if
it actually manages to slip to 2009 (which, of course, we're not saying that
it will).
Posted by Lee Pender on January 29, 20080 comments
RCPU's incontrovertible rule of the technology industry passed another test
last week. The rule, of course, is that no matter what happens -- with the economy,
with the industry or within the hallowed walls of Redmond itself -- Microsoft
makes
more money.
And so it came to pass last week, as you probably know by now, that MSFT (cool
financial writers love to refer to companies by their ticker symbols) tore through
Wall Street expectations again and reported
another blockbuster quarter for the period ended Dec. 31, 2007. Plus, the
company said that fiscal 2008 will also beat the Street's expectations. Microsoft
makes more money. And, hey, for partners, that's a good thing.
(By the way, a parenthetical note here not specific to Microsoft or its earnings
release: Don't be too impressed when companies -- and most of them do this --
talk about reporting "record revenues" for a quarter. All growing
companies should report higher revenues for their most recent quarters than
they did for the quarter before or for the year-ago quarter. If they don't,
that's a sign that the company is shrinking, not growing -- and that's usually
a very, very big problem. Record revenues just means that a company is still
growing -- which is totally normal and healthy, but not always terribly impressive.)
In case you missed them, there were a few interesting little tidbits from last
week's earnings report. First of all, SharePoint is now a $1
billion earner for Redmond, which goes some way toward muting claims from
competitors (hello, Salesforce.com) that nobody
really wants it or likes it. (We always suspected that the folks at Salesfoce.com
were engaging in a little hyperbole when they said that, anyway -- although,
to be fair, the exact phrase we heard was that SharePoint was "owned by
millions, used by few and loved by none," which could still be true, although
we kind of doubt it.)
Also, the Entertainment and Devices division -- the much-maligned (sometimes
in this space) folks
who bring you the Xbox and Zune -- finally came up profitable for a quarter,
and Microsoft says that the division will turn a profit for the fiscal year.
The one technology division that's still in the red is the infamous Online Services
Business, which actually lost more money in the last quarter than it did in
the same quarter a year ago. Yes, that's the stuff that competes with Google.
Perhaps the most interesting feature of the earnings news -- and it hasn't
escaped the notice of the press -- is that Microsoft brought
in $77 million through anti-piracy activities. It's a drop in the revenue
bucket, but it's some quantification of how much piracy actually costs Microsoft
(and partners) and how much the company can regain by fighting it.
So, Microsoft's making more money, but are you, partners? Are you reaping any
of Microsoft's windfall? Sound off at [email protected].
Posted by Lee Pender on January 29, 20080 comments
Sometimes, we like to make
these
arguments ourselves...and sometimes we let the former chief economist for
the FCC make them for us. The crux of the argument: Evil Microsoft didn't turn
out to be that evil after all.
Posted by Lee Pender on January 29, 20080 comments