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Carbonite's Wild Ride

It's been a wild ride for new Carbonite President and CEO Mohamad Ali. Named to the post on Dec. 4, Ali took charge of a cloud and hybrid backup and recovery solutions company that had received a buyout offer from J2 Global Inc. just two days earlier.

In the crucible of the back-and-forth between J2 and Carbonite, which quickly devolved from a friendly offer into a hostile bid, Ali and the Carbonite board of directors appear to have reaffirmed a vision for Carbonite's future that's different from what many investors see. As it happens, that vision is focused on SMB and is completely reliant on a channel strategy, as opposed to riding out the consumer legacy of the brand.

Ali is well-prepared for such high-profile stress. His last position was chief strategy officer at Hewlett-Packard, where he reported directly to CEO Meg Whitman on the company's restructuring. RCP caught up with Ali in a recent telephone interview to talk about his vision for Carbonite and his view of the channel.

"The investment community is still valuing the company as a lower growth consumer business," Ali said. "One of the things I saw in Carbonite was a really amazing SMB business that was buried in this consumer business."

By annual run rate, Ali argues that Carbonite's consumer business brings in $90 million at a 2 percent growth rate. The SMB business, by contrast, is a $50 million business with 42 percent growth in bookings in the last quarter.

"If you look at the hot cloud companies out there, not too many of them have revenues of $50 million and are growing at over 40 percent," Ali said. He wouldn't speculate on when the SMB business might outpace consumer, but he offered a sort of verbal wink: "You can do the math and figure out where you're going to have the crossover."

"One of the things I saw in Carbonite was a really amazing SMB business that was buried in this consumer business."

Mohamad Ali, President and CEO, Carbonite

That confidence in the future of the SMB side helps explain why Carbonite turned down a $415 million offer from J2, which had also tried unsuccessfully to acquire Carbonite in 2012. In a Carbonite statement on Jan. 9 titled, "Carbonite's Board of Directors Unanimously Rejects Unsolicited Tender Offer from J2 Global," the company said it believed the 27.6 percent premium that J2's $15-per-share offer represented over the unaffected market price on Dec. 2 "substantially undervalues the company." The statement also expressed the board's support for Ali and his channel strategy.

"The new President and Chief Executive Officer has strategies with respect to improved operating and margin performance, scalability of the business and other areas of operational and strategic focus, including expanding the market for the Company's products through broader distribution capabilities, as well as enhanced features and functionality in the product portfolio," the statement read.

In the short term, at least, the stance has been costly. A look at a stock chart covering the December-to-mid-April period looks like steep cliffs on either side of a plateau. One cliff, heading upward, reflected J2's offer when the NASDAQ-traded CARB jumped from an $11.76 close on Dec. 2 to a $14.44 close on Dec. 3. The plateau for most of the December-through-March period fluctuated with the twists and turns in the buyout drama, peaking at a $15.30-per-share close on March 2. The other cliff, heading down, reflected J2's change in strategy to approaching Carbonite about buying only its endpoint business and withdrawing the candidates it had planned to offer for election to Carbonite's board. That cliff goes from a $14.23 close on April 1 down to an $11.59 close on April 6.

Carbonite Inc.'s performance on the NASDAQ since December resembles a mesa, with sharp walls marking the introduction and withdrawal of a $15-per-share buyout offer from J2 Global Inc. (Image source: Google Finance.)

The stock value continued to fall to a nadir of $10.03 earlier this month. The announcement Thursday of a $20 million stock buyback program through 2018 by Carbonite briefly brought the price up 7 percent in midday trading before settling down to a little less than a 4 percent gain ($10.62) by close of trading.

Against that tumultuous backdrop, Carbonite has continued to invest in an SMB- and channel-focused future. Its partner recruitment efforts are "on fire," Ali said. "We had 5,400 resellers when I got here. Today we're up to 6,000. Where I'm heavily focused is with the seven big distributors and direct market resellers. From HP, I know some of these executives and CEOs personally. They love what we've done with the 6,000 VARs and are huge believers."

Carbonite also spent a reported $20 million in mid-December to acquire MailStore, a vendor of e-mail archiving solutions for SMBs. "In addition to offering email archiving to businesses worldwide with MailStore's existing solutions, Carbonite will integrate MailStore's robust full-text search and indexing capabilities into our product portfolio to help our business customers better manage, understand and leverage their data," Ali said in a statement at the time. Aside from the obvious SMB appeal of the product, MailStore also already had a Service Provider Edition for channel partners. Incidentally, the MailStore acquisition was a point of contention in a Dec. 23 letter to Carbonite from J2, which contended that the acquisition reduced Carbonite's value by $0.50 per share.

As part of its channel push, Carbonite also commissioned research from IDC showing, among other things, how much small businesses were willing to spend on backup and recovery. The study found SMBs are willing to pay $2,800 a year on average to protect their data, an amount less than some of Carbonite's competition but well in the range of the company's three-server, $799 solution, Ali said.

"That study is underscoring the approach we're taking, which is super-simple products. And since we came from the consumer world, we're able to create these super-simple products [that are also] price disruptive," Ali said. "CSB [Carbonite Server Backup] is six steps to install, compared to 20 to 30 for other products. That product is what's driving 40 percent growth. There's a huge whitespace opportunity in SMB."

Most recently, Carbonite went on a senior executive hiring spree announced May 6 that Ali characterized as channel-oriented. As Ali explains the hires, Chief Marketing Officer Nina McIntyre has experience marketing to the channel; Paddy Sreenivasan, vice president of server engineering, will stitch the products together with the ecosystem; Irwin Weiss, vice president of IT, will work on integrating Carbonite's internal systems with the channel; and Christopher Wey, vice president of corporate development, will bring his long channel and M&A experience to Carbonite.

A month ago, Carbonite declared it was shutting down a process to explore a potential sale of the company -- a process that was originally spun up in response to the J2 offer. In working to fend off a takeover and steadily investing in channel efforts, the company's board and executives seem to be putting real money behind the message that Carbonite's best potential lies in developing the channel and chasing the SMB opportunity.

Posted by Scott Bekker on May 14, 2015 at 3:34 PM0 comments

With Partners, Microsoft Taking the Cloud Underwater

Taking its public cloud infrastructure buildout beneath the sea, Microsoft this week unveiled investments in three trans-oceanic cable projects to improve the connections among its international datacenters.

"As we expand our cloud services and global infrastructure, we need a strong subsea strategy to ensure our customers experience high availability access to their data," David Crowley, managing director of network enablement for Microsoft, blogged earlier this week. "Over the past nine months, Microsoft has been significantly investing in subsea and terrestrial dark fiber capacity by engaging in fiber partnerships that span multiple oceans and continents. And today, our connections across the Atlantic and Pacific just got stronger."

At first blush, satellite connections for intercontinental communication might seem more in line with the concept of cloud. Both clouds and low earth orbit are "up" from here on the ground. But in the real world of hardware, wiring and electricity where the "cloud" actually exists, it's undersea cables that do the work of moving data between continents. Some estimates put the amount of intercontinental data moving through subsea cables at 99 percent. When it comes to international data, the "cloud" in a lot of those marketing diagrams might be more accurately represented by a fish tank.

Microsoft's global cloud efforts have always depended on such cabling, but now Microsoft is investing in fiber partnerships that will guarantee it higher priority and the latest bandwidth capability by helping to add three cables to the 230-plus cables already criss-crossing the ocean floor. "These cables will help deliver data at higher speeds, with higher capacity and lower latency for our customers across the globe," Crowley said.

[Click on image for larger view.] A map of planned and active submarine cable systems. (Source: TeleGeography/Submarine Cable Map.)

Microsoft's specific moves involve two transatlantic cables and one transpacific cable:

  • Hibernia Networks sent out three ships this week to start laying a transatlantic cable for its Hibernia Express project, which will connect Halifax, Canada, with Ballinspittle near Cork, Ireland, and pass on to Brean, which is near Bristol in the U.K. Hibernia Networks says the cable, which is supposed to begin service in September of this year, will be the first new transatlantic cable in 12 years. "Hibernia Networks is proud to have been selected by Microsoft to provide a key piece to their existing backbone network on our transatlantic cable system," said Hibernia's CEO Bjarni Thorvardarson in a statement.

  • Aqua Comms Ltd. also announced that Microsoft would be its first "foundation customer" on the America Europe Connect (AEConnect) subsea cable system. That cable, being built by TE SubCom, which is involved in all three of the Microsoft-related projects, is supposed to go into service in December 2015 and stretch from Shirley, N.Y., to Killala, Ireland. Asked in an e-mail interview why Microsoft was supporting two new transatlantic cables, Crowley said, "We optimized for two cables to ensure physical diversity, availability and uptime for customers."

  • Microsoft is one of a number of players in the new transpacific cable announced this week. TE SubCom began construction on the New Cross Pacific (NCP) Cable Network, which will run from Hillsboro, Ore., to the Chinese mainland in three places at Chongming, Nanhui and Lingang. It will also connect to Busan, South Korea; Toucheng, Taiwan; and Maruyama, Japan. Other members of the NCP consortium include Chunghwa Telecom Co. Ltd., China Mobile, China Telecom, China Unicom, KT Corp. and SoftBank Mobile Corp. The 13,000-kilometer network is planned for service launch in late 2017.
[Click on image for larger view.] A map of Microsoft's planned subsea cables to connect its Hillsboro, Ore., landing station to areas in the Asia-Pacific region. (Source: Chunghwa Telecom.)

Investing in undersea cable is not completely new for Microsoft. Last September, Microsoft and Seaborn Networks agreed to work together on a U.S.-Brazil subsea cable, which is called Seabras-1 and is planned to go live in 2016. The difference is in the scale of the announcements this week -- there were three at once and they covered a much broader geographical area. While Crowley declined to say how much Microsoft is investing or what percentage of the available bandwidth its participation is securing, such projects typically cost hundreds of millions of dollars.

Whatever the specific amount, it's a significant addition to the billions Microsoft has already poured into that global cloud buildout. Dollar by dollar, Microsoft continues to press its financial and scale advantages to ensure that it remains in a very small class of megavendors for public cloud services.

Posted by Scott Bekker on May 13, 2015 at 2:23 PM0 comments

Chambers To Step Down as Cisco CEO

After 20 years in the tech industry spotlight, John Chambers will ease into the shadows this summer.

Chambers will trade in his current titles of Cisco chairman and CEO for the role of executive chairman on July 26. His replacement as CEO is Chuck Robbins, a 17-year veteran at Cisco who is currently senior vice president of worldwide operations.

Chambers joined Cisco as head of sales in 1991 when Cisco was a 7-year-old company. Under his leadership, Cisco has grown from $1.2 billion to $48 billion a year in revenues and seen more than a 3,000 percent increase in non-GAAP earnings per share, according to the company.

"We've selected a very strong leader at a time when Cisco is in a very strong position," Chambers said of Robbins, going on in a statement to describe the next CEO's strengths as an insider. "Chuck knows every Cisco segment, technology area and geography and will move the company forward with the speed required to capitalize on the opportunities in front of us. He is a champion of the Cisco culture and has an incredible ability to inspire, energize and connect with employees, partners, customers and global leaders."

In the official announcement, Cisco emphasized Robbins' channel credentials. It noted that in his current role he leads the global sales and partner team that drives $47 billion in business for the company. In that role, Cisco credited Robbins with helping "lead and execute" the build-out of the partner program that is "now worth more than $40B in revenue to the company each year." Robbins was also a sponsor for the Sourcefire and Meraki acquisitions.

Robbins was elected to the Cisco Board of Directors effective May 1. For Chambers, the title change will probably mean fewer public speaking engagements as the voice of Cisco, which, because of Cisco's influence, doubled as a voice of the tech industry overall.

Chambers' new role will involve advising and supporting Robbins and engaging with business and government customers.

Posted by Scott Bekker on May 04, 2015 at 8:17 AM0 comments

Which Unpatched Holes Most Appeal to Attackers?

There are few better ways to guarantee a system will be breached, compromised and exploited than failing to keep up with vendors' patches. Yet millions of public-facing systems run unpatched.

In an effort to document which previously reported security vulnerabilities are most popular with attackers, government public computer security awareness agencies from five countries on Wednesday released a Top 30 list of targeted high-risk vulnerabilities.

"This Alert provides information on the 30 most commonly exploited vulnerabilities used in these attacks, along with prevention and mitigation recommendations," read an alert from the U.S. Department of Homeland Security's National Cybersecurity and Communications Integration Center and the U.S. Computer Emergency Readiness Team.

An analysis by the Canadian Cyber Incident Response Centre provides the foundation for the list, which was jointly developed by government computer security organizations in Australia, Canada, New Zealand, the United Kingdom and the United States.

The vulnerabilities are not listed by severity. Instead, they are grouped by the vendor or project whose software is affected. Microsoft accounts for 16 of the vulnerabilities, Adobe for 11, Oracle for 2 and OpenSSL for 1.

What's both interesting and depressing about the list is how old some of the vulnerabilities are. For example, in the Microsoft list, some of the 30 most commonly exploited vulnerabilities date to 2009 and 2008, as well as an Internet Explorer malware issue, which first emerged almost nine years ago.

On Microsoft platforms, the attackers' favorite flaws come from the following bulletins:

  • MS08-042
  • MS09-067
  • MS09-072
  • MS10-018
  • MS10-087
  • MS11-021
  • MS12-027
  • MS12-060
  • MS13-008
  • MS13-022
  • MS13-038
  • MS14-012
  • MS14-017
  • MS14-021
  • MS14-060

The malware issue with Internet Explorer is CVE-2006-3227.

The U.S. version of the Top 30 bulletin is available here.

Posted by Scott Bekker on April 29, 2015 at 10:33 AM0 comments

New Signature Gets $35 Million VC Investment

New Signature, the Washington, D.C.-based Microsoft national solutions provider and 2014 Microsoft U.S. Partner of the Year, unveiled a $35 million initial investment from venture capital firm Columbia Capital on Thursday.

The relatively rare VC investment in a pure-play solution provider is intended to drive accelerated capacity, geographic growth and acquisitions at New Signature, a 100-percent Microsoft-focused systems integration company with a high-profile cloud practice and a focus in the business segment that Microsoft calls SMS&P.

Columbia Capital, based in Alexandria, Va., manages about $2.5 billion in assets, according to the company's Web site, and companies in its portfolio similar to New Signature include Cloud Sherpas and 2nd Watch.

Along with the investment come a new CEO, Jeff Tench, and a new chairman, Neil Hobbs. Co-founders Christopher Hertz and David Geevaratne will stay on, Hertz as president and Geevaratne as Chief Sales Officer.

"We are excited to be entering the next stage of our development alongside Jeff and Neil and a respected capital partner," Hertz said in a statement. "Jeff's experience building successful services organizations enables our firm to take the reputation and credibility we have established to new heights."

Tench's resume includes roles as CEO at Teliris and president of the Business Markets Group at Level 3 Communications. He reiterated New Signature's commitment to Microsoft solutions. "New Signature has full-stack Microsoft expertise which enables us to evangelize Microsoft cloud services and ultimately accelerate the purchase and consumption of these services. With a clear focus on delivering actionable roadmaps to business and technical decision makers, we will chart the course for solution optimization and modernization through cloud technologies such as Azure, Office 365 and Dynamics CRM Online," Tench said in a statement.

Patrick Hendy, a partner at Columbia Capital, meanwhile, positioned the investment and plans for New Signature as a vote of confidence in Microsoft's current direction.

"Under Satya Nadella's leadership, Microsoft has transformed into a pivotal technology provider that is focused on empowering companies across every vertical to achieve value rapidly by reinventing productivity and business processes," Hendy said in a statement. "Microsoft is clearly positioned to be a market leader in this transformation and we believe that New Signature will be a key player in helping customers successfully navigate this transformation."

Posted by Scott Bekker on April 24, 2015 at 4:11 PM0 comments

Forget the Red Flags, Nadella and Investors Optimistic on Microsoft Direction

Put Microsoft's latest quarterly earnings on a business dashboard of some of the company's traditional key performance indicators, and the screen would light up red.

  • Windows OEM revenues down 22 percent!
  • Office commercial products and services revenues down 2 percent!
  • Earnings per share (EPS) off 10 percent!

So why did Microsoft CEO Satya Nadella sound so sanguine in the earnings call Thursday? "Overall, I'm pleased with our business performance," Nadella said, according to a Seeking Alpha transcript.

Could it be that the words "I'm pleased" mean something different to Nadella than they do the rest of us? After all, later in the call he said, "I'm pleased with our renewed partnership with Yahoo!" That would be the deal that was widely regarded as Yahoo CEO Marissa Mayer getting everything she wanted, including a new back-out clause, in a renegotiation.

For their part, investors seemed actually ecstatic with Microsoft's results. Microsoft shares were up a whopping 10 percent to close at $47.87 on Friday.

From the context of the rest of his remarks, it's pretty clear that Nadella was also actually optimistic. Microsoft did manage to scratch out a 6 percent year-over-year revenue increase, despite struggling in some of its historically core businesses. And the EPS figure, while lower than the year-ago period, beat analyst estimates.

Nadella legitimately pointed to three headwinds in this last quarter: the negative impact on Microsoft of the strong dollar, a bruising IT purchasing environment in Microsoft's second-biggest market of Japan, and a tough comparable because of Windows XP. The January-March period of 2014 was the absolute peak of the Windows XP end-of-life migration. Windows client purchases fell from those highs back to more normal levels in the most recently completed quarter. Normal would also be the new normal of a contracting PC industry.

One traditional metric, server software sales, was a bright spot. Microsoft CFO Amy Hood said server products and services revenues were up 12 percent, and revenues for premium offerings of SQL Server, System Center and Windows Server were up 25 percent.

It was cloud and devices that Nadella directed investors' attention to. "Our momentum in cloud is a highlight," he said. He fired off data points, including a $6.3 billion annualized run rate for Microsoft's commercial cloud, a seventh consecutive quarter of triple-digit commercial cloud revenue growth, 50 million Office 365 monthly active users, 5 million organizations in Azure Active Directory, three-x growth year-over-year in storage transactions in Azure, and a doubling of enterprise paid seats for Dynamics CRM Online year-over-year.

On the device side, Microsoft made some serious money in the quarter on Surface to the tune of $713 million, and that's ahead of the Surface 3 availability. Nadella pointed to the 64 percent usage of OneNote by Surface Pro 3 users as evidence of the potential for Microsoft's better-together story and hinted that the new Windows 10 upgrade strategy will provide opportunities to continue monetizing customers for years after the initial system purchase.

Windows Phone results were mixed. Still not making any real headway against Android devices and iPhones, Microsoft at least seems to be getting some of the Nokia acquisitional hiccups under control. Lumia sales volumes hit 8.6 million units for the quarter, and Hood reported that Microsoft has reduced the operating expense base in the phone business from an annualized rate of $4.5 billion at acquisition to less than $2.5 billion.

As a recurring theme during the call, Nadella encouraged investors not to think of Microsoft's transition as a one-to-one shift from the old revenue sources of on-prem Windows, Office and server software to the new revenue sources of cloud services and, to a lesser extent, devices.

He argued that, yes, Microsoft is getting the direct dollars -- the Office 365 subscription where there used to be a boxed suite of Office applications, the Azure infrastructure where there used to be a server closet. But he made the case that Microsoft is positioned for a lot of net-new workloads, such as Power BI, Delve, e-discovery and mobility management.

"We definitely are seeing one-for-one migration, but the opportunity in every one of our offerings from Office 365 to Dynamics to Azure has a non-zero-sum component to it," he said.

It's a message that, for now, Wall Street seems to be buying.

Posted by Scott Bekker on April 24, 2015 at 4:12 PM0 comments

Nintex Invests in Office 365 Workflow Capabilities

SharePoint-based workflow specialist Nintex this week revealed significant advances in its solutions for Office 365.

Nintex rolled out a number of usability and mobility functions to its Office 365-based workflow products and announced a partnership with Sharegate for migrating on-premise Nintex workflows between SharePoint versions and into the Office 365 cloud.

A one-time systems integrator, Nintex turned a specialty in SharePoint workflows into a product that allows users, developers and IT to collaborate on creating and updating business processes. The channel-centric company has more than 1,100 partners worldwide, including more than 400 in the United States.

This week, Nintex added several capabilities to its Office 365-focused product set of Nintex Workflow for Office 365, Nintex Forms for Office 365 and Nintex Mobile.

"We're rolling out some key enhancements for things related to approvals, content field data collection on our mobile forms, as well as some other areas," said Josh Waldo, vice president of channel programs and strategies at Nintex and a former senior partner executive at Microsoft, in a telephone interview.

The most appealingly titled of the enhancements is "Lazy Approval," which allows natural language e-mail responses such as "yes/no" from any device to be added to a business process. Lazy Approval does not require the user to log in to move a process along, making it easy for stakeholders on the go to stay involved in processes without becoming a bottleneck.

Other new features available to Nintex workflow designers are barcode scanning, image annotation and a single button tool that allows an end user to add geolocation information to a form. Also new are the ability to view multiple outcomes for tasks to make it easier to create workflows based on complex business logic and cascading lookups, which can do things like create dependencies between fields, such as country and state.

Nintex, with its U.S. headquarters in Bellevue, Wash., is also partnering with Montreal-based Sharegate for migrating customer workflows to the Office 365 cloud in a way that maintains metadata, business logic and security settings.

For Nintex, with the bulk of its customers using on-premise-based solutions, Sharegate's expertise and the ability of its tools to maintain connections between on-premises and cloud solutions in hybrid scenarios were key, Waldo said.

"We've got a number of customers that have thousands and thousands of workflows that are sitting on-premises, and they're looking to migrate a number of those to Office 365 and manage those touch points," Waldo said.

The companies will be demoing their joint solutions next month at the Microsoft Ignite conference in Chicago. Nintex will also be demonstrating its new capabilities to partners at the Microsoft Worldwide Partner Conference (WPC) in July in Orlando, Fla., where Nintex is one of the show's top three sponsors.

Posted by Scott Bekker on April 23, 2015 at 3:06 PM0 comments

Preview: Microsoft Conference Season Right Around the Corner

Spring is in the air in the northern hemisphere and that means Microsoft conference season is upon us.

Microsoft's Big Three tech industry-facing conferences start next week and run into mid-July. The technology giant has a lot of major products nearly ready for general availability, making the conferences even more noteworthy than usual for the Microsoft vendor ecosystem, partners, developers and customers. The big shows, in chronological order, are Microsoft Build, Microsoft Ignite and the Microsoft Worldwide Partner Conference (WPC).

Microsoft Build
San Francisco, April 29-May 1

Microsoft's developer-focused conference has emerged over the last few years as a major source of news about the entire Microsoft platform. A more closely controlled affair than the other two, this show is almost all about Microsoft rather than sponsors or partners.

The official description promises that Build will bring new information about Windows, Azure and Office 365. Microsoft is also intent on spurring developers to take advantage of the cross form-factor elements of the forthcoming Windows 10. The company emphasizes in its Build marketing the oft-repeated-of-late figure of 1.5 billion, the number of Windows devices Microsoft claims in the world. Redmond's hope is that the free upgrade offers for Windows 10 will put most of those 1.5 billion devices on a single platform, making Windows a central development platform for tablets and smartphones rather than the also-ran it has become in the iOS/Android era.

Keynotes are scheduled for Wednesday, April 29, and Thursday, April 30. Last year, Day 1 keynotes included Microsoft senior executives Terry Myerson, Joe Belfiore, David Treadwell, Stephen Elop and Satya Nadella. Day 2 featured Scott Guthrie, Steve Guggenheimer and John Shewchuk.

(Update, 4/24: Count on that Nadella keynote. During the Microsoft Q3 results earnings call Thursday, he said, "Next week at Build, our developer conference, I'll share more about our ambitions and how our next-generation platforms will empower every person and organization.")

Microsoft Ignite
Chicago, May 4-8

Microsoft Ignite is a new mega-conference for Microsoft, replacing the venerable TechEd conference with a new show rolling together TechEd with the programs from the Microsoft Management Summit and the Exchange, SharePoint, Lync and Project conferences.

Microsoft seems to be flying the majority of its senior technology executives to Chicago for keynotes and presentations. The main keynotes on the morning of May 4 will be delivered by Nadella. Other senior executives giving heavily promoted sessions or keynotes include Brad Anderson, corporate vice president of Enterprise Client and Mobility; Gurdeep Singh Pall, corporate vice president of Skype; Belfiore, corporate vice president of PC, Tablet and Phone; and Harry Shum, executive vice president of Technology and Research.

Among the many other Microsoft heavy-hitters with speaking slots are Dave Campbell, CTO of Cloud and Enterprise; Julia White, general manager of Office 365; Mark Russinovich, CTO of Microsoft Azure; Jeffrey Snover, distinguished engineer and lead architect for the Windows Server and System Center Division; and Perry Clark, corporate vice president of Exchange and distinguished engineer.

Ignite will be an ecosystem affair with hundreds of vendor partners on the show floor. The biggest sponsors of the event are Dell, HP and Salesforce.

Some of the technology expected to debut at Ignite includes an early look at SharePoint Server 2016, which was originally scheduled for general availability in the second half of 2015 but now is looking like a mid-2016 release. Also hotly anticipated at Ignite are clues and demos about Exchange Server 2016.

While those two potential previews have made headlines, Ignite covers a huge range of Microsoft technologies, and Microsoft is promising new information at the show on Azure, Dynamics, Intune, Lync, Office 365, Project, SQL Server, Surface, System Center, Visual Studio, Windows, Windows Server and Yammer. With Windows 10's release now looking like late July, according to a partner leak, expect a lot of detail on the new OS at Ignite.

Microsoft Worldwide Partner Conference
Orlando, Fla., July 12-16

The final big industry-facing event on Microsoft's conference-season calendar is the Microsoft Worldwide Partner Conference (WPC). Happening just a few weeks before the rumored launch of Windows 10, expect Windows client buzz to hit a fevered pitch in Orlando.

As a gathering of partners, WPC has more of a business focus than a technology focus. So in addition to a keynote from Nadella, partners will hear about business initiatives from Microsoft COO Kevin Turner and about partner-focused initiatives from Phil Sorgen, corporate vice president of the Microsoft Worldwide Partner Group. (Read our preview of key WPC 2015 sessions here.)

While the conference is largely about fostering connections among business partners to jointly sell and implement Microsoft solutions, news about the technology and the roadmap still tend to take center stage. Microsoft has been pushing partners hardest over the last few years to represent cloud solutions based on Office 365, Dynamics CRM Online, Windows Intune and Azure. Expect technology news focused on those products to come out at WPC.

Top-tier sponsors of WPC 2015 are Dell, HP and Nintex.


Posted by Scott Bekker on April 22, 2015 at 9:56 AM0 comments

Microsoft and Yahoo Agree to New Terms in Search Deal

At a time when Yahoo was contractually able to opt out of its search partnership with Microsoft, Yahoo CEO Marissa Mayer negotiated a much more flexible arrangement for her Internet company.

Yahoo and Microsoft on Thursday announced amendments to the deal originally struck in 2009. Yahoo will now be obligated only to serve Bing ads against search results for a majority of its desktop search traffic. Previously, Yahoo needed to put Bing ads against 100 percent of its traffic.

The deal is also non-exclusive, meaning if Yahoo wants to use its Yahoo Gemini ads platform for those desktop ads, it can. Or it could sell the traffic to another provider -- say Google, should Google be interested.

The other big change in the deal is that Microsoft will be responsible for selling all Bing ads, while Yahoo will be responsible for selling any Gemini ads. Previously Yahoo's salesforce handled a lot of the Bing sales. The two companies plan to begin transitioning those sales responsibilities over the summer.

While it's not a change, the deal remains non-exclusive in mobile search, leaving Yahoo with maximum flexibility in that emerging area.

"Over the past few months, [Microsoft CEO] Satya [Nadella] and I have worked closely together to establish a revised search agreement that allows us to enhance our user experience and innovate more in our search business," Mayer said in a statement. "This renewed agreement opens up significant opportunities in our partnership that I'm very excited to explore."

One upshot is that Microsoft will have to hire some search salespeople and Yahoo will have to hire some search engineers.

For his part, Nadella emphasized the ongoing value of the partnership. "Our global partnership with Yahoo has benefited our shared customers over the past five years and I look forward to building on what we've already accomplished together," Nadella's statement said. "Our partnership with Yahoo is one example of the diverse partnerships we'll continue to cultivate in order to have the greatest impact for our customers."

For Microsoft, the Yahoo agreement comes at an interesting time. The partnership arguably helped Bing claw some search share from Google. The new Yahoo arrangement is a wild card just as Google faces antitrust scrutiny in the European Union.

Posted by Scott Bekker on April 16, 2015 at 12:25 PM0 comments

Hewlett Packard Enterprise Unveils New Logo

Meg Whitman rolled out a new logo for Hewlett Packard Enterprise on Wednesday, and her blog post revealed that she's sweating the smallest details.

By the end of its fiscal year on Oct. 31, HP is committed to splitting into two roughly equally sized independent companies -- Hewlett Packard Enterprise and HP Inc. Whitman will be CEO of Hewlett Packard Enterprise, which includes HP's servers, storage, networking, services, software, cloud and converged systems.

Dion Weisler will run the other company, called HP Inc., which includes notebooks, desktops, mobility, printing, managed print services and graphics. Whitman will be non-executive chairman of HP Inc.

Behind-the-scenes work has been going on since the planned split was announced six months ago, but this week Whitman unveiled something visible in the form of a new logo for Hewlett Packard Enterprise. It's a simple green rectangle above the company name.

"We needed a design that would express our renewed commitment to focus and simplicity," Whitman wrote, adding about the color of the green, dollar-bill-shaped rectangle, "The color we picked is no accident."

A smaller detail in the logo involves the way the letters connect.

"Maybe you noticed it, but take a look at the name 'Hewlett' in the new design. This is the first time in our history that the two t's in Hewlett connect," Whitman wrote. "That connection is symbolic of the partnership we will forge with our customers, partners, and our employees -- what we will do together to help drive your business forward."

Whitman and the HP team are thinking deeply about the little things. It's good to see partners near the symbolic center stage in that thought process.

Posted by Scott Bekker on April 16, 2015 at 11:39 AM0 comments

First Look: 10 Key Microsoft Worldwide Partner Conference Sessions

With a few months to go before the Microsoft Worldwide Partner Conference (WPC) in July, Microsoft is starting to post details on some of the hundreds of sessions that will be available to partners at the show in Orlando.

Even with only a small percentage of sessions listed in the online catalog, some key themes for Microsoft's fiscal year 2016 are becoming clear.

What follows are RCP's suggestions for major keynotes and other sessions to start building your WPC calendar around:

1. Satya Nadella Vision Keynote
By far the most talked-about keynote at any WPC is usually the CEO's session. Following in Steve Ballmer's footsteps, Satya Nadella spoke last year and will once again headline WPC this year. Nadella's two-fold mission will be to first reassure partners that they are critical to Microsoft and, second, to outline the broad trends and priorities for Microsoft for the coming year. Nadella will give one of the first keynotes of the conference on Monday, July 13.

Nadella giving his keynote address at WPC 2014. (Source: Microsoft.)

2. Kevin Turner Vision Keynote
After the CEO's talk, COO Kevin Turner's annual barn-burner of a speech is usually the second-most talked about single event of WPC. With his folksy humor and competitive, can-do spirit, Turner usually delivers a dozen or more memorable one-liners.

Microsoft has famously discontinued its annual enemies list this year, the group of companies whose employees are barred from attending WPC. The list has previously included Oracle, Salesforce.com, VMware, Amazon, Google and Cisco. As Nadella presents a friendlier face of Microsoft to former rivals, the list has gone away. It will be interesting to see if Turner pulls his competitive punches.

The official theme is "Our Roadmap to Profitability." Turner usually closes out the second and final day of Vision keynotes from Microsoft executives. He is slated to talk on Wednesday morning.

3. Phil Sorgen Vision Keynote
Somewhere in those Vision keynotes on Monday or Wednesday, Microsoft's worldwide channel chief (formal title: Corporate Vice President of the Worldwide Partner Group) Phil Sorgen will get more specific for partners. Judging by previous years, he'll talk about partner momentum on cloud and will detail new programs, competencies, incentives and priorities for Microsoft's massive community of channel partners. Expect to see a short parade of other senior Microsoft executives talking about specific products that Microsoft wants partners to sell in FY '16.

4. Microsoft Partner Programs and Opportunities
Another perennially significant event is the annual update diving into specific details about the Microsoft Partner Network (MPN) for the coming years. Running this session in her second year at WPC as Microsoft's No. 2 channel executive is Gavriella Schuster, general manager of the Microsoft Worldwide Partner Group.

5. U.S. Regional General Session (and Other Regional Sessions)
The WPC truly attracts an international audience, and multiple regions have country- or region-specific keynotes. U.S. partners account for the single biggest group of attendees, making the U.S. Regional General Session one of the key events of the show. The title of the U.S. general session this year is "The Trifecta Partner Will Win the Race for Customers Wanting to Digitize Their Enterprise." In that case, the trifecta applies to Cloud Platform, Cloud Productivity and Sales Productivity.

An inside-baseball theme is that there should be a new U.S. channel chief giving the keynote. Longtime Microsoft channel executive Jenni Flinders retired from the role this month, and the U.S. keynote at WPC could be the first opportunity for partners to take the measure of her replacement.

6. "Gartner: Reading the Tea Leaves -- Top 10 Technology and Channel Trends"
This session isn't just important because it's about where Gartner sees the industry going, although that can be interesting. The reason it's significant for Microsoft partners is because it's given by Tiffani Bova, a Gartner analyst who has the ear of senior channel Microsoft executives. If you want to know how Microsoft executives are thinking about the industry and what partners should be doing, it's wise to sit in on Bova's session.

7. Evolution of Windows Licensing
The previous six sessions are all specific recommendations for sessions that will probably generate news and chatter in Orlando this summer. RCP's remaining four recommendations are less about the specific sessions than they are about the themes these sessions touch on that are already emerging as important for the coming year.

"Evolution of Windows Licensing: How SA Per User and the Enterprise Cloud Suite Modernize the EA and Position Your Business for Revenue Growth" hits one of those themes. Over the last few months and with relatively little fanfare, Microsoft rolled out some major changes to the options for licensing its software. A lot of the changes relate to cloud, and the fanfare is coming.

8. Consumption of Cloud Services
Microsoft is becoming concerned about how many (or how few) customers are actually using those Office 365 licenses that were included in their Enterprise Agreements. If Microsoft is concerned about it, its incentives will be configured to make sure partners are worried about it, too. "Moving the Needle: Boosting Customer Value by Driving Office 365 Adoption" is an early example of a WPC 2015 session that sounds that theme.

9. Windows 10
With Windows 10 on the near horizon by mid-July, partner readiness for the next operating system will be a major theme. A few sessions are already focused on it. The most intriguing one listed so far is "Stories from the Trenches (Uncensored Edition): Migrating Customers to Windows 10." The session promises both Microsoft-presented opportunity analysis and a panel discussion by early adopters, including systems integrators, ISVs and the Microsoft IT department.

10. Cloud Solution Provider
One of the biggest announcements at WPC 2014 was the introduction of the Cloud Solution Provider partner model. Details and elements of the two-tier program continued to trickle out throughout Microsoft's fiscal 2015. By WPC 2015, the program should be fully baked with some best practices starting to emerge and tweaks coming out.

One session aimed at delivering those details is "Own the End-to-End Office 365 Customer Lifecycle: the Cloud Solution Provider Partner Opportunity."

Posted by Scott Bekker on April 09, 2015 at 11:01 AM0 comments

A Year After Support Cutoff, Windows XP May Still Have 250 Million Users

A year to the day that Microsoft pulled the plug on Windows XP support, the operating system remains heavily used worldwide. How heavily used? A little back-of-the-envelope math puts the number at up to 250 million users.

Extended support ended for Windows XP on April 8, 2014. That meant no more security updates or technical support for the operating system, which at that time was already 12 years old.

The two major share tracking outfits, Net Applications and StatCounter, both report significant ongoing use of Windows XP in their latest public data covering March 2015.

According to Net Applications, Windows XP users account for nearly 17 percent of worldwide share.

Net Applications' worldwide share figures by operating system for March 2015. A year after end-of-support, only Windows 7 has more share than Windows XP.

StatCounter puts Windows XP share at just over 11 percent. XP's share in the United States is lower, 6.5 percent, according to StatCounter.

[Click on image for larger view.] StatCounter's worldwide desktop operating system data shows Windows XP trailed only Windows 8.1 and Windows 7 by the end of March 2015.

Applying those percentages to Microsoft's frequently stated claim of 1.5 billion Windows users worldwide gives a ballpark estimate of how many Windows XP users are still out there. The range goes from 167 million using the StatCounter figure to 254 million using the Net Applications figure.

"There's actually still a lot of people running Windows XP," said Kasper Lindgaard, director of research and security at Secunia, in a recent telephone interview about Secunia's Annual Vulnerability Review.

Before the deadline, much concern was focused on how vulnerable all those Windows XP machines would be to newly discovered flaws. Since the support deadline, there's been less attention paid to the issue, other than a Microsoft decision to patch a particularly serious flaw affecting Windows XP a few weeks after the support deadline (MS14-021).

The warning that has greeted visitors to Microsoft's Windows XP end-of-support page since April 8, 2014.

Nonetheless, other new vulnerabilities discovered since April 8, 2014 probably affected Windows XP, as well, Lindgaard said.

"Vulnerabilities that affect Windows 8 only or Windows 7 only probably won't affect Windows XP," Lindgaard said. "It's fair to assume that some vulnerabilities that affect older versions of the Windows client and Windows server may also affect Windows XP."

Meanwhile, as the anniversary of the Windows XP support cutoff passes, other deadlines approach. On July 14 of this year, support ends for Windows Server 2003. On the same day, Microsoft plans to end anti-malware signature updates for Windows XP on Microsoft Security Essentials. A little further out, support ends for SQL Server 2005 on April 12, 2016.

Posted by Scott Bekker on April 08, 2015 at 9:05 AM0 comments