Digital Lifestyle | Windows 7

Microsoft’s Branded ‘Windows 8′ Tablet Seems Unlikely

Corporate, Desktop & Mobile, Digital Lifestyle, Windows 7, Windows News No Responses »

Jun 082011

There’s a rumor floating around that Microsoft intends to produce its own branded “Windows 8″ tablets.

Specifically, the rumor comes from a June 8 article in the publication “DigiTimes,” itself citing unnamed “sources from the upstream supply chain.” The article further suggests that Microsoft will collaborate on the branded tablet with Texas Instruments and a variety of Taiwanese manufacturing partners.

As DigiTimes points out, Microsoft has a bit of a mixed track record when it comes to this sort of thing: “Xbox 360 is currently the only own-brand product line that Microsoft has achieved success…while Zune media player, Kin smartphone and own-brand TVs all had unsatisfactory performance.”

Just as a bit of a refresher: Windows 8 (which isn’t necessarily the final name of Microsoft’s next-generation operating system; that’s just the company’s internal code name du jour) offers a user interface composed of colorful tiles that can be clicked or tapped, accessing applications. It’s totally different from previous versions of Windows and their focus on a folder-loaded desktop. And it’s built for a variety of form-factors, ranging from desktops and laptops, down to tablets.

Every so often, rumors start to float that Microsoft is jockeying to purchase a company that builds hardware. Nokia was the most recent target of those acquisition rumors, despite Microsoft’s sweetheart deal with them, which basically provides all the benefits of a takeover for far less cash. Those rumors never seem to pan out, and for good reason: Microsoft might take a stab at building hardware for initiatives like the Xbox, but ultimately hardware-chain management (particularly for something as big and complex as mass consumer-tablet production) isn’t among the company’s core competencies. Logistically and financially speaking, it’s much easier for them to sell software to companies like Hewlett-Packard or Dell, which then have to worry about integrating and deploying it on their devices.

That’s why I’m not putting an incredible amount of faith in these “DigiTimes” rumors. If anything, it seems that Microsoft’s devoting more of its tablet-related energies to keeping its manufacturing partners on the proverbial tight leash. According to a June 1 article in “The Wall Street Journal,” itself based on discussions with unnamed “people familiar with the matter,” the company wants five chip makers to pair with a single tablet manufacturer. The chip makers include Intel, Advanced Micro Devices, Nvidia, Texas Instruments and Qualcomm, which would eventually be allowed to expand beyond that single partner.

If Microsoft did decide to build its own branded tablets, it would risk irritating partners that have demonstrated their absolute willingness to throw their weight behind Android devices. Not exactly the smartest move. The manufacturing partners also have experience in actual tablet-building, unlike Microsoft. When it comes to Windows and tablets, executives in Redmond could very well decide the path of least aggravation lies in replicating the model that worked so well with Windows and PCs: Let the OEMs handle the hardware.

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Apple iCloud Forces Microsoft to Unleash Master Chief

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Jun 072011

So Apple had kind of a big day yesterday, unveiling the next versions of its iOS and Mac OS X operating systems–along with iCloud, the company’s new (and free) cloud offering.

As detailed by Apple CEO Steve Jobs and his executives, the iCloud service will sync user content and push it to various devices (such as the iPad and iPhone) via the cloud. Apple contacts, calendar and email are now cloud-centric features, with new messages and updates automatically delivered across the user’s ecosystem. Documents uploaded to the cloud will appear on the user’s other devices (provided the documents in question have been created using Apple’s productivity software; that is, Pages, Numbers and Keynote), along with any music downloaded from iTunes. To top it all off, iCloud is also a photo depository.

It’s a big deal. More to the point, it’s a shot across the bows of Google, Amazon and Microsoft. And what was Microsoft’s immediate response to Apple’s cloud revelations?

That was the trailer for “Halo 4,” which appeared at roughly the same time Jobs appeared onstage to show off his latest software toys. If anything was going to take even a smidgen of Apple’s thunder, it was Master Chief doing his usual personality-free, shoot-everything-in-sight routine. But all the virtual bullets in the world won’t stop this latest challenge to Microsoft’s “all-in” cloud strategy.

What does Microsoft have in its consumer-cloud corner? SkyDrive, Hotmail, Xbox Live and Messenger. Within a day of Apple’s presentation, Microsoft sent an email to media calling out a Windows Blog post highlighting some of those services’ features–including Hotmail’s “contacts anywhere” and Skydrive’s ability to store and sync photos and video.

There’s also a substantial mobility play, with the upcoming Windows Phone Mango update giving users the ability to view and share photos on their smartphone via SkyDrive. Something similar extends to documents. “Windows Phone lets you view folders and files directly on your phone,” read the post, “so when you group things on SkyDrive, you know they’ll be available with the same folder structure on your phone.”

Hotmail and Xbox Live certainly have substantial audiences, and both SkyDrive and Messenger offer some interesting features. But if Apple’s proven anything over the last decade, it’s their ability to enter a new market and establish a substantial presence. It’s a near-certainty that Microsoft will respond to its rival’s newest initiative with a harder push for its own cloud offerings–including Office 365, set to debut later this month (and also intended as a robust response to Google Docs).

Nonetheless, Apple raises the specter of a new, tough opponent in a new, tricky market. Maybe Microsoft should consider calling in Master Chief.

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Microsoft’s Skype Deal Offers Huge Benefits, Risks

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May 102011

Last night, Microsoft signed the largest deal in its history: $8.5 billion for VoIP provider Skype.

Under the terms of the agreement, Skype becomes a business division within Microsoft, headed by Skype CEO Tony Bates. Skype’s services will be meshed with a variety of products in Microsoft’s portfolio, including its Lync unified-communications platform, Outlook, and Xbox Live.

That $8.5 billion is a substantial markup from the $2.6 billion eBay agreed to pay for Skype way back in 2005, or the $1.9 billion a team of private investors shelled out in 2009. Did Microsoft overpay?

According to one analyst, the answer’s a definite Yes.

“Wall Street hated the deal when eBay bought it, and they only paid 1/4 of what Microsoft is now paying,” Roger Kay, founder and president of Endpoint Technologies Associates, wrote in an email to me this morning. “In eight years, Skype hasn’t made any money, and even at the operating level, it would take three decades to pay out in cash terms alone.”

Other analysts took a more optimistic perspective.

“Skype refreshes the Microsoft customer base with 170 million early-adopter progressive users,” Ray Wang, principal analyst and CEO at Constellation Research, wrote me. “Microsoft gets a social platform that accelerates its work on Lync. Microsoft will gain a VoIP platform critical for future unified communications.”

What does Microsoft buy for that $8.5 billion?

Momentum

Skype’s customer base totals around 170 million users, which gives Microsoft considerable influence within the evolving VoIP and video-conferencing market–and momentum to its existing communications offerings. For example, if Microsoft goes through with its plans to bake Skype software into future Windows Phone releases (over the carriers’ screams of bloody murder), it could create a mobile platform strong enough to overshadow Apple’s FaceTime and Android’s anemic video-conferencing offerings. If Microsoft integrates Skype with Xbox Kinect, that could help forward the company’s designs on the living room.

Keep Away

Guess who doesn’t own Skype? Google or Cisco. Either one of those companies seizing Skype’s assets–or initiating some sort of far-reaching partnership–could have placed Microsoft at a sizable disadvantage in the VoIP and video-conferencing arena. Over the past few days, rumors suggested that either Google or Facebook could make some sort of Skype play.

That didn’t exactly play out. Nonetheless, during the May 10 press conference to walk through the deal, Tony Bates neatly dodged the question of whether other companies had been in the running to acquire Skype: “We were very focused on our IPO, we had an unsolicited offer [from Microsoft], we made an evaluation.”

Competitive Strength

“Product-wise, this could be a nice fit,” ABI Research senior analyst Aapo Markkanen wrote in a May 10 research note forwarded to media. “Microsoft has several areas in both consumer and enterprise sectors that will benefit from a top-notch VoIP, video and sharing solution. All of the synergies may never realize, but even the promise of them goes a long way explaining why the price may not seem that right.”

Windows Phone could also benefit from the acquisition. “A preinstalled, well-integrated Skype client could be a potent differentiator for Windows Phone devices vs. Androids, iPhone and BlackBerry,” Markkanen added.

Personally, I think this deal is complex enough–and Microsoft’s existing offerings overlapping enough–to place a great deal of weight on the tactical execution. If Microsoft can figure out ways to seamlessly integrate Skype with its existing offerings, then the potential benefits could be enormous over the longer term. That being said, I think there are also sizable opportunities to flub an integration this enormous. Whoever Microsoft tasks with digesting Skype, they better be on their game.

What do you think?

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Microsoft Stores: Vital or Sideshow?

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Apr 262011

Microsoft is on the path to opening new retail stores across the United States.

The company already has outlets in Arizona (1), Colorado (1), California (3), Illinois (1), Minnesota (1) and Washington (1). Add to that list Georgia, with a big store opening in Atlanta, and Texas, with a location in Houston. (ZDNet’s always-thorough Mary Jo Foley offers a complete breakdown of cities here, along with a link to a job listing for an upcoming Los Angeles location.)

Microsoft has been dipping its toe very cautiously into the retail waters. Back in late 2009, after the company opened its first store in Scottsdale, Ariz. and a second in Mission Viejo, Calif., a spokesperson told me: “We will open these first two stores, listen to and learn from consumers, evolve the model, and open additional stores as quickly as it makes business sense.”

That represented something of a toning-down of Microsoft’s previous rhetoric. At the Worldwide Partner Conference in summer 2009, Microsoft Chief Operating Officer Kevin Turner told an audience that the company was “on the offensive” against Apple, and willing “to take some of these hard market-share opportunities head-on.” Presumably, that meant a battle on the retail level, where Apple enjoys a significant presence.

Microsoft even went so far as to hire George Blankenship, a former Gap executive who helped launch Apple’s retail efforts in 2001. But as time passed, only a handful of stores opened–and until Atlanta and Houston, Microsoft seemed more interested in smaller cities as potential locations.

“Microsoft will open a ninth store this year in Seattle,” read an April 26 posting on WinRumors. “Microsoft is also rumored to be launching stores in New York, Houston and Orlando later this year too.”

That suggests those initial stores performed well, right? I mean, it’s not like Microsoft’s ever poured millions of dollars into a concept that didn’t work out.

Whether they prove a loss leader, Microsoft’s stores do serve one vital purpose: helping reaffirm Microsoft as a consumer brand unto itself. Manufacturing partners such as Hewlett-Packard (with its webOS, soon to appear on tablets, smartphones and PCs) and Dell (with its Android-based tablets) have shown a terrifying lack of fidelity to the Redmond mother-ship of late, and retail partners like Best Buy aren’t exactly in the business of exclusively promoting Microsoft’s products.

In light of that, and no matter what the condition of their balance sheets, Microsoft’s stores serve to generate a sort of brand equity. It’s certainly worked for Apple, whose stores served as an effective brand ambassador since long before the release of the iPhone or iPad.

In reality, though, the launch of a successful product line (like, hey, a tablet that runs a lightweight OS!) would probably do more for the Microsoft name than a few stores that sell Xbox 360s and Windows 7 PCs mercifully free of bloatware. The retail locations might give Microsoft a little boost, but ultimately they remain a minor component (or, if you want to be unkind, a sideshow) within the much larger endeavor of selling Microsoft’s products in a rapidly changing and aggressive marketplace.

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Microsoft Versus Google: European Edition

Advertising & Search, Corporate, Digital Lifestyle, Windows News No Responses »

Apr 052011

It’s getting vicious between Google and Microsoft.

Last week, I wrote a few articles for eWEEK discussing the antitrust complaint Microsoft filed with the European Commission, pillorying Google as an 800-pound gorilla in the world of search.

“We’re concerned by a broadening pattern of conduct aimed at stopping anyone else from creating a competitive alternative,” Brad Smith, Microsoft’s senior vice president and general counsel, wrote in a March 30 statement posted on the Microsoft on the Issues blog. “We’ve therefore decided to join a large and growing number of companies registering their concerns about the European search market.”

His posting argued that Google restricts other search engines from property cataloging YouTube videos in search results, that it prevents those YouTube videos from running well on Windows Phones, that it blocks access to book publishers’ content and that it restricts advertisers’ access to their own data.

In addition, Smith accused Google of contractually blocking “leading Websites in Europe from distributing competing search boxes” and discriminating against competitors by raising the price for prominent placement in Google advertisements.

The European Commission, of course, spent years chasing Microsoft around the block over supposed anti-competitive practices related to Internet Explorer. Eventually, Redmond executives relented to releasing a “Web browser choice screen” that gave Windows users in the European Union a selection of browsers other than IE.

Google didn’t take Microsoft’s EC filing very well.

“We’re not surprised that Microsoft has done this, since one of their subsidiaries was one of the original complainants,” a Google spokesperson wrote in a March 31 e-mail to eWEEK. “For our part, we continue to discuss the case with the European Commission, and we’re happy to explain to anyone how our business works.”

By “one of their subsidiaries,” the spokesperson is referring to Ciao! from Bing, an online-community portal aimed at a handful of Western European markets. Back in February 2010, the European Commission notified Google that Ciao, along with U.K. price-comparison Website Foundem and French legal search engine ejustice.fr, had filed complaints about Google’s effect on European search-engine competition. Foundem is a member of ICOMP, a lobbying group sponsored by Microsoft.

Is Microsoft’s move surprising? Not really.

Redmond is pouring hundreds of millions of dollars into supporting its Bing search engine, in exchange for incremental market-share gains (which add up, to be fair; if you add Bing.com’s share with what the search engine earns from powering Yahoo’s back-end search, Microsoft can claim close to 30 percent of the market, according to research firm comScore).

At the same time, Microsoft is also attempting to carve out a presence in the smartphone market with Windows Phone 7. Several rivals occupy that territory: Research In Motion, Apple, Google and (soon) Hewlett-Packard’s re-launched Palm franchise. But it’s Google’s burgeoning market share that seems to have everyone else concerned.

Lastly, there’s also the business cloud side of the equation. Google and Microsoft have been battling for several quarters over government and corporate contracts for their respective cloud IT services. In November 2010, Google filed a lawsuit against the federal government, alleging that the Department of the Interior unfairly restricted its bid to update its email and messaging system in favor of Microsoft’s BPOS-Federal suite. That action alone hints at the animosity level between the two companies.

So a lawsuit with the European Commission is just another twist in what promises to be a long battle, one in which both sides seem willing to do anything to gain even a small advantage over the other.

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Microsoft’s Branded ‘Windows 8′ Tablet Seems Unlikely

Apple iCloud Forces Microsoft to Unleash Master Chief

Microsoft’s Skype Deal Offers Huge Benefits, Risks

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