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World Tech Update- August 29, 2014

IDG News Service

Coming up on WTU Instagram brings Hyperlapse to the iPhone, Microsoft cuts Surface 2 prices and Google reveals its secret drone delivery program.

 

Why Are PC Sales Up And Tablet Sales Down?

TechCrunch

When iPads first came out, they were hailed as the undoing of the PC. Finally, a cheap and reliable computing device for the average user instead of the complicated, quirky PC. After a few years of strong growth for iOS and Android tablets and a corresponding decrease in PC sales, the inverse is suddenly true: PC sales are up and tablet sales are “crashing.” What happened?

The tablet slowdown shouldn’t be a surprise given that tablets have hardly improved beyond relatively superficial changes in size, screen resolution, and processor speed. The initial market for tablets is now saturated: grandparents and kids have them, people bought them as Sonos controllers and such, and numerous households have them around for reading. People that want tablets have them, and there’s just no need to upgrade because they more than adequately perform their assigned tasks.

Businesses and consumers alike are again purchasing PCs, and Mac sales are on the riseyear-over-year. Businesses in particular are forced to upgrade older PCs now that Windows XP is no longer supported. When purchasing a new PC, the main driver to choose a PC versus a tablet is fairly obvious: If you are creating any type of content regularly, you need a keyboard, a larger screen, and (for most businesses) Microsoft Office.

Reigniting Tablet Growth with “Super Tablets”

For the tablet category to continue to grow, tablets need to move beyond what Chris Dixon calls the “toy phase” and become more like PCs. The features required for a tablet to evolve into a super tablet are straight from the PC playbook: at least a 13” screen, 64 bit processor, 2GB of RAM, 256GB drive, a real keyboard, an actual file system, and an improved operating system with windowing and true multitasking capability. Super tablets form factors could range from notebooks to all-in-one desktops like the iMac. Small 7” and 9” super tablets could dock into larger screens and keyboards.

The computer industry is littered with the detritus of failed attempts to simplify PCs ranging from Sun Micrososytems’ Sun Ray to Oracle’s Network Computer to Microsoft’s Windows CE. But this time, it’s actually different. The power of mass-produced, 64-bit ARM chips, economies of scale from smartphone and tablet production, and — most importantly — the vast ecosystem of iOS and Android apps have finally made such a “network computer” feasible.

Businesses Need Super Tablets

As the former CIO at CBS Interactive, I would have bought such super tablets in droves for our employees, the vast majority of whom primarily use only a web browser and Microsoft Office. There will of course always be power users such as developers and video editors that require a full-fledged PC. A souped-up tablet would indeed garner corporate sales, as Tim Cook would like for the iPad … but only at the expense of MacBooks.

The cost of managing PCs in an enterprise are enormous, with Gartner estimating that the total cost of ownership for a notebook computer can be as high as $9,000. PCs are expensive, prone to failure, easy to break and magnets for viruses and malware. After just a bit of use, many PCs are susceptible to constant freezes and crashes.

PCs are so prone to failure that ServiceNow — a company devoted to helping IT organizations track help desk tickets — is worth over $8 billion. Some organizations are so fed up with problematic PCs that they are using expensive and cumbersome desktop virtualization, where the PC environment is strongly controlled on servers and streamed to a client.

And while Macs are somewhat better than Windows, I suggest you stand next to any corporate help desk or the Apple genius bar and watch and learn if you think they are not problematic.

Continue reading…

Microsoft still believes in basic phones, launches Nokia 130 for $25

IDG News Service

Microsoft’s Devices Group has unveiled the Nokia 130, a mobile phone that costs just $25 but lacks an Internet connection and apps.

The focus of Microsoft’s mobile device strategy is on building both high-end and low-cost smartphones running Windows Phone, but there is still a need for “ultra-affordable” mobile phones, the company said on Monday.

With the 130, Microsoft is going after people in emerging markets who are buying their first phone. It’s also a good fit for people who want a backup to complement their existing smartphones, according to the company.

The $25 price tag (before taxes and subsidies) is about $90 cheaper than the Lumia 530, which is the lowest cost Windows Phone Microsoft has introduced so far. The price difference with the cheapest Android-based Nokia X — which was recently killed in favor of Windows Phone — is about the same.

For many people in the emerging markets that Microsoft is targeting, a price tag over $100 is simply too much. The company hence feels it needs to offer them a more affordable alternative to prevent them from going to another vendor from whom to buy a phone today and possibly a smartphone in the future.

The 130 has a 1.8-inch color display and will be available with one or two SIM cards. Microsoft also brags about a month-long standby-time, which is a boon for users that live in parts of the world where access to electricity isn’t always a certainty.

The phone also has a built-in video player, music player, an FM radio and a flashlight. It’s expected to begin shipping in the third quarter, and will be available in countries such as India, China and Indonesia.

The choice of this trio is far from a coincidence; they added the largest number of new mobile phone subscribers in the world during the first three months of the year, according to a survey conducted by telecom vendor Ericsson.

There might be a market for products like the 130 today, but the window of opportunity is closing quickly thanks to a continuing decline in smartphone pricing.

For example, Mozilla Foundation and chip maker Spreadtrum have developed a reference platform and partnered with Indian vendors Intex and Spice to launch ultra-low-cost Firefox OS smartphones in the next few months, they said in June. Spreadtrum has said the phones will cost about $25.

That means Microsoft has to continue to work on making Windows Phone available on smartphones that cost well below $100, which is what Google is doing with Android.

The 130 will also go on sale in Egypt, Kenya, Nigeria, Pakistan, the Philippines and Vietnam.

Why Microsoft Azure could have the last laugh in the cloud wars

CITEworld

Venture capitalist Brad Feld recently wrote an interesting post predicting the end of Amazon’s dominance of the cloud computing market, and concluded, “it’s suddenly a good time to be Microsoft or Google in the cloud computing wars.”

I’d go one step farther. Using Feld’s arguments, I’d say that Microsoft is in the driver’s seat.

First, the price war. Microsoft and Google are on approximately equal ground when it comes to cutting prices — both have highly profitable core businesses that they can use to subsidize a price war in cloud infrastructure, even to the point of sustaining losses for a while to gain market share. Amazon does not.

Second, the quality argument. Like Feld, we’ve also pointed out that there are niche cloud providers that do a better job than the big guys at providing infrastructure-as-a-service for specific verticals, but when you move all the way up the stack to full software-as-a-service applications, Microsoft has an edge among the big three with Office 365. Google has been making inroads into smaller businesses with Google Apps for almost a decade now, Microsoft remains the standard in the biggest and most profitable business customers — as this recent investigation from Dan Frommer at Quartz showed, only one company in the Fortune 50 uses Google Apps. (That company happens to be Google itself.)

The third argument, support, is mostly a wash. While Amazon’s support may be terrible (I have no evidence of this, but I’m taking Feld’s word for it), Microsoft and Google and their respective ecosystem partners do a decent job of supporting customers on their stacks. This hasn’t always been the case — Google used to treat support as an expensive afterthought — but in the case of Google Apps, at least, the company and its partners have stepped up significantly.

But then comes the fourth argument. Feld points out that once companies get to $200,000 per month of cloud-infrastructure spend, it’s actually significantly cheaper to build their own data centers.

Microsoft is the only one of the big three players with an on-premise offering — Windows Server and the rest of the Microsoft infrastructure family. Maybe the exact break-even point will change as the cloud price wars continue, but Microsoft has the most pieces customers would need to move from all-cloud to a hybrid or on-premise solution. Or, for that matter, for existing on-premise customers to begin experimenting moving some workloads to the cloud.

There’s one more point favoring Microsoft. Google’s core business is selling online advertising. That business makes up about 90% of Google’s revenue, and it has enviably high operating margins — around 30%, based on Google’s 2011 financial report. (I picked 2011 because that was before Google bought Motorola Mobility, which changed the margin structure.)

It’s unclear how the Google Cloud Engine helps that business. Are customers using Google’s cloud somehow more likely to advertise with Google? I don’t see it. Are Google advertising customers demanding to run other workloads on Google technology? I don’t see it.

Click to read more…

 

Who has the biggest cloud? By year’s end, the answer may surprise you.

Gigaom

Amazon Web Services remains the biggest of the big cloud providers, but it’s seeing competitors gaining in its rear-view mirror.  Nomura Securities analyst Rick Sherlund now expects Microsoft to field the largest cloud business by December — at least in terms of annual revenue run rate which he estimated will be $5.77 billion.

In a research note, Sherlund, who has covered Microsoft on and off for years, said that revenue estimate would represent 89 percent year-over-year growth for that business. In terms of run rate, he ranked Salesforce.com as the second largest provider at $5.5 billion and 28 percent growth year over year.

This is a tricky calculation for a few reasons, not least because AWS, the world’s largest cloud infrastructure provider, does not break out its numbers. Actually, none of the cloud providers make it easy to assess the size of their businesses. Microsoft, for example, seems to lump Azure, Office 365 Software-as-a-Service (SaaS) business all together. Still, given that rather large caveat, Sherlund estimates that Amazon’s cloud business run rate would be comparable to Salesforce.com’s.

Another wrinkle is that this is not an apples-to-apples comparison. Salesforce.com’s business is mostly SaaS with some Platform as a Service (PaaS) sales from Force.com and Heroku. AWS, on the other hand, is typically defined as Infrastructure as a Service (IaaS). Microsoft Azure started out four years ago as a PaaS but last yearadded AWS-like IaaS capabilities.

Purists prefer to break out all those categories separately, but for non techies those roles are muddled. For example, Synergy Research Group’s recent figures which combine IaaS, PaaS and SaaS into one big blob, show Microsoft and IBM growth rates in the second quarter of 2014 (164 percent and 86 percent respectively) outstripping AWS growth (49 percent), Google (47 percent) and Salesforce.com (38 percent).

For context, note that AWS remains the largest cloud provider per Synergy, but it is no longer bigger than all four of its nearest competitors combined (see chart.)

For Amazon’s recent second quarter, net sales for the category including AWS grew 38 percent year over year, to $844 million but were off 3 percent sequentially. And the growth rate declined from 60 percent for the previous quarter.

Read more…

But really — what IS the point of Windows Phone?

CITEworld

Tech blogger and former Microsoft employee Robert Scoble drew some attention today for suggesting that Microsoft should abandon Windows Phone.

Scoble is an easy target — he’ll never live down the Google Glass shower thing — but in this case he’s making a pretty rational point.

Windows Phone was Microsoft’s attempt, four years ago, to grab a profitable chunk of the smartphone market from Apple and Google before it was too late.

It didn’t work. Microsoft’s share of the smartphone market is still well under 5%– as it’s been since Windows Phone launched in November 2010. Windows Phone shipments are growing overall, and it’s the number-two platform in some countries like Italy, but overall, worldwide, its market share makes it insignificant to most developers, users, and companies.

(I don’t always subscribe to the church of market share, as installed base is more important for drawing developers, but every year that Windows Phone stays a bit player means it will have to take even more market share in the future to make a dent in the installed base. Also, I know that Android isn’t really a single platform but has multiple versions and forks and runs on all kinds of devices with different screen sizes and specs, but in general the various Android platforms are closer together than Android and Windows Phone are — and in most cases, an app maker starting from scratch will get more users with an Android app than a Windows Phone app.)

Microsoft’s dreams of achieving 10 or 15 or 20 percent market share with Windows Phone look to be just that — dreams. It could happen, but based on all evidence so far, there’s zero reason to assume it will.

So if it’s doomed to be a perennial also-ran, what is the point of Windows Phone? Why should Microsoft keep investing in it? If Microsoft under Satya Nadella is really serious about making the cloud the platform for the next generation of the company, why not just build cloud services and clients that work equally well on competing client operating system platforms?

Here are a few possible reasons.

The developer argument. PC sales are flat. Most of the growth in computing platforms over the last few years has been in mobile devices, particularly smartphones. As Microsoft pursues its “One Windows” vision, in which the various versions of Windows — desktop, tablet, and phone — get closer to the “write once, reuse most of the code and tweak slightly to run everywhere” ideal, it must have a feature-competitive mobile platform to keep developers engaged. If Microsoft were only to focus on the PC and tablet, it would lose all those developers who believe the future of apps is mobile-first.

Yeah, but: With insignificant market share, Microsoft is basically irrelevant in smartphones anyway. It’s hard to imagine a mobile-first developer investing in Microsoft before iOS and Android, unless they already have a big Windows app business or a ton of Microsoft-platform experience anyway and want to leverage that into mobile platforms, perhaps via Xamarin.

The lock-out argument. Microsoft’s biggest business today is selling productivity and back-end infrastructure servers and the client apps that go with them. Its most promising business is selling cloud services that replace or augment those servers — and still work with the same client apps. If Microsoft allows Apple and Google to control the smartphone market, those companies could make arbitrary, secret, and/or difficult-to-reverse-engineer changes to their platforms that block these Microsoft apps and services from working properly. Having Windows Phone gives Microsoft a trump card — at least for enterprises who rely on Microsoft’s productivity servers, services, and software and want to enable a mobile workforce. (Consumers may not care as much, or at all, given the well-developed ecosystem of apps and services on iOS and Android for every imaginable personal productivity function.)

 Click to continue reading

Chrome gets sharp after dumping 30-year-old Windows technology

IDG News Service

Google last week said that it was finally ditching a 30-year-old technology to display fonts on Web pages in its Chrome browser for Windows.

In an announcement Thursday about some of the notable changes in Chrome for version 37, which reached Google’s Beta build channel earlier that day, a software engineer said the preview relied on Microsoft’s DirectWrite technology.

“Chrome 37 adds support for DirectWrite, an API on Windows for clear, high-quality text rendering even on high-DPI displays,” said Emil Eklund in a July 17 blog post.

Microsoft introduced the DirectWrite API with Windows 7, which shipped in the fall of 2009, and back-ported the technology to Windows Vista Service Pack 2 (SP2) at the same time with what it called a Platform Update. Windows XP, the now-retired operating system — but one that still powers one-in-four personal computers worldwide — does not support DirectWrite.

Prior to the switch to DisplayWrite, Chrome used Microsoft’s Graphics Device Interface (GDI), which was a core component of Windows since the graphical user interface’s (GUI) debut in late 1985. Microsoft had been working on GDI for at least two years before that.

Chrome 36, the current version out of Google’s Stable build channel, continues to use GDI to render text on Windows.

Eklund said that DirectWrite had been a top user request for years: An entry in Chromium’s bug tracker — Chromium is the open-source project that feeds code to Chrome proper — about adding DirectWrite support to the browser was penned Oct. 22, 2009, the same day Windows 7 launched.

As far as a reason for the long stretch between that entry and DirectWrite support making it into Chrome, Eklund said, “The switch to DirectWrite … required extensive re-architecting and streamlining of Chrome’s font rendering engine.”

Much of that difficulty stemmed from the sandboxing — an anti-exploit and anti-crash technology — of Chrome’s rendering engine; it wasn’t until February of this year that developers reported on the bug tracker that they’d managed to get DirectWrite to work inside the sandbox.

Other browsers have long since adopted DirectWrite. Mozilla’s Firefox, for example, switched from GDI to DirectWrite with version 4, which debuted in March 2011. Microsoft’s own Internet Explorer (IE9) began using DirectWrite with IE9, which also shipped in March 2011.

DirectWrite was one of the reasons why Microsoft declined to add the then-powerhouse Windows XP to the list of supported editions for IE9, a move that made the company the first major browser developer to drop support for XP.

If all goes according to plan, DirectWrite support will reach the Stable edition of Chrome with version 37. Google does not hew to a set timetable to browser upgrades, as does Mozilla, but it typically rolls out a new version every six to eight weeks.

Read more

Surface survives Microsoft cuts, but tablet strategy remains muddled

IDG News Service

As Microsoft announced its largest layoffs in its 39-year history — while saying it would press forward with its in-house Surface — analysts contended that the firm still hasn’t clearly stated its tablet strategy.

Earlier today, Microsoft said it would cut up to 18,000 jobs, or 14% of its work force, with the bulk of those layoffs coming from streamlining efforts after acquiring much of phone-maker Nokia.

The layoffs begin immediately, but as many as 5,000 will be left on tenterhooks for up to a year before knowing whether their jobs are safe.

Along with the layoffs, Microsoft also signaled an end to its experiment with Android, which powered the Nokia X series of smartphones. Nokia had kicked off the line prior to the deal’s completion.

“We plan to shift select Nokia X product designs to become Lumia products running Windows,” CEO Satya Nadella said in a message to employees.

Surface, the tablet-one-moment-notebook-the-next hardware that Microsoft debuted two years ago, will survive, the company made clear.

“With a set of changes already implemented earlier this year in these teams, this means there will be limited change for the Surface, Xbox hardware, PPI/meetings or next generation teams,” wrote Stephen Elop, the head of Microsoft’s device division, in a separate, much longer email to workers.

Nor, apparently, has Microsoft’s Surface strategy changed.

“More broadly across the Devices team, we will continue our efforts to bring iconic tablets to market in ways that complement our OEM partners, power the next generation of meetings [and] devices, and thoughtfully expand Windows with new interaction models,” Elop said.

While some on Wall Street have urged Microsoft to dump the Surface — and the Xbox for that matter — to focus on more profitable services and software, industry analysts contacted by Computerworld today weren’t surprised that the tablet/notebook survived the cuts.

“I’m not surprised that Microsoft is keeping Surface,” said Patrick Moorhead, principal analyst at Moor Insights & Strategy, in an email today. “While it doesn’t fit 100% with ‘mobility and cloud,’ it’s close enough to keep it as it supports them driving their expanded definition of productivity by tying hardware, software and services.”

Others agreed.

“No, I didn’t think that they’d dump it,” echoed Wes Miller of Directions on Microsoft, a Kirkland, Wash. research firm that focuses on the moves of nearby Microsoft. “Some people thought Microsoft would use this opportunity to ax the Surface, but it’s a big long-term bet for them. And the Surface Pro 3 sure seems to be a lot more popular than the earlier models.”

Microsoft started selling the third-generation Surface Pro 3 – an Intel processor-powered device that runs Windows 8.1 — last month, and will finish rolling out the line in two weeks. The Surface Pro 3 starts at $799, but costs $929 with a keyboard, a necessary add-on to fit the notebook replacement role that Microsoft markets.

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The Rise of Cloud in the Channel

IDC PMS4colorversion 1 300x99 The Rise of Cloud in the Channel

Cloud services represent a growing opportunity for partners of all types in a wide array of activities across resale, services, and development. However, it’s of key importance that partners have an understanding of the what, where, how, and why of cloud services prior to embarking on wholesale business strategy change.

This IDC study, commissioned by Microsoft, examines the implications of becoming a successful cloud partner in 2013. Developed with insight garnered through in-depth conversations with leading Microsoft cloud partners and backed by supportive survey data (see methodology for further details), it provides a profile of the potential upside of integrating cloud to a partner’s mix of solution offerings.Finally, it concludes with guidance as a partner begins, or continues, their journey into the cloud.

the rise of the cloud in the channel The Rise of Cloud in the Channel

Nadella’s Microsoft is obsessed with data-driven growth hacking

CITEworld

Satya Nadella’s message to the Microsoft troops yesterday underlines the way consumerization has changed computing already: To Microsoft, everyone is now a “dual user” who uses technology for work and play. That’s two chances to lose a customer if Microsoft products don’t delight them.

To make sure that those products do delight, and do what people need, Nadella is turning to some of the tenets of Silicon Valley startups like LinkedIn, Facebook, Twitter, AirBnB, and Netflix: Data science and growth hacking.

Change agents and growth hacking

If you talk to people who work at Microsoft, you’ll have heard them use some new language this year, with phrases like “change agent” and “growth hacking.”

Getting comfortable with change and being involved in changing things is what Nadella pointed out that everyone at Microsoft is going to have to do; “Culture change means we will do things differently. Often people think that means everyone other than them. In reality, it means all of us taking a new approach and working together to make Microsoft better.” One Microsoft, as you might say.

And growth hacking is a Silicon Valley startup term that’s a lot more than just viral marketing, SEO, and A/B testing. It’s about turning product development and marketing into a virtuous, data-driven cycle where you get more users by figuring out what users do and don’t want; how they find your product and how they use it.

Josh Elman, now a VC at Greylock, tells a story about growth hacking in the early days of Twitter, when lots of people were signing up but few of them carried on using the service. Instead of emailing those users or trying to show ads to people who might be more likely to stick around, they focused on understanding what was going on.

“We dug in and tried to learn what the ‘aha’ moment was for a new user and then rebuilt our entire new user experience to engineer that more quickly.”

The key was getting people to follow other Twitter users, so they were seeing tweets they would be interested in. “As we kept tweaking the features to focus on helping users achieve these things, our retention dramatically rose,” says Elman.

His advice for growth hacking is very like Adam Pisoni’s principles for turning a company into a responsive organization (something he’s been doing at Microsoft as well as for Yammer customers). Find your heavy users who already love your product and find the features and the pattern of usage that made them into active users. Build things that attract new users — whether that’s your marketing or sharing from existing users — and make sure there’s a way for new users to get started that turns them into active users quickly. Then build more features that your old and new customers will love, and keep on going.

That means getting everyone involved in growth. Early on, Facebook had a growth team that included marketing, business development, product development, finance, and HR. It wasn’t just trying to get more users; it was behind projects like the system for importing email contacts, making Facebook available in multiple languages by crowdsourcing translations of the interface, and even creating the Facebook Lite experimental interface (a slimmed-down version of the site).

 One of the first times I heard “growth hacking” from someone at Microsoft was talking to Jeffery Snover about his “Just in time, just enough admin” toolkit for PowerShell at TechEd this year, when he compared fast releases and agile development to balancing on a bicycle. “You don’t get stability by going slowly,” he pointed out.

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