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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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PC Shipments in EMEA Return to Growth in 2Q14, Says IDC

IDC PMS4colorversion  300x99 PC Shipments in EMEA Return to Growth in 2Q14, Says IDC

According to International Data Corporation (IDC), PC shipments in Europe, the Middle East, and Africa (EMEA) reached 21.9 million units in the second quarter of 2014 — a 10.5% increase year on year and a clear return to growth after seven quarters of consecutive decline. As in the previous quarter, Western Europe drove most of the regional growth, with shipments supported by strong enterprise renewals, which led to an overall 25% increase in the PC market. Consumer shipments also returned to growth after a severe contraction in 2013. At the same time, Central and Eastern Europe (CEE) remained impacted by the unstable political and economic situation in Russia and by currency fluctuations; as forecast, CEE declined by 13.2%. The Middle East and Africa (MEA) posted a modest 1.9% increase in shipments. In line with those trends, portable PC shipments in EMEA returned to growth (up 8.3%), while desktop PC shipments increased 14.1%. The increase in total EMEA shipments indicates a rebound in the market but not a recovery as volumes remain below the 25 million unit mark of the peak periods in 2010 and 2012.
“The clear improvements in EMEA are positive signs for PC manufacturers,” said Chrystelle Labesque, research manager, IDC EMEA Personal Computing. “However, there was still a big difference between the subregions, and especially in the consumer segment the divide between mature and emerging markets is similar to the worldwide trend. While some parts of the CEMA [Central and Eastern Europe, Middle East, and Africa] PC market continued to suffer from unfavorable exchange rates and a difficult political situation, Western European shipments were fueled by low-end consumer notebooks. Even if the comparison is eased by a very poor second quarter of 2013, more attractive products at the right price points encouraged more consumers to renew their devices. Retailers and etailers also seem more confident as new product designs and features better positioned price-wise are now generating higher sales and not only just interest. Promotional activities and vendors’ preparation for the back-to-school period further supported the market. The level of inventory will have to be monitored closely as back-to-school sales progress during August and September.” In this context, Chromebooks continued to grow, but their impact is limited to several countries in Western Europe.
PC shipments in Western Europe have continued to benefit this quarter from ongoing renewals in the SMB space following the end of Windows XP support. Commercial demand remained strong as business confidence stemming from an improving macroeconomic outlook contributed to corporate renewals. Commercial PC shipment growth in Western Europe reached 26.9% — clear confirmation that PCs remain key productivity tools in the enterprise environment. At the same time, the rebound in consumer shipments accelerated and some markets, including southern Europe, returned to levels of business close to their capacity. Shipments in Spain, Germany, and the Netherlands took off, with sell-in up by more than 40%.
“The lack of investments in PC renewals during the past two years contributed to an aging installed base across the commercial market and, together with the end of Windows XP support, this generated large renewal needs,” said Maciej Gornicki, senior research analyst, IDC EMEA Personal Computing. “As the macroeconomic outlook improved in most Western European countries, large enterprises regained confidence and started to replace their PCs, while many companies in the SMB segment reacted late to the change in the operating system. This has mainly boosted demand for desktops in the past two quarters, while the wave of portable renewals remains ahead of us.”

2014 B2B Tech Content Marketing Trends: Tailoring Content, Tactic Effectiveness, Social Media

Looking for insight into how technology marketers are using content marketing? Check out Content Marketing Institute’s newest research report, 2014 B2B TECHNOLOGY CONTENT MARKETING TRENDS — BUDGETS, BENCHMARKS, AND TRENDS, NORTH AMERICA, sponsored by International Data Group (IDG).

This infographic video focuses on how tech marketers tailor content, tactic effectiveness, and social media usage.

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Apple’s IBM Deal Marks the Real Beginning of the Post-PC Era

Mashable

When you look at the landscape of powerful players in the enterprise, a few names tend to stand out: IBM, Oracle, SAP, Microsoft, Apple.

Wait, Apple? A decade ago, it was rare to see Apple products in the enterprise. Sure, an executive here and there might have had a MacBook — maybe the graphics or marketing division used OS X — but everyone else worked on Windows and carried a BlackBerry.

Fast forward to today. Consumers have shifted away from the desktop-and-laptop world and more to the cloud, streaming media and mobile devices, and business and enterprise have, too. Today, iOS is in 98% of the Fortune 500. Almost in spite of itself, Apple has become a force of nature in the enterprise.

Seemingly overnight, Apple — the consummate consumer company — is a big player in the enterprise.

That reality became crystalized on Tuesday when Apple announced that it would be partnering with IBM to focus on “transforming enterprise.” The deal will pair Apple’s mobile and tablet hardware with IBM’s services, which include its Big Data, cloud and security infrastructure.

How exactly did this happen?

Falling into enterprise

The original iPhone wasn’t designed for business users. You could use a custom email setup, but there was no Exchange support, no VPN and no built-in productivity apps. With the iPhone 3G and iOS 2.0, Apple started adding more enterprise-friendly features, largely at the behest of businesses. Executives bought iPhones and wanted to use them in the office.

But it was the iPad, first released in 2010, that really changed the game. The portable nature of the tablet, coupled with a growing library of custom or publicly available third-party apps made the devices an instant hit in the office and in schools.

The iPad came along at the perfect time. Big enterprise customers were already starting to shift to cloud-based solutions for CRM and document management, which made it easy for an iPad to step in for a laptop on sales calls or in meetings.

Phil Buckellew, IBM’s vice president of enterprise mobile, says enterprise customers are constantly asking — demanding, really — more mobile solutions that are easy to use.

Why? It’s simple. People use an iPad at home and want to have that same experience at work. Users are accustomed to solutions “just working.”

Historical enterprise companies such as Microsoft and BlackBerry have struggled to adapt their technologies for the modern consumer, but by virtue of its consumer-friendly user experience, Apple seems to have almost accidentally fallen into enterprise.

Post-PC for the office is coming

Back in 2010, Steve Jobs famously discussed the emergence of a Post-PC world. Much hand-wringing and rationalizations about how the PC is still relevant has followed, but the reality is, Jobs was right. For most users, the PC is no longer the center of their digital lives, that center is now a smartphone (or even a tablet).

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Brazil Wins at Something: Digital Ad Spending in Latin America

eMarketer

Digital ad spending in Latin America will increase 28.5% this year—the second-fastest growth rate out of all regions worldwide, trailing only the Middle East and Africa—to hit $5.29 billion, according to eMarketer’s latest estimates of global digital ad spending.

175102 Brazil Wins at Something: Digital Ad Spending in Latin America

Double-digit gains will continue throughout our forecast period, pushing total investments in Latin America to $9.36 billion by 2018. Thanks to this growth, the region will rise from second-to-last place in digital ad spending worldwide in 2016, when it is set to surpass Central and Eastern Europe. However, it will still see far lower spending compared with North America, Asia-Pacific and Western Europe, and will claim just 4.4% of the digital ad spend market in 2018.

Brazil will maintain the highest levels of digital ad spending out of the Latin American countries for which eMarketer produces estimates, at $2.88 billion—or 54.4% of all digital ad spend in the region. Meanwhile, second- and third-place Mexico and Argentina will see far lower digital ad investments of $900 million and $310 million, respectively.

Despite higher gains in Mexico than in Brazil, the former will still rank second for digital ad spending in Latin America throughout our forecast period. Argentina will continue to pull up the rear, with increases at 7.0% or lower expected through 2018, compared with double-digit gains in the other two nations.

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Coming soon to Facebook: Video ads that follow you from device to device

VentureBeat

Advertisers on Facebook see the emerging method of sequential mobile advertising as a way to better control their branding message with consumers on social media.

Sequential video advertising allows marketers to place targeted video ads in front of a user when they click an ad on their mobile device. Based on what the person clicks, and what the product or message is, marketers are then able to follow up with similar video ads as they hop from one device to another.

By creating a sequence of targeted ads, marketers can build up a pitch from one video to the next — starting with a “pitch” video and ending with a “sell” video intended to close the sale.

VentureBeat spoke to two sources who requested their names not be used because the information they were describing was based in conversations with Facebook executives.

“Video is where its going,” an advertising executive who works with Facebook told VentureBeat. “With unique profile IDs, you have the ability to better sequentially target content for users as they embark on their journey through the social media funnel.”

The same executive added: “Sequential video advertisers gives marketers the ability to place different messages that can build upon each other. This gives you greater control over the delivery of your message.”

Another mobile executive who works with Facebook told VentureBeat that advertisers want to better control, and deploy, product messages. But they are content, for now, in permitting Facebook and others obtain user data to target their ads.

For its part, Facebook uses a combination of its own in-house analytics and partners for the task of ad targeting.

Facebook is able to amass tremendous amounts of user data based on information contained in in its users’ profiles as well as their activity. That includes information on who you interact with and where you like to shop, for example. That data is gold to advertisers, keen to take advantage of Facebook’s 1.2 billion users.

“The writing is on the wall. Sequentially targeted ads are hugely efficient and ultimately cost effective. They have greater relevance for advertisers and better targeting,” said the second source, who has knowledge of Facebook’s mobile ad strategy.

“Anecdotally, it’s very promising. Facebook is putting a lot of effort into it,” the same source added.

Indeed, Facebook bought the video advertising outfit Liverail for an undisclosed sum earlier this month. Liverail’s technology optimizes video ad deliveries for mobile devices utilizing bidding and proprietary data. Liverail was considering an IPO this year but threw in its lot with Facebook instead, media reports said.

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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

Standalone wearables coming this year, AT&T executive says

IDG News Service

The most successful wearable devices will be ones that can work without a phone, and AT&T will have at least one of them by the end of this year, the man who manages the carrier’s partnerships said.

“It needs to be an independent device. It needs to do something different for the end-user, for people to buy it en masse,” said Glenn Lurie, AT&T’s president of emerging enterprises and partnerships.

A likely place to start could be wearables for wellness, such as a device that knows when your workout’s begun, holds your music, and lets you post information about your performance to social networks, he said. “I think you’ll see devices like that this year,” Lurie said.

The hottest devices will be able to work both on their own and with a phone, Lurie said. They’ll also have to be simple to use, a bar that no wearable has crossed yet, he said.

Once wearables start talking to LTE on their own, the sky’s the limit of what consumers will take with them, Lurie said. “Just like tablets, it’s going to all of a sudden explode.”

Cars will be another hot category of connected devices, with natural-language commands letting drivers do many things, he said.

“We believe technology in a car can make the car not only a safer place, but a place where you can do everything you can do today with your smartphone in your hand,” Lurie said. But there are hurdles left to be crossed: Cars will need to be able to talk to both Android and iOS phones without those phones coming out of the driver’s pocket. And as cars age through several generations of mobile technology, their software will have to be upgradable over the air. “The car is going to become a smartphone with four wheels.”

Lurie has overseen AT&T’s new businesses and partnerships for years, going back to the carrier’s blockbuster deal to carry the Apple iPhone exclusively for five years. Speaking before the audience at the MobileBeat conference in San Francisco on Tuesday, he wasn’t giving away any secrets about what manufacturers are showing off to AT&T.

“The things I’m seeing are pretty darn exciting,” Lurie said.

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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Digital marketing budgets will grow

Warc

More than three-quarters of senior marketers in Asia-Pacific think digital, mobile and analytics will change the face of the industry over the next five years, a recent survey has revealed.

According to the regional segment of Accenture’s global study of 600 CMOs in 11 countries, 39% of its 180 APAC participants also expect spending on digital to account for over 75% of their marketing budgets over the same period.

But even though another 42% forecast that their marketing spend on digital will increase by more than 5% next year, only 23% expect their company to be known as a digital business within five years, Campaign Asia reported.

This prompted Accenture to warn industry practitioners that they need to embrace digital in order to survive.

“To be part of the enterprise digital transformation that every business needs to undertake for survival, CMOs need to extend their vision of marketing and its scope,” the report said.

Patricio De Matteis, managing director of Accenture Interactive for APAC, urged marketers to make best use of digital opportunities while also taking account of the customer experience.

“Senior marketing executives are well positioned to assume this role because the opportunities, as well as the potential, lie in the customer, the brand, the interface with the customer and how the customer is empowered,” he said.

He noted that an increasing number of companies are now hiring staff specifically to manage the customer experience and said “the key to success” is in developing an effective omnichannel experience.

This would appear to be an area requiring improvement because nearly three-quarters (73%) of the survey respondents believe it’s “essential” to deliver an effective customer experience, yet only 61% think their company is doing this well.