Windows Server 2012 Waiting in the Wings

More than eight months after Microsoft released Windows Server 2012, and despite an 11 percent uptick in the company's Server and Tools business last quarter, it appears most enterprises, mostly with fewer than 1,000 employees, have yet to upgrade or deploy the new operating system.

A report published yesterday by Symantec reveals that while 56 percent of respondents plan to deploy Windows Server 2012, 93 percent of them have yet to do so. The survey consists of 530 organizations worldwide. The notion that organizations appear to be moving slowly to Windows Server 2012 is not surprising. Typically IT decision makers are conservative about introducing new platforms into their datacenters and there's no reason Windows Server 2012 should diverge from that practice. Nevertheless IDC in February reported that Windows Server hardware's overall growth increased 3.2 percent in the fourth calendar quarter of last year, though it's unclear how much of those sales are systems with Windows Server 2012. I have a query into Microsoft and will update this blog if I receive an answer.

Symantec's survey found of those planning to move to Windows Server 2012, 13 percent are waiting for the first service pack, 15 percent will do it within six months, 17 percent within a year and 11 percent plan to wait longer.

"It's going to be a wait and see," said Susie Spencer, a senior product marketing manager at Symantec. "Those that are more risk takers will jump on board pretty soon but those wanting to make sure everything is tested and tried before they implement it in their organization are going to wait before they move to Windows Server 2012."

For those that are planning to move to Windows Server 2012, the key reason for doing so is to run SQL Server (67 percent), followed by Active Directory Exchange Controllers (61 percent), Exchange (58 percent), file and print servers (54 percent) and finally SharePoint (52 percent).

Key new capabilities in Windows Server 2012 respondents are seeking are improved VDI, Hyper-V virtualization and the new Resilient File System (ReFS), according to the survey. PowerShell improvements and refined disk de-duplication were close followers, Spencer said.

The survey also found that only 18 percent have more than three-quarters of their IT environments virtualized, while 52 percent plan to be completely virtualized within two years. A survey of Redmond magazine readers found only 12 percent have upgraded to System Center 2012, which combined with Windows Server 2012 is the underpinnings of its so-called Cloud OS strategy. The good news I'm hearing from various third parties is improvements to Hyper-V in Windows Server 2012 have for the first time made the hypervisor a viable alternative to the VMware stack.

What are your plans in upgrading to Windows Server 2012 and what do you find most compelling about the new OS and the Cloud OS story? Are you waiting or hoping Microsoft will have more to say about its roadmap at next month's TechEd 2013 conference in New Orleans? Feel free to comment or drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 05/22/2013 at 12:49 PM0 comments

Microsoft Ad Finally Describes What Surface Does

Microsoft's Windows 8/RT-based Surface devices are pretty slick and attractive to those who want both a tablet and a PC in one lightweight, ultra-modern unit. Yet most people are unaware of the benefits of the device despite a six-plus month ad blitz that's hard to miss. The commercials, slick in their own right, don't explain what a potential customer can do with a Surface.

I know many people who don't follow technology closely but nevertheless use it. Quite a few have no clue what the Surface does and Microsoft's commercials have done little to advance its cause. Microsoft today is finally acknowledging this.

"As much as we love the ads and others have, they've also been a bit polarizing," Michael Hall, general manager for Surface at Microsoft admitted in a blog post. "Some of our biggest Surface fans have been downright angry (ANGRY!) that we aren't talking about more of what it actually does!"

It appears Microsoft has finally gotten the message that if it wants to convince customers to look at the tablet hybrid, perhaps it should tell them why. The company's new ads do just that. The spots implicitly point out what you can't do with an iPad by pointing to the ability to run Office, a keyboard and support for peripherals via SD card and USB ports.

Perhaps these new commercials will help move the needle a bit on Surface sales. But I suspect until the next generation of devices hit the market, presumably with Intel's next-generation Haswell processors, it may remain a tough sell. But it's harder to convince people to buy something if they don't know what it is. Hence the new ads are a step in the right direction.

Posted by Jeffrey Schwartz on 05/20/2013 at 1:54 PM0 comments

Yahoo Beats Out Microsoft To Nab Tumblr

In a defining moment for Yahoo, the company today said it has agreed to acquire the popular micro-blogging site Tumblr for $1.1 billion in cash. Rumors had swirled for several days that Yahoo was the leading contender to acquire Tumblr, though Facebook and Microsoft were also reported to have engaged in serious talks to acquire the company.

It's hard not to see just a bit of irony in the fact that Yahoo bested Microsoft for Tumblr, given Microsoft's failed bid to acquire Yahoo in 2008 and the current search partnership between the two companies. Of course the latter is less unusual given that partners almost always compete at the same time.

It's not clear how badly Microsoft wanted Tumblr, a company that boasts 300 million unique visitors monthly, 120,000 new accounts each day and 900 posts per second. Half of those posts are from mobile devices that conduct an average of seven sessions per day, and Tumblr says its collective audience spends 24 billion minutes on its site monthly. It seems Microsoft is itching to do some kind of deal, coming off reports last week that it's also weighing buying Barnes & Noble's Nook business.

In rather unique verbiage for an official announcement on an investor relations site, Yahoo said the two companies agreed "not to screw it up" by deciding to keep Tumbr as a subsidiary that will continue to be led by its founder and CEO David Karp. For Yahoo the deal is a big bet. While Tumblr has a huge audience its revenues are not so enormous -- a paltry $13 million. That's because it has eschewed advertising. Something Yahoo will undoubtedly change.

Microsoft has a vested interest in Yahoo's overall well-being, at least for now. A report in The Wall Street Journal two weeks ago said Yahoo may want out of its deal with Microsoft to use Bing as its search engine. According to that report, Yahoo CEO Marissa Meyer is unhappy with the fact that its revenue per search with Bing is lower than it was when it ran its own engine.

Meyer's former employer, Google, is waiting in the wings, according to the report, though Microsoft is said to have no interest in letting Yahoo out of the deal before it expires in 2020. One source close to the contract said the earliest Microsoft might let Yahoo walk is 2015.

As for Tumblr, what's your take on Microsoft's alleged interest in acquiring a blogging site? Should Microsoft go down that path, either via acquisition or organic development or should it leave that to the likes of Facebook, Twitter and WordPress?

Posted by Jeffrey Schwartz on 05/19/2013 at 1:33 PM0 comments

Google CEO Larry Page Lashes Out at Microsoft

The rivalry between Google and Microsoft took on a new twist this week as the two companies accused each other of providing selective interoperability. While that's nothing new, the Google CEO Wednesday kicked off a tirade of barbs at a surprise appearance during the company's annual developer conference where he lashed out at Microsoft and accused the company of impeding interoperability.

During his unscheduled presentation at Google I/O, Page criticized Microsoft for integrating the Gmail chat/IM service into Outlook.com but not letting Google do the same with its service.

"The Web is not advancing as fast as it should be," Page said. "We struggle with companies like Microsoft. We would like to see more open standards and more people involved in those ecosystems."  A day later, Google slapped Microsoft with a demand that it remove its Windows Phone 8 YouTube app from the Windows Store for violations of the company's terms of service.

Is there a double standard here or does Google have a legitimate beef that Microsoft is tinkering with the app by blocking ad content, while not returning in kind interoperability with its IM service?  The reality is, when it comes to interoperability, it's not hard to find both companies (actually most IT players) guilty of hypocrisy.

Nevertheless, Microsoft continues to make strides in its support for platforms not born in Redmond, most recently by extending support for Android and Apple's iOS. While that hasn't led to a version of Office for those mobile platforms as many would love to see, I saw first-hand at this week's Visual Studio Live! conference in Chicago, produced by Redmond magazine parent company 1105 Media, that Microsoft has stepped up its tooling for those mobile environments, including its Windows Azure Mobile Services offering.

Suffice to say, this isn't altruism here on Microsoft's part. Android and iOS are by far the most widely used platforms for phones and tablets these days. Google revealed 900 million devices worldwide now run Android, up from 400 million last year at this time and 100 million two years ago, said Sundar Pichai, Google's senior vice present for the Android, Chrome and Apps teams, in his keynote address at the developer conference.

So it's in Microsoft's interest to reach those users lest it provoke further erosion of the Windows and Office platforms. At the same time, Page shouldn't talk out of both sides of his mouth. Instead of effectively saying "can't we all love one another," if he wants interoperability, he might want to refine his approach. It all boils down to selective interoperability and this week's crossfire is only the latest chapter.

Posted by Jeffrey Schwartz on 05/17/2013 at 11:22 AM0 comments

Windows 8.1: What's in a Name?

Yesterday Microsoft released some of the first details of its Windows 8 upgrade, code-named Windows "Blue."

Here's now what we know: The update now has the official name of Windows 8.1. And we also know that Windows 8 and Windows RT users won't need to shell out any more money for the update, which may or may not bring back the start button.

We also have this vague description from Microsoft's Tami Reller on what the offering will be: "Windows 8.1 will advance the bold vision that we set forward with Windows 8 to deliver great PCs and tablets with an experience that does allow you to simply do more," she said during a presentation yesterday.

Even with Reller's presentation, it's still unclear what Windows 8.1 is. In the past, when Microsoft rolled up updates and new features for its OS, these used to be called service packs. But seeing that this will be called Windows 8.1 and not Windows 8 SP1, one might be inclined to believe that this is not the same thing -- that it's something different than a service pack.

However, this is Microsoft -- the company that avoids product name consistency like the plague.

And the few glimmering details we do have (either by rumor or directly from Microsoft) does make it sound like Windows 8.1 will just consist of rolled up updates and new features. So I'm leaning more towards this being more Microsoft naming shenanigans and an attempt by the company to jazz up what is essentially a service pack.

This is a rare occurrence where the naming switch does make sense for the sole purpose of at least getting the public to take another look at Windows 8.

Let's face it -- Microsoft is desperate to move some Windows 8 units. It clearly sees that releasing something called Windows 8 Service Pack 1 won't light a fire under an apathetic consumer base. And calling it Windows 8 "do-over" doesn't really work as well. So what can Microsoft name this to convey both to the public that it's a new and improved Windows 8?

Luckily, Apple has already laid the groundwork. For more than 10 years now, Apple has been rolling out new updates to its OS X operating systems with a yearly refresh that, in some cases, has been drastically different than the previous year. But instead of calling it a new OS, they stick a new version number on it (along with throwing a large cat code name on it).

We've been conditioned to understand that Apple's latest version upgrade, OS X v10.8, is almost a completely different product than its previous OS X v10.7 because of a change in one decimal number.

I could see that Microsoft would want to take a page of the market branding that Apple has already established, especially since Redmond desperately needs some help in this department. And it does want to convince consumers that Windows 8.1 is worth giving a shot, even among those who gave Windows 8 vanilla a shot and have already wrote it off.

However, a name that consumers can get behind can only carry you so far, and a product rarely lives or dies by its brand name (Ok, the Microsoft Kin may be the exception to that).

What we really need to see are the nitty-gritty details of how Microsoft has addressed the legitimate concerns users have with its latest OS. Thankfully, we won't have to wait too long for the missing pieces to drop in during next month's Build conference. And for those looking for a way in the door, Microsoft released some more tickets this morning.

What do you think, is Windows 8.1 Microsoft's attempt to spruce up the service pack name? Let me know in the comments below.

Posted by Chris Paoli on 05/15/2013 at 10:50 AM0 comments

Rackspace Wants the Windows Cloud Market

While Rackspace typically emphasizes that its infrastructure as a service is now based on the open-source OpenStack cloud platform, the hosting provider still has a vested and significant interest in Windows. In addition to offering SharePoint hosting and development services, many of its customers use the Rackspace cloud to run Windows-based apps. The company also points to the improved Hyper-V support in Grizzly, the latest update to the OpenStack cloud OS released last month.

Now Rackspace is trying to make it more attractive to have Windows apps run in its OpenStack environment. The company earlier this month added new tools to help IT pros and developers alike build and manage .NET applications. Among them are Rackspace's PowerClient, a Powershell-based API client for the company's public cloud and the Rackspace Cloud SDK for Microsoft.NET.

"Now you can start seamlessly and easily integrating your applications into your Windows cloud environments," said Cole Humphreys, a Rackspace senior product marketing manager in a blog post. PowerClient is intended for those who want to build custom Microsoft Powershell-based cmdlets.

While Rackspace and OpenStack have a CLI known as NovaClient (for Nova compute), it's Python-based and designed to run natively in most Linux environments. NovaClient can work with Windows as well but it's not optimized for that OS, wrote Rackspace sales engineer Mitch Robins in a description of PowerClient posted to Github.

For systems administrators and IT pros responsible for ensuring uptime, implementing tools designed to run natively in Linux can be a difficult process in Windows, he noted. "You want to be able to use natively supported and functional tools, without the potential headache of having something fail because it wasn't meant for use within the Windows eco-system."

Designed to run on Rackspace OpenStack cloud servers today, Robins signaled that the roadmap calls for it working in any OpenStack environment in the future, however the OpenStack Foundation hasn't established a timeframe for that.

Meanwhile Rackspace is looking for .NET developers to build modern apps designed for mobile environments where the company sees much of the demand for its cloud services. A Rackspace survey found that 82 percent of IT decision makers believe mobile apps will become a standard method of accessing enterprise data and 28 percent say they will build their own enterprise app stores.

"The trend is toward more and more mobile apps and we are in the early stages," said Rackspace CTO John Engates, who also noted that 84 percent access to information at any time from any place while 55 percent said the cloud and mobile devices are enabling that.

To bring .NET developers into the fold, the Rackspace Cloud SDK for Microsoft.NET library runs from within Microsoft's free Visual Web Developer Express 2012 tool using its integrated NuGet extension manager.

Posted by Jeffrey Schwartz on 05/14/2013 at 10:58 AM0 comments

Could Big Data Have Prevented the Boston Marathon Attack?

The terrorist attacks of September 11, 2001 widely exposed the fact that if the CIA and FBI had data sharing capabilities, law enforcement could have thwarted the worst attack in U.S. history. Ironically it came to light just a week after Robert Mueller took over as head of the FBI.

As word quickly got out of the CIA's suspicions about the terrorists who carried out the attacks on the World Trade Center and the Pentagon, Mueller's key task as the then new FBI chief was to rectify that problem. Nearly a dozen years later, Mueller is set to retire this summer and he's confronted with the latest revelation that the suspected bombers in last month's deadly Boston Marathon attack had ties to Russian terrorists.

The suspect, Tamerlan Tsarnaev, who reportedly had extreme views, was interviewed in 2011 by the FBI, though it later dropped the case. Now The New York Times points out that as Mueller's career comes to an end, while the two agencies may have improved the way data is shared, it still has a long way to go before it can predict with better precision a threat that's about to initiate such unthinkable acts.

Perhaps it's unfair to say Mueller didn't get the job done during his tenure -- law enforcement at many levels have thwarted dozens if not hundreds of attacks in the 12 years since 2001. It may be impossible to prevent someone determined enough to initiate an attack but in the age of IBM's Watson, predictive analytics is already making us safer.

There are numerous companies and approaches aimed at using big data to provide better intelligence. But we're not there yet. President Obama needs to find a successor who is savvy about the role big data can in predicting the risks without overstepping and encroaching on the privacy and civil liberties of innocent citizens.

Posted by Jeffrey Schwartz on 05/10/2013 at 11:39 AM0 comments

Windows 8 Isn't a New Coke Moment

A number of media sites over the past day or so have compared Microsoft's failure to wow the market with its Windows 8 operating system as analogous to New Coke, the ill-fated attempt in 1985 to change the flavor of the century-old popular soft drink.

The change was so widely rejected that three months later Coca Cola Corp. reversed course and brought back the original Coke. First it branded the revived version as Classic Coke while keeping New Coke on the shelves as Coke II, which was ultimately phased out.

Whether or not you're old enough to remember the New Coke debacle, it certainly remains a case study in how not to destroy a brand. Search for "New Coke" today on Google or Bing and you'll see numerous articles and blog entries comparing Windows 8 to New Coke. However, Windows 8 is not a "New Coke moment" for Microsoft and I'll explain why.

But first, here's the latest news on Windows 8. Tami Reller, Microsoft's chief marketing officer and CFO of Windows yesterday revealed on the Microsoft's official Windows Blog that a public preview of Windows "Blue" will debut at next month's BUILD conference in San Francisco and with general releases slated by year's end.

Reller tacitly acknowledged Windows 8 hasn't met customer expectations. She also reported that slightly six months after its release, 100 million Windows 8 licenses have shipped, which includes license upgrades as well as its Surface own devices, PCs and tablets offered by third-party partners such as Acer, Asus, Dell, HP, Lenovo, Samsung, Sony and Toshiba.

In enterprises however, IDC analyst Al Gillen, told The New York Times, that 40 percent of those customers have license agreements that allow them to downgrade to Windows 7. I sent Gillen a note asking how many of those customers exercise those rights. While he didn't have hard data, he said "my sense is that it is pretty high, probably similar to or higher than Windows Vista (meaning majority of those with downgrade rights are probably exercising them). It is a classic avoidance scenario having more to do with existing momentum of Windows 7 than anything else."

A survey of more than 1,100 Redmond magazine readers planning to replace their PCs, 69 percent said they will install Windows 7, while 18 percent will use Windows 8.

That Microsoft sold 100 million Windows 8 licenses was also the range most analysts had assumed (or at least in that ballpark), though Microsoft raised eyebrows when it didn't provide an update when it reported its fiscal year third quarter earnings last month. The last update Microsoft offered was in January when it said it sold 60 million Windows 8 licenses.

Now most observers believe Windows Blue will let users configure their PCs to boot up to the classic Windows 7-like desktop rather than to the current tile-based Windows Store interface, which requires them to touch or click on the Desktop tile. Everyone is also expecting Microsoft will bring the Start menu back to the classic desktop. None of this is certain, nor did Reller tip her hand.

Microsoft will face a loud uproar if doesn't include these changes and Reller all but indicated that's not what Microsoft wants. "The Windows Blue update is also an opportunity for us to respond to the customer feedback that we've been closely listening to since the launch of Windows 8 and Windows RT," Reller said. "From a company-wide perspective, Windows Blue is part of a broader effort to advance our devices and services for Microsoft."

Also part of that effort is to have smaller devices that can answer Apple's iPad Mini, Amazon's Kindle Fire and the Google Nexus 7. The Wall Street Journal last month reported Microsoft is planning a 7-inch device, based on interviews with Asian component manufactures.

The BBC yesterday interviewed me for its daily World Business Report for a piece it did trying to compare Microsoft's moves as a "New Coke moment." When asked if I saw similarities I said no because Microsoft's not doing an about face here. Unless planets collide, Microsoft's not scrapping its tile interface. Microsoft's likely plan is to make Windows 8 more appealing to those who want the traditional interface while allowing them to use the tile interface at their leisure or as apps they need make sense.

As far as I can tell, the first to make the New Coke analogy was Steven J. Vaughan-Nichols, who last week maintained Microsoft should respond by "dumping the Metro interface."

I wouldn't bet on that happening, nor should it.

Posted by Jeffrey Schwartz on 05/08/2013 at 12:49 PM0 comments

U.S. Accuses China of Cyber Warfare

The Pentagon this week accused the Chinese military of what was long reported: that it was backing cyber-espionage by hackers attacking government and commercial computer systems.

It's the first time the U.S. government unambiguously accused China of backing and engaging in protracted cyber-warfare, potentially putting a rift in relations between the two countries.

"In 2012, numerous computer systems around the world, including those owned by the U.S. government, continued to be targeted for intrusions, some of which appear to be attributable directly to the Chinese government and military," the Pentagon said in its annual report to Congress.

While the China Ministry of Foreign Affairs denied the accusations, an editorial in The New York Times said "there seems little doubt that China's computer hackers are engaged in an aggressive and increasingly threatening campaign of cyber-espionage directed at a range of government and private systems in the United States, including the power grid and telecommunications networks."

To be sure, the U.S. government has had to answer charges that it and Israel were behind the Stuxnet attacks against Iran, in an effort to subjugate its alleged nuclear warfare ambitions.

But a number of major banks and government agencies have sustained crippling attacks, as this month's Redmond magazine cover story points out. President Obama back in his February State of the Union Address pointed to cyber threat as a major risk to the nation's security. The warning came with an executive order mandating government agencies share information about cyber threats between state and local governments, and the private sector.

It looks like the Pentagon has upped the ante.

Posted by Jeffrey Schwartz on 05/08/2013 at 12:45 PM0 comments

More Women in Redmond's Exec Suite

The U.S Senate has a pretty big problem on its hands.  I'm not referring to its inability to arrive at consensus on most issues these days The latest setback is much more fundamental: the scarcity of ladies' rooms in the Senate chamber.

Until recently that wasn't as big an issue, but with last year's elections, there's now an all-time high of 20 female U.S. senators. That's causing long lines because there are only two stalls for women near the Senate floor. I suspect it's not so bad at Microsoft's headquarters in Redmond but with Amy Hood taking over as the company's chief financial officer last week, the company now has its first woman overseeing its books. 

Like many large companies, Microsoft touts its diversity, and the company has taken a step forward with Hood's promotion.

These days, four women make up Microsoft's senior leadership team of 16, meaning they account for 25 percent. Two of them, Tami Reller and Julie Larson-Green have become the face of Windows in recent months.

Posted by Jeffrey Schwartz on 05/08/2013 at 12:36 PM0 comments

Bill Gates: Users 'Frustrated' with iPads

Apple's iPad may be a market-leading tablet but Microsoft founder and chairman Bill Gates this morning dismissed its usefulness saying they lack the breadth and capabilities of new devices based on Windows 8 (including the company's own Surface).

Acknowledging the iPad's dominance Gates told CNBC the following: "A lot of those users are frustrated. They can't type, they can't create documents, they don't have Office there. We're providing them something with the benefits they've seen that have made that a big category, but without giving up what they expect in a PC."

Gates was sitting next to his close longtime friend, the billionaire investor Warren Buffet, in Omaha, which just wrapped up the Berkshire Hathaway annual board meeting (Gates is on the company's board). If you want to listen to his comments but don't want to hear what he has to say about interest and currency rates, investor confidence in wake of the three-year anniversary of the Flash Crash (has it been that long?) and his view on board governance, you can scroll to 7:22 when Gates is asked about the plummeting PC business.

In the interview, Gates also scoffed at the notion the PC's best days are over. "PCs are a big market," he said. "It's going to be harder to distinguish products, whether they're tablets or PCs. With Windows 8 Microsoft is trying to gain share in what has been dominated by the iPad-type device."

Regarding Microsoft's Surface hybrid PC-tablets Gates said: "You've got that portability of the tablet but the richness in terms of the tablet but the richness in terms of the keyboard and Microsoft Office of the PC."

Perhaps Gates implicit prediction that Windows will have a successful second life is right -- he's defied naysayers before -- but Windows 8 and its successors based on the new Windows Store or "Metro" style model will take time to gain acceptance, according to industry analysts and according to a survey of Redmond magazine's readership.

More than half, or 54 percent, said they don't have a single Windows 8 PC in their shop, according to our survey in which over 1,000 registered and qualified readers of Redmond magazine responded. And 37 percent say Windows 8 accounts for less than 10 percent of PCs, presumably a handful in most cases. Over the next year, 39 percent say they won't have any Windows 8 PCs, while in two years, more than a quarter, 26 percent, still won't have one. Only 8 percent say all of their PCs will be Windows 8 based in two years.

At the moment, the iPad and Android-based devices are the devices of choice. Apple delivered 19.5 million iPads, while Microsoft shipped a mere 900,000 Surface Pros and Surface RTs, market researcher IDC reported last month. Meanwhile 27 million devices based on Google's Linux-based Android operating system have shipped from a number of vendors. Windows 8 pales in comparison accounting for 1.6 million units and Windows RT just 200,000 units.

Even though Windows 8 has gotten off to a slow start, I believe it's too early to write it off. Surveys show what people are contemplating based on what they know now. When Microsoft reveals the future of Windows later this month, the company will need to convince users it has a compelling alternative. If it does, people's thinking can change in a very short amount of time. Either way, the future of Windows will take years to play out.

In addition to his enthusiasm for Windows 8, Gates gave a plug for Microsoft's emphasis on cloud computing. "The cloud is a gigantic opportunity because now there are so many things you can do in computing that just wouldn't have been possible before," he said. "You've got a lot of the top companies going to seize that opportunity."

Posted by Jeffrey Schwartz on 05/06/2013 at 2:56 PM0 comments

Can Intel's New Chief Revive the Sagging PC Business?

Intel's decision to name Brian Krzanich as its sixth CEO comes as the CPU giant is looking to breathe new life to its x86 PC architecture, among many other challenges facing the world's largest manufacturer of processors. Krzanich was an odds-on favorite to succeed Paul Otellini, who in November caught Intel's board off guard when he said he would step down three years earlier than expected.

Otellini's premature retirement left Intel's board scrambling to name a successor with a search that included both outside and internal candidates. The company yesterday stuck with tradition in naming a longtime insider. Krzanich, who joined the company over three decades ago at the age of 22, is now the company's chief operating officer.

While many analysts predicted Krzanich would get the top job, the company also promoted long-shot candidate Renée James, Intel's software head, as its new president. Krzanich is known for his manufacturing chops while James is credited with advancing Intel into next-generation devices, though that work is far from complete.

Both understand that while the WinTel dynasty that once fueled huge revenue and profit growth no longer embodies everything Intel and Microsoft do, it's still a huge business for both companies. Nevertheless Intel will never rely solely on Microsoft to boot up its processors, while Redmond also has turned to many of Intel's rivals such as ARM licensees including NVIDIA, Qualcomm and Texas Instruments.

With questions about who will fill Otellini's shoes out of the way, both companies have a lot at stake with next month's anticipated announcements of new PCs based on Intel's new Haswell low-power CPUs. If they push the envelope as expected -- offering 2x to 4x improvements in battery life while providing added graphics capabilities, new Windows 8 machines could become more desirable, especially if the forthcoming upgrade enamors potential customers.

Consumers and enterprises alike are buying new PCs -- they're just not purchasing them in droves the way they once did, as noted in yesterday's report that Windows 8 now accounted for 3.8 percent of all PCs in use as of April. This is up from 3.2 percent in March. They're also stretching the lives of their old machines longer than in the past because they're not the only device they rely on. And, for many, there's no compelling reason yet to upgrade, which undoubtedly contributed to last quarter's worse-than-expected decline in PC shipments, reported last month.

With Haswell and Intel's hybrid laptop design called North Cape, it will be up to the company and Microsoft with Blue, aka Windows 8.1, to change that along with the WinTel ecosystem. Are you optimistic that will happen? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 05/03/2013 at 3:41 PM0 comments

Would You Wear a Windows Watch?

Many people I know have stopped wearing watches, opting to check their smartphones for the time. I’m among those who feel naked without my Seiko (having experienced that a few weeks ago when the battery suddenly died). I couldn’t change that battery fast enough. At the same time, I found a report in The Wall Street Journal that said Microsoft may be developing a Windows-based watch. Intriguing.

While Microsoft hasn’t commented on the report, The Journal said executives with an Asian suppliers said the company has requested components for a potential watch-type computing device. Microsoft, however, is only in the consideration stage, according to the report.

Until now, I’ve rolled my eyes at the spate of reports that Apple and Google have plans to offer wearable devices.  Take Google Glass, the glasses that let people take pictures using voice commands or certain physical gestures, as well as request directions and request other information from their Android phones. Mashable’s Lance Ulanoff gave a demo yesterday on NBC’s The Today Show.

The thought of replacing my glasses with Google's eyewear has as much appeal to me as having a chip implanted in my brain. I just had an eye exam last week, and as it turns out, my prescriptions have changed both for reading and distance. The doctor suggested I consider progressive lenses rather than replacing lenses on two sets of frames. But he warned me it takes some getting used to. Now imagine having progressive lenses that also let you search for information or take pictures? And if you were concerned about privacy before... well that’s a whole separate discussion.

The prospective Microsoft watch would have a 1.5-inch display for the prototype. I’m not expecting to see a Microsoft watch anytime soon but I must admit, I could see a day when I replace my Seiko with a timepiece that could give me a quick glance of my schedule, messages and other quick tidbits of information including of course, the time.

A watch-based interface would be much less invasive, districting and dangerous than eyewear. True the temptation to glance at my watch would increase but it would mean less pulling out of the phone to quickly access information. But I suppose it would suddenly become illegal to look at your watch while driving (but that’s a small price to pay). Perhaps the biggest fear is we’d see pedestrians walking the streets glued to their watches. However, those same pedestrians are already glued to their phones.

So I’m open to a watch that could let me quickly check my messages and perhaps look up information as long as it doesn’t look too odd and is as comfortable as my current timepiece. Nevertheless, I expect I’ll be changing the battery on my Seiko at least a few more times.

Posted by Jeffrey Schwartz on 05/01/2013 at 9:46 AM0 comments

A New Look for Redmondmag.com

If you had to double-check to make sure you didn't go to the wrong Web site, it's understandable. But you're at the correct place. Welcome to the complete makeover of Redmondmag.com! 

As you can see, this isn't just a minor design tweak -- this is an entirely new look and feel, aimed to make it easier for you to find your favorite articles based on topics based on your areas of expertise and interest. While this new modern look may take some getting used to, I have no doubt you will discover more of the rich information available on the site.

Our design team, under the direction of Scott Shultz, worked tirelessly to give the site a much more visually-appealing, welcoming and less cluttered look, while front-end developer Rodrigo Munoz and site administrator Shane Lee executed the new look flawlessly.

We broke down the six most popular subjects: Windows/Windows Server, Active Directory, SharePoint, Exchange, Cloud/Virtualization and Security. At the same time, the site has menus that make it easy to find anything else of interest.

Perhaps the most welcome change is the fact that you'll find Redmondmag.com much easier to read on a mobile phone or tablet. No longer will you have to resize pages in order to read stories on your devices.

While the look has changed, the mission to bring IT pros the most useful information about the rapidly evolving computing environments in enterprises and to live up to our tagline as the leading "Independent Voice of the Microsoft IT community" stays the same. As always, I appreciate your feedback and hope you'll drop me a line to let me know what you think of our new look.

Posted by Jeffrey Schwartz on 04/30/2013 at 5:27 PM0 comments

Windows 8: Get 'Started' Now!

He's baaaaackkkkkk!!! As I'm sure you recall, The New York Times columnist David Pogue made a guest appearance in the pages of Redmond magazine last month to offer his Top 20 Windows 8 Tips. His first tip -- that those who bemoan the loss of the iconic Start button could use a third-party alternative to bring it back -- caused an uproar.

Scores of respondents flamed us saying Microsoft should bring back the Start button. Some argued failure to do so would be the downfall of Windows 8. While it's unlikely Windows 8 will live or die by whether or not Microsoft brings it back, which, according to a number of reports, is suddenly looking possible -- at least in some form -- I asked Pogue if he would give us his take on the third-party options that are out there. You can find his update here.

There are seven third-party Start buttons for Windows 8 that caught Pogue's eye. Most of them are free, though some cost $5 or less. When he sent me the piece as I requested the other day, I faced a bit of a quandary. At the time I asked him to run down these third-party options a few weeks back, there was no sign whatsoever that Microsoft was even considering bringing the Start button back. The first evidence suggesting that has changed came last week when ZDNet blogger and Redmond magazine columnist Mary Jo Foley reported that it looks likely that Microsoft is bringing back the Start button as an option in Windows Blue, aka Windows 8.1.

If that's the case -- and we all know Mary Jo has good sources -- it made me wonder: should anyone bother with a third-party option when it's possible Microsoft may bring back the Start button? Would it be a disservice to post Pogue's piece with this possibility looming? I thought long and hard about it and came to the following conclusion: Right now there is no Start button and there are at least 60 million Windows 8 machines out there at last count -- and that was in January. Most people I hear from are quite frustrated with the missing Start button, readers, friends and family included. If there's a free or inexpensive tool that could service some of those people today, then what's the downside to getting "started" (pun unintended) right away?

Also, though it's looking likely Microsoft will bring the Start button back, it's still not a certainty. Microsoft could still backtrack since it hasn't made a public decision. And even if it does bring back the Start button, it will be at least several months before Windows 8.1 is available. Perhaps you'll even prefer the third-party Start buttons over Microsoft's once it ships. With that in mind, I didn't feel it could do any harm to post this piece. In fact I believe it will help many of you get "started" right away.

Posted by Jeffrey Schwartz on 04/27/2013 at 8:46 AM0 comments

GFI Adds Cloud-Based Patch Management

In a move that should broaden the appeal of its cloud-based antivirus and monitoring service for PCs and servers, GFI Software has added patch management. The company launched GFI Cloud last year and adding patch management addresses a critical pain point for IT pros looking to ensure systems are secure.

With its Web-based interface, GFI Cloud is targeted at mid-sized companies generally with fewer than 1,000 employees. However GFI's CEO Walter Scott told me it is used by some customers with many thousands of employees. As I reported last month, GFI spun off its security business into a new company called ThreatTrack, which will target large enterprises.

Scott and ThreatTrack's CEO Julian Waits are longtime close friends and while the two companies have the same shareholders, they're separate business. ThreatTrack will continue to license the Vipre technology it inherited to GFI. But our discussion yesterday was about the addition of patch management to GFI Cloud.

Adding patch management was a natural way for GFI to expand GFI Cloud since the company already has patch management technology via its LanGuard software. "We're seeing the trends that more and more applications are trying to do automatic patching -- we've seen Microsoft have two big failed patches this year," Scott said. "If that's not a reason for automatic update, turning those types of features off, I think automatic patching is putting people at risk."

In addition, Scott warned that due to the size of some patches -- which sometimes are as large as hundreds of megabytes -- distributing them across 1,000 machines can create network performance issues. In some cases, that could be trivial and brief but in rural areas that don't have access to high speed networks, it could wreak havoc.

Scott said a growing number of IT decision makers are becoming more comfortable with the notion of using a cloud provider for patch management. "We're seeing that more and more business are giving up the control of trying to control the end point," he said.

GFI Cloud installs the company's TeamViewer, a Web-based interface that lets IT pros remotely access a system with an issue, enabling them to repair it. The new patching option provides updates to Windows, Exchange, Office, browsers, Adobe and Java, among other widely used software.

The cost is $12 per system, per service, per year, with a minimum of 10 computers.

Posted by Jeffrey Schwartz on 04/26/2013 at 4:40 PM0 comments

Windows XP for Life

With the clock ticking on Microsoft's plans to pull the plug on Windows XP, analysts are warning the millions of enterprises users still running the 12-year-old operating system that time's running out. A careful migration can take many months and up to a year (depending on the shop) and waiting until the last minute or past the deadline means there will be no more security patches after April 8, 2014.

Microsoft also confirmed it won't support Windows XP Mode in Windows 7, for those who are concerned about that, though if they are running Windows 7 as their host OS, their systems should be protected. There are many options for migrating to Windows 7 and/or Windows 8, and my colleague Kurt Mackie wrote an exhaustive and thoroughly researched analysis on many of those options, which you can find here.

Yet a reader quickly commented: "We have no plans to move off XP after support ends. Our specific compatibility needs are met only by Windows XP and unless Microsoft reverses course and puts back Windows XP features in modern Windows, it is XP that we will continue to use. In fact we find newer Windows quite a downer to productivity and usability."

I have received a few e-mails saying they'll use Windows XP until they die. One Redmond reader, Mike, responded a few weeks ago with the following: "XP will continue to run millions of users' applications for decades. Just the Microsoft support options are going away, not the OS. No reason to worry."

Well there is a reason to worry, especially if your machine is connected to the Internet, which is pretty much a given these days. Your systems won't only be more vulnerable to attack, but they could very well become purveyors of malware. So if you do plan to stick with Windows XP, you'll need to find some way to protect it -- both for your benefit and others.

As for Windows XP Mode in Windows 7, one reader e-mailed me the following suggestion:

"I understand Microsoft's position regarding XP Mode. After all, users have had plenty of warning and, after all, XP Mode is Windows XP SP3. Microsoft cannot be expected to continue to issue patches for XP Mode and not XP.  That said, I would hope that Microsoft will not remove XP Mode from Windows 7 via a service pack come next April.  Even if they do, it would still be better for Windows XP users to install Windows XP SP3 under some other VM tool (such as VMplayer) running under Windows 7 than to continue to run Windows XP on bare metal."

While it's true there are some legacy programs that run on Windows XP or below, and some users still have some old MS-DOS-based systems chugging along, most enterprises will be best served by migrating to a newer operating system. The process may be painful, but most should find the benefits worth the effort.

Posted by Jeffrey Schwartz on 04/24/2013 at 9:43 AM0 comments

Microsoft's Commitment to Green Datacenters

Many enterprises have stepped up their efforts to reduce the carbon footprints of their facilities to cut the costs of their operations. It makes good business sense but just as important, reducing emissions is a responsibility every organization should endeavor to provide a cleaner environment.

On this Earth Day many companies are using the occasion to share their contributions toward reducing the amount of power their facilities are consuming. For its part, Microsoft's multi-year cloud computing transformation has afforded the company to push the envelope in reducing the amount of power required to run its growing global datacenter footprint.

Microsoft says it is one of the first major organizations to impose internal fees on carbon emissions, which has given those who manage different businesses and operations incentives to conserve energy by using alterative renewable power sources at 100 worldwide datacenters. Robert Bernard, Microsoft's chief environmental strategist said in a blog post today the company has so far used $4 million from those fees to invest renewable energy projects around the world.

"While we still have progress to make in reducing our environmental footprint and realizing the potential of technology to address environmental challenges, I'm pleased to say that we are well on our way to making environmental sustainability a core value at Microsoft," Bernard noted. "We're more confident than ever about the role of IT to address climate change and other important environmental challenges."

As a result of its efforts to run greener datacenters, Microsoft this year ranked No. 2 behind Intel on the EPA's Green Power Partnership list this year. Microsoft's annual green power usage was about 1.9 billion kilowatts per hour, representing 80 percent of its energy usage,  thanks to its implementation of Sterling Planet's bioenergy products and services as well as Microsoft's investments in hydro and biomass renewable energy.

In its new datacenters, Microsoft's Power Use Effectiveness, or PUE averages at 1.125, compared to an industry average of 1.8. Among some other facts noted by Microsoft, its new Quincy, Wash. datacenter uses primarily hydro power generated by the local Columbia River and at its Dublin, Ireland datacenter uses 1 percent of the amount of water typically utilized in traditional datacenter. Bernard also last year said for every unit of energy not coming from a renewable energy source such as hydro or wind, the company purchases renewable energy to offset that.

Not every organization has the resources and commitment to invest in green initiatives to that extent but everyone can do their part. En Pointe Technologies, a systems integrator based in Gardena, Calif. last week gave some tips that we all can consider:

• Conserve power: Using the power management options in Windows and Active Directory, IT can ensure systems are in sleep mode during non-business hours
• Power down completely: Shutting down monitors, PCs and printers after business hours can reduce 66 percent of power usage. For example large enterprise printer in sleep mode still consumes 26 watts of power but only .5 watts when turned off
• Reduce paper usage by printing less. According to the EPA, the average user prints 10,000 pages per year. Reducing that could add 3 percent to a company's bottom line.

Earth Day is a good day to renew our commitment to making more efficient use of energy not just to save money but to provide a cleaner environment.

Posted by Jeffrey Schwartz on 04/22/2013 at 9:32 AM0 comments

Microsoft and Intel Disavow Fears of Doom

Over the past several weeks, it appeared the sky was falling for Windows and its longtime partner Intel. With PC sales falling more precipitously last quarter than analysts had originally forecast and IDC blaming it on disappointing uptake of Windows 8, we all were anxiously awaiting this week's earnings reports to hear from the horses' mouths themselves as to actually how bad things are now.

The good news is Intel and Microsoft didn't deliver even more dire reports or forecasts as feared. As it turned out they fared better than IBM, which sharply missed expectations with a quarter-over-quarter revenue decline of 5 percent, following last month's shortfall reported by Oracle and fears about Apple. IBM's miss was the first in eight years and doesn't bode well for other major IT players.

The bad news is Microsoft's decision not to provide an update on Windows 8 sales did little to refute IDC's Windows 8 claim, made last week. Noting that Microsoft sold 100 million Windows 7 licenses six months after it was released, the company's silence certainly raises questions, inferred All About Microsoft blogger and Redmond columnist Mary Jo Foley. It's no secret Microsoft is competing with itself with the popularity of Windows 7. Listening to Microsoft's earnings call last night, CFO Peter Klein, who is stepping down at the end of June, stated the obvious about Windows 8: The best is yet to come.

Now that Windows 8 has been available for six months, anyone not urgently needing a PC surely doesn't want to buy something that they know will be obsolete in a few months (I sure don't). Hence anyone who desires a "new" Windows 8 device (tablet, PC or hybrid) is going to wait for the Windows "Blue" to land on the high end systems based on Intel's next generation Haswell processor and on the low-end Bay Trail Atom processor.

Indeed the hardware out there from OEMs and Microsoft's own Surface RT and Surface Pro will clearly appear underwhelming if you stitch together the improvements the new devices will sport once they start to hit the market later this year. Klein suggested as much on yesterday's earnings call.

"We've always felt that with Windows 8 it was a process of the ecosystem really innovating across the board and really starting to see that on the chips," Klein said on the earnings call. "We're very encouraged by both Haswell and some of the Atom processors to really improve the overall user experience that Windows 8 delivers. And over the coming selling season, I think that's very encouraging and we're optimistic about that."

So here's my takeaway from Microsoft's third-quarter earnings report and investor call yesterday:

• Windows 8 systems are shipping at a weaker pace than it would like to admit but the company is bullish that a new crop of PCs, tablets and hybrids later this year will bolster the OS. Our own data shows Redmond magazine readers are deploying Windows 8 incrementally and will continue to go at that pace for many years.
• Microsoft's transition to the cloud is going well, specifically with Office 365. Office 365 saw an increase of five times this quarter over the same period last year and one in four enterprise customers are using it. Klein said the business is on a $1 billion run rate. While it may be cannibalizing traditional Office licensing sales, this is business Microsoft is not losing to Google, which nevertheless continues to gain momentum with Google Apps. "We expect our transactional customers to increasingly transition to the cloud with Office 365," he said.
• With an overall 11 percent year-over-year improvement in its flagship enterprise business -- Server and Tools -- multiyear licensing increased 20 percent, with Systems Center revenue up 22 percent and HyperV gaining 4 points in the market, Klein said.
• This week's launch of Windows Azure Infrastructure Services and Windows Azure Active Directory positions Microsoft to provide a solid public cloud offering and is poised to capture a major piece of the public cloud business. At the same time, Amazon Web Services will remain the market leader for many years to come, and Microsoft will also face a broad array of competitors in the public cloud from AT&T, Google, Rackspace, HP, IBM, Salesforce.com and those in the RedHat and VMware ecosystems.

As Microsoft looks to close out its 2013 fiscal year, it will no doubt be a challenging sprint to the finish line as the company continues to transition to new products and services. While Microsoft didn't knock it out of the park yesterday, no one thought it would. By virtue of the fact that Microsoft performed within expectations (depending on which consensus groups you look at it either slightly missed or slightly beat forecasts) and didn't drop any bombshells, the company can keep its head down for now.

Posted by Jeffrey Schwartz on 04/19/2013 at 9:24 AM0 comments

IBM Bets Big on Enterprise SSD Flash Storage

IBM may be looking to get out of the commodity x86 server business but it's making a major bet on extending the use of solid state disk (SSD)-based flash storage technology in the datacenter, which holds the promise of enabling faster transactional and analytical applications. At the same time Big Blue believes it can be used for mainstream workloads such as boosting performance and removing latency of key operational systems such as Exchange Server, SharePoint and SQL Server.

I attended an analyst and press briefing last week at IBM's New York office, where the company trotted out its top technology execs to kick off a major corporate initiative to advance SSD-based flash. In addition to investing $1 billion over the next three years to extend its flash technology and to integrate it into its server, storage and middleware portfolio, IBM is opening 12 centers of competencies around the world for customers and partners to test and conduct proofs of concept using its flash-based arrays.

Though IBM and its rivals have offered SSDs in their storage systems over the past several years, Big Blue believes the economics of flash storage make it increasingly more viable for enterprise and cloud-based systems, which led to its last year's acquisition of industry leader Texas Memory Systems.

Steve Mills, IBM's senior vice president and group executive for software and systems, pegged the price of low-cost disk drives at $2 per gigabyte and high-performance disks costing $6 per gigabyte. While SSD-based flash costs about $10 per gigabyte, Mills argued that because only a portion of spinning disk can actually be used in high-performance systems, the actual cost is also around $10 per gigabyte.

"This is such a profound tipping point," Mills said at last week's event. "There's no question that flash is the least expensive, most economical and highest-performance solution." Over the past decade, processor, memory, network, and bus speed and performance has increased tenfold while the speed of mechanical hard disk drives [HDDs] remains the same, according to Mills. "It has lagged," he said.

"We clearly think that the time [for flash] has come," he added. "This idea of using semiconductor technology to store information on a durable basis is what flash is all about."

Specifically, flash can also offer substantially faster transaction speeds -- on average just 200 microseconds compared with 3 milliseconds, Mills noted. "By reducing the amount of time, the IO wait that the database in the system is experiencing, you're able to accomplish more," he said.

Several customers were on hand to validate Mills' argument, including Karim Abdullah, director of IT operations at Sprint, which tied IBM's FlashSystem to an IBM SAN Volume Controller (SVC) to improve access to the wireless provider's 121 distributed call centers worldwide. The volume of calls to Sprint's call center increased dramatically two years ago when the company offered its unlimited data plan, leading to much higher volumes of database queries. "It provided a 45-fold boost in access to that piece of data," Abdullah said of the flash systems.

Al Candela, head of technical services at Thomson Reuters, implemented the flash arrays to build a trading system that could offer much lower latency than the existing architecture with HDDs allowed. "I saw benefits of a 10x improvement in throughput and a similar achievement in latency," Candela said.

While some of these early implementations are aimed at very large scale, high performance computing systems, it also could be used to boost the performance of commodity servers and Windows Server-based systems, said Ed Walsh, VP of marketing and strategy for IBM's system storage business unit. "We see it being used uniformly across Microsoft platforms, Linux platforms, Power platforms and to be honest mainframes," he told me

Mark Peters, a senior analyst at Enterprise Strategy Group said flash from IBM and others is rapidly moving from niche/vertical/specialist workloads, such as HPC, to more general workloads including Exchange Server SharePoint. "People running Microsoft based systems could absolutely find it appealing," Peters said.

Texas Memory Systems traditionally targeted high-end HPC workloads. "IBM's ownership and focus will swing it to the commercial side way more and faster," Peters said.

In addition allowing systems like Exchange to run faster, Mills said the ability to read and write from flash storage means applications will require fewer server cores, meaning licensing fees for database, operating system and virtualization software, as well as other line-of-business apps, will be much lower.

While that may be true, that doesn't mean some software companies won't try to compensate by raising their licensing fees, warned PundIT analyst Charles King. "Oracle, as an exemplar, a company that hasn't been shy about adjusting its pricing schema to ensure its profits in the face of emerging technologies," King said. "However, that could also work in IBM's favor. If the company keeps the licensing cost of DB2 steady and Oracle attempts to rejigger its own pricing, the result could make IBM's new FlashSystem solutions look even more compelling."

Because of the much smaller footprint -- Mills described a two-foot rack of flash systems capable of storing a petabyte of data -- datacenter operators can lower their costs by 80 percent, including the power and cooling expenses.

As noted, IBM is not the only company touting SSDs. A growing number of companies such as SolidFire and STORServer are targeting flash storage to enterprises and cloud providers. Incumbent storage system provides like EMC, Hewlett-Packard and NetApp also offer flash technology. Likewise, key public Infrastructure as a Service cloud providers including Amazon Web Services, Rackspace and others offer SSD-based storage.

"IBM claims its hardware-based approach offers better performance than what it called 'flash coupled' software-centric solutions from major competitors like EMC and HP, and it didn't really address smaller and emerging players," King said. "Overall, it's going to take some time to sort out who's faster/fastest and what that means to end users, but IBM's argument for the value of flash was broader and sounder than most pitches I've heard."

Scott Lowe, whose Random Access column debuted on RedmondMag.com last week, warned:  "Solid state disks still remain orders of magnitude more expensive than hard disks. Many array solutions include powerful deduplication and other data reduction features that can help to address the capacity question while still providing incredible performance for workloads that need it, such as VDI and big data. Here, the cost per IOPS is low, but the cost per GB is high." Lowe cited SSD flash as one of five options in a modern storage topology.

Do you see using SSD flash in your storage infrastructure? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 04/19/2013 at 9:23 AM0 comments

Can Microsoft Unseat Amazon in the Cloud?

Game on. Microsoft's launch yesterday of Windows Azure Infrastructure Services, armed with another round of price cuts, puts the two cloud giants in the Pacific Northwest on more equal footing. Three years after launching Windows Azure as a complete platform as a service, or PaaS, Microsoft finally is able to let customers stand up their own virtual machines in the company's cloud. That means for the first time Windows Azure's infrastructure as a service (IaaS) is now a viable alternative to Amazon's widely used EC2.

Thanks to cut-rate pricing and a widely distributed global cloud service, some of the largest cloud implementations run on Amazon's EC2 including Netflix, Nasdaq, Dropbox, and even Salesforce.com's Heroku service. Almost everyone offering various IT services I speak with say they use Amazon as their provider. Yet surprisingly, Windows Azure may be more widely used than it appears.

A survey of Redmond magazine readers, who are obviously skewed toward Microsoft offerings, shows 26 percent of 979 respondents use Windows Azure, while an equal percentage use "other" services not mentioned in our survey (Rackspace, AT&T, Verizon, Google, HP, Dell, IBM and Oracle). That suggests many are using regional hosting providers or nothing at all. As for Amazon, 13 percent indicated they're using EC2, However the number that plan to use Amazon over the next 12 months jumps to 20 percent, while Windows Azure increases to 28 percent. Those using other services will drop to 18 percent.

It's not just Redmond magazine readers who say Windows Azure is the most widely used cloud provider. Morgan Stanley's April CIO survey found 20 percent use Windows Azure for PaaS functionality compared with 12 percent who use Amazon, though it should be noted that Amazon is primarily an IaaS provider. The Morgan Stanley CIO survey showed 13 percent are using Windows Azure IaaS, presumably the preview release, since it was just made broadly available yesterday. As a result, Morgan Stanley is bullish on Microsoft's cloud prospects and it was a key reason the investment bank upgraded the company's stock.

"Our research suggests Microsoft's large technology base and captive audience of over 5 million .NET developers has propelled the company into an early leadership position in Cloud Platforms," wrote Keith Weiss and Melissa Gorham in yesterday's research note. "Additionally, the cloud-based Office 365 platform continues to see good adoption in customers of all sizes. The contribution from these cloud initiatives remains relatively small today and the shift to subscription licensing may actually create slight near-term headwinds. However, the potential positive sentiment impact of Microsoft being seen as a 'winner' in the cloud as these offerings gain scale and exposure could act as a positive catalyst for MSFT shares, in our view."

Still IaaS is where the action is and Amazon appears to be the company to beat. In addition to Amazon a large swath of IaaS providers including Rackspace, IBM, HP, AT&T and Piston Cloud, among a slew of others are building out a formidable rival with OpenStack. Infrastructure providers such as Cisco, Intel and Red Hat, among over 100 others also have big bets on OpenStack as well. Built on the open source cloud compute, storage and networking platform, a lot of players are investing heavily in OpenStack. The OpenStack Foundation, which is having its biannual summit this week in Portland, Ore., just released its twice yearly platform update, code-named "Grisly." Keep an eye on my Cloud Report blog for updates on OpenStack. One thing I should note is that Grisly includes improved Hyper-V support, something that was notably absent in earlier releases, as I noted last month.

Turning back to Windows Azure, Forrester analyst James Staten said in a blog post yesterday that after yawning about the long anticipated Microsoft and OpenStack releases, that Redmond stands to gain further credibility as a cloud infrastructure provider with its IaaS release.

"Microsoft has done a good job of balancing the sense of comfort and familiarity with this release between those who have experience with other IaaS platforms and those who want the familiarity of their existing Microsoft corporate environments," Staten wrote. "Microsoft Windows Azure IaaS will feel familiar to developers who have experience with Amazon Web Services' Elastic Compute cloud."

Staten added that System Center admins will find the service familiar and very much like a Hyper-V compute pool. "This is probably the best validation of the hybrid cloud model from a major tech supplier so far this year," he said. "Microsoft is steadily delivering on its promise to make the extended, hybrid cloud the way forward for enterprise customers; especially systems admins, who want the option of extending datacenter workloads to the cloud without giving up the tools and IT processes they have spent years refining."

It appears Windows Azure will appeal to large audience of enterprise customers but it also looks like many business units will use different cloud service providers depending on the nature of the application, the development platform and the service levels required. Likewise there are hundreds of smaller providers out there offering services.

Who is your cloud service provider of choice now and looking ahead? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 04/17/2013 at 9:35 AM0 comments

Foxit Targets Adobe with Free PDF Creator

There are plenty of ways to create PDFs without spending a fortune on Adobe's Acrobat Standard software. Of course you can save Microsoft Office files as PDFs. But if you want to generate PDFs that you can annotate and enable extensive workflow capabilities -- including the ability to electronically sign and stamp them -- Foxit tomorrow will unveil a new free reader that the company said rivals Adobe's Acrobat Standard.

While less expensive alternatives to Adobe Standard offer many of these features from Avanquest, Nitro, Nuance and Wondershare (among others), Foxit is upping the ante with its new Foxit Reader 6.0. The Freemont, Calif.-based company says 150 million have already downloaded a Foxit Reader, which it believes makes it the second most used PDF reader behind Adobe's offering. With tomorrow's release, Frank Kettenstock, Foxit's VP of marketing told me: "We're expecting that to go up significantly."

The new Foxit Reader 6.0 will include a Microsoft Office ribbon interface that lets users create PDFs from Word, Excel and PowerPoint, as well as and hundreds of file types via drag-and-drop. It'll also support Microsoft's Active Directory Rights Management Services.

Users will also be able to create PDFs by right clicking on files, scan documents, use a PDF print driver, and cut and paste from the Windows clipboard. Users can download the Foxit Reader here.

For those requiring more extensive editing and form creation capabilities, Foxit tomorrow will also unveil PhantomPDF 6.0, which allows users to reformat texts and manipulate objects within a PDF. It also offers extended search capabilities via the company's PDF IFilter, which lets the Windows indexing and other search technologies to index PDFs. Support for Evernote lets users attach PDFs to Evernote notes. Users can also edit scanned documents and implement optical character recognition.

Foxit will offer two versions of the PhantomPDF 6.0. The standard edition is priced at $89 and business edition, priced at $129, offers extended compression features, editing and security for enterprise users.

Posted by Jeffrey Schwartz on 04/15/2013 at 9:28 AM0 comments

Intel's Uncertain Future

Microsoft took a lot of heat last week when IDC reported a 13.9 percent decline in PC shipments for the first quarter of this year. While it wasn't a shocker that PC sales were declining, the shortfall far exceeded the 7.7 percent shortfall IDC had originally forecast.

After IDC blamed disappointing sales of Windows 8, I begged the question if Microsoft can turn it around with the next wave of Windows wares code-named "Blue." We'll get more insights on that going into June. However, I'm still of the belief that a better crop of processors from Intel will make Windows 8 more attractive.

Haswell, which promises to offer improved battery life and better graphics rendering, will be key to the delivery of new high-end systems, notably Ultrabooks. Just as important, the redesigned 22 nanometer Atom processor, code-named "Bay Trail," could work its way into new tablets and smartphones. But it faces stiff competition from a number of other players including AMD, Nvidia, Qualcomm and others supporting the low-power processor design of ARM.

As Intel looks to spread its wings, there are a lot of questions about the company's future, including who will replace CEO Paul Otellini, who unexpectedly said he will retire next month -- three years short of the company's mandatory retirement age of 65. Intel apparently did not have a successor lined up, though it appears the company is likely to tap an insider, The New York Times reported today.

Though expectations are that Intel will report revenues and earnings tomorrow on the low end of analyst expectations, the report and any future outlook or guidance company officials give could either amplify or mute IDC's findings.

Regardless, the deliverables from Intel and its partners, along with the new wave of Windows software from Microsoft, should result in some improved new device choices later this year.

Microsoft and Intel may no longer be exclusively tied at the hip but the fact that Wintel has evolved is not a bad thing. What type of Windows 8 device would win you over? Feel free to comment or drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 04/15/2013 at 9:31 AM0 comments

Can Microsoft Fix Windows 8?

Microsoft over the past week has taken its lumps -- first with Gartner reporting a 7.6 decline in worldwide PC sales last quarter, followed by rival researcher IDC's more dire analysis saying shipments dropped a record 13.9 percent. And if reporting the worst decline in PC sales since IDC first started tracking shipments two decades ago wasn't bad enough, the analysts issued an uncharacteristically direct blow, blaming the deterioration on "weak reception" for Windows 8.

It doesn't matter whose numbers you believe -- every market researcher has its own methodologies. We have long understood demand for PCs have been on a downward spiral, thanks to the fact that tablets and smartphones are rapidly becoming the preferred devices for accessing the Internet. The sucker punch came when IDC said Windows 8 has accelerated the PC decline of PC sales.

"It seems clear that the Windows 8 launch not only failed to provide a positive boost to the PC market, but appears to have slowed the market," said IDC analyst Bob O'Donnell, in a statement. "While some consumers appreciate the new form factors and touch capabilities of Windows 8, the radical changes to the UI, removal of the familiar Start button, and the costs associated with touch have made PCs a less attractive alternative to dedicated tablets and other competitive devices. Microsoft will have to make some very tough decisions moving forward if it wants to help reinvigorate the PC market."

It appears Microsoft has made some of those decisions, which the company will start to reveal at TechEd North America in early June and the entire plan unfolding at the Build conference in late June. One encouraging sign is that it appears the so-called Windows Blue wave, will facilitate new form factors. As reported by The Wall Street Journal Thursday, Microsoft is developing a new line of its Surface, and the lineup of its hybrid PC-tablets will include a 7-inch device that will compete with the Google Nexus, Amazon's line of Kindle Fires and Apple iPad mini, among others in that size range.

While Microsoft didn't comment on the Journal's report, the company has not discussed plans to address that form factor, as noted by ZDnet blogger and Redmond columnist Mary Jo Foley.

Presumably if a smaller Surface is in the works, Microsoft will also let OEM partners build and market smaller Windows 8 tablets as well. But Microsoft needs to offer licensing terms that can enable OEMs to offer devices that are competitive with Android-based tablets. As we all know, OEMs don't pay licensing fees for Android.

Indeed Gartner sees devices based on Google's Android outpacing anything else, running on nearly 1.5 billion units by 2017. Coming in second is Windows at 571 million and those based on Apple's MacOS and iOS will come in third at 504 million. Those forecasts combine PCs, tablets and phones, further skewing in favor of Android, given its dominance in the smartphone market.

If Microsoft was initially reluctant to offer smaller Windows 8 tablets, there's growing hope that mindset has changed. As Microsoft cuts Windows 8 to size, so is Wall Street. What will make analysts, who have downgraded the company in recent days, more upbeat? In a research note issued by Merrill Lynch today, which downgraded Microsoft from a buy to neutral, PCs will continue to decline by 20 to 25 percent before picking up steam again. "PC unit growth could improve after reaching that trough level, as a function of enterprise and high-end unit demand," the research note said. "However, enterprise upgrade cycles could get elongated from trends like BYOD [bring your own device] and desktop virtualization."

Tablets have indeed made it easier for consumers to put off upgrading PCs. Enterprises, coming off or in the midst of Windows 7 upgrades, are replacing systems as needed. I'm personally waiting to see what the next crop of devices look like once PCs are available based on Intel's new Haswell processor, which will deliver better display and offer much longer battery life.

The next shoe to drop will be next Thursday evening, when Microsoft is scheduled to report earnings for the quarter. Of course, a lot can happen before that.

Posted by Jeffrey Schwartz on 04/12/2013 at 9:27 AM0 comments

Windows 7 XP Mode Is History Too

When Microsoft stops supporting Windows XP next year, hopefully using Windows XP Mode in Windows 7 isn't your fallback plan. I received an inquiry from a reader asking if Microsoft will continue supporting the Virtual XP within Windows 7. The answer is no.

"Windows XP Mode in Windows 7 aligns to the same lifecycle as Windows XP," a Microsoft spokeswoman confirmed. Some may see this as a double whammy since that pretty much puts the kibosh on running those legacy Windows XP-based apps that won't work on Windows 7 or above.

"Microsoft made a big deal of having the Virtual XP machine within Windows 7 as a smooth way to transition to the modern world," the reader making the inquiry said, adding users should be able to run Windows 7 as the host operating system and Windows XP Service Pack 3 (SP3) Professional as the guest operating system.

When Microsoft issued its gentle reminder on Monday that Windows XP users have one year to migrate, was Windows XP Mode your fallback plan or did you presume that was on the chopping block as well? Or perhaps  will you will take comfort in using Windows 7 security and patches to continue running those apps in Windows XP Mode? Feel free to comment or drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 04/12/2013 at 9:42 AM0 comments

HP Aims To Reshape Datacenters with Moonshot Servers

For once there's noise coming out of Hewlett-Packard this week that doesn't center on the dysfunction that has surrounded the company for the past two-plus years. As expected, the company this week started shipping its next-generation server architecture known as Project Moonshot.

This is not just about the latest update to a server line. Project Moonshot represents an entirely different system architecture. It also introduces the first major shift in server form-factors since HP's release of blade servers a decade ago. In these racks are cartridges that are half the size of a typical laptop PC. The company describes Moonshot-based systems as software defined servers that have networking and storage interfaces built into the racks as well.

But what's really unique  is these new systems take up 80 percent less space, use 89 percent less energy and cost 77 percent less, the company says. "HP is taking head on the challenges of space, energy, cost and complexity of the datacenters for today and tomorrow," said CEO Meg Whitman, in a Webcast kicking off the launch Monday.

"This is not an incremental change, it's the launch of a new class of servers," added Dave Donatelli, executive VP of HP's enterprise group.  "With current server technology, the economics behind social, mobile, cloud and big data will begin to deteriorate rapidly as requirements for servers continue to escalate,"

The first deliverable is the HP Moonshot 1500, based on a 4.3U chassis that supports up to 45 hot-pluggable server cartridges and shares storage  -- both traditional hard disk drives and flash-based solid state drives -- and network interfaces. And the initial crop is powered by Intel Atom S1260 processors. Look for future systems to support ARM-based processors, those used to power tablets and smartphones, this year as well.

HP is initially only offering support for Linux (Red Hat, SUSE and Ubuntu) and KVM virtual machines but company officials said customers will be able to specify Windows and VMware-based virtualization later this year.

"Windows server support will roll out later in the year and also on additional targeted server cartridges when they're available," explained John Gromala, HP's director of product marketing for industry standard servers and software, in an interview. "It will be specifically targeted towards workloads and applications that are actually taking advantage of those specific types of offerings."

Asked if any customers are testing Moonshot systems bundled with Windows Server, Gromala confirmed they are but he declined to elaborate. It appears HP will only be offering Windows Server 2012.

By virtue of these substantially smaller sized systems, coupled with the equally dramatically lower power consumption requirements (the equivalent of six 60-watt light bulbs), the release of HP's first Moosnshot systems is a key milestone for a company that has struggled to find its way of late. Not that HP pulled Project Moonshot out of a hat. Project Moonshot was a key initiative that HP Labs has had under development for many years.

Presuming these systems perform as advertised, they promise to change the footprint of many datacenters over time. Just like blade servers didn't initially take off (from any vendors), the economics ultimately made them appealing. We'll see if Project Moonshot has the same impact.

Posted by Jeffrey Schwartz on 04/10/2013 at 9:30 AM0 comments

Windows XP Farewell Tour Begins

Presuming running a version of Windows supported by Microsoft is a requirement in your shop, you have one year left to rid yourself of Windows XP. On April 8, 2014, Microsoft will no longer support Windows XP. To commemorate -- or considering the wide proliferation of Windows XP, to give customers a kick in the teeth -- Microsoft has launched its one-year countdown.

The pending end-of-life support for Windows XP is a big issue for a lot of businesses. Anecdotally, I can't tell you how many businesses that still have Windows XP running rampant. Every time I'm at the gym, the doctor, at many restaurants and stores, and even my local Bank of America branch (which is a relatively new one), I see Windows XP on their desktops.  

A year from now, those with Windows XP, as well as Office 2003, will no longer receive security updates or tech support (at least from Microsoft). Microsoft is kicking off this countdown with a promotion that gives those who upgrade from Windows XP to Windows 8 and Office 2003 to Office 2013 a 15 percent discount though June 30. The offer, dubbed Get2Modern,  is available to customers who upgrade via Microsoft's partners for migration assistance.

But regardless of small incentives, many organizations may not feel ready for Windows 8, which Microsoft acknowledges. "For some, moving their full company to Windows 8 will be the best choice, and for others it may be migrating first to Windows 7," Erwin Visser, a senior director in the Windows division, noted in a post on the Windows for Your Business blog today. "Still, for many, it will be deploying Windows 8 side-by-side with Windows 7 for key scenarios, such as Windows 8 tablets for mobile users."

According to the latest market share reports published by Net Market Share, Windows 7 is the most deployed PC operating system, accounting for nearly 48 percent with Windows XP filling in nearly 39 percent. Windows 8 now accounts for a mere 3.17 percent, though up from 2.67 percent a month earlier. Clearly Windows 8 will grow much more incrementally than previous versions, which, given the scope of change it introduces, isn't surprising.

Research of the Redmond magazine readership indicates within the next year, 61 percent will have deployed Windows 8, though, in most cases, only to a small percentage of employees. In two years, 74 percent will have deployed Windows 8 on a much broader basis.

Currently 95 percent of Redmond magazine readers have Windows 7 deployed, while 76 percent still have Windows XP, 41 percent have some Windows 8 and 20 percent have Windows Vista. Since multiple responses were permitted, the data doesn't say to what extent these various versions are deployed. But given the survey was based on 1,178 respondents it should give a valid measure and point to the strong proliferation of the various versions of Windows.

For those of you that still have Windows XP what are your plans? Are you going to let it go down to the wire (or perhaps beyond) or are you planning to act sooner than later? Will you go right to Windows 8 or are you going with Windows 7?

Please share your Windows XP migration plans by dropping me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 04/08/2013 at 9:45 AM0 comments

Will IT Nix Facebook Phones?

Miffed that there still isn't a Windows 8/RT app for Facebook nearly six months after the launch of the new operating system, I tried in vain to ignore yesterday's launch of the new so-called Facebook phone. The new smartphone software, dubbed Facebook Home, and the HTC First phone coming next week, takes a forked version of Google's Android and puts the social network front and center.

If Facebook Home gains critical mass, we may become a society of zombies -- though some may argue that's already occurred. Either way, it promises to only make things worse. It remains to be seen whether the software -- downloadable April 12 from the Google Play app store for select Android phones from HTC and Samsung -- will gain critical mass.

"The Android launcher approach allows it to target a huge installed base of hundreds of millions of Android users, which will be a large chunk of Facebook's total user base of more than a billion people," wrote Ovum chief telecom analyst Jan Dawson, in prepared commentary.

Much of the reaction I've seen has given it a thumbs-down. Analyst Jack Gold said in an e-mail to me he predicts only the Facebook diehards will embrace it. "I think this appeals to the 10-20 percent of true junkies," he said. "Others will find it very intrusive."

I agree, though it's the teens and twenty-somethings that will seal its fate either way.

I'd like to think most people don't want Facebook to take over their phones and will be content using the app (that is unless you're a Windows Phone user in which case like those with Windows 8/RT PCs and tablets, you're stuck accessing it via the Web browser or through third-party apps). But if Facebook does what some fear -- offer free phones in exchange for their privacy -- there are suckers who will go for it without batting an eye.

As IT pros, will the potential proliferation of Facebook Home lead to the demise of BYOD? Probably not but it might require a re-thinking of what IT needs to do to recapture employees' attention while on the job. Does this mean invoking policies that ban the use of this software on BYOD-supported devices? Will IT need to put new rules in policy management systems and security software to put the kibosh on Facebook Home?

"I think this will just exacerbate an already big problem in many companies -- mobile anarchy," Gold said. "Companies have to establish some level of governance on devices (many have already). Some user devices just are not acceptable in the corporate environment. If you buy one, don't expect it to get connected to the corporate network or use the apps."

All of these are issues IT may confront if Facebook Home is even a moderate hit. Meanwhile, now that Facebook has finished developing its phone software, how about giving Windows 8 and Windows Phone users an app?

Posted by Jeffrey Schwartz on 04/05/2013 at 9:40 AM0 comments

Ray Lane Finally Steps Down As HP Chairman

It was long overdue but Hewlett-Packard chairman Ray Lane yesterday said he was stepping down, but will remain on the company's board of directors. Two other board members, John Hammergren and G. Kennedy Thompson said they will exit the board when their terms expire next month.

The three were up for re-election this week and got by with a slim majority but the vote made clear investors were not happy with the three. Many fault Lane for the way he guided former CEO Leo Apotheker and the chaos that erupted under Lane's reign as chairman.

The dysfunction came to a head in August of 2011 when Apotheker simultaneously announced the company was evaluating the divestiture of its PC group, the demise of its TouchPad tablets less than two months after their release and the $10.3 billion acquisition of Autonomy -- a deal that turned out to be worth a small fraction of what HP paid. The company wrote off most of that deal. That led to Lane's ultimate ouster a month later when Meg Whitman was named CEO.

In a statement, Lane tacitly acknowledged the level of dissatisfaction with him. "After reflecting on the stockholder vote last month," Lane said. I've decided to step down as executive chairman to reduce any distraction from HP's ongoing turnaround."

Indeed Lane and his board colleagues did the right thing. By most accounts, HP is making progress, albeit incremental, under Whitman. Employee morale is improving and the company's stock is up. But as Whitman warned, it will take years to right HP's ship. Investor confidence is a step in the right direction.

Posted by Jeffrey Schwartz on 04/05/2013 at 9:29 AM0 comments

VDI Demand Remains Tepid

A Forrester report released this week found that only 8 percent of IT shops in North America and Europe plan to deploy VDI and/or hosted Windows desktops. This is consistent with a recently fielded study by Redmond magazine.

Though we asked the question in broader terms than Forrester, about 1,130 responding to our online survey indicated that 63 percent will have a hosted desktop or VDI implementation -- though mostly for a small percentage of employees -- over the next 12 months, compared with 54 percent last year.

That would suggest 9 percent of shops will implement VDI this year. The increase, though moderate, suggests slightly more growth than the Forrester sample revealed, which found the same percentage had VDI/desktop hosting plans last year.

But as Redmond's Kurt Mackie reports: about a one-fourth (24 percent) of respondents were interested in VDI, yet had no plans to deploy it, according to the Q4 2012 study. That figure represents a decline from the 33 percent showing interest in VDI in Forrester's Q4 2011 study. It should be noted that Forrester is comparing surveys fielded last year and the previous year -- our conclusions come from a single survey fielded in February.

The Redmond magazine survey, which was fielded to those who subscribe to the magazine, showed 37 percent will have no VDI/hosted desktops this year, compared with 46 percent who say they currently have no such deployments.

Of those who do have VDI/hosted desktops, the largest number of respondents --30 percent -- said they only have rolled them out to 10 percent or less of their employees. That suggests it's being used for specialized applications such as for help desks, employees who may not need to use a PC all day and perhaps contractors. That's not a surprising finding. Interestingly those planning rollouts to 10 percent or less of their employees will decline this year to 28 percent.

Interestingly, a growing number of shops planning rollouts in the next 12 months plan to do so to a larger percentage of their workforces, according to our survey. Whereas only 12 percent planned rollouts for up to 25 percent of their workforces, that number will increase to 17 percent this year. And those who plan even larger deployments of up to 50 percent of their employees will increase from 6 percent in 2012 to 11 percent this year. Very few plan rollouts to larger portions of their users and only 1 percent said they plan to do so to their entire workforce.

Are you planning a VDI/ hosted desktop implementation -- or expanding/upgrading an existing one? If so, what's your infrastructure of choice? If not, why is it unappealing? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 04/03/2013 at 9:38 AM0 comments

Victims of Cyber Attacks Lawyer Up

It's no secret to anyone in IT that the number of reported cyber attacks is on the rise. And while victims have historically avoided at all costs disclosing the fact their systems were penetrated, some now have to do so.

The result, The Wall Street Journal reports today, is that many victims are hiring law firms or seeking legal counsel so they can invoke attorney-client privilege. I'm not a lawyer or an expert in compliance but my first thought was: "really?" In one of several such examples cited by the Journal, Nationwide Insurance disclosed a breach in which customer records were accessed. Nationwide reported the breach in compliance with new state laws and under strong urging by the Securities and Exchange Commission that they do so.

The FBI investigated further, even while class action suits were filed on behalf of customers saying that Nationwide failed to protect their information. In response, the insurance giant hired the law firm Ropes & Gray and then declined to comment further, citing the litigation.

While companies need to act in the best interest of their shareholders and customers, clamming up is a dual-edged sword. Certainly disclosing more information has its own risks but hopefully companies like Nationwide are quietly sharing information with the proper authorities that can help better protect themselves and others, as President Obama ordered back in February in his State of the Union Address.

The number of breaches disclosed over the past two years has increased 40 percent, according to accounting firm KPMG, the Journal noted, adding that hackers have penetrated 681 million records between 2008 and 2012. I obtained a copy of the KPMG report, which also noted that 60 percent of all incidents reported were the result of hacking.

The report does show an encouraging development: the healthcare sector, which just a few years ago accounted for the highest percentage of data loss incidents (25 percent) saw that drop to just 8 percent last year. It looks like health care providers are doing something right.

With the recent spate of attacks, such as last week's Spamhaus distributed denial of service (DDoS) attack reported Friday or the recent and quite significant strikes I noted back in March:

We're under siege purportedly by the Chinese, Iranian and Russian governments. Organizations including the Federal Reserve Bank, The New York Times, NBC News, Apple, Facebook, Twitter, heck even Microsoft itself, have all recently sustained cyber-attacks.

As the President noted in his State of the Union Address, "We cannot look back years from now and wonder why we did nothing in the face of real threats to our security and our economy."

As long as we continue to fight back, IT needs to contend with the fact that hackers and cyber-terrorists will only get smarter and find new ways to attack our systems. So what are you doing or what do you feel needs to be done? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 04/01/2013 at 9:19 AM0 comments

Microsoft Taps Silicon Valley for Build

Microsoft will court Silicon Valley developers when it holds its Build developer conference June 26-28 in San Francisco, where the company is expected to preview the future of the Windows platform and the apps that will run on it.

Steve Guggenheimer, Microsoft's corporate VP and chief evangelist for Microsoft's developer and platform group made the announcement at the Visual Studio Live! Conference in Las Vegas last week. (Disclosure: Like Redmond magazine, Visual Studio Live! is produced by parent company 1105 Media). Guggenheimer subsequently posted details on the planned conference in a blog post. Registration opens tomorrow.

Former Redmond magazine editor Keith Ward, who is now editor in chief of Visual Studio Magazine, caught up with Guggenheimer at Visual Studio Live! after the announcement and tried to get some details about what Microsoft will reveal at the upcoming conference.

In the interview, posted on the Visual Studio Magazine Web site, Guggenheim (not surprisingly) kept details close to the vest. "It's a little early to get into the details," Guggenheim told Ward. "The key is we'll provide updates across the range of our platforms, and depending on where we are with different pieces we'll give updates. It will be the Windows family of products, Visual Studio, many different things."

As All about Microsoft and Redmond columnist Mary Jo Foley noted in her post, the Build conference will overlap with TechEd Europe, due to take place in Madrid. The implications of that remain to be seen.

Certainly watchers are anticipating Microsoft will have more to say about the next wave of Windows updates, code-named Blue, which have indicated support for new form factors, among other things. As reported by Foley and Redmond's Kurt Mackie, Microsoft's chief spokesman Frank X. Shaw confirmed Blue, albeit with few details.

Not only is it good to hear that Build is in the not-to-distant future but the fact that Microsoft chose San Francisco as the venue for the conference was a wise move -- the company needs to have Silicon Valley in the fold.

Posted by Jeffrey Schwartz on 04/01/2013 at 9:36 AM0 comments

Spamhaus Suffers Biggest DDoS Attack of All Time

This week's attack on the Spamhaus Project was the worst known distributed denial of service (DDoS) attack raising the bar on the brute force weapons at the disposal of cyber assailants.

Spamhaus is often attacked by those who take issue with the fact that it blacklists spammers. But this week's DDoS attack started at 10 gigabits per second and peaked at an unprecedented 300 Gbps, The New York Times reported. "It is the largest DDoS ever witnessed," said with Dan Holden, director of Arbor Network's Security Engineering and Response Team, noting that the unknown attackers were well aware that Spamhaus already had sophisticated cyber defenses.

"It's unique because of the amount of power they've been able to harness," added Dean Darwin, senior vice president for security at F5 Networks. Despite the new level of magnitude, Darwin warned it may just be the tip of the iceberg. "It's the kind of attack we're going to see a lot more of," said Darwin, saying the Spamhaus attack is the latest data point showing the need for CIOs and CSOs to step up their game by providing application-level security to their systems.

"The attacks we've seen in the past are very network centric," he said. "Now we're seeing the sophistication of the attack profiles as being very application centric." In effect, Darwin said unless firewalls, intrusion prevention systems, threat management gateways and malware remediation programs, among other tools, can work intelligently together, victims of DDoS and other attacks will remain vulnerable.

Despite its magnitude, Spamhaus is just the latest of an onslaught of cyber-attacks that have gripped companies of all sizes in recent months, especially some of the nation's largest banks. While DDoS attacks are nothing new, most have lasted a few days or at most a week, Holden said. "To go for months is unprecedented."

Experts also pointed out this week that the largest telecommunications and Internet service providers (ISPs) need to make their networks more intelligent so as to know that a flood of millions of packets targeted at DNS at once from organizations is the result of botnets rather than legitimate traffic.

There is a best practice recommended by the Internet Engineering Task Force published in 2000 called BCP38. David Gibson, vice president of strategy at Varonis, a provider of data governance solutions, pointed out in a blog post that most providers have implemented these best practices except for 20 percent. The problem is 80 percent isn't good enough, he noted.

"Just like on the road, where a few (or many) distracted or careless drivers can cause harm to countless others, a group of sloppily configured routers can allow attackers to disrupt critical infrastructure that we've come to depend on," Gibson noted. "We can't turn off DNS. Though it's theoretically possible to make everyone use TCP instead of UDP for DNS queries (which would make these queries much more difficult to spoof), so many people would be adversely affected during the transition that this might make things worse than just living with the DDoS attacks."

Has the onslaught of attacks caused you to change how you defend your company's systems? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 03/29/2013 at 10:00 AM0 comments

ThreatTrack CEO Explains Why GFI Spun Off Security Business

• Read Jeff's in-depth interview with ThreatTrack CEO Julian Waits here.

GFI Software earlier this month spun off its security business into a new company called ThreatTrack, whose core assets came from the 2010 acquisition of Sunbelt Software. The move is aimed at creating a separate business targeted at large government agencies and enterprises such as big-box retailers and financial services firms. GFI will continue focusing on its heritage customer base consisting of small and mid-sized companies with fewer than 1,000 users.

Earlier this week, I spent a half-hour chatting with ThreatTrack's CEO Julian Waits, who has spent much of his career in the IT security industry, most recently as general manager of GFI's security business. Waits is a longtime friend of Walter Scott, CEO of GFI, and despite the plethora of companies that offer IT security software and services, the two believe they have a unique set of offerings such as ThreatAnalyzer, based on the company's SandBox technology.

In the interview, Waits emphasized his belief that despite the increased onslaught of attacks from China, Russia, Iran and North Korea, enterprises need to take a more proactive stance in trying to predict where the next threat will originate. "I still believe 80 percent of security problems are risk management problems," Waits said. The company is using Cloudera's Hadoop distribution technology to use big data to more proactively predict future threats, Waits explained.

An encouraging development was President Obama's executive order announced last month for the government and private sector to share more information to protect the nation's critical infrastructure. The executive order promises to boost the amount of data that can be collected and analyzed, Waits said.

"The more of that data we can collect, the more fancy analytics stuff we can use to do our job a lot faster," he said. "There's no way we'll be able to anticipate an APT before it's created. God knows they're becoming more and more sophisticated. All we can do is become more sophisticated about how rapidly we can respond to it, and it's going to take a community to do that."

Waits said ThreatTrack has about 300 employees at its Clearwater, Fla. headquarters and is looking for a site in Washington, D.C. where it will staff 50 additional people. The company is also considering a presence in the San Francisco Bay area, Waits said. In addition, Waits indicated he'll be shopping for companies to acquire, especially those that can help ThreatTrack apply predictive analytics to the big data it collects.

See Also:

• Q&A: ThreatTrack Chief Details Enterprise Security Plans

Posted by Jeffrey Schwartz on 03/27/2013 at 12:12 PM0 comments

Bidding War Leaves Dell's Future in Limbo

Dell's bid to go private is very much up in the air, and with it is the future of the company and who will run it. When founder and CEO Michael Dell lined up Silver Lake Partners and an ensemble of other investors, including Microsoft, early last month, it appeared reasonably certain the $24.3 billion deal would sail through.

However a week after Michael Dell and Silver Lake made the offer, some key shareholders felt it was a lowball bid and indicated they'd vote against it, hoping for a better offer. As the 45-day "go-shop" period to consider superior offers arrived Friday, the company received two bids.

One was from the private equity fund manager Blackstone Group and the other was from activist investor Carl Icahn, who said he has amassed a 4.6 percent stake in Dell. Under both bids, a portion of the company would remain public.

Icahn wants to buy 58 percent of the company at $15 per share (compared to the existing $13.65 per share offer). Under that scenario, investors could only sell part of their holdings, according to Icahn's proposal, published by Dell this morning. Subsequently, Icahn would hold a 24.1 percent share, Southeastern Asset Management would wind up with a 16.6 percent share, and T. Rowe Price would receive a 9.3 percent share.

Blackstone's offer of $14.25 per share would give shareholders the option of receiving cash or stock, according to the company's proposal. Alex Mandl, chairman of the Special Committee of Dell's board evaluating the bids, issued a statement saying the board will review both bids. "There can be no assurance that either proposal will ultimately lead to a superior proposal," Mandl warned. "While negotiations continue, the Special Committee has not changed its recommendation with respect to, and continues to support, the company's pending sale to entities controlled by Michael Dell and Silver Lake Partners."

If either rival bid is successful, it remains to be seen whether Michael Dell would continue to run the company he built 29 years ago, The Wall Street Journal reported today (subscription required). There were rumblings last week that Blackstone approached former Hewlett-Packard CEO and current Oracle President Mark Hurd about taking the helm of Dell, should Michael Dell not stay on.

Blackstone has more than a passing interest in this deal. The company hired Dell exec David Johnson, a key player in the computer giant's acquisition efforts and now "actively involved" in Blackstone's attempt to acquire Dell, sources told WSJ.

While Blackstone has retained Morgan Stanley to help it secure financing of the deal, several reports say GE Capital is a leading contender to acquire Dell's financing arm for $5 billion.

Silver Lake and Dell have insisted they believe their offer fairly values the company and hence don't plan to counter with a higher bid. An increased offer would add to the already high level of debt the investors would be taking on to go private, thereby extending the risk they're taking on.

The bigger problem for Dell, however, is customer confidence, warned analyst Roger Kay in a Forbes blog post published today, noting with irony that HP by comparison is suddenly looking more stable than Dell. "During HP's rocky time of management changes and policy reversals, Dell and IBM made as much hay as they could," he said. "Now, HP is looking stable-ish and its customers have begun to calm down."

It's too early to tell whether the committee will accept either offer and, if they do, whether the Dell-Silver Lake team will up the ante. Or if the committee rejects both offers favoring the original one, investors could still nix the deal if they can gather enough votes -- an unusually distinct possibility.

And even though Barron's (subscription required) noted today that HP's situation is much improved and its shares are up 62 percent from its 10-year low in November, the report noted HP's revenues are still declining.

As Dell customers, how would you like to see this play out? And is the current uncertainty leading you to shop elsewhere? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 03/25/2013 at 11:10 AM2 comments

Will Microsoft Stand Out In the Big Data Fray?

Microsoft took a key step forward in its quest to bring "big data" to the cloud this week when it released the public preview of its Windows Azure HDInsight offering. The cloud-based service, first made available on a limited basis last fall, aims to let enterprise customers process huge volumes of structured and unstructured data using Microsoft's SQL Server and the Hortonworks distribution of the Hadoop file store.

A growing number of organizations have started using file management systems based on the Apache open source Hadoop Distributed File System (HDFS). The Java-based file repository lets users store huge volumes of unstructured information in massively distributed clusters based on commodity servers. Using query tools, users can rapidly find and access that content.

Organizations of all types -- law enforcement agencies, retailers, financial services firms and health care providers, among others -- are rapidly gravitating to Apache Hadoop to store information gathered from sources such as social media, news feeds and user-generated content in order to determine trends to deliver insights and intelligence in near real time.

With scores of startups and established players all jumping on the Hadoop bandwagon, Microsoft has hitched its wagon with the Hortonworks distribution, which the company emphasizes is 100 percent Apache-compatible. The HDInsight service in Windows Azure lets organizations spin up Hadoop clusters in Windows Azure in a matter of minutes, noted Eron Kelly, general manager for Microsoft's SQL Server group, in a blog post this week.

"These clusters are scaled to fit specific demands and integrate with simple Web-based tools and APIs to ensure customers can easily deploy, monitor and shut down their cloud-based cluster," Kelly noted. "In addition, [the] Windows Azure HDInsight Service integrates with our business intelligence tools including Excel, PowerPivot and Power View, allowing customers to easily analyze and interpret their data to garner valuable insights for their organization."

Among the first to test HDInsight is Ascribe, a U.K.-based Microsoft partner that provides healthcare management systems for hospitals and large medical practices. Its solution handles the lifecycle of patient care using key new components of Microsoft's portfolio including Windows 8-based tablets, SQL Server 2012 and HDInsight to perform trending analysis using anonymous patient data.

Paul Henderson, Ascribe's head of business intelligence, demonstrated the application at the GigaOM Structure Data conference in New York this week. "Rather than building our own server farm or incurring huge capital costs, HDInsight provides us with the ability to process that volume of stuff at scale and that is a huge benefit," Henderson told me after the demonstration.

But at the Structure Data conference, there were scores of other players talking up new ways of capturing, analyzing and processing huge amounts of data. While Microsoft once only had to worry about players like Oracle, IBM and Teradata, now there are a vast number of players looking to offer modern alternatives to traditional SQL database stores.

For example, a growing number of customers are using NoSQL databases such as those based on MongoDB (the leading player here is 10gen) to store data in the cloud, as well as a number of other approaches I'll touch upon in future posts. "The majors, as we may call them, Amazon, Google and Microsoft all have multiple plays going on in the cloud database world," noted Blue Badge Insights analyst Andrew Brust, who was on a cloud database panel at Structure Data.

Despite the growing number of players and approaches, Brust believes many customers will look for the mainstream providers to embrace them. "We're seeing specialized products from specialized companies doing things that the major databases have glossed over," Brust said. "That's great, but when it's going to really become actionable for companies is when the mega-vendors either implement this stuff themselves or do some acquisitions and bring these capabilities into their mainstream databases that have the huge installed bases, then it becomes a lot more approachable to enterprise companies."

Noted cloud analyst David Linthicum, also on the panel was more skeptical. "It pushes them to be more innovative but I haven't seen much innovativeness come out of these larger database organizations in the last couple of years," Linthicum said.

As for Microsoft, the company is addressing growing demand for in-memory databases, brought to the mainstream last year by SAP with HANA. In-memory databases can perform queries much faster than those written to disk. Microsoft revealed its plans to add in-memory capabilities to the next release of SQL Server, code-named Hekaton, at the SQL Pass Summit back in November.

"This is a separate engine that's in the same product in a single database and will have tables optimized for either the conventional engine or the in memory engine," Brust said. "You can join between them so you are going more towards an abstraction."

But with a growing number of startups looking to re-invent the data repository, such as NuoDB, Hadapt and the new Pivotal initiative from EMC, Microsoft is now in a more crowded field. While Microsoft has broadened its data management portfolio with SQL Azure and now HDInsights, the requirement to find, process and analyze new types of information is greater than ever. All eyes will be on Hekaton and Microsoft's ability to deliver new levels of performance to SQL Server.

Posted by Jeffrey Schwartz on 03/22/2013 at 9:50 AM0 comments

Should Microsoft Step Up OpenStack Support?

While software and service providers continue to support OpenStack, the open source cloud infrastructure initiative, there are still a healthy number of key players who haven't committed to it (or have done so in a limited way).

The behemoths that come to mind are Amazon Web Services, Google, Microsoft, Oracle and Verizon (including its Terremark business unit). That's quite a few heavy hitters missing, even though some 200 players have joined the OpenStack Foundation including AT&T, Cisco, Citrix, Dell, EMC, HP, IBM, Intel, NetApp, Rackspace, Red Hat, Suse, Ubuntu and VMware.

Yet some of those, notably Citrix and VMware, have offered half-hearted support for OpenStack. Citrix was an original sponsor of the project until last year when it launched its own CloudStack open source project, offering up its cloud management platform from its 2011 cloud.com acquisition, to the Apache Foundation, much to the consternation of Rackspace. Oracle hasn't endorsed OpenStack either, though last week's acquisition of Nimbula, at least gives it a foot in the door, but its intentions remain to be seen.

As for VMware, it became an overnight supporter following last summer's acquisition of software-defined networking (SDN) provider Nicira, a major OpenStack contributor. Still Rackspace execs say VMware needs to step up and make its ESX hypervisor fully OpenStack compatible.

The same holds true for Microsoft. Though not a member of the OpenStack Foundation, Microsoft has participated in various OpenStack meetings and has provided some support for Hyper-V (outlined in this OpenStack wiki). A Microsoft spokeswoman also pointed out that Microsoft is enabling System Center 2012 to monitor, orchestrate and backup open source cloud environments.

The only hypervisor that can run as a host in an OpenStack cloud is the open source KVM, said Jim Curry, a Rackspace senior VP. "There's no reason there shouldn't be five or 10 well-tested and implemented hypervisor choices for customers that's the promise of OpenStack," Curry said.

Only 25 percent of Hyper-V's features work in an OpenStack cloud, Curry added. "We can run Windows as a guest, but if customers require it on the host, it would require Microsoft to step up the Hyper-V compatibility," he said.

When it comes to Microsoft's own cloud efforts such as Windows Azure, the company likes to talk up its support for Java, PHP and Python, though it's still geared toward .NET applications. Microsoft is also readying infrastructure as a service capabilities for Windows Azure via support for virtual machines including Linux instances.

Given the limited Hyper-V support for OpenStack, it's probably a long way off, if ever, that Windows Azure would gain OpenStack compatibility -- at least from Microsoft unless there's some stealth effort in Redmond.

Would you like to see Microsoft step up its OpenStack support or is that best left to others? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 03/20/2013 at 9:55 AM1 comments

Readers Chime In: Bring Back the Start Button for Windows 8!

Last week's post questioning whether Microsoft should have kept the traditional Start button in Windows 8 really hit a nerve. I can't recall a topic of late that has generated such a flood of comments and e-mails.

An overwhelming majority of respondents said Microsoft should bring it back -- some went as far to say the company never should have ditched it in the first place. The pushback comes as PC sales are on pace to decline for the second year in a row and analysts are predicting Windows 8 tablets will only have a single-digit share in 2017. That's not the only bad news. As I noted Friday, now it appears Microsoft has only sold 1.5 million of its Surface devices, according to a report by Bloomberg.

While it's a stretch to blame all that on the absence of the Start button, the visceral reaction is a clear example of how resistant people are to change. "Microsoft should bring back the Start button, I think that it would definitely aid the transition of all Windows users into Windows 8, increasing sales as the result," wrote Kirk Lewis, a tech support expert in Northridge, Calif. "The start button has been the intuitive glue that all desktop versions of Windows have shared since Windows 95."

An IT pro in Montana who supports PCs running everything from Windows 98 to Windows 8 described the removal of the Start button as "probably the worst thing Microsoft could have done."

One consultant said: "This is honestly the first version of Windows I can't recommend to my business customers," while an IT pro expressed his annoyance with Microsoft. "The fact that Microsoft has once again decided that they are smarter than the thousands of administrators who use it every day once again has turned me off," he noted. "Why replace it for the simply sake of replacing it?! Bad call. This looks to me to be the next ME or Vista."

For business and enterprise environments, many IT pros are concerned users will struggle to find and easily launch their programs when running Windows 8 in the classic Desktop mode.

"I have used Win8 enough to understand Microsoft's thinking, but I believe they made a mistake by not including a fully functional Win7 style desktop so people could ease into it," argued another IT pro. "Use of Windows 8 on non-touch screen devices is awkward at best, and without the complete Win7 style interface, it requires a pretty steep initial learning curve. This is because you can't just click past the tile start screen and go to work on the desktop. You have to figure out how to use it, and how to mimic gestures with a mouse, to get anything done. I dread trying to support users through that transition. And this is from someone who has supported users thru the green screen to GUI transition, the Win 3.x to Win 95 transition, Win95 to XP, etc."

Also, third-party Start programs may not be an option for many shops, he added. "Many corporate environments will not allow it," he noted.

Despite all the complaints, a vocal minority believes all this fuss is about nothing and people need the need to change their habits. "It has been since 1995 since Microsoft made a real change in then desktop GUI," says Allen McEuin, MCSE from Louisville, Ky. "Leave it be and get used to it. It ain't 1995 anymore." And said another from Brazil: "Bringing back Start menu would be a major step backwards to this technology."

Then there are some who are actually glad to see it go. "I do not like the Start button and happy that they removed it. It is cleaner and easier to use the 'search' function or the Start screen. I have Win8 on all my computers and it really is not different than Windows 7 except [minus the] Start menu. I understand the annoyance it causes to learn new ways to do it but it is also more efficient and cleaner this way."

Noel from Kentucky agreed: "It took very little time to get to know the interface. The desktop is a click away. You can have all the apps listed with a click or have shortcuts galore. You can still have multiple Windows open. I think some of these respondents may be pushing against Windows 8 for other reasons. Bottom line is that it is a very fast and secure OS."

Microsoft had no comment on the reaction to last week's post on the topic. Though the company has surprised me plenty of times before, I wouldn't bet on Redmond bringing the Start button back.

So how am I dealing with this? I've created shortcuts on the desktop to applications I use most frequently. Using Search is another easy alternative. There are some keyboard shortcuts as well. But it appears many are less forgiving of Microsoft on this one.

Posted by Jeffrey Schwartz on 03/18/2013 at 9:51 AM32 comments

Will Google's Android-Chrome Consolidation Threaten Windows?

Google's decision to pull the man known as the father of Android from that group is a huge gamble by CEO Larry Page and one that poses a new threat to Microsoft and Apple.

The unexpected move to bring Android under the auspices of Sundar Pichai, who already oversees Chrome and Apps, suggests Page remains determined to upend the PC business just as his company has done with tablets and smartphones.

While Page didn't say that outright, read between the lines: "Today we're living in a new computing environment," he said in a blog post announcing the move. "While Andy's a really hard act to follow, I know Sundar will do a tremendous job doubling down on Android as we work to push the ecosystem forward."

Since their debut in 2011, Chromebooks have not moved the needle much. Page's move this week looks like he has a master plan in hopes of giving Chromebooks a major lift. Windows fans and Microsoft shouldn't shrug this off, at least not yet, lest we forget how many did the same when Google first announced the Android phone OS. By bringing Android, Chrome and ChromeOS together, Google will be able to draw from the ecosystem that to make Chromebooks a more compelling alternative to Windows PCs (and Macs for that matter).

In addition to piggybacking on the Android ecosystem for Chrome OS, leveraging technology from Android could have all kinds of ramifications including the ability to provide application portability and an improved touch interface, among other things. While the initial crop of Chromebooks boast a low price tag of less that $500 (some half that amount), they have had limited capabilities -- effectively only allowing you to use the Chrome browser to run Google Apps in the cloud.

Things are changing and now the latest entry, the Google Chromebook Pixel, starts at a hefty $1,299, which PCWorld labels "an expensive curiosity." One of the key objections to Chromebooks -- that you have to store your Google Apps in the cloud -- is going to go away.  As Derik VanVleet, a senior solutions engineer on the sales team of Atlanta-based Cloud Sherpas, Google's largest partner, explains, Google will offer a native client for Chrome that will be natively built into Google Apps thanks to the company's acquisition of Quickoffice last year.

"This whole conversation of documents fidelity and document conversion goes away," VanVleet told me. "Quickoffice allows me to natively edit Microsoft documents in their native format with virtually 100 percent fidelity, better than what Microsoft is able to offer in Office 365 Web Apps. Once Quickoffice is fully integrated to Google Apps whole conversation is going to go away and Microsoft is going to have a real problem."

All About Microsoft blogger and Redmond magazine columnist Mary Jo Foley has often pointed to the possibility of Microsoft bringing together its Windows and Windows Phone groups. Weighing in on Google's OS consolidation move this week, she again raised the specter of Microsoft finally merging the two groups and platforms.

There's another factor to consider. PC makers are fuming over Microsoft's covert development and ultimate release of its Surface tablet. That has led quite a few, the latest being HP, to jump on the Chromebook bandwagon. But just as PC makers need to keep Microsoft in check, Google is offering its own branded device and with its Motorola Mobility unit, has the resources to continue that push.

Google's realignment also comes as Bloomberg today reports that sales of Microsoft's Surface devices are more dismal than originally projected. Microsoft has sold only 400,000 Surface Pros and 1 million Surface RTs -- half of what it projected, sources told Bloomberg. Microsoft did not comment on the report.

Chromebooks haven't made a dent either, so right now Google and Microsoft are in the same boat. While I asked last month if HP and others jumping on the Chromebook bandwagon might bolster ChromeOS's prospects, the response was that Chromebooks will have their place but so will Windows 8 and Windows RT.

Do you think Google's move Wednesday will up the ante in making Chromebooks more appealing to consumers and business users? And how do you think Microsoft should respond? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 03/15/2013 at 9:47 AM4 comments

Google Moving In On Redmond, Literally

Hardly a week goes by when Google doesn't announce an enterprise signing on to its cloud services, notably Google Apps and to a lesser extent its Google App Engine platform as a service (PaaS), usually at the expense of Microsoft. But now Google is stepping up its assault on Redmond in more ways than one -- the company's moving in.

Google is doubling its capacity in nearby Seattle, The New York Times reported last night. In addition to embarking on an aggressive campaign to recruit engineers and other cloud experts in the area, the company is adding 180,000 square feet of datacenter capacity there. The new office in Kirkland, Wash., is about the size of a Walmart Supercenter, making the location its third largest -- outpaced only by its headquarters in Silicon Valley and its facilities in New York.

One of Google's latest recruits from Microsoft is 10-year veteran Brian Goldfarb, who now heads up cloud platform marketing at the search engine giant. He acknowledged to The Times that his new employer is coming from behind. But he insisted Google will be a force to be reckoned with. "We have the best data centers on the planet. You can't really give engineers a bigger, badder thing to work on," he said.

The latest endorsement of Google's cloud offering came yesterday from Swiss-based Holcim, which is said to be one of the world's leading suppliers of cement and related supplies. The company is rolling Google Apps out worldwide to its 40,000 users.

"We chose Google Apps because it will help us concentrate on our core businesses, and bring our employees, customers and partners across the globe closer together," wrote Holcim CIO Khushnud Irani, in a blog post Tuesday. On top of the Google Apps productivity and collaboration suite, Holcim plans to use the Google Search Appliance, Google App Engine and Google Apps Vault, the latter to archive and manage e-mail content.

"With the introduction of Google Enterprise products, we are embracing modern cloud-based delivery models that ease the technical complexities of internal operations," Irani said. "Such a model takes away the technical complexities of internal operations and instead allows IT personnel to focus on closer involvement with their business counterparts in creating deeper business value."

Among other big wins for Google are Japan's All Nippon Airways, California's City of Monterey and The Chicago Public Schools -- the latter deploying 40,000 seats in 681 locations.

Microsoft has announced its fair share of big Office 365 wins as well, such as the retail giant JC Penney, the Department of Veterans Affairs and the State of Texas, which is deploying 100,000 seats.

So who's winning this battle? "I would say we see them neck and neck at this point," said Sara Radicati, president and CEO of The Radicati Group, a market researcher firm that tracks enterprise use of e-mail, collaboration social networking and security software and services. "Google Apps tends to appeal more/gain more traction with SMBs and non-US customers, Microsoft seems to be doing better in small- to medium-size market in the US, so if you look at it on a worldwide basis I would say they are about even right now, whereas in the U.S. I would put Microsoft slightly ahead at this time."

Meanwhile, some of the key arguments Microsoft is making to warn customers of the risks of moving to Google Apps are becoming moot. Perhaps the biggest one, that you can't store documents locally, is about to go away, said Derik VanVleet, a senior solutions engineer on the sales team of Atlanta-based Cloud Sherpas, Google's largest partner.

Google is going to make Quickoffice, the company it acquired last year, a native client with its Chromebooks, effectively letting users store documents on their systems, rather than requiring them to only save them in the cloud, VanVleet pointed out.

"The capability from our understanding is very close," he told me. "What that allows me to do is use the Google Apps platform and this whole conversation of documents fidelity and document conversion goes away. QuickOffice allows me to natively edit Microsoft documents in their native format with virtually 100 percent fidelity, better than what Microsoft is able to offer in Office 365 Web Apps."

The rivalry between Microsoft and Google in the cloud is nothing new. In fact I've followed this for many years. Now with the revamp of Microsoft's Office 365 released two weeks ago, and Google's moves toward reducing the shortcomings of its offering, the battle is entering a new phase.

Who do you think has the edge? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 03/13/2013 at 9:54 AM0 comments

Should Microsoft Bring Back the Start Button?

Perhaps the most controversial of David Pogue's Windows 8 tips was the first one suggesting third-party tools that let users effectively re-instate the Start menu that made its debut with Windows 95 but was removed from the new OS.

Pogue said those who bemoan the absence of the Start menu can get it back via third-party apps such as Start­IsBack, Classic Shell, Start8, Power8, Pokki and StartW8. Admittedly, I tried Start8 and found it to be a nice crutch. It made me wonder, why doesn't Microsoft just bring it back in the next service pack?

I asked a spokeswoman at Microsoft if there are any plans to bring back the Start menu and she said the company had no comment. One critic slammed Pogue for even suggesting users bring back the Start menu, arguing such a move would be a step back. "I look forward to an article on Windows 8 by a real enthusiast, not someone who explains how to undo the interface," wrote Mark Justice Hinton.

While Microsoft removed the Start menu to wean people off its traditional way of using Windows to the new app model in Windows 8 via the Windows Store, some habits die hard. Some agreed, asking why Microsoft didn't leave Start menu intact?

"The start menu would have minimized retraining, provided continuity and allowed both the tablet and desktop communities to be well served," a commenter known as D Weeberly wrote. "A simple option could have been provided to disable it for those with an opposite preference."

For some, the removal of the Start menu has turned them off to Windows 8 altogether, especially those who had to get new PCs and were content with the way earlier versions of Windows worked. "I have several friends and acquaintance that have needed new computers recently and HATE W8," one commenter said. "I have now found StartW8 and 8GadgetPack so I can now at least offer them a working solution."

Keep in mind, if Microsoft wanted to play hardball, it could have architected Windows 8 so it wouldn't allow third-party Start menu add-ons or permit them in the Windows Store. Do you think if Microsoft brought back the Start menu it would be a setback for its effort to move people to its new modern Windows Store model? Or would it actually help ease the transition from Windows XP or Windows 7 to the new OS?

Let me know if you think Microsoft should bring back the Start menu by dropping me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 03/11/2013 at 10:01 AM84 comments

Why Is Microsoft's Cyber Security Leader So Optimistic?

When Scott Charney spoke at last week's annual RSA Conference in San Francisco, he expressed optimism about the future of IT security despite a new onslaught of attacks and threats facing consumers, businesses and the nation's critical infrastructure.

I initially wondered why Charney, the Microsoft corporate VP for Trustworthy Computing was so upbeat? After all, we're under siege purportedly by the Chinese, Iranian and Russian governments. Organizations including the Federal Reserve Bank, The New York Times, NBC News, Apple, Facebook, Twitter, heck even Microsoft itself, have all recently sustained cyber-attacks.

When President Obama last month issued his Executive Order directing immediate information sharing between the Federal government and the private sector, notably operators of critical infrastructure, he painted a bleak picture of the looming threats in his State of the Union Address. Many in IT were already aware of the problems the President raised but nevertheless he amplified the issue.

On deeper reflection however it bears noting that the President appointed Charney to the President's National Security Telecommunications Committee (NSTAC) in 2011 and presumably he has Obama's ear. Charney described in a blog post the President's order, called Presidential Policy Directive 21, as a key step forward:

When reviewing the key definitions, approaches and activities outlined in the Executive Order, it is fairly well aligned with a set of global principles essential for enhancing cyber security. More specifically, it recognizes the principles of active collaboration and coordination with infrastructure owners and operators, outlines a risk-based approach for enhancing cyber security, and focuses on enabling the sharing of timely and actionable information to support risk management efforts.

It is important to see these principles reflected in the Executive Order for three reasons. First, it is the private sector that designs, deploys and maintains most critical infrastructure; therefore, industry must be part of any meaningful attempt to secure it. Second, both information sharing and the implementation of sound risk management principles is the only way to manage complex risks. Finally, while critical infrastructure protection is important, it cannot be the only objective of governmental policy; privacy and continued innovation are also critical concerns.

Microsoft itself has come a long way in improving the security of all its products, as noted in last year's Redmond magazine cover story "10 Years of Trustworthy Computing." Charney used last week's RSA keynote to re-iterate the security improvements introduced in Windows 8, such as the Unified Extensible Firmware Interface (UEFI) specification which enables new users to securely boot their systems.

Charney also has played a key role in fostering cloud security. Jim Reavis, executive director of the Cloud Security Alliance last week told me why the group gave Charney its industry leadership award this year.

"Microsoft was the first major provider to support our STAR registry by being very transparent," Reavis said. "They've also created vendor neutral tools to help assess their own readiness based on the cloud industry's best practices. He's that rare individual that not only does the right thing with their company but with his competitors and the industry at large. Scott is the epitome taking on that shared responsibility."

The latest cyber-attacks are also putting the spotlight on public cloud computing. Already security remains the biggest inhibitor to cloud computing. I was at IBM's Pulse Conference in Las Vegas earlier this week and the security fears surrounding cloud were not lost on Big Blue as it talked up its cloud portfolio and launched its open standards-based initiative for cloud computing.

Kris Lovejoy, IBM's general manager for security services and the company's former chief security officer, believes the move to cloud computing will actually provide enterprises with more secure IT than their existing infrastructures.

"Cloud is fundamentally more secure or inherently more securable than traditional infrastructure environments because of the way it's designed and because of the way you can replicate security controls on top of cloud environments," she said during a panel discussion for media and analysts Tuesday at Pulse. "One of the biggest challenges we have in traditional infrastructure is complexity -- too many pieces of technology. In a cloud environment everything can be standardized so we can be secure."

Do you feel your systems are on the road to becoming more secure despite a new crop of sophisticated and persistent threats including the risk of cyber terrorism? Or are you of the mind that for every step forward IT security takes, these new risks are taking us a step or two back?  Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 03/06/2013 at 9:57 AM0 comments

Breakdown in Procedures Caused Azure Outage

When Microsoft's Windows Azure cloud storage service went down worldwide late last month, the company confirmed within a few hours the cause of the massive meltdown.  An expired SSL certificate crippled the service late Friday Feb. 22 into the next day.

Furious customers wanted to know how something as simple as renewing a SSL cert could fall through the cracks. Even worse, how could that become a single point of failure capable of bringing down the entire service throughout the world?  It turns out the cause was a "breakdown in procedures," according to Mike Neil, general manager for Microsoft's Windows Azure service, in a contrite post-mortem posted Friday detailing the cause of the outage and plans to ensure the error isn't repeated.

 "A breakdown in our procedures for maintaining and monitoring these certificates was the root cause," Neil noted. "Additionally, since the certificates were the same across regions and were temporally close to each other, they were a single point of failure for the storage system."

Neil explained that Windows Azure has an internal service called the Secret Store that manages hundreds of certificates used to securely run the cloud service. The Secret Store alerted the team on Jan. 7 that the blob, queue and table certificates would expire on Feb. 22. It turns out the storage team did update the certificates but failed to flag a storage service release as one that included the updated certs.

"Subsequently, the release of the storage service containing the time critical certificate updates was delayed behind updates flagged as higher priority, and was not deployed in time to meet the certificate expiration deadline," Neil explained. "Additionally, because the certificate had already been updated in the Secret Store, no additional alerts were presented to the team, which was a gap in our alerting system." Hence, that's how it fell through the cracks.

So what's Microsoft doing to ensure this doesn't happen again? Neil said the Windows Azure team will improve the process for detecting certificates that need to be renewed. Production certs due to expire in less than three months will generate and operational incident and will be tracked as what he termed a Service Impacting Event.

"We will also automate any associated manual processes so that builds of services that contain certificate updates are tracked and prioritized correctly," he noted. "In the interim, all manual processes involving certificates have been reviewed with the teams. We will examine our certificates and look for opportunities to partition the certificates across a service, across regions and across time so an uncaught expiration does not create a widespread, simultaneous event. And, we will continue to review the system and address any single points of failure."

Posted by Jeffrey Schwartz on 03/04/2013 at 9:48 AM4 comments

Do SharePoint Users Clamor for Yammer?

The release of SharePoint 2013 and this week's launch of an upgraded Office 365 for small- and mid-sized customers, offers enterprise a mind-numbing amount of new ways workers can find and share information. With My Sites and SharePoint Communities, the new collaboration platform offers social networking features such as activity streams aimed at fostering greater interactivity among enterprise users.

But for a richer social networking experience, Microsoft last year spent $1.2 billion to acquire Yammer, one of the leading enterprise social networks. Among other things, Yammer's APIs connect to other enterprise business systems such as SAP. Microsoft has been relatively quiet about its plans for Yammer, though at the SharePoint conference in November Microsoft said Yammer will use SkyDrive Pro to store data, the same cloud-based service it's using for SharePoint 2013 and Office 365.

Also in the pipeline this summer, users will be able to preview and edit files from their Yammer feeds via Office Web Apps. Microsoft this week also announced it will implement technology in Yammer that will translate languages, for those in multi-national and multi-lingual environments.

The expectation is that Microsoft will next year offer a version of Yammer that will tie to SharePoint. But it remains to be seen how many organizations want to add that extra component. "There's not much demand for it to be honest,"  said Errin O'Connor, founder and chief SharePoint architect at EPC Group, which consults with organizations that typically have more than 5,000 users and is already engaged with 25 SharePoint 2013 implementations. "People want to get their feet wet first with My Sites in SharePoint 2013 before they sign on another big ticket item."

Shane Young, founder of SharePoint911, which Rackspace acquired last year, said a lot of customers are trying to figure out their enterprise social networking strategies, but social is not a key reason organizations are looking to upgrade to SharePoint 2013. "From the people I've talked to at this point, a lot of them have the understanding they need to do more with social and SharePoint offers it, so it has their interest but I'd be lying if I told you a lot of these companies had a solid social strategy in place," said Young, a SharePoint MVP.

Yet others I've talked with say many organizations are clamoring to add social networking to SharePoint. A survey of SharePoint customers conducted back in August by Forrester Research found 38 percent plan to implement SharePoint's social networking features, while 25 percent have no plans. Do you have a social networking strategy? If so, where does SharePoint and Yammer fit in that strategy?  Share your thoughts or drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 03/01/2013 at 9:53 AM0 comments

Getting to Know Windows 8 and You

A few months ago, David Pogue, the personal technology columnist at The New York Times, penned his weekly column on how to choose a tablet.

The holiday gift-giving guide recommended the usual suspects: the various iterations of the Apple iPad, including its new sibling the iPad mini; a variety of Android-based tablets; and the latest Kindle Fire upgrade. But conspicuously absent was any mention of the recently released Surface RT from Microsoft and devices from other OEMs running Windows 8 and its Windows Store (aka Metro)-only Windows RT.

I was miffed by the omission because I knew Pogue was quite familiar with the most significant revamp of Windows ever. As author of a number of the O'Reilly Media guides on how to use Windows 7, (as well as Vista and XP), Mac OS X Lion and iPhone, Pogue's latest book is "Windows 8: The Missing Manual" (also from O'Reilly Media), officially released today.

Wondering what led to the Windows 8 exclusion, I asked Pogue if it ended up on the cutting room floor, or if perhaps he simply didn't consider the Surface RT -- with the new Windows 8 and Windows RT touch-enabled interface -- a legitimate tablet. I made clear my interest was in understanding his point of view on the matter, not to critique his column.

In his response, Pogue reiterated he'd spent a lot of time with Windows 8 and had already covered it weeks earlier -- ­and would have more to say in the future (and he did). I invited him to share his favorite Windows 8 tips with Redmond readers and his result is this month's cover story, "20 Windows 8 Tips."  While editing it, I tested his tips, and hope they're as useful to you as I found them. Be sure to share your own Windows 8 advice at Redmondmag.com or send your tips directly to me at jschwartz@1105media.com.

Quite a few Redmond readers have taken a wait-and-see stance regarding Windows 8. Many of you panned the preview version before its Oct. 26, 2012, release, while others have warmed up to it. Personally, the more time I've spent with it, the more I've come to like it. But in order for Windows 8 to succeed, the catalog in the Windows Store is going to need many more apps.

Just over four months after the OS release, Microsoft recently disclosed it has sold 60 million Windows 8 licenses. But PC shipments have declined. Microsoft is betting it can make up for that in sales of Windows tablets.

I encourage you to get to know Windows 8. And I'd like to get to know you better. This is my first Redmond View column as Redmond magazine's new editor (available in March's Redmond magazine), though I'm no stranger here, having covered IT and Microsoft since the early 1990s -- and spent the last six years with this publication and its sister titles.

But enough about me. A number of exciting things are in the pipeline for Redmond, including a refresh of Redmondmag.com and an extensive readership survey that will help us understand where you are and where you're headed. We look forward to publishing the results.

Technology has shifted rapidly over the past few decades, and now it's changing faster than ever. In the meantime, I want to hear from you. Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 02/27/2013 at 9:06 AM5 comments

Microsoft Is Latest Cyber Attack Victim

Microsoft joined a large parade of organizations to announce they are victims of hackers who've infiltrated and infected their systems with malware and/or stole data.

In recent weeks, The New York Times, Wall Street Journal, NBC News, Apple, Facebook and Twitter are just a handful to come out and say they've been hit. In a blog post late Friday, Matt Thomlinson, Microsoft's general manager for trustworthy computing security, revealed the attack it sustained was similar to those that hit Apple and Facebook. He said there was no evidence that customer data was stolen. Here's what he said:

"As reported by Facebook and Apple, Microsoft can confirm that we also recently experienced a similar security intrusion.

Consistent with our security response practices, we chose not to make a statement during the initial information gathering process. During our investigation, we found a small number of computers, including some in our Mac business unit, that were infected by malicious software using techniques similar to those documented by other organizations. We have no evidence of customer data being affected and our investigation is ongoing.

This type of cyberattack is no surprise to Microsoft and other companies that must grapple with determined and persistent adversaries (see our prior analysis of emerging threat trends). We continually re-evaluate our security posture and deploy additional people, processes, and technologies as necessary to help prevent future unauthorized access to our networks."

Indeed the growing admissions by customers beg the question: Are we under siege more than we have been in the past? Or are companies putting aside their concern that such admissions are embarrassing and risk other liabilities, in order to ensure they are compliant with regulations that govern them? It's no doubt a combination of both.

When President Obama announced his cyber security directive earlier this month in his State of the Union Address, many IT security experts may have rolled their eyes, but it nevertheless appears to have raised the profile of the growing cyber threats and the urgency for organizations to work with the government without compromising customer privacy. It will be interesting to hear what Microsoft's corporate VP for trustworthy computing Scott Charney has to say in his RSA keynote address tomorrow.

Regarding Obama's cyber security directive, Charney echoed concerns that there needs to be a balance between cooperating and maintaining flexibility. In a Feb. 14 blog post two days after Obama's directive, here's what Charney had to say:

"It will remain important that government and industry work together to manage carefully the most significant risks to our most critical infrastructures. To that end, we must remain focused on the desired security outcomes and recognize that owners and operators of critical infrastructures must retain the flexibility to manage risks with agility, implementing practices and controls that are both practical and effective. Continued collaboration between the government and the private sector will be essential in ensuring the success of this Executive Order"

It's clear that the sophistication and determination of cyber attackers continues to rise dramatically. A months-long investigation by The Times last week alleges the origin of a spate of attacks coming from the Chinese military, a charge its government vehemently denies despite a deep trove of evidence pointing its way including a 76-page report from the cyber security consultancy Mandiant, based on extensive research.

Today The Times reported that in wake of President Obama's directive and the latest allegations, the administration is treading carefully not to call anyone out noting the sensitivities of challenging China's new president Xi Jinping. Equally sensitive are other purported purveyors of such attacks, such as those from Iran and Russia.

Nevertheless, the latest report "...illustrates how different the worsening cyber-cold war between the world's two largest economies is from the more familiar superpower conflicts of past decades -- in some ways less dangerous, in others more complex and pernicious."

No doubt this will take center stage at this week's annual RSA Conference 2013 and we'll be keeping you abreast on what you can do to protect yourself from the growing threats.

Posted by Jeffrey Schwartz on 02/25/2013 at 11:28 AM0 comments

The Irony Behind the Windows Azure Meltdown

Just as I was getting ready to call it a week late Friday afternoon, Microsoft's Windows Azure cloud storage service went down worldwide. As I reported, Windows Azure storage was unavailable because of an expired SSL certificate.

The global outage of Windows Azure late Friday into Saturday is ironic, considering the release of last week's study that Windows Azure storage offered the fastest response times of five large cloud networks -- namely those operated by Amazon Web Services, Google, HP and Rackspace. Good thing for Microsoft that Nasuni, the vendor that ran the shootout, wasn't testing Windows Azure at that time.

Once the service was back up Saturday, I posted an update noting that Microsoft had fixed the problem and users could once again access their data. The company said it was 99 percent available early Saturday and completely restored by 8 p.m. PST. But the damage was already done and many customers and partners were furious.

In comments posted on a Windows Azure forum, Sepia Labs' Brian Reischl, who first pointed to the SSL certificate as the likely culprit, seemed to feel users should cut Microsoft some slack. Reischl said letting an SSL certificate fall through the cracks is a mistake anyone could make. "I know I have. It's easy to forget, right?," he posted. "It's an amateur mistake, but it happens. You end up with some egg on your face, add a calendar reminder for next year, and move on."

But one has to wonder how Microsoft, which has staked its future on the cloud and has spent billions to build Windows Azure into one of the largest global cloud services, could not have put in safeguards to prevent the domino effect that occurred when that cert expired, much less having a mechanism in place to know when all certificates are about to expire. Putting it in admins Outlook calendars would be a good start.

Of course there are more sophisticated tools to make sure SSL certificates don't expire. Among them are Solar Winds' certificate monitoring and expiration management component of its Server & Application Monitor, a Redmond reader favorite. Another option not so coincidently hit my inbox this morning. Matt Watson founder of Stackify, spent a few hours over the weekend developing a free tool called CertAlert.me, which allows a site owner to scan the Web sites its owns and track SSL and domain name expirations.

"It happens a lot," Watson told me in a brief telephone conversation regarding outages such as the one that struck Friday, which affected Stackify.  "All you can do is sit on your hands and pray," he said, adding years ago he had to deal with an expired SSL certificate. "You buy them and you forget about them and the next thing you know your site's gone. It's one of those things that get overlooked."

Asked what's the business opportunity for offering this free service, Watson said he saw it as an opportunity to bring exposure to the startup's namesake offering, a Windows Azure-based server monitoring platform targeted at easing access for developers while ensuring they don't have access to production systems.

Indeed you can bet Microsoft is going to ensure it doesn't happen. "Our teams are also working hard on a full root cause analysis (RCA), including steps to help prevent any future reoccurrence," said Steven Martin, Microsoft's general manager of Windows Azure business and operations, in a blog post apologizing for the disruption. Given the scope of the outage, Microsoft will offer credits in conformance with its SLAs, Martin said.

This is not the first outage Microsoft has had to explain and probably won't be the last. And we all know the number of well-publicized outages Amazon Web Services has encountered in recent years.

If you're a Windows Azure customer, did last week's slipup erode your confidence in storing your data in Microsoft's cloud? Drop me a line at jschwartz@1105media.com.

Note: This post was updated to clarify hat the Windows Azure outage affected Stackify. 

Posted by Jeffrey Schwartz on 02/25/2013 at 6:34 AM3 comments

HP Shoots for the Moon with Low-Power Servers

Hewlett-Packard shares shot up 13 percent this afternoon after reporting better than expected -- but still poor – earnings yesterday evening. Investors seemed to ignore the company's declining PC business perhaps paying attention to the company's plans to deliver its next-generation datacenter offering called Project Moonshot next quarter.

Project Moonshot is based on a revamped server architecture announced last year that replaces traditional Intel Xeon and AMD Opteron processors with low-power chips from ARM and Intel, the latter using Atom CPUs, both of which are found in tablets and smartphones. These servers are targeted at enterprises running large datacenters, cloud service providers and others running large Web sites.

CEO Meg Whitman said while servers based on Project Moonshot will start to ship next quarter, HP won't be in full production until 2014. Whitman believes Project Moonshot will have a major impact on its enterprise and datacenter business.

"We expect this to truly revolutionize the economics of the datacenter with an entirely new category of server that consumes up to 89 percent less energy, 94 percent less space and 63 percent less costs [than] traditional x86 server environments," she said on yesterday's call. "This is exactly the technological inflection that can fuel the exponential growth of hyperscale computing."

Whitman said HP has received its first order from a company operating in Japan, which is still reeling from the earthquake and resulting Tsunami two years ago that knocked out much if its power grid. As a result, space, energy and cost of compute are at a premium she indicated.

In a CNBC interview this morning, Whitman talked up HP's enterprise business noting it makes up 43 percent of the company's profits. "I don't think many people understand that," she said.

While she may see the enterprise as HP's salvation, HP's deteriorating PC sales -- down 8 percent with margins of just 2.7 percent -- continue to plague the company. Consumer sales declined 13 percent, commercial business was down 4 percent while desktops and notebooks dropped 10 and 14 percent respectively, HP reported.

Though all PC vendors are in similar boats, HP's share of "smart connected devices," which consist of PCs, tablets and smartphones, dropped 8.5 percent in 2012 year-over-year, while Samsung grew 119 percent, Apple 44.3 percent and Lenovo 61.4 percent, IT market researcher IDC reported yesterday. Only Dell saw a greater decline of 12.9 percent. For the most recent quarter, HP was the only of the big-five to see its share decline.

Whitman said HP will continue to emphasize "personal systems," which include PCs, tablets and yet-unannounced smartphones. She also underscored HP's plan to spread its personal systems portfolio beyond Windows, pointing to this month's launch of Chromebooks, based on Google's Chrome OS.

"We like the overall market but there is a transition from more traditional form factors to new form factors," Whitman said. "There's also a transition from one operating system to multi operating systems and we are pursuing a multi operating system strategy. At HP, we've got to reallocate resources from our PC business to our mobility business, from one operating system to multi operating systems, and we have to allocate resources to services, because profit pools are shifting here."

Responding to a question about longstanding rumors and continued calls to breakup HP into separate company, Whitman didn't entirely shut the door on such a move but indicated that's not what she favors. "No one knows more about computing than HP," she said. "It's a core part of the DNA of this company. We like being able to go from the device to the datacenter but it's a tough transition to manage."

Continuing her refrain that rebuilding HP is a multiyear strategy, Whitman believes the company is on the right track. Do you? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 02/22/2013 at 12:41 PM1 comments

SharePoint in the Cloud Is 'Up in the Air'

Earlier this month, I pointed to a survey by Metalogix that found 55 percent of enterprises will run SharePoint on premise only, while 45 percent will deploy SharePoint in hybrid clouds that combine on-prem installations with Office 365 or third-party cloud providers. Only 10 percent said they are planning to run SharePoint purely in the cloud.

While that's not far off from the prevailing wisdom, it's important to keep in mind that it's hard to draw firm conclusions on a sample of 100 people, especially a crowd attending Microsoft's SharePoint Conference. Their mere presence suggests they may be ahead of the curve compared with typical SharePoint users.

One of Metalogix rivals, AvePoint, today announced the release of DocAve 6 Service Pack 2, the latest iteration of its SharePoint management and deployment platform. The new release boasts new governance features that will help organizations determine what data can safely be moved to the cloud versus information that must stay in house, depending on predefined compliance requirements. The new release also is designed to help customers manage SharePoint 2013 on prem and in the cloud along with Office 365.

I asked Shyam Oza, AvePoint's senior product manager for administration, migration and cloud strategy, if he agreed with Metalogix core findings. "I really do think it's up in the air," Oza said. "While that number might be accurate or snapshot of right now [actually in late November], it's a number that's shifting very quickly. We've had phone calls with customers who in the middle of last year said they would go to the cloud and are now saying it's too sensitive."

Do you plan to move any of your SharePoint farms to the cloud or deploy new ones via Office 365, Windows Azure or other third-party cloud providers? I'd love to speak with you to hear how you're making the move -- or why you're not. Please share your plans, issues and concerns with me at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 02/20/2013 at 12:03 PM0 comments

NewsGator Looks Beyond SharePoint Amid Yammer Tie

Microsoft today said its $1.2 billion acquisition of Yammer has resulted in record growth for the cloud-based provider of enterprise social networking. At the same time, Yammer's key rival NewsGator plans to extend the reach of its enterprise social networking platform beyond SharePoint.

In a vague news release announcing the growth of Yammer, Microsoft disclosed that sales quadrupled last quarter and the total user base grew to seven million. During the quarter, 290 new customers added Yammer including GlaxoSmithKline, SABMiller and TGI Fridays, among others.

Since the deal closed last year and Yammer was folded into the Office Division, Microsoft has said little about how it will integrate Yammer into SharePoint. What Microsoft has revealed is that it will integrate Yammer with SkyDrive Pro, the cloud-based storage Microsoft is offering with SharePoint 2013 and Office 365. Yammer will also give SharePoint users the ability to preview and edit SharePoint files from their Yammer news feeds via Office Web Apps.

These two features, slated for release this summer, will make it easier for users to find and share information in the Yammer interface. While Microsoft hasn't said how and when it will more tightly integrate Yammer into SharePoint, NewsGator does not see it as a threat. NewsGator has a large installed base of large enterprise customers (many with tens of thousands of employees) and the company will start to become less focused on SharePoint as its primary platform, as reported by Computerworld last week.

Brian Kellner, NewsGator's VP of products, told me that while the report was accurate, he went a little deeper explaining that doesn't mean its social networking tools won't continue to support SharePoint. "We're not ending our SharePoint integration," Kellner said. "We have a great business on SharePoint but we have other things we can do to extend that value."

NewsGator is adding connections to Salesforce.com's Chatter, the company's software-as-a-service-based enterprise social networking offering and with SAP applications. Kellner said NewsGator is also focusing on helping bridge between SharePoint running on premise and Office 365, as well as securing mobile access running in a Microsoft Windows Azure-based service rather than requiring VPN access.

"These are all investments that are stretching out away from SharePoint but still it's running on top of SharePoint," Kellner said. Looking ahead, NewsGator is looking to offer the core logic of its Social Sites without requiring SharePoint. "Today Social Sites must have SharePoint but at some point we'll have something that doesn't have to have SharePoint." When? Perhaps later this year he said.

But he emphasized that doesn't mean the company is walking away from SharePoint. "It's not an either-or proposition," he said, noting last week the company issued a new release that will let organizations use Social Sites on both SharePoint 2010 and 2013 using the same code base. This is important, he noted, because organizations are likely to run SharePoint farms with both versions for many years to come.

If adding social networking to SharePoint is on your roadmap, are you going to rely on what Microsoft brings forward with Yammer, or are you going to use third parties like NewsGator to extend your social networking footprint? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 02/20/2013 at 12:37 PM0 comments

Microsoft Still Ranked Most 'Indispensable' to CIOs

While Microsoft may have dropped a few notches on the annual Harris Interactive Reputation Quotient this week, dropping from 2 to 15, Redmond does top a more important status list: it's the most indispensable vendor to big-spending CIOs.

At least that remains the finding in Piper Jaffray's quarterly CIO Survey released to its clients this week, which found Microsoft was by far their most critical "mega-vendor" for the future. In its survey of 135 CIOs, 61 (or 45 percent) picked Microsoft, which had more than double the mentions of the No. 2 vendor, Oracle. The ranking, in order, below those two include: SAP, Cisco, IBM, EMC, Hewlett-Packard and Apple. Interestingly only 10 percent or less picked the latter four, with only 4 percent choosing Apple.

While that's not the first time Microsoft has topped that list, the company widened its lead this year with 45 percent giving Redmond the thumbs-up, compared with 33 percent in 2012.

"CIOs state that 'there are really no alternatives to Microsoft,'" said the report. "[Others said] 'MS services are getting better and will allow us to move more to the cloud,' and 'we are highly invested in their technologies and dependent on them extending their platforms.'"

Piper Jaffray senior research analyst Mark Murphy goes on to note: "We believe Microsoft's dominance in the enterprise is underappreciated, and some of the threats against Microsoft, such as alternatives to the Windows desktop OS in the enterprise or productivity software, may be over-hyped in the near term. That said, keep in mind that our CIO survey does not address the large consumer business for Microsoft, which faces much more intense competitive pressures than its enterprise business."

Looking at what that means in terms of actual spending, Microsoft is still on top in terms of market penetration with a 98.5 percent (all but two of 135 respondents) reporting they run the company's software. Coming in second was VMware with 91.1 percent followed by Symantec (78.5 percent), Oracle (76.3 percent), Citrix (71.9 percent) and IBM Software (64.4 percent).

For Microsoft, 56 percent of the survey group plans to maintain consistent spending with Microsoft, while 29 percent will increase the amount sent to Redmond by up to 10 percent. A smaller sample (7 percent) will increase spending with Microsoft by more than 10 percent while only 5 percent said their Microsoft spending will decline by up to 10 percent.

Overall that translates to spending growth for Microsoft of 2.1 percent, bested only by fast-growing cloud-based human capital management provider Workday (4.7 percent), VMware (3.7 percent) and ServiceNow, a cloud-based provider of IT management tools (2.9 percent).

While both Linux and Windows Server will show increased growth, Linux is on a higher trajectory, according to the survey. Last year 36.7 percent expected Linux to grow in their organization while this year 33.3 said it will grow. But while 34.9 percent expected Windows Server to grow, only 14.8 percent said it will this year. Not surprisingly, Unix and mainframe environments will decline more but also a substantial footprint should remain unchanged. When I talk to those who prefer Linux, they make it very clear that Windows is not an option in their eyes.

Microsoft's more obvious threat is on the desktop, including tablets and phones, where investors continue to raise questions on the company's moves. Its calculated risk to offer its own Surface-branded hybrid PC-tablet has had the consequence of motivating OEMs including Samsung, Acer and Hewlett-Packard to offer Chromebooks -- PC-like devices running Google's Chrome OS.

Another shoe dropped this week when a report surfaced that HP is developing Android-based tablets and phones, not a huge surprise especially in wake of Microsoft's growing ties to Dell. Maybe these OEMs would have done this regardless of Microsoft's Surface play but nonetheless Windows 8 -- good as it is with strong ties to Windows Server -- is going to have to earn its way into consumer hands and enterprises alike.

Perhaps no one put the changes that have evolved out there more poignantly than Tod Nielsen, a Microsoft executive that I recall meeting with on a number of occasions in the 1990s. Nielsen, who famously testified in 1998 with then-Microsoft executive Paul Maritz as defendants in Microsoft's famous anti-trust trial, recalled those days in a speech last week at the Parallels Summit in Las Vegas.

"When I was at Microsoft, and I left in 2000, if you told me when I would be in business meetings where everybody would have a computer around the room and the majority of the computing devices would be non-Windows PCs, Macs or new types of tablets, I would have thought you were on drugs. There was no way it's even possible," Nielsen said.

Nielsen, who went on to head BEA Systems, spent time as COO at VMware and is now an exec with its newly launched Pivotal offshoot, added:  "Today in our industry, it's very common to see PCs just being part of the fabric but they're not the dominant part of the fabric that they once were. If you think how many native Win32 applications you use in your daily life, the only one I use is PowerPoint. Everything else is a Web app and is not native to Windows. It's interesting how things have changed."

While Nielsen's loyalties have invariably changed over the years, Microsoft still remains the most relevant company by two-thirds of software developers surveyed by Evans Data, according to a study released this week. But No. 2 Google was seen as likely to dominate in three years, especially with younger developers under the age of 25.

"The developer landscape is shifting as developer demographics change," said Evans Data CEO Janel Garvin, in a statement. "The age of software developers in North America has been trending younger since 2009, and as a new generation of developers comes on stage they bring new perceptions of the industry and its leaders."

Depending on your point of view, the CIOs surveyed by Piper Jaffray are out of touch, a skewed sample or maybe Microsoft's threats are indeed over-stated. But few would argue Microsoft needs to get younger developers and users in its camp. What's your take? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 02/15/2013 at 11:31 AM4 comments

Obama Issues Executive Order To Tackle Cyber Threat

President Barack Obama yesterday issued an executive order mandating government agencies share information about cyber threats between state and local governments, and the private sector.

It's the latest effort by the President, who revealed the order in his State of the Union address, to combat the growing number of attacks that have hit the federal government, businesses and operators of critical infrastructure.

Just last week, the Federal Reserve was the victim of an "Anonymous" hack in which user data from the Fed's Emergency Communications System was breached, though reportedly no data was compromised. Reports of major cyber-attacks across the public and private sectors have become routine and the President made no bones that risks of cyber terrorism loom large.

 "America must also face the rapidly growing threat from cyber-attacks," Obama said in last night's address. "Now, we know hackers steal people's identities and infiltrate private e-mails. We know foreign countries and companies swipe our corporate secrets. Now our enemies are also seeking the ability to sabotage our power grid, our financial institutions, our air traffic control systems. We cannot look back years from now and wonder why we did nothing in the face of real threats to our security and our economy."

The Presidential Policy Directive (PPD) on Critical Infrastructure Security and Resilience mandates the heads of all federal agencies and departments to identify and remediate all threats to critical infrastructure and ensuring a policy for continuity. The directive emphasizes information sharing, without disrupting existing privacy policies: 

Greater information sharing within the government and with the private sector can and must be done while respecting privacy and civil liberties. Federal departments and agencies shall ensure that all existing privacy principles, policies, and procedures are implemented consistent with applicable law and policy and shall include senior agency officials for privacy in their efforts to govern and oversee information sharing properly.

The directive may get a warmer reception from privacy proponents because, while it orders the government to inform with the private sector and operators of Internet infrastructure, it only goes one way. The private sector and operators are not required to share information with the government, Forbes points out.

Nevertheless, the i2Coalition, a lobby group consisting of hosting providers including Rackspace, Softlayer and Hedgehog Hosting, called on the White House to support the controversial Cyber Intelligence Sharing and Protection Act (CISPA) information-sharing bill, which two members of the House of Representatives are set to re-introduce today. Originally introduced last year, it died in the Senate and the White House hasn't supported it to date.

"Companies like those that make up the i2Coalition -- the providers of the nuts and bolts of the Internet -- must have a seat at the table in any discussion about the future of cybersecurity," noted Christian Dawson, the i2Coalition's co-founder and board chair, in a blog post, which included an online petition for Homeland Security Secretary Janet Napolitano. "We must work to achieve voluntary best practices that promote the growth of an open Internet. To be successful, the efforts must be truly voluntary and not a result of heavy-handed 'incentives' that effectively compel compliance."

CISPA is more controversial than the President's order because the former would let companies such as Facebook or Google share information regarding cyber attacks with the Feds, notes PCMag, while the President's order only requires the government to share information with the private sector.

However the battle with CISPA plays out, it looks like the administration has taken a step forward in stepping up defenses against cyber threats.

Posted by Jeffrey Schwartz on 02/13/2013 at 11:49 AM1 comments

Influential Shareholders Oppose Dell Buyout

It's looking more like the leveraged buyout of Dell for $24.4 billion is not a fait accompli -- not that it was ever a sure thing.

When announcing last week's unprecedented agreement for Michael Dell to buy out the company he founded with an investor group led by Silver Lake Partners, key financial institutions and a $2 billion loan from Microsoft, they left the window open for 45 days to consider any better offers if they were to come along. The prevailing belief last week suggested that wasn't likely.

That may still be the case but with key investors opposing the deal, they may have to sweeten their offer or the LBO could be on ice. Dell's largest outside shareholder Southwest Asset Management, which owns nearly 8.5 percent of the computer giant, last Friday kicked off the opposition to the deal, saying it "grossly undervalues the company."

In a letter to Dell's Board also filed with the Security and Exchange Commission in an SC 13D filing, Southwest Asset Management not only stated it would vote against the deal but said it wouldn't rule out a proxy fight or litigation. The chorus has grown louder this week with Yackrman Asset Management, Pzena Asset Management and Harris Associates speaking out against the deal.

The latest shoe dropped yesterday when mutual fund giant T. Rowe Price, which holds 4.4 percent of Dell's shares, said it opposed the deal. "We believe the proposed buyout does not reflect the value of Dell and we do not intend to support the offer as put forward," T. Rowe Price chairman and chief investment officer Brian Rogers said in an e-mailed statement.

The current opposition amounts to 15 percent of all shares, though in order to nix the deal, 42 percent would need to vote against it, The Wall Street Journal reported.

Dell has predictably kept mum on the matter, though reports say Silver Lake and Michael Dell have no intentions to raise their offer. We'll see if more shareholders step up.

Posted by Jeffrey Schwartz on 02/13/2013 at 11:51 AM2 comments

Surface Pro Sellout!

I took my lumps from some of you over the weekend in response to Friday's prediction that the first edition of the Surface Pro, released over the weekend, would be a bust.

Based on reviews I read from respected critics such as David Pogue, the personal technology columnist for The New York Times, and All About Microsoft blogger and Redmond columnist Mary Jo Foley (granted she's not a technical review per se), among others, the consensus was it was a nice machine that lacked one critical component: the ability to run all day. Pogue only got three and a half hours out of his review unit. Microsoft rates the device as having at least 5 hours of battery life..

As far as I was concerned, that was a deal breaker. If I'm going to shell out more than a thousand dollars for a portable machine, I want it to work all day. In response, Dan in Iowa said,"I believe what you're saying is you've never owned a laptop, and you've never seen the Surface Pro. Hmmm... I guess I'll trust your judgement [sic] then?"

Actually I have owned an Asus netbook that has averaged 14 hours a day (and it still does run all day) for three years. I chose it over the iPad, which had just debuted at the time, to replace a Windows XP-based Fujitsu Lifebook. The Lifebook had served me well since 2004, providing 8 hours of battery life. Unfortunately it wasn't upgradeable to Windows 7. The three-pound netbook cost less than an iPad and was sufficient for work in the field. Six years earlier, I had invested nearly $2,000 for the three-pound Fujitsu Lifebook for its long battery life.

So when it comes to power, I'm biased. Maybe spoiled but that's what I need if I'm using it out of the office all day. That said, I'm not a "Microsoft hater," as two respondents concluded. It is my responsibility to advocate for IT pros to ensure they're getting the most from Microsoft and its third-party ecosystem and believe people should use technology that best suits their needs at a price within their budgets.

As promised, I went to a nearby Microsoft retail store yesterday to see the Surface Pro for myself (I would have gone Saturday but a blizzard pre-empted my plans). I spent an hour with it and liked what I saw. It was notably thicker than the Surface RT. That's because it has an Intel i5 processor and needs a fan to keep it cool. That also explains the limitation in battery life.

When I predicted the inaugural Surface Pro would be a flop, it was from the point of view that most business professionals will wait for the next version, which presumably will come out later this year with Intel's next generation Haswell processor. Based on some reports, that suggests the next Surface Pro will get at least double the battery life. Knowing that, why wouldn't one wait? I will note that if Haswell doesn't deliver, as some reports are now suggesting, that would be a bad news.

There are rumors that Microsoft may be planning to offer a docking station or extra battery to address the power issue. That would be a good thing but at what price?

Personally, I'm going to wait for the next release of the Surface Pro and compare it with what comes out from Microsoft's OEM partners. Or perhaps I'll sacrifice power and go with an Intel Atom-based device that runs Windows 8 Pro all day long.

Time will tell if I overstated my case that the first edition of the Surface Pro will be a flop. Reports over the weekend that the 128 GB units were sold out on the Microsoft Web site and in stores suggest otherwise. No one seems to want the 64 GB version since it's only $100 cheaper and its capacity is paltry.

At the Microsoft retail store, one sales rep told me that they're flying off the shelves. "My friend works at the Best Buy in Commack [NY] and there were lines outside the store and they sold out," the rep told me. I later went to a Best Buy next door in Huntington, NY and found a display unit past the more prominently showcased iPads. It was one with a 64 GB drive. No one was looking at them but the Best Buy sales rep said his store only received three units, two of which had 128 GB drives and sold out right away.

Back at the Microsoft retail store, I asked a customer there with his young daughter looking at the Surface Pro what he thought of it. "Looks pretty good," he said. "You can do a lot more with it than the iPad, which doesn't have Word or Excel." While that latter point may be a temporary argument (that remains to be seen), I still agree.

Meanwhile, Microsoft must now content with some angry customers on its hands. According to comments underneath Microsoft Corporate VP and Surface Pro team engineering lead Panos Panay's blog post Friday announcing its release, quite a few customers are livid about the unavailability of 128 GB units after the company already missed its January target for releasing the devices.

It's not clear whether Microsoft purposely limited supply in order to create demand or if the company simply missed its delivery targets. Either way, the Surface Pro got more buzz than I had expected.

Posted by Jeffrey Schwartz on 02/11/2013 at 12:41 PM9 comments

Surface Pro: Ironically Powerful While Lacking Power

Microsoft's Surface Pro hybrid tablet-PC goes on sale tomorrow, and based on the early reviews, the debut model is impressive yet shaping up to be a flop. It appears Microsoft is strategically rushing this device out to showcase how powerful a tablet can be, even if it lacks enough battery power to get you through half a business day.

In other words, don't expect the Surface Pro to share the fate of the Kin, Microsoft's short-lived consumer shartphone that the company pulled from the market in 2010 less than two months after releasing it. Rather, consider the Surface Pro a prototype of what's to come later this year.

I haven't seen the new Surface Pro but I plan to check it out this weekend. I'm not sure I'd personally plunk down more than a grand for any PC but if I did, I'd expect in the range of 10 hours battery life as a non-starter. Sight unseen, I wouldn't even consider any portable machine for as little as $500 that couldn't get me through the day -- after all, what's the point?

In his review yesterday, New York Times columnist David Pogue noted the test unit Microsoft sent him only ran 3.5 hours, others have said it gets a paltry four-plus hours. Surely Microsoft can't believe these systems are going to fly off the shelf at the price of $1,129 (for a 128GB unit with a keyboard) with that kind of battery life. At least Microsoft better hope they don't sell like crazy because if they do, I predict they're going to have a lot of disappointed customers.

More likely Microsoft is releasing this lacking-in-power Surface Pro to show IT pros how ironically powerful a tablet PC running Windows 8 can be compared with competing devices which now rule the roost, namely iPads, Kindle Fires and Android-based tablets.

With the Surface Pro's Intel Core i5 Ivy Bridge processors, Microsoft can now stem the bleeding and showcase to CIOs how a Windows 8 tablet can do things that a low-power ARM-based devices can't do, like running Photoshop and running other processor-intensive apps.

In a Reddit AMA (ask me anything) chat Wednesday, Panos Panay, the Microsoft corporate VP leading the Surface Pro engineering team explained why the company decided to sacrifice power for more power, so to speak.

The product was designed to take full advantage of Windows 8 coupled with the Ivy Bridge core processor from Intel. We created a product that did not compromise speed, performance in any way. With that, we wanted to be the best notebook/laptop product in its class, but still deliver you the tablet form factor. This product is optimized in every way to take advantage of the full third generation core i5 it runs, yet give the best battery life. If you compare it to say a MacBook Air, you will quickly see that pound for pound in battery size vs battery life, you will find optimizations that puts Surface best in its class. That said we picked a smaller battery to be sure we were able to give you the same performance and to keep it thin. This kept the weight under 2lbs, and still kept it thin enough to take advantage of our great Windows work for inking and give you a great inking experience (like pressure sensitive inking, ability to do kanji, great sketching). While these tradeoffs are challenges as much as they are opportunities, we think given the performance and experience you will be getting, it is an exciting product.

I'm still not buying it and others, like All About Microsoft blogger and Redmond magazine columnist Mary Jo Foley, aren't either. Come June when Intel is expected to release its 7-watt Haswell processor, touted to offer the most significant boost in battery life yet, that could be a game changer. If Haswell lets Ultrabook manufactures, including Microsoft, to deliver these new truly high-power systems -- that could raise the stakes for the Surface Pro and Windows 8 Pro.

That's why the initial Surface Pro may be a dud, but it's certainly not headed down the path of the Kin.

Posted by Jeffrey Schwartz on 02/08/2013 at 8:30 AM13 comments

Microsoft's $2 Billion Dell Loan Could Yield Dividends (but No Guarantees)

If shareholders approve Silver Lake's $24.4 billion leveraged buyout bid for Dell, announced yesterday, Microsoft could reap a variety of dividends for its good will in the form of a $2 billion loan. But as far as I can tell, it's a no-strings-attached investment to offer support for a strategic partner with no assurances that Microsoft will get the return it may desire.

In a brief statement acknowledging the loan, Microsoft cryptically said: "We're in an industry that is constantly evolving. As always, we will continue to look for opportunities to support partners who are committed to innovating and driving business for their devices and services built on the Microsoft platform."

Microsoft's loan is effectively high-yield debt, according to The Wall Street Journal, which reported last night that it doesn't give Redmond any "direct role in the management or oversight of Dell." Nor does it give Microsoft "a board seat, equity ownership or formal strategic involvement." 

Interestingly, the Journal also noted neither Silver Lake, nor Dell, needed Microsoft's $2 billion loan to pull off the LBO but nevertheless accepted it to ensure good will between the two companies in wake of Microsoft's release of its Surface hybrid tablet PCs.  Back in October on the eve of the Windows 8 launch, Michael Dell and Microsoft CEO Steve Ballmer sat down with The New York Times to talk about Dell's comfort with the Surface strategy. It was a noteworthy show of faith when other OEMs reportedly were not happy with Microsoft's foray into the hardware business.

As a Dell creditor, will Microsoft's move further unnerve its other OEM partners including Hewlett-Packard, Lenovo, Acer, Asus, Samsung, Toshiba, Sony and others even more? A number of those players already are offering Android tablets, and a growing number of them are rolling out Chromebooks including HP as the latest to release one, as I noted Monday.

Having propped up underdogs including Barnes & Nobel, Yahoo and, of course, Nokia, it seems there's nothing to preclude Microsoft from aiding any of its other major PC suppliers if they were in need. The only player I can see falling into that bucket at the moment might be HP if it were to once again revisit spinning off its PC business or breaking itself up entirely. Despite a brief rumor yesterday suggesting HP was considering breaking itself up (the rumor that keeps resurfacing), there's also evidence HP also continues to see merits in keeping itself intact.

The lack of shackles notwithstanding, Dell does appear committed to Windows PCs and Windows Server-based datacenter and cloud offerings but that didn't appear to be in question even if Microsoft hadn't ponied up the $2 billion.

While the jury is still out on its Barnes & Noble and Nokia investments, Microsoft has benefitted from pumping money into Apple in the late 1990s when it bought $150 million in Apple stock to prop up the then-struggling company. Of course that wasn't altruistic, given legal disputes between the two, a looming antitrust suit by the U.S. government and another avenue to sell Office. When Microsoft later sold its Apple stock, it profited handsomely.

If indeed Microsoft's loan is the equivalent of high-yield debt, Redmond could see a nice return. While this move is not without risk, let's not forget, $2 billion is not a huge chunk of change for Microsoft. Do you think Microsoft's $2 billion loan to Dell was a good move for both players? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 02/06/2013 at 12:19 PM1 comments

Is Google's Chromebook a Windows 8 Killer?

While Hewlett Packard CEO Meg Whitman said she is in support of Windows 8, she never promised her company's exclusive support for the Windows OS. HP is apparently hedging its bets with today's launch of its first Chromebook laptop.

The HP Pavilion 14-c010us Chromebook has a 14-inch display, is equipped with 2 GB of RAM, 16 GB SSD and is powered by an Intel Celeron 847 (1.1 GHz) processor. It weighs 4.25 pounds, and HP claims battery life of 4 hours and 15 minutes. It's priced at $329.99.

HP joins rivals Acer and Samsung in joining the Chromebook party. To date, Chromebooks have not lit the world on fire. Unlike Windows PCs and Macs, Chromebooks are bundled with Google's suite of productivity tools, and the computers presume you're always connected using its cloud infrastructure as its platform.

It's a different approach and, in many ways, mimics the network computers IBM, Oracle and Sun tried pushing in the late 1990s with little uptake. Until recently, I didn't know anyone who owned a Chromebook. That changed a few weeks ago when Andrew Brust, CEO of Blue Badge Insights, tweeted he just bought a Samsung Chromebook.

Upon learning HP jumped into the Chromebook pool this morning, I checked in with Brust to see how he likes his Chromebook (I had made a mental note to do so anyway). He pointed out he needs more hands-on time with his Chromebook to fairly compare it to Windows 8, which he uses all day. Brust also has an iPad, Kindle Fire, Nexus 7 and MacBook Air.

"People I respect have been saying the second gen Chromebooks were surprisingly good, so I decided to buy one, especially given the low price of $249," Brust noted. "The thing is surprisingly useable.  I still prefer to use Windows, or even MacOS, with a full version of Office. But the fact remains that the presence of a touch pad and keyboard makes the Chromebook a true content creation machine and at a price point that achieves parity with the cheapest of content consumption-oriented tablets like the Kindle Fire and Nexus 7.  And the availability of Chrome Remote desktop also makes Chromebooks useable as thin clients that connect back to beefier Windows machines."

He underscored the Achilles heel of the Chromebook is its requirement of a constant Internet connection. "But with the addition of the next generation of Chrome packaged apps, which will work offline by default, and run not only on Chrome OS, but also Windows, MacOS and Linux, Google really has something here."

As Microsoft looks to gain momentum for Windows 8, its primary target is offering a superior alternative to competing tablets such as iPads and Google Android-based devices as well as ever-so-slick MacBooks. Should Microsoft also be worried about the rise of Chromebooks?

"For Microsoft, this may just be a thorn in the side, but it's one of many," Brust said. "And with now four important Windows OEMs hopping on the Chrome OS bandwagon, it's got to be impossible for Redmond to ignore.  Meanwhile, I question how much revenue the OEMs can get on such inexpensive devices."

How much OEMs will emphasize Chromebooks remains to be seem but one can't blame them for hedging their bets after Microsoft launched the Surface PC/tablet thereby reneging on its 30-plus year legacy of not competing with them. Some, including Acer CEO JT Wang, have made their displeasure known, while HP is showing it by throwing its new Chromebook in the mix.

Have you used a Chromebook or are you considering one? How would you compare it to various versions of Windows and other computing devices you have used? Will Chromebooks emerge as a true player or will they just appeal to a limited niche of users, the fate I have predicted since their launch. Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 02/04/2013 at 11:53 AM8 comments

Oracle To Acquire Microsoft Lync Connectivity Tool Company

It appears Oracle wants to add networking to its broadening portfolio of datacenter and applications offerings. Oracle today said it will acquire Acme Packet for $2.1 billion, the company's largest acquisition since it bought Sun Microsystems in 2010. It's also noteworthy because the move puts Oracle in direct competition with Cisco, who was rumored for some time to have had its sights on Acme. Another interesting twist: Acme Packet counts Microsoft as one of its key ecosystem partners -- its Session Border Controllers (SBCs) are used to enhance connectivity of Redmond's Lync Sever unified communications (UC) platform.

Enterprises and service providers alike use Acme's appliances to boost the reliability, interoperability and security of IP communications links. Because IP  is inherently not reliable or secure, Acme targets session delivery networks to enhance session-based voice, video, data and UC. Acme's session delivery networks offer session boarder control and management to ensure prioritized, secure and trusted delivery of such services and apps.

The company provides enterprise SBCs, which Microsoft recommends to boost the reliability and interoperability of Lync when connected to telecom providers SIP trunks. According to an Acme description of its Lync integration support:

"The session management function routes sessions between your Lync and legacy IP telephony environments, centralizes dial plan management for the entire infrastructure and provides interoperability with non-Lync communications systems. The Net-Net ESD is fully qualified by Microsoft under its Unified Communications Open Interoperability Program and offered in software and appliance configurations that provide efficient, highly scalable solutions for integrating Lync into your network."

A February 2011 TechNet article describes the various network topologies it recommends.

Acme is seen as the leader in providing SBCs, though its revenues have declined amid growing competition. It claims over 1,850 customers in 109 counties have deployed 20,000 systems. The company counts 89 of the top service providers and 48 of the Fortune 100 as customers.

It will be interesting to see whether Oracle will continue and advance support for Lync, or whether Microsoft will turn its sites to Alcatel -Lucent, Juniper Networks or Sonus. Do you use Acme to provide SBC services to your Lync deployment? If so, how do you feel about Oracle acquiring the company? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 02/04/2013 at 11:56 AM0 comments

Reckoning Time for Office and SharePoint

This week's launch of Office 2013 has put the spotlight on Microsoft's calculated move to condition individuals to pay a yearly fee to use the suite in tandem with managing your e-mail and using SkyDrive to store content. The notion of installing Office on up to five devices (including tablets) is compelling, as contributing editor Brien Posey pointed out this week. Microsoft is betting the farm individuals and enterprises alike will pay an annual subscription like they do if they want to use all the features in an antivirus software.

Perhaps that would be a slam dunk for customers if Office was available for the iPad. But it appears Microsoft doesn't want to help boost the growth of iPads at the risk of cannibalizing Windows 8 and its Surface devices, which so far don't seem to have made a dent in the tablet market. I believe Microsoft will ultimately offer Office for the iPad --  the question is when?

The other shoe is expected to drop this month or next, when Microsoft releases the enterprise versions of Office along with SharePoint 2013. As reported in detail back in December, SharePoint 2013 will offer extensive new enterprise social networking capabilities, search, business intelligence and support for cloud deployments. It will also offer parity with the SharePoint Online edition in Office 365.

Some argue these features will compel a larger-than-normal percentage of shops to upgrade than those that typically migrate to newly released versions of SharePoint. Microsoft has released new versions of SharePoint every two to three years over the past decade. SharePoint migration partner Metalogix this week did its own survey of SharePoint customers, which found 64 percent plan to upgrade to the 2013 release.

How accurate this forecast is remains to be seen. Jignesh Shah. Metalogix chief strategy and marketing officer told me his team sat down and conducted 20-minute interviews with 100 IT decision makers attending last November's Microsoft SharePoint conference in Las Vegas.

The fact that those customers were at a SharePoint event may very well have skewed the results, but Shah countered this is a higher percentage than he has noticed in the past under similar environments. "In 2010 it was less than 50 percent [that migrated to the new SharePoint version] over a period of two years. More than 60 percent plan to upgrade [ to SharePoint 2013] in the first year," Shah said, though the earlier data point was not based on a formal survey like it conducted this past November.

What's the reason for the uptick this time around? Companies want to take advantage of the social features and support for mobile devices, according to the survey, which is consistent with what I've heard for some time, regardless of whether Metalogix findings reflect the sentiments of the overall SharePoint community.

SharePoint shops also have major content management headaches. Three years ago, Shah said its average customer had between 50 to 100 GB of data in their SharePoint farms. Now 50 percent have more than 1 TB of data in their SharePoint stores and 15 percent have 10TB, the survey found. Furthermore, the average shop has seen their SharePoint content grow 75 percent over the past year.

The findings also show 55 percent will keep SharePoint on premise, while 10 percent will go "all-in" to the cloud. The remaining 35 percent will deploy a hybrid approach running in house and using cloud services to augment their SharePoint infrastructures.

If you're running older versions of SharePoint, notably the 2003 and 2007 releases (according to Metalogix, 37 percent still have those in their SharePoint farms), you can't migrate to SharePoint 2013 directly -- you must first deploy SharePoint 2010 and then upgrade that to SharePoint 2013. If as many shops plan to upgrade to SharePoint 2013 as quickly as the survey results suggest, that would be good news for Metalogix and others that offer SharePoint migration tools including AvePoint, Idera, Quest (now part of Dell's software group), among others.

For Metalogix, it sees this as an opportunity for it and its integration partners to let organization skip the two-hop upgrade step, while ensuring organizations can undertake a migration without losing use of their existing SharePoint systems during the transition. Metalogix also promises its tools will let organizations migrate content with fidelity of existing metadata, permissions and formatting time stamps and revisions.

With the pending release of SharePoint 2013, do you plan to migrate to SharePoint 2013 in the near term and where does the cloud fit into those plans? Likewise with Office 2013 -- do you see moving to the subscription model of Microsoft's productivity suite? Feel free to comment below or drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 02/01/2013 at 8:06 AM2 comments

Can BlackBerry Make a Comeback at Microsoft's Expense?

Everything is on the line today for Research in Motion as the company launched its long-awaited BlackBerry 10 at a high profile launch event in New York. The company, which also renamed itself BlackBerry today, launched its first two next-generation smartphones -- the Q10 with its signature physical keyboard and the touch-only Z10.

"It's a new day in the history of BlackBerry," said the company's CEO Thorsten Heins, speaking at this morning's launch. Despite a much-improved app-centric model that looks to build on BlackBerry's reputation for offering real-time and secure communications for enterprises, no one expects the company to lead the smartphone market it pioneered. The best it can hope for is to duke it out with Microsoft for third place.

That's ironic because five years ago -- just months after first iPhone shipped, Microsoft and RIM were jockeying for market leadership -- at least from an enterprise standpoint. Prospects for the iPhone were uncertain at that point and Google's Android was still gestating under the radar. "BlackBerry is the device to beat," the industry analyst Rob Enderle told me at the time.

Fast forward five years and USAToday asked if today's BlackBerry 10 launch is the company's Kodak moment, citing market research forecasts from Gartner that BlackBerry sales will decline 36 percent by 2016 giving it just 1.1 percent share of the market. By comparison, Gartner expects Android to have a commanding 55 percent share of the market, iOS 11 percent and Windows Phone 9.7, according to the report.

Ovum analyst Jan Douglas is also skeptical about BlackBerry's prospects. "At its peak, RIM shipped between 12 and 15 million devices per quarter, but there is no way it can hit this number on a sustainable basis once the BB10 launch filters through," Douglas said in a blog post. "Though the new platform should have significant appeal to existing users, we don't expect it to win significant numbers of converts from other platforms. There is little in the new platform that suggests it will have the compelling apps, content stores, or the broader ecosystem that consumers have come to expect in a competitive smartphone platform."

Not everyone believes it's game over for BlackBerry. RBC Markets technology analyst Mark Sue told CNBC its forecasting 500,000 BlackBerry 10s will ship in the first month, and the company could sell 10 million units in the first year.

"All their competitors need to be paranoid because if you look at a lot of devices, some of them are looking pretty old," Sue said. "A lot of the designs haven't changed over the last four or five years. Where we see a lot of growth is in the other category this year and I think RIM night have a small chance of opportunity if they execute."

Tech columnist David Pogue of The New York Times was skeptical of BlackBerry's prospects as well but wrote today BlackBerry delivered a new platform and product which didn't have any gaping holes. Because BlackBerry has a new real-time secure operating system, the BlackBerry 10 won't support old apps but the company developed software that can support 70,000 existing Android apps.

The BlackBerry 10 is also designed to appeal to enterprises by giving users one view of their business and personal data, thanks to a feature called BlackBerry Hub. The question raised by Times reporter Ian Austin is whether enterprises will want to upgrade their BlackBerry Enterprise Servers with this new software, which also supports other mobile phone platforms.

The trouble for BlackBerry is, so do many other mobile device management (MDM) offerings on the market. At the same time, BlackBerry 10 allows IT to better secure access to enterprise data from the phone and removing all data if access is revoked, should a device be lost or if the user were to leave the company.

Despite a much improved offering, like others Pogue was reluctant to say BlackBerry will see its fortunes revived. But he did argue the company may not be on the brink. "These days, excellence in a smartphone isn't enough. Microsoft's phone is terrific, too, and hardly anyone will touch it," Pogue noted.

But don't expect Microsoft to let BlackBerry get in its way. It has the cash and marketing might to continue its long battle with the BlackBerry.

With the launch of BlackBerry 10, is it on your short list or are you unmoved by the new offering? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 01/30/2013 at 11:39 AM2 comments

Symantec CEO Reveals Long-Awaited Turnaround Plan

Six months after ousting Enrique Salem as CEO of Symantec and replacing him with Chairman Steve Bennett, the company last week revealed plans for a reboot, which includes plans to consolidate its management, reduce overhead and re-organize into 10 business areas. Bennett, the former CEO of software maker Intuit and onetime GE executive, outlined how he plans to remake the company with a plan called Symantec 4.0.

The biggest news around Symantec 4.0 is the company doesn't plan to shed any key assets as many had thought he might do. When Bennett first stepped into the CEO seat, analysts were wondering whether it would spin off Veritas, which Symantec acquired in 2004 for $13.5 billion and was viewed as the root of the company's problems. While it became clear he wasn't going to shed the company's data protection business, there were rumors on the street Bennett might spin off or sell Altiris, which turned out to be untrue.

During a two-hour live analyst event that was Webcast, Bennett said Symantec 4.0 centers around adding more value to all of its product lines and re-aligning R&D to allow technologies and intellectual property developed for one group or product to be shared and utilized cross products when it makes sense. The company has historically developed technology in siloes.

Francis de Souza, Symantec's group president for enterprise products and Services shared an example of how Symantec is putting this new cross functional technology sharing into practice. The company has added File system technology developed by Symantec's Storage and Availability Management (SAMG) to its Data Loss Prevention and security offerings.

"What that technology allows us to do is to actually understand who's been accessing important files in your environment, again in SAMG technology in a security context," de Souza explained, adding Symantec is also looking to deploy it into its integrated backup and recovery software.

"We believe that allows us to set a new bar in the scalability of our integrated backup offering." he added. "The idea though is that instead of doing this as one-off integration between products, we'll focus on creating centers of excellence and use those technologies across our portfolio in a lot of cases to solve new unmet customer needs. And this isn't just an internal concept. We're going to take these centers of technology and look to leverage them through partners."

To that last point, he emphasized that Symantec has no plans to get into the network security business. "We have this tremendous Data Loss Prevention [DLP] technology that's actually content-aware," he said. "So more than knowing what application you're using, we can tell you what the content is. It may make sense to leverage that technology through a partner ecosystem to go to the next next-generation of network security."

Symantec 4.0 will also involve the centralizing of various functions. Symantec has made numerous acquisitions over the years but the companies were never properly integrated. Noting Symantec has copious point solutions, he believes the company has never integrated them across product lines and groups to add value. The company is also looking to improve what it admitted was poor rate of product renewals. To address that, Symantec is creating a team to address that company-wide.

While Symantec has struggled to successfully integrate Veritas, suggestions the company should divest it never made sense to me. Data protection and security should work hand-in-hand. Symantec is a popular company among Redmond magazine readers. In the publication's Third Party Readers Choice Awards, you'll see 26 products were voted came in first, second or third place, among various categories including security, IT asset management and backup and recovery. Seven products came in first place.

That to me says Symantec is one of your key software providers. How do you feel about Bennett's plan to make it a better company to do business with? Feel free to comment below or drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 01/28/2013 at 10:33 AM1 comments

Microsoft Financial Report: Is the Worst Over for Redmond?

When Microsoft reported earnings that slightly missed revenue forecasts but beat profit projections yesterday, investors reacted by trading down the company's stock 2 percent in after-hours trading. However, after sleeping on it, Wall Street seems to be seeing the glass half-full.

Microsoft stock was trading up about 1 percent midday today, following several analyst upgrades. While the jury on Windows 8 is still out and Microsoft certainly didn't hit it out of the park, the 60 million licenses sold -- albeit much from deferred revenues -- was enough to convince analysts that it's not a dud.

"We remain positive on the Windows 8 strategy around client, mobile, server, and cloud," Raymond James analyst Michael Turits noted, according to Barrons. "While W8 has not deflected the downward course of PC shipments thus far we expect the acid test to come in C2H13 with improved OEM hardware and distribution, and increasing value of both the enterprise and home ecosystem."

Citigroup analyst Walter Pritchard also was upbeat and raised his estimates for Microsoft's moribund stock to $35, which was trading at just under $28 midday Friday, Barron's Tiernan Ray reported. "We'd note that while PC market declines in CYQ4 continued, there are signs that the worst may be behind the company," according to Pritchard. "Looking forward, with 10" iPad sales plateauing, touch coming to more PCs, price points coming down, a lower-power Intel SOC architecture [Haswell] launching CYQ2/Q3 and a likely update to Win8 in the fall, Q4 may be the bottom for MSFT's consumer PC business. We look to see further confirmation of this trend."

Indeed Microsoft CFO Peter Klein indicated on yesterday's earnings call that he believes lower cost systems are in the OEM pipeline. "We are working very closely with our chip partners as well as the OEMs to bring the right mix of devices which means the right set of touch devices at the right price points depending in the unique needs of the individual," Klein said on the call. "I think we've learned a lot from that and one of the things you'll see is a greater variety of devices at a bigger variety of price points that meet the differentiated needs of our consumers."

The performance of Windows overshadowed the best performing part of Microsoft's business: Server and Tools. Revenues of $5.19 billion were up 9 percent, suggesting a healthy lift for Windows Server, SQL Server and System Center.

It remains to be seen whether indeed the worst is over for Microsoft but yesterday's report could have been a lot more alarming.

Posted by Jeffrey Schwartz on 01/25/2013 at 11:15 AM0 comments

Last Chance To Get Windows 8 Pro on the Cheap

At the risk of sounding like a car salesman, time is running out. Next Thursday is the last day to take advantage of Microsoft's $39.99 upgrade to Windows 8 Pro -- $14.99 if you purchased a Windows 7 machine after June 2 of last year. I'm not a pitchman for Microsoft, and at Redmond magazine we clearly understand many enterprises coming off Windows 7 upgrades are in no rush to move to Windows 8. Nevertheless, there are many good reasons why IT pros should use Windows 8.  

Anyone who has followed the pricing history of Windows can attest the company has never (at least in recent memory) offered its flagship PC operating system at such a cut rate price. Who knows if Microsoft will offer Windows at that price again? It's possible they will, especially if Windows 8 sales don't meet Microsoft's and Wall Street's hopes. But it could also prove to be your last chance to get Windows 8 Pro so cheap (upgrade licenses jump to $119 on Feb. 1).

When Microsoft released Windows 7, the company initially offered a package to consumers that permitted upgrades to 3 PCs for $149.99, an offer it brought back briefly in the early days but never did so after that point. I took advantage of the offer even though I didn't actually upgrade all of my family PCs right away. But it turned out to be worthwhile a couple of years later.

Even if you don't have touch-enabled PCs -- and most people probably don't -- you should become familiar with Windows 8 and its new Windows Store (aka Metro) interface. It works fine with a mouse and keyboard. And while the store lacks the number of apps available in the iTunes App Store or Google Play, the numbers are increasing. Using apps on a PC is a compelling experience and portends how people will ultimately use their PCs with or without touch.

Perhaps you're worried your existing apps won't work if you install Windows 8. Certainly make sure you run the Windows 8 Migration Assistant and make sure your hardware and software is compatible. Presuming your system passes muster, I can say running existing apps through classic Windows 8 has been a charm -- pun intended. So if you want to take advantage of some of the features Windows 8 offers but don't feel like shelling out big bucks for a new touch-enabled machine, Microsoft's soon-to-expire offer is worth considering -- even if you think you might want to perform the upgrade later.

Posted by Jeffrey Schwartz on 01/25/2013 at 11:19 AM10 comments

Lotus Notes Is Still Thriving -- or Is It?

I recall covering the launch of Lotus Notes two decades ago, when many companies were using it to improve their productivity. IBM's $3.5 billion investment in Lotus Development Corp. has served it well, even as it is now seen by many as a legacy platform.

Nevertheless I was surprised to read a report in The Wall Street Journal Monday that it was a $1.2 billion business, according to IDC, as of 2011. IBM, which yesterday exceeded analyst forecasts with revenues of $29.3 billion for the quarter ended Dec. 31 and earnings of $6.1 billion, said its Lotus business grew 9 percent for the period.

However, company officials didn't refer to Notes in its discussion with analysts yesterday, according to a transcript of its earnings call. Rather it referred obliquely to its social business offerings such as Connections as well as Kenexa, a cloud-based talent management and recruiting platform the company acquired last month. IBM is placing a big bet on social communications, perhaps hoping it will marginalize e-mail.

That leads me to wonder, how many enterprises are still using the Lotus Domino and Notes portfolio as their core messaging platform? Moreover do you intend to stick with it or are you looking to move to a hosted offering? If so which one? Or perhaps you're considering a move to the forthcoming Exchange Server 2013 and SharePoint 2013 tandem? Feel free to comment or drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 01/23/2013 at 1:12 PM2 comments

Does a Microsoft Investment in Dell Make Sense?

Reports surfaced yesterday that Microsoft might pump up to $3 billion in Dell, a notion that until recently was unthinkable if not laughable. But times have changed.

As reported last week, Dell is purportedly lining up investors to take the company private led by private equity firms TPG Capital and Silver Lake Partners. The latter firm, the influential broker which brought the likes of Skype and Yahoo to Microsoft, seems to currently have the upper hand in leading a deal, which would include Microsoft, several sources close to negotiations told CNBC reporter Dave Farber yesterday.

Talking about the negotiations this morning, Farber said a deal could come together as early as this week but he noted it could also unfold. Given the total leveraged buyout of Dell would exceed $20 billion, according to numerous reports (though unconfirmed by either company), a $3 billion investment in Dell wouldn't give Microsoft a controlling interest in the company.

Nevertheless, the reports have indicated a Microsoft agreement to invest in Dell would come with the assumption the computer giant would make a commitment, perhaps formidable, to the Windows platform and even strengthen the distribution of Microsoft's new Surface, the company's hybrid tablet PC.

Under those circumstances, what's the downside for Microsoft, which has $66 billion in reserves, has already thrown similar amounts of cash to help Nokia market its Windows Phones and has invested $600 million in Barnes and Noble to prop its Nook tablet business? Microsoft even spent $8.5 billion on Skype, so what's a few extra billion to ensure the prosperity of perhaps the most strategic partner in the Windows ecosystem?

The downside risk for either company isn't trivial. First off, would the rumored investment itself be enough to achieve the outcome of solidifying Windows? If Microsoft's investment in Dell was to achieve the promise of giving it a competitive advantage, via early access to development or preferred licensing, it would drive a wedge between Redmond and its other strategic partners, notably Hewlett Packard and Lenovo, which are key providers of Windows-based PCs. One executive told The Wall Street Journal that a Microsoft investment in Dell indeed would embolden rivals to advance their support for Android. It could even annoy IBM. Though Big Blue no longer offers PCs, IBM does have a substantial Windows Server business and a Microsoft stake in Dell could drive IBM to further its bet on Linux, which is already significant.

But by deciding to make its own PCs last year with the release of the Surface RT and yesterday's announcement that it will release the Windows 8-based Surface Pro on Feb. 9, Microsoft has already signaled to OEMs that it'll do whatever it has to do to ensure the best prospects for its newly revamped desktop OS.  

So if Microsoft hitches its wagon closer with Dell will HP, Lenovo and others go deeper with Android? My guess is (and I don't have any inside knowledge on this), those companies have already made those decisions regardless of what Microsoft does. At the same time, if Microsoft can ensure strong demand for Windows, it should keep those partners from drastically reducing their commitment or walking away from it.

But even if all its partners were to further empower Google, Microsoft may be betting that an investment in Dell could give it what it needs to ensure it's a dominant supplier of Windows-based PCs, tablets and potentially phones, giving it the development and distribution might that has served Apple well.

Of course this influence would go beyond the device level, which isn't what's going to help Dell proper in the long run, as the company and others determined long ago. As Dell continues its push into the datacenter and cloud, Microsoft's influence could have equally untold implications. For example, Microsoft could get affordable access to technology to continue its build-out of Windows Azure, while helping it stave off, at least to some extent, the threat of alternative cloud platforms such as Amazon's EC2, OpenStack and VMware's vCloud, among others.

Some might argue Microsoft should acquire Dell outright and it could do so for much less than the $44.6 billion it almost spent to acquire Yahoo five years ago. But as its ultimate search deal with Yahoo years later showed, Microsoft can get what it needs by taking far less risk and nothing would preclude a further investment or complete buyout down the road, if it came to pass that made sense.

If anything, Dell taking on too much equity and influence from Microsoft could jeopardize the computer giant's own long-term well-being, should it be pulled away to any extent from other platforms including many popular open source initiatives. It remains to be seen whether Dell would diminish its support for other platforms but I don't think such a shift is likely -- it would cost Microsoft more than $3 billion to make that happen.

Do you think a Microsoft investment in Dell would be good for the future of the Windows platform or would the collateral damage be too significant for your comfort level? Please share your comments below or drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 01/23/2013 at 11:12 AM2 comments

Does HP Want Autonomy?

Hewlett Packard this week denied reports that it's looking to sell its troubled Autonomy unit and the EDS services business it acquired nearly five years ago for $14 billion.

It's the latest scuttlebutt surrounding a company that continues to appear lost and can't seem to escape bad news such as yesterday's confirmed report that the architect of its public cloud effort Zorawar "Biri" Singh, senior vice president and general manager, has left the company. Singh's departure was first reported by All Things D. See more on that in my Cloud Report blog.

While the EDS business may have issues at the moment and HP last year took an $8.9 billion write down for that deal, services are a key driver of business for rival IBM and it's hard to envision HP selling it off at this time.

As for Autonomy, which HP famously acquired for the astronomical -- actually, it's fair to say "ludicrous" -- price of $10.3 billion. I was among the skeptics at the time. Its approximate $1 billion in revenues never justified the valuation, a conclusion Oracle reportedly made many months before HP took the bait.

CEO Meg Whitman ultimately came around to agree that HP not only overpaid for the company but said it was duped by Autonomy's founders accusing them of "serious accounting improprieties" and "a willful effort by Autonomy to mislead shareholders," thereby taking a massive $8.8 billion write off. Founder Mike Lynch, who HP fired last May, adamantly denied the accusations, set up a blog to defend his position and accused HP of backtracking.

Former CEO Leo Apotheker pushed for the deal but he was unceremoniously dismissed before it closed. Whitman decided to go ahead with the purchase. After a whistleblower apparently came forward, HP had investigated the matter and Whitman went on CNBC making no bones about the fact the company felt it was the victim of massive fraud. The company has referred the matter to the SEC and the U.K Fraud Office (Autonomy was a British company).

An interesting Reuters report said HP's Apotheker and then chief strategy officer Shane Robison, who Whitman later dismissed, blindly went into the Autonomy deal out of desperation. Apotheker defended the deal in a statement to Bloomberg.

While all of this went down in in the closing weeks of 2012, it resurfaced this week when reports came out that several Silicon Valley companies were interested in acquiring EDS and Autonomy. Whitman's denial certainly could be posturing for a better deal but many believe Autonomy is of value to HP despite the incredulous price it paid for it.

One such believer is IDC chief research officer Crawford Del Prete. "When you talk to customers, what you find is that if you have an unstructured data problem, if you have a problem around syntax, if you have a problem around search, Autonomy has got some really useful technology," he told CNBC. "Autonomy can really help in a world where you have a mix of structured and unstructured data."

HP also has Vertica, a company it acquired in 2011 to help build data warehouses to discover structured data. The move to manage Big Data is a hot agenda item and an area not lost to other key IT players including IBM, Oracle, EMC, Google and Microsoft.

Would you like to see HP keep and emphasize Autonomy or do you envision building your data management and e-discovery efforts around other platforms such as the SharePoint-SQL Server tandem (along with Exchange and Windows Server of course) . See what SharePoint 20013 will offer in that regard. 

What's your take? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 01/18/2013 at 11:15 AM0 comments

New Dynamic Access Control Tips Posted

The cover story of this month's Redmond magazine looks at a key feature in Windows Server 2012 called Dynamic Access Control, designed to improve file server authorization and authentication by reducing Active Directory groups.

Microsoft has described DAC as one of the most important new features in Windows Server 2012. Of course there are many other key new capabilities in the new server OS, as Redmond contributing editor Brien Posey reviewed last summer.

Today MSDN kicks off the first of a four-part series on DAC. Authored by the U.K. Solutions Development Team of Microsoft Consulting Services, the blog post explains how to get started with images that show how to set up and manage permissions.

DAC is important because it allows IT to secure files, folders and other resources without having to manage groups. Just as the Redmond cover story pointed out, the MSDN post explains: "The main idea here is that a user's access rules are based upon Claims from their Active Directory properties. This makes it much easier to manage which users can and which users cannot access a specific resource."

If you want to learn more about DAC, expert Mark Minasi, will be giving a discussion on it the TechMentor conference, produced by Redmond magazine publisher 1105 Media, in Orlando in March.

Are you using, or planning in implementing, DAC in your organization? Please share your stories or concerns, by dropping me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 01/18/2013 at 11:23 AM0 comments

Is Dell on the Market?

While Dell hasn't publicly confirmed that it's considering leveraged buyout proposals from private equity firms, Wall Street continues to buzz at the prospect that indeed the computer giant is on the market and a deal could surface in the not-to-distant future.

Two bidders apparently in the mix include TPG Capital and Silver Lake, with Bank of America Merrill Lynch, Barclays, Credit Suisse and the Royal Bank of Canada in the pipeline to provide financing. First reported by Bloomberg on Monday, CEO Michael Dell is not surprisingly a key player in any such deal -- he holds an estimated 16 percent stake valued at about $3.6 billion in the company he founded in his dorm room back in 1984.

The company's stock rose 21 percent as of the close of business yesterday before tapering off more than 4 percent this afternoon. Once valued at more than $100 billion during the dotcom boom, a deal today would be valued at approximately $20 billion, ironically in the ballpark of the amount Hewlett Packard paid for Compaq a decade ago.

Both Dell and HP continue to struggle in the PC market as Asian rivals gain momentum -- most notably Lenovo, which gained prominence after acquiring IBM's PC business in 2004, but also by Acer and Asus.

Like HP, Dell is looking to further extend its footprint into the enterprise, as evidenced by numerous acquisitions in recent years such as SonicWall, EqualLogic, Compellent, Perot Systems, KACE Networks, Ocarina Networks, Force 10, Boomi, Wyse, AppAssure and most recently its push into enterprise software capped by the recent $2.4 billion acquisition of Quest Software.

The question is, would a privately held Dell have the resources to make the acquisitions the company needs in order to continue its push to build upon its enterprise hardware, software and services portfolio? Is a spinoff or outright sale of its PC business in the cards?

What's your view on the potential impact of Dell going private? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 01/16/2013 at 2:59 PM5 comments

Microsoft's Role in Facebook's New Search Graph

In his opening monologue last night, Jimmy Kimmel took note of Facebook's announcement yesterday that it intends to use the mounds of data it has collected from its 1 billion users to enable a new form of search.

The new Search Graph, Kimmel pointed out, provides customized search results by incorporating data from your network of Facebook friends. "So you can ask questions like 'who are my friends that live in San Francisco?' Which by the way if you have to ask that, you don't have any friends in San Francisco," Kimmel quipped. "It's an interesting new feature. Soon you'll be able to find anything you want on Facebook, except for the thousands of hours of your life you lost going on Facebook."

All kidding aside, Facebook is hoping that Search Graph will steer users away from the widely used Google search engine. And apparently acknowledging there's life outside of Facebook, it will continue to use Microsoft's Bing to find information on the Web, which it has done since 2010, as noted by Redmond columnist and All About Microsoft blogger Mary Jo Foley.

Could this Facebook integration also bolster her theory about why Microsoft is in it for the long haul with Bing? Apparently Microsoft, which was an early investor in Facebook, worked closely with the company to ensure Bing's role in extending Search Graph. In a blog post yesterday, Derrick Connell, Microsoft's corporate vice president of Bing, explained how the two work together.

"Now when you do a Web search on Facebook, the new search results page features a two-column layout with Bing-powered Web results appearing on the left-hand side overlaid with social information from Facebook including how many people like a given result," Connell explained. "On the right hand side, you will see content from Facebook Pages and apps that are related to your search."

Naturally both companies have a common goal in taking away search share from Google.

Could adding more Facebook features to Bing be in the works? Connell said, stay tuned. "Over the next several weeks our two teams will continue to experiment and innovate towards our shared vision of giving people access to the wisdom of their friends combined with the information available on the Web."

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Posted by Jeffrey Schwartz on 01/16/2013 at 3:33 PM0 comments

Cisco Releases New UC Tool

Cisco Systems this week took the wraps off a unified communications platform that combines chat, presence and voice messaging onto PCs, tablets and smartphones.

Cisco Jabber is the culmination of the company's 2008 acquisition of Jabber Inc. Cisco said Jabber works with or is set to support Windows, iPhone, iPad, Nokia, Android and the BlackBerry platforms. Support for the Mac is slated for this summer.

It also works with Cisco's own video endpoints, including Cisco Unified IP Phones, Cisco WebEx MeetingCenter and Cisco TelePresence.

The company launched the new product at the Enterprise Connect trade show, taking place this week in Orlando, FL. The release of Cisco Jabber sets the stage for a battle with Microsoft, which late last year released Lync Communications Server. Cisco, like Microsoft, is looking to convince customers to move away from traditional PBXes.

While Cisco last week stepped away from a different battle with Microsoft, deciding not to go to market with its Cisco Mail offering, the battle in the UC market between the two companies is alive and well. Don't expect either company to back away.

Based on the standard Extensible Messaging and Presence Protocol (XMPP), Cisco Jabber is interoperable with a variety of presence and instant messaging platforms, according to Cisco. That allows for chat among individuals using other IM platforms from Google, IBM, Microsoft and AOL.

Cisco also said Jabber can integrate with Microsoft Office, enabling individuals to set up calls or chats within Office.

On the video side, Cisco Jabber supports the H.264 standard and provides high-definition resolution. It allows for multiple parties to participate in a videoconference. However, the latter capabilities aren't set to be available until the second half of the year.

Posted by Jeffrey Schwartz on 03/02/2011 at 11:46 AM0 comments

Can Windows Phone 7 Succeed?

After attending Microsoft's launch of Windows Phone 7 Monday in New York, I walked away feeling that Microsoft has put its best foot forward in attempting to regain share in the hypercompetitive mobile phone market (see Microsoft Launches Windows Phone 7). The defining question: will Windows Phone 7, despite its positive attributes, get lost in the crowd that is clearly dominated these days by Google's Android, Apple's iPhone and Research in Motion's BlackBerry?

"I've never seen anything like it," said Forrester Research analyst Jeffrey Hammond, who was at Monday's launch event. We were talking about the rapid ascent of the Android mobile platform, which had virtually no share a year ago, and now has emerged as the fastest selling smartphone OS, according to data released by Nielsen last week.

With Verizon Wireless reportedly set to start selling the iPhone early next year and the BlackBerry platform holding its own, where does that leave even a respectable Windows Phone 7? Hammond pointed out it is not game-over for Microsoft.

"Right now we see 23 to 25 percent of phones out there in the U.S. that are smart phones, so there's still another 75 percent of the market to convert over," Hammond said. "If they aggressively price Windows phones so they are logical replacements for quick messaging devices and they offer lower cost data plans, they can grow in the market without having to take Android devices out of users' hands."

Plus every two years, a good number of users swap out their phones, suggesting the long term outlook for all platforms could shift. Key to whether or not Windows Phone 7 will be a viable platform moving forward is whether the .NET developer community mobilizes, so to speak.

IDC analyst Al Hilwa believes they will. "They have a ready base of developers that haven't been very much engaged so far with either Android or Apple that will bring that whole base of developers on board," Hilwa said.

Hammond agrees: "I think there is general interest from the core Microsoft developer network out there and there's a lot of them," he said. There are two things that have to happen, he added. "They've got to get units in market and they've got to make sure they make the on-boarding process as easy and as inexpensive as possible."

Despite a slick batch of devices that will come at launch, this is very much a consumer play. Microsoft still has to evolve Windows Phone 7 into an enterprise-grade platform, adding the ability to remotely manage the devices and embed improved security. Still this is a market where consumers decide first and if a platform succeeds, enterprises will then decide whether or not to support it. So from that perspective, Microsoft's strategy makes sense.

At the same time though, Microsoft will have to win over consumers that want to use their devices to help them in their jobs. From that standpoint, the SharePoint support and E-mail integration are good first starts.

Microsoft CEO Steve Ballmer summed up Windows Phone 7 as "a different kind of phone." It is from the perspective that it is focused more on what the user wants to do with their phones, Hammond pointed out. "They are focusing on what it allows you to do, as opposed to what it does," he said.

If you’re a Microsoft partner or enterprise developer, I'd like to hear your take on whether Windows Phone 7 still has an opportunity over the long haul. Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 10/13/2010 at 6:19 AM4 comments

Microsoft Extends HPC's Limits

Microsoft is looking to up the ante with its Windows Server HPC platform. The company released its third iteration yesterday and signaled it would like to see broader use of its high-performance computing platform.

"Think of this as one of the key shifts in our fleet for what we look at as this future of technical computing," said Bill Hilf, Microsoft's general manager for technical computing. Hilf made his remarks in his keynote address at the High Performance Computing Financial Markets conference in New York.

"It's a pretty wide initiative where we want to take the technical computing technologies and really make those available and accessible to a broader number of IT end users and developers," explained Bill Hamilton, Microsoft's director of technical computing.

In an interview right after his keynote address, Hilf said he believes HPC applications will drive usage of Windows Azure, thanks to Windows HPC Server's newfound support for Microsoft's cloud service.

"I believe the technical computing workload will be the killer Azure app because the nature of these workloads consume a ton of computer," he said. "We believe having an infrastructure with hundreds of thousands of servers is going to be very compelling."

Some notable facts about Windows HPC Server 2008 R2:

• It will support 1,000 nodes, up from 256.
• Excel users will be able to perform computations much faster.
• Organizations can tap idle Windows 7 desktops in their clusters.

If you're among those that are testing it out, or intend to do so, share your thoughts with me at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 09/21/2010 at 4:10 PM0 comments

Microsoft Skipping Verizon for Round 1 of Windows Phone 7

Reports that Windows Phone 7 initially won't be available at launch on the Verizon Wireless network are hardly a surprise, given that all test units were assigned to AT&T. But now comes word that it might be awhile before Verizon Wireless users will be able to get their hands on Windows 7 Phones.

That's because, according to News.com's Ina Fried, Microsoft will need to create an upgrade to Windows Phone 7 to support CDMA networks. Both Verizon Wireless and Sprint's networks are CDMA-based while AT&T's and T-Mobile's networks are GSM-based.

How extensive that upgrade will be and when it will arrive is unclear, reports All About Microsoft's Mary Jo Foley but it appears Microsoft is targeting the first half of 2011.

If anything, Microsoft should have aimed to release WP7 on CDMA networks first, and then worry about GSM support.  By not offering support for CDMA from the outset, it only gives Google's Android further opportunity to become entrenched on Verizon's network.

That might not be so terrible if Verizon didn't have the largest percentage of subscribers in the U.S. with a share of over 31 percent, according to comScore. Perhaps Verizon wanted no part of Microsoft after the Kin debacle? Or maybe Microsoft feels it's getting even with Verizon for heavily pushing Android phones.

Whatever the case, Microsoft should have endeavored with more priority to deliver Windows Phone 7 on Verizon's network at launch. If Microsoft wants to have any chance of slowing the momentum of Android, its phones need to be on Verizon's network and prominent among the carrier's dealers.  It wouldn't hurt to have them available with Sprint as well.

What's your take? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 09/17/2010 at 2:41 PM1 comments

Microsoft Downplays Windows 1.0

Windows 1.0 got off to its auspicious start on Thursday Nov. 10, 1983, at the Plaza Hotel in New York City. Invitations to the launch were sent to the press in a box with a squeegee. The header read: "For a clear view of what's new in microcomputer software please join Microsoft and 18 microcomputer manufactures for a press conference…"

But, like many versions of Windows that would follow it, the first release didn't ship until two years after that fateful press conference, leading many to refer to it as "vapor-ware." Finally, Microsoft released Windows 1.0 in November of 1985 at Comdex.

When it comes to Windows 1.0, Microsoft prefers not to look that far back and has no apparent plans to celebrate its pending 25th anniversary. When we reached out to Microsoft to talk about its first rendition of Windows, the company declined to make anyone who was there at the time available. "We are focusing our anniversary efforts on the Windows 7 first birthday so unfortunately we won't be able to provide a briefing from someone [from] the Windows 1.0 days," a spokeswoman for Microsoft said in declining our request.

Of course, that anniversary is coming next month on Oct. 22. But we want to hear your recollections of Windows 1.0. Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 09/10/2010 at 4:36 PM3 comments

Apple iPads and iPhones to Get Flash?

Apple's decision to loosen the guidelines of its App Store means you should could soon be seeing Flash-based content on iPhones and iPads.

But that remains to be seen. While the company's move will allow developers to use third party tools including those used to create Adobe Flash code, that doesn't mean iPads, iPhones and iPod Touch devices will be able to run Web-based Flash content. Still, it suggests that may be in the cards at some point.

What happened to Apple CEO Steve Jobs' insistence that Adobe Flash was too buggy and would be a drag on power on the devices? Will he stick to that stance?

"We have listened to our developers and taken much of their feedback to heart," Apple said in a statement released yesterday. The news drove Adobe's shares up 12 percent yesterday. The unusual about-face by Apple was likely the result of the Federal Trade Commission's June inquiry and success of Google's Android platform, according to The Wall Street Journal. IDC this week said Google's Android and Microsoft's Windows Phone 7 platform will steal share from Apple in the coming quarters.

It remains to be seen whether Flash on iPhones and iPads Apple's relaxed guidelines for developers if iPhones, iPads and iPods will increase their appeal and put a wrench into challenges by Google, Hewlett-Packard, Microsoft, Research In Motion and others. 

What's your take on Apple's unexpected move? Drop me a line at jschwartz@1105media.com.

Note: Updated September 13th. 

Posted by Jeffrey Schwartz on 09/10/2010 at 4:35 PM3 comments

Who Will Replace Elop?

The news that Stephen Elop is leaving Microsoft is hardly a surprise -- Elop was believed to have been coveting a CEO job for a long time and now he has one.

Elop will take the reins of Nokia Sept. 21, leaving yet another void in the executive ranks at Microsoft. In addition to looking to fill the hole left by the departure of Robbie Bach, who headed Redmond's Entertainment and Devices business, now CEO Steve Ballmer will oversee the Microsoft Business Division until he names a successor.

In an e-mail to employees announcing Elop's departure, Ballmer pointed to MBD's bench, including Chris Capossela, Kurt DelBene, Amy Hood and Kirill Tatarinov, who will report to him until a successor is named.

It's been a few months though since Bach was ousted. Will Ballmer take as long to replace Elop? Or might he use the change to re-organize the different business groups at Microsoft?

What's your prediction? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 09/10/2010 at 4:33 PM0 comments

Will MPN Drive Consolidation?

It's hard to believe it's already September. While that means back to school for many, it also means there's less than one month until the official launch of the long-awaited new Microsoft Partner Network.

Some may dispute whether it's long-awaited, I realize. After all, for some smaller partners, the new certification requirements could mean their once-coveted Gold Certified status will be no longer attainable.

But others are eagerly anticipating the change. One such firm is Tallan, a Microsoft National Systems Integrator (NSI) based in Hartford, Conn. As I reported today, Tallan has acquired twentysix New York, a move it said positions it for the pending changes.

"It wasn't really a concern and not a factor but now that they've announced it and gotten the rules out, it makes me feel easier we will be able to satisfy that we will be able to stay in the top tier of the program," says Craig Branning, Tallan's CEO. In fact, he welcomes the fact that it will be harder to achieve Gold status.

"I like it. It gives a company like ours some advantages because we can set ourselves apart," he says. "It was a little bit too easy to qualify for gold status for some of the smaller players."

How will MPN shape your business? Is it giving you the urge to merge? Are you looking at other partnering opportunities? Please share with us the good, the bad and the ugly as some did at the recent WPC 10 conference in Washington, D.C. You can drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 09/02/2010 at 11:03 AM0 comments

Should HP Be Split Up?

There's no shortage of opinions out there as to what should happen now that Hewlett-Packard has ousted CEO Mark Hurd.

Oracle CEO Larry Ellison blasted HP's board for taking what he felt was a minor infraction and cutting him loose as a result. "The HP board just made the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago," Ellison wrote to The New York Times. "That decision nearly destroyed Apple and would have if Steve hadn't come back and saved them."

Meanwhile, Kevin Kelleher revives an idea that was frequently broached at the end of the Carly Fiorina era: break up the company.  Kelleher made his proposal in DailyFinance:

"If the board were really honest with itself about the best strategy, it would use Hurd's departure as an occasion to break the company up into three smaller pieces -- a computer hardware maker, an IT services firm and a printer company. Find a solid CEO for each, and let them focus on what they do best."

While that may be extreme, staying the course could be a tough act to follow. True, while Hurd grew revenues from $87.6 billion in 2005 to $125 billion projected for this year, that was done primarily through mega acquisitions.

The cost of doing so has meant the company has taken on huge debt. Daily Finance's Peter Cohan points out HP's debt has mushroomed from $3.4 billion to $14 billion on Hurd's watch, while its cash position has slipped from $13.9 billion to $13.3 billion.

Hurd's cost cutting, while improving operations has had a price. According to yesterday's Wall Street Journal:

"Caris & Co. analyst Robert Cihra estimates that HP's PC business has effectively driven all revenue growth since Mr. Hurd took over. But operating margins in that business are just 5 percent. And in the last two quarters, HP has been losing share to Asian rivals Lenovo Group, Acer, Toshiba and Asustek Computer at a faster clip.

HP's market-leading printing business generates solid 17 percent margins, but growth is a sluggish 3 percent, estimates Mr. Cihra. The same is true of its services business, which became a big part of HP's business with the acquisition of Electronic Data Systems: 16 percent margins but just 2 percent growth."

Meanwhile, Reuters points out that Hurd reduced research and development spending by 20 percent, noting HP spent only 2.5 percent of sales on R&D. Reuters notes that rivals Apple, Cisco, Dell  and IBM averaged more than 6 percent, meaning HP will need to increase its R&D if it wants to keep pace.

What's next for HP is anyone's guess but the status quo likely won't do. Does the board need to do something as drastic as splitting up the company? What's your recommendation? Feel free to comment below or drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 08/11/2010 at 12:20 PM3 comments

Microsoft Targets Mission-Critical Systems

Microsoft yesterday launched what it calls Premier Mission Critical Support Service, which, as the name implies, is intended to help users architect and maintain apps and systems that require constant availability.

These long-term services are for those who want to invest hundreds of thousands of dollars to perform architectural reviews, implementation and monitoring services thereafter, as reported by my colleague Kurt Mackie.

I spoke with Norm Judah, CTO of Microsoft Consulting Services to try to get a better understanding of where partners would fit into this service. When asked if they would be certified to potentially deliver these architectural reviews, he sounded doubtful -- and certainly not in the short term.

"Probably not, at least not initially, because the solutions engineer, the guy we are going to keep on site is generally deeply involved in doing that work to have that context," Judah explained. "There's an opportunity for us, when we have much more knowledge about the system to really investigate what a sell-through would look like, but I don't think we are ready for that. In many cases, the customers are asking for us to do this because they want Microsoft's skin in the game."

That said, Judah does see partners delivering some of the remediation services. "Remediation might be something simple such as tune a database but it could be something very complex, like you need to re-architect the middle tier of your commerce application. Those are all partner opportunities, driven by the customer. That is really the customer's choice who they want to do that with. If they have an existing partner that they work with, maybe it's the guy who wrote the application, no problem in doing that and we would work very closely with them taking the output of their remediation."

What's your take on this new service? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 08/11/2010 at 12:13 PM0 comments

HP's Hurd Had To Go

A top executive charged with sexual harassment or violating company policies is hardly a rarity in today's business world. Yet, the news Friday that the laser-focused Hewlett-Packard CEO Mark Hurd was effectively dismissed for such allegations has rocked Silicon Valley.

As the story played out over the weekend, and no doubt will continue to do in the coming days and weeks, some argue HP's board should have looked the other way, given the fact that the company's market cap has doubled and the company has substantially and consistently grown revenues and profits since Hurd took the reigns five years ago.

It's bizarre that the woman at the center of the scandal, marketing consultant and "actress" Jodie Fisher, charged Hurd with sexual harassment and hired the celebrity attorney Gloria Allred to represent her only to release a statement expressing regret.

"Mark and I never had an affair or intimate sexual relationship," she said in a statement released Sunday. Fisher went on to say that she has reached a private settlement with Hurd, who also denied any intimate relationship. "I was surprised and saddened that Mark Hurd lost his job over this," Fisher said. "That was never my intention."

Are you buying this from either party? Even if all that is true would HP have let go a CEO who turned the company around merely for fudging expense reports or having a few ill-advised dinners? Perhaps it would have given the company's strong focus on requiring employees to uphold ethical standards. HP reportedly has let go numerous employees who had violated HP's rules of conduct and it would have been hypocritical to look the other way when Hurd did so. In the end, Hurd no longer had the confidence of HP's board. While Wall Street loved him, employees and many in Silicon Valley detested him, according to analysts.

Suffice to say, it appears there's much more to this story. But the bigger question is what's next for HP? Even those who argue that Hurd was to HP what Steve Jobs is to Apple, let's not forget that Apple did just fine during his six-month leave of absence last year. Hurd's departure is an opportunity for the company to bring innovation forward and strengthen its partnerships.

Internal candidates to replace Hurd include Todd Bradley, who turned around the company's once-struggling PC business. Ann Livermore, who runs HP's huge services business is another oft-mentioned possibility. Outside candidates include two Softies: Microsoft COO Kevin Turner and Stephen Elop, president of the company's Business Division.

Others include EMC CEO Joe Tucci, IBM executive Michael Daniels, and former Compaq CEO Michael Capellas, The Wall Street Journal reports. Netscape founder and Silicon Valley VC Marc Andreessen is leading the search committee. (Could he be a candidate too?)

HP's board should be looking for a CEO who can execute as well financially as Hurd did -- no easy task -- but also someone who will bring technical and product leadership that companies like Apple, Google and (yes, even) Microsoft are demonstrating these days.

If not, those companies, along with the likes of Acer, Cisco, EMC and IBM, just to name a few, will further erode HP's effort to lead in markets that range from tablets to PCs to communications devices to enterprise infrastructure.

The new CEO will also have to look at its partnerships, including the one Hurd extended with Microsoft back in January to develop and bring to market advanced data center technology. While there has been some progress, that partnership looks a little cold these days.

For example, HP phoned it in when it came to endorsing Microsoft's Windows Azure appliance. At Microsoft's Worldwide Partner Conference last month, Dell and Fujitsu had executives front and center to talk up their plans to deliver an Azure appliance. At WPC, HP was nowhere to be found, though Scott Farrand, vice president for the company's Industry Standard Servers and Software business told me not to read anything into that.

"It was a simple matter of logistics for trade shows and availability of key executives for that kind of time line," said Farrand, who also gave telephone briefings at WPC. "There was no specific message in there that's of significance relative to HP's attitude here. We've had a longstanding partnership with Microsoft."

Also, while HP is now planning to deliver a Windows-based tablet PC, that was not a sure thing following its April announcement that it was acquiring Palm for $1.2 billion. In the months that followed, HP went dark regarding the future of the Windows-based Slate PC that Microsoft CEO Steve Ballmer highlighted earlier this year. It appeared DOA only for the company to recently disclose it will deliver the Windows-based Slate targeted at high-end enterprise users.

HP needs a leader who will not just give lip service to advancing its wares and its partnerships. It's not only important to the future of HP but to the ecosystem that surrounds the company.

What's your take? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 08/09/2010 at 2:22 PM1 comments

IBM vs. Microsoft: The Big Iron Battle

It appears either Microsoft has mainframe-envy or IBM is not too happy about Microsoft's data center ambitions of late. Most likely, it's a combination of both.

Consider the following:

• Microsoft recently said it is going to offer portable data centers based on its cloud-based Windows Azure platform.

• IBM just launched a new mainframe that is the first to support virtualization of x86-based blades with Linux, not Windows, as the preferred platform. Big Blue appears cold to the idea of the blade extensions supporting Windows.

• The European Union last week launched an investigation of IBM's mainframe business. IBM's response: Microsoft and its minions are behind the investigation.

So it was a hot July for two companies who really have bigger fish to fry than each other. It is clear IBM is not happy with Microsoft these days, based on Big Blue's response to the EU investigation:

The accusations made against IBM by TurboHercules and T3 are being driven by some of IBM's largest competitors -- led by Microsoft -- who want to further cement the dominance of Wintel servers by attempting to mimic aspects of IBM mainframes without making the substantial investments IBM has made and continues to make. In doing so, they are violating IBM's intellectual property rights.

T3 and TurboHercules offer mainframe software that competes with IBM's own offerings.

As for the newly launched mainframe, the zEnterprise is the most important new piece of big iron launched by IBM in more than a decade because it is the first to provide integration with its Power7 blade infrastructure and x86-based blade racks running Linux.

Where it breaks new ground is its common virtualized platform capable of running 100,000 VMs simultaneously, while providing a turnkey data center that shares network, storage and power components.

Providing the capability for the mainframe to assign workloads to x86-based blades is the system's Universal Resource Manager, made up of software and embedded hardware, said IBM Distinguished Engineer Donna Dillenberger, in an interview at the launch event.

Her colleague, David Gelardi, IBM's vice president of sales, support and education, told me one could opt to run Windows workloads rather than Linux on the x86 BladeCenter Extensions, dubbed zBX.

"There's no reason you can't use it to run Windows, because Tivoli's provisioning capabilities is operating systems agnostic," he said. "Windows would run on an outboard blade and ultimately would run on an xBlade inside zBX."  

But at the same time, Steve Mills, senior vice president of IBM's software and hardware businesses, was in another room with analysts playing down that notion. When asked if the blades would run Windows, Mills reportedly said because they are x86-based, Windows could run on it "but the problem was essentially, to IBM, Windows was too much of a black box to be able to do what they wanted to do with it," recalled RedMonk analyst Michael Cote, in an interview.

"I don't think IBM is especially interested in managing Windows on the zEnterprise," Cote said. "Technologically it wouldn't work out, and they probably are unwilling to do whatever it would take to make Microsoft help them out with it. But I think in the wider context of things, IBM's not really out to help Microsoft out really."

Analyst Joe Clabby of Clabby Analytics, in an interview, explained it would require Microsoft to support IBM's virtualization technology and make tweaks to its own Hyper-V. "Hyper-V is nowhere near IBM from a virtualization and provisioning perspective," Clabby said. "If I were IBM I'd say get that stuff out of the way, use this approach and then you can integrate with our mainframes better, but I don't think that will be received well by Microsoft."

So both Cote and Clabby are in agreement that we shouldn't anticipate the new zEnterprise running Windows workloads -- at least with the help of Microsoft and IBM -- any time soon.

As for the EU investigation: "I don't know if IBM's allegations that Microsoft is behind it are true, but in this day and age, part of the way you compete is to try to help government agencies do antitrust stuff," Cote said. "Whether it's a good way of competing, it seems like one front in a war of competing."

Is Microsoft really a threat to IBM these days? Cote says certainly more so than it was in the past. "Microsoft wants to expand into the enterprise area," he said. "If you look at the numbers on Windows server usage, it's everywhere. That's a chunk of revenue that IBM is missing out on."

It's not just the data center where IBM is taking on Microsoft. IBM is also taking its best shot at breaking into the desktop with its new CloudBurst offerings and its free Microsoft Office alternative, Lotus Symphony.

While the two companies both compete and partner in many areas, it does appear that the rivalry between them is picking up. "I don't think IBM as a culture has ever forgiven itself for creating Microsoft with DOS licensing and everything, but I see a bit more viciousness when it comes to IBMers talking about Microsoft people these days," Cote said.

All that said, he points out that IBM's true nemesis is Oracle. And Microsoft has made it clear that its two biggest enemies are Apple and Google, with VMware and Oracle clearly in its path, as well. The tensions between IBM and Microsoft "are definitely more active but they're not at each other's throats," Cote said.

Clearly it will be interesting to see the two go head to head in the market for so called private clouds "in a box." What's your take? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 08/03/2010 at 9:57 AM0 comments

MPN: Going for the Gold

Anyone who was hoping that Microsoft's partner organization would put the breaks on its plans to require unique certifications was disappointed last week.

"It's full speed ahead," said Julie Bennani, general manager for partner programs at Microsoft, in an interview during last week's Worldwide Partner Conference in Washington, D.C. "We are still going on with those requirements and landing those in October."

While she and Microsoft's new partner chief, Jonathan Roskill, signaled they were willing to consider alternatives at a later date, as reported, the plan looks baked to move forward with the Oct. 1 date for transitioning to the new Microsoft Partner Network (MPN). "If we said, 'If you could get Gold in three of the five in Core IO, we could give you a Core IO competency.' That's one thing that's interesting to think about," Roskill said.

Microsoft last week did say it's renaming the competency and advanced competency designations Gold and Silver, but many appeared to welcome a Silver designation like receiving a booby prize.

At WPC last week, I sat in on a session called MPN: The Good, The Bad, and the Ugly. It was moderated by Mo Edjlali, a management consultant, who, until recently, served five years as the president of the International Association of Microsoft Channel Partners Washington D.C. chapter.

Now a management consultant, Edjlali looked at the situation from both points of view. "I think Microsoft wants people to have focus, that makes sense," Edjlali said. Indeed there are many partners who are Gold who most would agree don't deserve that designation today.

"But I think the trouble is some products are so closely related that you can't say your good in BI and not in SQL Server, it confuses customers when they might feel that expertise isn't there when it's always been there," he added. "People say 'my staff hasn't changed but now we are going to come across like we're not as sharp as we used to and these big companies that have the manpower will have the credentials but not have the skills or actually put the billable people on project with those skills.'"

That is the center of the fear. The large integrators can afford to have Gold certified engineers across the board, but the small- and mid-sized firms can't. So they will have to decide which disciplines they want to be Gold certified in and accept Silver for the rest.

Perhaps a better idea would have been to introduce a Platinum tier, Edjlali said. "It's going to be difficult for people to go from Gold to Silver," he told me in an interview after the session.

Janice Crosswell of Microsoft Canada's Corporate Assurance Group, who was sitting in on the session tried to spin the situation. "Silver is better than [the current] Gold," Crosswell said to the group. "When you're talking about some of the math, and I am saying 'I am just Silver,' you are actually rank higher than the [current] gold. There are some more requirements."

That didn't go over too well. "Customers are never going to know that Silver is now better than Gold used to be," a partner in the session replied. "They see Gold and that's what they see."

Posted by Jeffrey Schwartz on 07/12/2010 at 3:50 PM0 comments

Compromise in the Works on MPN Competencies?

There is growing buzz that Microsoft will come up with some compromise over the certification requirements that some partners fear will put them out of business. But it is not clear to what extent.

Details of any changes to the new Microsoft Partner Network (MPN) are expected to be made public next week at the company's annual Worldwide Partner Conference, set to be held in Washington, DC.

"The word on the street is some changes have been made and will probably be announced at WPC," says Howard Cohen, northeast regional chairman of the International Association of Microsoft Channel Partners (IAMCP).

Cohen says it remains unclear what those changes will be but he was optimistic. "The people at Microsoft who were responsible for MPN have told us clearly that they are open to dialog and they appreciate the role IAMCP plays as the voice of their partner channel." A Microsoft spokeswoman said the company does not comment on rumors but said "we will be talking a lot about MPN next week at WPC."

As reported, MPN is set to place new certification requirements that will force many partners to hire additional engineers in order to maintain multiple advanced certification levels. As the Gold Certification Partner designation is set to fade away, MPN will give way to specialty-specific designations called Advanced Competencies.

The requirement that bars double-dipping by engineers could impact those organizations with multiple Competencies now because they will have to add engineers to cover multiple disciplines at the Advanced level in the MPN.

Many Microsoft partners, larger ones in particular, say that's a good thing. "We don’t want to compete with someone who paid $1,500 and passed one test and became a virtualization partner," says Thad Morrow, director of sales at Concord, Calif.-based Entisys Solutions.

"Personally I think they are going to have make revisions because it will put too many partners out of business to be quite honest," argues Jeff Goldstein, president of New York-based Queue Associates, winner of Microsoft's CRM Dynamics SL Partner of the Year Award. "I understand what Microsoft is trying to do. Too many people are Gold Certified Partners."

Cohen doesn't dispute the notion that Microsoft has too many partners out there who have abused the Gold designation over the years. By his estimate, of the 12,000 partners in the New York City metropolitan area, 7,000 don't even have registered domains. Of those that do, perhaps only 3,000 to 4,000 are active Microsoft partners looking to grow their businesses, he reasons.

"Nobody who's making investments in building a good practice likes to see anybody level the playing field," Cohen says. "I think MPN is meant to wipe away all of the things that leveled the playing field. This is a good thing. As long as you don’t hurt the people who are playing by the rules, those are the ones we have to make sure we are taking good care of."

Pruning Microsoft's partner base in a way that doesn't take meat off the bone could be a critical challenge for the company's new channel chief Jonathan Roskill, who took over last week after swapping jobs with Allison Watson, who held the job for over seven years.

Another challenge for Roskill will be to get partners comfortable with Microsoft's "we're-all-in" cloud strategy.  What other challenges does Roskill have? If you'd like to make your opinions known, please take a minute to participate in a brief poll. As always, your responses will be kept anonymous unless you invite us to follow up with you about your answers. Click here to take the survey.

Posted by Jeffrey Schwartz on 07/08/2010 at 2:10 PM1 comments

Fireworks in Redmond

Report suggests Microsoft's woes stem from lack of young developers and customers.

It was, no doubt, a rather unsettling beginning of Microsoft's new fiscal year.

First Microsoft kills the Kin, making it arguably its biggest flop since Bob. Then a report by Microsoft Kitchen's Stephen Chapman detailed some specifics about plans for Windows 8 including a Windows Store, faster boot-up, support for slate-type devices and facial recognition. Not a welcome move as Microsoft is looking to keep the focus on Windows 7.

Then on July 4, The New York Times published a scathing piece that questioned Microsoft's ability to appeal to young consumers and developers alike. Using the Kim demise as the backdrop, the Times piece questioned Microsoft's ability to appeal to the youth crowd.

"We did not get access to kids as they were going through college," Bob Muglia, president of Microsoft’s business software group, told the Times last year. "And then, when people, particularly younger people, wanted to build a start-up, and they were generally under-capitalized, the idea of buying Microsoft software was a really problematic idea for them."

Tim O'Reilly, the influential book publisher and conference organizer, lent credibility to the Times' Ashlee Vance assertion:

"Microsoft is totally off the radar of the cool, hip, cutting-edge software developers. And they are largely out of the consciousness of your average developer," O'Reilly was quoted as saying.

O'Reilly in a blog posting said he doesn't recall saying that. "My memory is that Ashlee opened our conversation with that assertion, which I countered by saying that Microsoft still has big, active developer communities, and that you shouldn't assume that just because you can't see them in San Francisco, that they are dead," O'Reilly writes.

"I feel more than a little misrepresented," O'Reilly concludes. "It's sad when the NYT uses "flamebait" techniques in its stories. Rather than real journalism, this felt like a reporter trying to create controversy rather than report news."

Frank Shaw, Microsoft's corporate VP of communications told Seattle's public radio station KUOW that Microsoft has two strong efforts to recruit young developers -- Dreamspark and its Imagine Cup project taking place now in Poland. "We've got programs designed at young developers," Shaw said. "I look at both those things and think maybe our definition of cool and hip is different."

He points to his recent blog posting where he highlights Microsoft's net income for its 2009 fiscal year of $14.5 billion, compared to Google's $6.5 billion and Apple's $8.2 billion. "We've grown revenue and profits in a phenomenal way," Shaw said. Of course a clearer indication will come later this month when Microsoft reports its fiscal year 2010 earnings for the period ended on June 30.

Do you think Microsoft can pull out of its current morass and appeal to young developers and consumers? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 07/07/2010 at 1:29 PM2 comments

Kin May Outshine Bob as Microsoft's Biggest Dud

Microsoft cut its losses quickly with the Kin, even though it never should have been hatched in the first place. Not that it's a big shock that Kin failed or Microsoft had much choice in the decision to kill it. It just seemed that after the lack of logic in rolling it out in the first place, that Microsoft might be reticent to concede defeat so rapidly.

Kin, known internally at Microsoft as Pink, of course was borne of Microsoft's acquisition of Danger, maker of the Sidekick, which was marketed by T-Mobile until it yesterday pulled the plug on it as well, according to CNET's Ina Fried. Even though Kin was destined to be a dud, Andrew Brust blogged some interesting theories on why Microsoft had to launch it and let it fail. Check out his top 10 reasons why Microsoft may have launched Kin anyway. Brust notes:

Kin had to be brought to market, and had to fail, in order to topple [corporate VP Roz] Ho from her position and consolidate power in the WP7 [Windows Phone 7] team.

When I saw the Webcast of the Kin's launch in April, I couldn't help but cringe. It came after Microsoft finally had a credible story with Windows Phone 7, even if it is still has an uphill battle to cut into the comfortable lead maintained by Apple with the iPhone and Google with its Android platform.

But it would be foolish to rule Microsoft out of the mobile enterprise race, yet. But when Microsoft launched Kin, it was evident it had no legs, and moreover it was a clear distraction from its Windows Phone 7 story.

The Kin, if it is remembered at all, may challenge Microsoft's Bob as the company's biggest dud ever. For those who remember Bob, launched 15 years ago to make Windows 95 easier to use, it recently made Time magazine's list of 50 worst inventions ever.

Now that's a tough act to follow.

Posted by Jeffrey Schwartz on 07/02/2010 at 7:29 AM0 comments

Quest Reaches Out To MSPs

Quest Software wants providers of managed services to use its broad portfolio of systems management, migration and connectivity software. The problem is managed services providers, or MSPs, don't want to pay Quest's traditional lump-sum licensing fees. In order to make its software palatable to managed services providers, Quest has introduced a new consumption-based licensing model that it hopes will broaden its market.

The company earlier this month launched its new Service Provider Program, designed to let MSPs license its software the way service providers are accustomed to doing business -- by the month or quarterly and as applicable on a per user or account basis.

"We are traditionally targeted at the on-premise customer to give them all the capabilities they need to do things themselves," Darren Swan, Quest's manager of development told me. "We have worked with service providers to help them do it with the customers, but we haven't targeted specifically the service providers to enable them to move on-premise to host and manage."

Quest had to make a fundamental change in its business model to reach this new customer set. That's because the business model for MSPs doesn't encourage them to incur up-front software license fees.

After seeing its revenues decline for the first time in a decade last year, Quest is trying to extend its reach to MSPs by offering its software via a new licensing and model that is more conducive to them.

The subscription model is appealing for two reasons: the ongoing revenues and convenience for the end customer, explains Scott Gode, VP of marketing at Azaleos, a managed services provider and Quest partner.

"The unique thing with Quest, particularly around their migration tools, is that it's not at all a niche because migrations are huge and will continue to be," Gode says. "But it's not your typical annuity model because a migration is more often or not a one-time event verses consuming cloud storage space, which is an ongoing annuity model."

But Quest also has monitoring and other tools that are used on an ongoing basis. Yet MSPs are only willing to pay for those tools as they are consumed. One MSP that found Quest's array of tools appealing is DirectPoint Inc., based in Lindon, Utah.

Dan Atkinson, DirectPoint's VP of alliances, hooked up with Quest about a year ago, and found many of its monitoring and migration tools suitable for its needs. But Atkinson said DirectPoint couldn't introduce new capital expenditures to pay for the software when the company was accustomed to weighing its costs towards operational expenditures. Atkinson said Quest's move from perpetual license fees to quarterly per-user pricing sealed the deal.

"Paying all of those upfront license fees and maintenance fees does not work well for somebody like ourselves that is a pure-play MSP," Atkinson explains. Software vendors who want to do business with MSPs and cloud providers appear to be grudgingly if not gradually moving in this direction, according to Atkinson.

Case in point is CA Technologies, which recently acquired monitoring vendor Nimsoft and cloud virtualization platform vendor 3Tera. "We're beginning to see more and more of it," Atkinson says.

If you're an MSP, are you finding software vendors showing more willingness to work with you on licensing? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 06/29/2010 at 11:32 AM0 comments

Big Changes Afoot for Microsoft Partners

Time will tell whether the reshuffling of responsibilities between soon-to-be former Channel-chief Allison Watson and her successor, Jon Roskill was a chance to allow both execs to broaden their careers and put new blood into their respective organizations or whether there are more pronounced changes in the works to the way Microsoft goes to market with its partners.

It's hard to be shocked that after nearly seven years Watson is moving to a new role. That's the Microsoft way and anyone who follows the company knows it frequently shuffles execs. By many accounts, Watson was overdue for such a change.

The move caught many partners and even those inside Microsoft off guard --just a few weeks before Microsoft's Worldwide Partner Conference.

"The new fiscal year is a week away, and that means kicking off and executing the 2011 marketing campaigns and Allison's new role will play an important role there," Directions on analyst Paul DeGroot suspects. "Microsoft's global sales meeting usually happens a week or two after the partner conference, so she'll be getting worldwide visibility right away."

Watson's move as corporate VP for Microsoft's Business and Marketing Organization (BMO) should not be viewed as a kick upstairs, DeGroot added. "BMO is a pretty critical part of Microsoft's sales organization, so leading the U.S. BMO is by no means a trivial role or a sideways move," DeGroot said. "Maybe they are grooming her for future roles in the corporate mainstream."

By most accounts, Watson was well regarded in the partner community. "Allison truly has supported our group and we were very happy to have the opportunity to work with her," said Kerry Gerontianos, president and CEO of  Incremax Technologies Corp. and the IAMCP's national president. "The most rational explanation for the change is she's been there awhile."

Now it is unclear whether she will share the keynote stage with her successor or will cede it to him. The message of course is that the two will work together. Watson said as much in a blog posting yesterday.

"As I shift into my new role, one thing that will not waiver is my passionate dedication to partners," Watson noted. "My commitment to strengthening and evolving our engagement, and the collective learning you've imparted will be a toolset I will continue to employ. Jon and I are eager to hear from you about how we can best serve Microsoft's partners and customers."

Yet if she knew this was coming as recently as two weeks ago, she held it close to the vest. In fact she spent nearly an hour just two weeks ago talking to myself and Redmond Channel Partner editor-in-chief Scott Bekker, outlining the importance that partners follow Microsoft to the cloud, which was to be the basis of her keynote at WPC.

"Microsoft is 'all in' but we haven't really been telling everyone what 'all in' is yet," she told us. "In a comprehensive way, that's obviously a major goal for WPC. And the roadmap is becoming very fleshed out during the course of the next 12 months."

How partners should follow Microsoft to the cloud will surely remain the theme of WPC (stay tuned for the July RCP cover story), still lots of questions loom. Perhaps the most significant is what this will mean for Julie Bennani, general manager of Microsoft's Worldwide Partner Group. Bennani is architect of the new Microsoft Partner Network.

Many channel partners are concerned about what the new certification rules will mean to them, particularly smaller ones. Under the new rules, as I reported, there will be no double dipping, but partners are hoping Microsoft will make exceptions.

While it appears the new rules are pegged at those that latch onto a certification without committing enough to those product lines, others argue the collateral damage can hurt those partners who can't afford to hire additional engineers, yet those they have are skilled in multiple disciplines.

"If they want to make bigger changes to MPN, they could use this re-organization as an excuse for a delay," suggests Howard Cohen, regional chairman of the International Association of Microsoft Channel Partners (IAMCP).

Also it remains to be seen what this will mean to Pam Salzer, Microsoft's Senior Director of Worldwide Partner Marketing. Many are bracing for additional personnel moves at some level in the coming days and weeks.

What's your take on all these changes? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 06/25/2010 at 12:31 PM0 comments

New Desktop Virtualization Licensing Looms

Microsoft is talking up application virtualization and there are some new technology, partnering and licensing considerations on the horizon. Also in its battle against VMware, look for Citrix and Microsoft to act as true partners-in-crime to take on the cause for desktop application virtualization.

First, in case you haven't heard, effective July 1, those customers who don't qualify for Windows Client Software Assurance will require a new license called Windows Virtual Desktop Access, or Windows VDA. According to a posting on Microsoft's site, the company came up with Windows VDA to allow organizations to license virtual copies of Windows in virtual environments for devices that don't qualify for Windows client SA such as third-party contractor PCs and thin clients, among others.

Windows VDA is a device-based subscription license that will cost $100 per device per year. "It will allow organizations to create multiple desktops dynamically, enable user access to multiple virtual machines (VMs) simultaneously and move desktop VMs across multiple platforms, especially in load-balancing and disaster recovery situations," Microsoft says.

What's the benefit of that added cost? Among other things, Microsoft says it will allow users to run Windows in a data center including Enterprise editions, rights for a primary user to access corporate VDI desktops from non-corporate PCs including home systems and kiosks and access rights for up to four VMs, concurrently. It will also support unlimited mobility of VMs between servers and storage and unlimited backups of VMs, according to Microsoft.

At a time when Windows 7 sales appear to be going through the roof, Microsoft appears to be making a strong push toward desktop virtualization even as it may cannibalize future Windows licensing.

To strengthen its portfolio, Microsoft is working closely with longtime partner Citrix to take on the larger behemoth -- VMware. Brad Anderson, who oversees Microsoft's virtualization efforts, gave a keynote address at Citrix's annual Synergy conference earlier this month following Citrix launch of the first bare-metal client hypervisor..

Following Anderson's keynote, he and Citrix CTO Simon Crosby posted a recorded video conversation between the two where he talked up what Microsoft has in store on the App-V front.

"With application virtualization, what we're doing is taking all the assets, all the experience from the desktop, applying it to the server, and this will be released in conjunction with the next version of System Center in 2011," Anderson said. "Think about this as being embedded into virtual machine manager that gives you the ability to separate out your existing applications, so that you can actually have that separation of the app and the OS and dramatically reduce your number of operating system images."

One of the things Anderson demonstrated in his keynote was the next version of System Center Virtual Machine Manager making Xen Server a first class citizen. "The integration is definitely there," Anderson said.

Added Crosby: "So you can drag and drop a multi tier app from Xen App and Xen desktop, which has tons of components, and just magically shows up. One cool use case: once you've done all this virtualization, it's a good way to deploy things into the cloud, so I can then take an app that I've virtualized and pop it up into Azure."

What's your take on the new VDA licensing? If you're a Microsoft partner are you looking more closely at Citrix's XenSource platform and the new bare-metal hyper-visor the company announced? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 05/28/2010 at 3:09 PM1 comments

Some Partners Unsure About Microsoft Partner Network Changes

Not feeling all that prepared for the forthcoming changes in the Microsoft Partner Network? You're not alone.

According to a poll of a small but very influential group of partners, only 29 percent said they feel very aware of the changes and requirements in the Microsoft Partner Network, while 58 percent are somewhat aware and 12 percent are either unsure or not aware. Meanwhile, 38 percent say they are not familiar what they have to do to prepare for the changes, while 46 percent said they were somewhat prepared. Only 15 percent feel very prepared.

These stats and others were gathered at last week's first-ever national meeting of the U.S. chapter of the International  Association of Microsoft Certified Partners (IACMP), where I reported Microsoft's effort to extol the virtues of its move to the cloud and the uneasiness that partners are experiencing.

During the event, which included live meetings around the country and attendees who logged into a Webcast, Microsoft polled the audience to get their feelings on MPN.

While only 26 attendees weighed in, only members of IAMCP were invited and these are influential Microsoft partners. So you may choose to take these numbers with a grain of salt but they are at least an indicator of how some key partners feel.

We’d like to hear from more of you. Please let us know what level of awareness and readiness you have for the forthcoming changes in MPN. Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 05/26/2010 at 11:30 AM0 comments

Are You Ready for MPN?

The International Association of Microsoft Certified Partners held its first-ever national meeting yesterday where the forthcoming new Microsoft Partner Network (MPN), the Worldwide Partner Conference (WPC) and Microsoft's emphasis on the shift to cloud computing were front-and center.

Nearly 1,000 partner firms are members of IAMCP. The goal of yesterday's held event was to reinforce the IAMCP's mandate that partners should network with one another and create relationships by which they go to market together in areas where their skills are complimentary.

"We see an opportunity to really help you gain more information and connections to grow your business," said Cindy Bates, VP of Microsoft's U.S. Partner Strategy, who was the keynote speaker. Bates used her pulpit to talk up MPN -- launched at last year's WPC but set for some key changes to be rolled out this year. For a deep dive on the MPN see Scott Bekker's full report.

As far as many partners are concerned, MPN spells uncertainty. Approximately 60 to 70 percent of the IAMCP are now Gold Certified Partners, said Kerry Gerontianos, president and CEO of New York-based Incremax Technologies and president of the U.S. IAMCP, in an interview following the presentation. That's because it is unclear how those partners will rank under the new structure, which looks to create an advanced certification for some of Microsoft's largest partners.

Gerontianos, who hosted the event at Microsoft's New York City office, talked to me about satisfaction with MPN so far by IAMCP members. "I would say it's mixed," he said. "I think there is a lot of concern about MPN." While Bates did little to address how partners may be affected down the road, she did tell the several hundred in attendance that she considers IAMCP an important constituency.

"IAMCP and its very impressive partner community is closely and strategically aligned with Microsoft and, in our view, is one of the most [important] communities in the industry, fostering and facilitating partner-to-partner connections," Bates said.  "I have seen first-hand how partners have increased revenue as a result of p-to-p networking, identifying new customer opportunities through point solution delivery, expanding geographical reach or increasing capabilities through partnerships."

Of course those are mere platitudes to those partners that may find themselves having to invest in further certifications or losing their existing status. To its credit, the IAMCP is pushing hard for Microsoft to take the needs of smaller but high-revenue producing partners into consideration when rolling out MPN. How that will play out remains to be seen.

What's your take on MPN? How do you see it affecting you? And how does Microsoft's "we're-all-in" the cloud emphasis potentially impact your business moving forward? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 05/20/2010 at 2:02 PM2 comments

CardSpace 2.0 Headed for the Heap?

Active Directory Federation Services 2.0 is now shipping but Microsoft postponed the release of CardSpace 2.0, putting its future in doubt.

The current CardSpace is built into Windows 7 and Vista but it doesn't appear that it is widely used. Perhaps that's why Microsoft quietly announced that it was putting on hold the next version, CardSpace 2.0, which was to provide a common user-interface for managing multiple logins.

CardSpace 2.0, which had been in beta since last year, supports ADFS 2.0 and includes support for the Windows Identity Foundation. To address the lack of an updated Information Card, in the new ADFS 2.0, Microsoft next month is expected to release a Community Technology Preview of an add-on to ADFS 2.0 that will enable Windows Server to issue InfoCards.

It appears that Microsoft shifted gears in March with the release of its U-Prove information identifier at the RSA Conference when Scott Charney, Microsoft's corporate vice president of Trustworthy Computing, launched the CTP of the company's U-Prove technology.

U-Prove centers on the issuance of digital tokens that allow users to control how much information is shared with the recipient of the token. Used against ADFS 2.0, U-Prove lets users federate identities to across trusted domains. Microsoft released U-Prove under its Open Specification Promise and also donated two reference toolkits for implementing the algorithms under the Free BSD License.

Moreover, Microsoft released a second specification under its OSP for integrating U-Prove into open-source identity selectors. How that will play out, in terms of whether the .NET and open-source communities embrace U-Prove, remains to be seen.

But that has many people wondering if there's any future for CardSpace 2.0 and if U-Prove will prove, pardon the pun, to be a viable replacement. "There's certainly support for information cards; our involvement in information cards is alive and well," said  Joel Sider, a senior product manager in Microsoft's Forefront security group, in an interview yesterday. Microsoft is not saying when it will update its CardsSpace 2.0 plans, but some are wondering whether the technology has a future.

CardSpace 2.0’s uncertain fate is "no surprise given its limited adoption," said Patrick Harding, CTO of Denver-based Ping Identity, a Microsoft partner and competitor. "Unfortunately, it has also really upset all of those people and companies that have bought into the InfoCard model at Microsoft's urging."

What's your take on the CardSpace 2.0 situation? Have you looked at U-Prove? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 05/06/2010 at 10:58 AM0 comments

HP with Palm Reshapes Mobile Landscape

About 10 days ago, I broke down and bought a Palm Pre Plus for a mere $49. The few people I've told have given me blank stares. I love the gesture-based interface and the way the device works. An added bonus was the free mobile hotspot built into the device that I can use to connect my netbook while on the road. I've been reluctant to reveal my purchase because I have 20 days left to return it to Verizon should I conclude it's a dud.

While I have been on the fence, HP announced yesterday that it has agreed to acquire Palm Inc. for $1.2 billion. This leaves me thinking Palm's webOS has a much brighter future. Here's why: The biggest knock against webOS and the Pre is its lack of apps. That has been the source of my dilemma -- not the device itself.

Only 2,000 are in Palm's App Catalog compared to 200,000 or more in Apple's iTunes App Store. Making matters worse, sales of Palm-based devices are nimble, in part because developers have taken a pass on webOS in favor of Apple's iPhone and Google's Android platform.

IDC said in a research note yesterday that it believes Google's Android platform will be number two behind Nokia's Symbian platform. As everyone knows, Apple iPhones and iPads are selling like hotcakes. Then there's the BlackBerry brand and devices based on Microsoft's Windows Mobile coming out this fall.

So where does that leave Palm and webOS? Until HP came to the rescue, the future was looking bleak, despite what I think is a superior platform and user interface to Android and BlackBerry. Windows Phone 7 is a dark horse with a lot of potential, but the jury is still out. If I end up disappointed with my Palm Pre, I wouldn't rule out settling with a Windows Phone 7 or an iPhone, as an alternative. But I have no intention of leaving Verizon and neither are an alternative at this time.

The good news for webOS is that HP plans to invest significantly in both sales and marketing as well as in its developer eco system, said Tom Bradley, executive vice president of HP's personal systems group, speaking on a call to investors that was webcast. Bradley also sees extending webOS to other form factors and using its vast channel and retail presence to reach customers -- both enterprise and consumers.

"Our breadth of products between smart phones, slate and potentially netbooks represents an enormous opportunity for our customers," he said. While he declined to elaborate, the Web site CrunchGear posted five devices it envisions HP developing with webOS.

Bradley also is well aware he needs to get developers as excited about webOS as they are about Android and the iPhone, and indicated he's up for the challenge. "We believe this is a very, very early stage market. I think the developer community will very aggressively, as we invest and provide support, begin to develop that suite of applications for webOS that will make it even more compelling than it is today," Bradley said.

Indeed, HP has the means to quickly give a boost to the webOS developer eco system, said Jeffrey McManus, CEO of Platform Associates, in a brief e-mail exchange. McManus, who has given talks in the past on how to develop apps for the iPhone, was among the first to purchase the Pre when it came out last year.

"I'm confident that HP will be a great steward of Palm's webOS platform, which is still the most compelling mobile platform in existence today, particularly from a developer perspective," McManus said.  "It gives developers the ability to build native mobile applications using the same tools and technologies they already use to build ordinary Web sites today (HTML, CSS and Javascript). And WebOS will become even more compelling as HP brings it to more devices, including the Slate (which I'd expect them to do fairly soon)."

Still, IDC and others say the move could strain HP's relationship with Microsoft, whose CEO Steve Ballmer showcased HP's forthcoming Windows 7-based Slate tablet device at the Consumer Electronics Show in January. It also suggests HP's move into the smart phone market will come at the expense of Windows Phone 7, though Bradley was coy as to whether it will have a multi-platform smart phone and tablet strategy -- or emphasis.

Let's not forget that Bradley's successor at Palm, Ed Colligan, licensed Windows Mobile for the Palm Treo, in a widely publicized event with Microsoft chairman Bill Gates. It represented the first non-PalmOS-based platform the company added and, at the time, a key vehicle for Windows Mobile (in 2005 the Treo was the only major smart phone on the market besides the BlackBerry). That had mixed results for both companies, and I guess we'll find out how Bradley might handle Windows Phone 7.

Bradley insisted HP will continue to work closely with Microsoft. "We clearly believe in choice," he said. "We intend to continue to be a strategic partner for Microsoft, they are a huge piece of our business today and will continue to be so."

Still, there are reasons to be skeptical. As analyst Rob Enderle pointed out in a blog posting, HP has a history of missteps in the mobile market. "Palm and HP have both made runs at matching Apple in the past, and fallen flat on their faces," Enderle noted. "But the two companies’ combined resources might be just the secret sauce needed to stand tall beside Cupertino’s Goliath."

Michael Gartenberg, an analyst at Altimeter Group, agreed. "HP is now a force to be reckoned with in the mobile space," Gartenberg said in a blog post. "The combination of Palm technology and brand combined with HP resources and channel partners will be a strong combination for HP to drive their mobile efforts forward."

Having bought my first 3Com PalmPilot 3x in 1999 and a longtime user of the Treo, it bares noting that what's left of Palm is the company's name and heritage. The Palm Pre and webOS are very different platforms, but in my opinion, it is the only platform that currently rivals the iPhone and Droid.

A year ago I asked: Will Palm Get its 'MoJo' Back with webOS and Pre? Things certainly went down a different path than the company and many of its investors and supporters had envisioned and hoped.

With HP agreeing to acquire Palm (and let's not forget the deal could fall through, or another suitor could come along with a better bid), I agree with McManus. The future of webOS is looking brighter. But the question remains: will HP get its mojo back in the mobile market? It's too early to say but as I pointed out yesterday, it is quite ironic that Palm will once again be reunited with its former CEO Bradley, with 3Com and will be under the same roof as the once iconic iPaq. Presuming Jon Rubenstein, the key developer of the Apple iPod, and his team stick around, some interesting things can happen.

I still haven't decided whether I will keep my Pre but I am more inclined to hold onto it than I was yesterday at this time. What's your take on HP's move? If you're a developer, are you more inclined to look at webOS? Should I keep or return my Palm Pre? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 04/29/2010 at 9:16 AM2 comments

Will ADFS 2.0 Boost Cloud Security?

The pending release of Microsoft's Active Directory Federation Services (ADFS) 2.0 is expected to play a key role in simplifying how organizations provide access control to systems and applications, including those running in the cloud.

Microsoft is expected to release ADFS 2.0, the free Windows 2008 Server add-in to Active Directory, this week, as reported. ADFS 2.0 provides claims-based authentication to applications developed with Microsoft's recently released Windows Identity Foundation (WIF).

While ADFS 2.0 give single sign-on to .NET applications built-in WIF and systems running Windows 2008 Server instances, it also extends that authentication to Microsoft's Windows Azure cloud service. But just as important, it provides single sign-on to Windows applications running on other cloud-based services, said Jackson Shaw, Quest Software's senior director of product management.

"ADFS 2.0 is really going to shed the spotlight on federation and cloud services and that's something the industry can use," Shaw said, in a telephone interview from the company's TEC 2010 conference in Los Angeles. "You can put an ADFS 2.0 instance up and use it to connect directly to Google or Salesforce.com. It's fairly straightforward."

Key to ADFS 2.0 is its support for the Security Assertion Markup Language 2.0 (SAML) standard, which is widely supported by cloud providers and ISVs. By allowing Windows and .NET apps to make and exchange SAML-based authentication claims, that removes a key barrier.

While Shaw sees ADFS 2.0 as a key step forward toward improving cloud security, he cautioned it's not a panacea. "Not every single piece of information about what someone can or can't do is stored in Active Directory," Shaw said. "There may be something about my spending authority in the SAP system, for example. What that means is it forces a customer to synchronize more info into Active Directory."

The problem, he explained, is customers may not want to always do that."That's part of the evolution of cloud services we have to go through, and that's why I am excited about ADFS 2.0, because as more and more customers start to use this, these types of difficulties are going to be surfaced," Shaw said.

Not lost on him of course, is the opportunity that presents for third parties like Quest, Ping Identity, Symplify, CA, Novell and others to offer tools to remediate some of these issues.

Keynoting at this year's TEC 2010 was Conrad Bayer, Microsoft's general manger for Identity and Access solutions. Shaw, who attended the keynote, shared a few observations:

• Directory technologies have all been brought together into one group at Microsoft, which Bayer will oversee. That includes ADFS, Forefront Identity Manager and Rights Management Server. "This is definitely a step in the right direction from the perspective of actual integration across the product line and hopefully some proper integration with Active Directory," Shaw said in a blog posting released just after we spoke.

• When Bayer polled the audience to see how many were using AFDS, very few raised their hands. "I believe this will change once ADFS v2.0 releases later this year - since ADFS is basically free," Shaw noted.

• Cardspace 2.0 is not ready, Bayer confirmed. "It doesn't go away but it isn't imminent to be released either," noted Shaw. "They want to add OpenID support and they are working on that along with incorporating it into Internet Explorer."

Are you looking to use ADFS 2.0 in your organization or for your clients?  Drop me a line at jschwartz@1105 media.com.

Posted by Jeffrey Schwartz on 04/26/2010 at 2:00 PM1 comments

Inside Microsoft's Private Cloud

I had the opportunity this week to see Microsoft's portable data centers, which the company showcased here in New York.

In honor of Earth Day, I thought it would be fitting to describe what Microsoft is showcasing because it does portend its vision for the next generation data centers that have self-cooling systems and servers that don't require fans.

Microsoft first demonstrated the portable data centers at its Professional Developers Conference back in November in concert with the launch of Windows Azure. It gained further prominence last month when Microsoft CEO Steve Ballmer made his "we're all in the cloud" proclamation at the University of Washington with these huge units in tow. The one I saw in New York was 20-feet long by seven feet wide but Microsoft also has one that stretches 40 feet.

These portable data centers, which are designed to be housed outdoors, are packed with loads of racks, blade servers, load balancers, controllers, switches and storage all riding on top of Windows Azure and Microsoft's latest systems management and virtualization technology.

But they also have self-cooling systems that suck the hot air out of the servers and use that to generate heat when needed in other parts of the data center. In places where the climate is cold, it brings that cool air into the data center. Otherwise it takes the outside air and runs it through what are known as adiabatic coolers. These custom-configured containers have sensors that automatically adapt to outside temperatures that fall below 50 degrees or above 95 degrees, as well as humidity levels lower than 20 percent or higher than 80 percent.

While these portable data centers represent the latest proof-of-concept for where Microsoft sees organizations building on-premises private clouds, they are used to power Microsoft's own Azure-based data centers. "These are actual units that run our data centers today," said Bryan Kelly, a service architect for research and engineering in Microsoft's Global Foundation Services business unit, who demonstrated the portable data center for me.

It is also a reasonable bet that while they are not on Microsoft's official product roadmap, customers will ultimately be able to buy their own Azure powered containers that, in some way, emulate this model, most likely from large systems vendors such as Cisco, Dell, EMC Hewlett-Packard, IBM and custom system builders.

Speaking at the Microsoft Management Summit in Las Vegas Tuesday, Bob Muglia, president of the company's systems and tools business was the latest to suggest as much.  "The work that we're doing to build our massive-scale datacenters we'll apply to what you're going to be running in your datacenter in the future because Microsoft and the industry will deliver that together," Muglia said, according to a transcript of his speech.

Microsoft will buy 100,000 computers this year for its own data centers, Muglia said. They will be housed in these containers weighing roughly 60,000 pounds, equipped on average with 2,000 servers and up to a petabyte of data.

The units I saw showed no brands, so I have no idea, whether they were bundled with Cisco, Dell, HP or IBM components, just to name a few. But it doesn't matter, according to Kelly. "This is all commodity hardware," he said.

That may be so but the configuration of these data centers is anything but commodity. To give it justice, check out this Channel 9 video taken by Microsoft's Scott Hanselman at PDC where cloud architect Patrick Yantz provided a 16-minute walkthrough of the units.

Do you see these data centers in your future? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 04/22/2010 at 4:25 PM0 comments

Infosys Bags $100 Million from Microsoft

After declining to disclose the value of its outsourcing deal with Microsoft, Infosys CFO today reportedly revealed that it's worth a whopping $100 million.

Bangalore-based Infosys announced Tuesday that Microsoft is outsourcing its IT help desk, PC, infrastructure and application support to them in a three-year deal that involves 450 Microsoft locations in 104 countries.

CFO V. Balakrishnan revealed its windfall to Dow Jones today.  When I spoke with Nataraj, Infosys VP and unit head of infrastructure management Tuesday, he emphasized that the deal will not lead to any job displacement.

Nataraj also said that the work it has picked up was support already farmed out to a multitude of partners in the past -- that this was mainly the consolidation of that work to one partner. "Microsoft has outsourced parts of its internal IT before," notes Directions on Microsoft analyst Paul DeGroot.

Our original news report generated some less than enthusiastic comments. "C'mon Microsoft -- use US-based workers," wrote Bob. "No wonder no one wants to go into the tech field. Even Microsoft drinks the outsourcing Kool-Aid."

Added John: "What bugs me more than anything is that, like anyone who offshores to China or India, the cost of Microsoft products will not be cheaper. On the one hand we're too expensive to employ, on the other hand we live in the U.S. and are paying a premium for goods and services. Well, we may be seeing the last of the great experiment we call the U.S.A."

DeGroot points out that outsourcing of IT support could have other ramifications for Microsoft. For example, with fewer internal operations being performed by Microsoft employees, it could mean that there are no longer as many people internally with easy access to product groups and to highly detailed operational data.

It’s also potentially providing less access to "the world's best Exchange/Windows/SharePoint/SQL Server engineers who they might be able to call on to solve a problem that a lot of customers are having," he said.  

"Microsoft also uses its internal systems to 'dogfood' new products," he added. "For example, new products are often put into full production internally while they are still in external betas. Microsoft users put up with the problems they might encounter because they understand that their experience will help the company make a better product."

Posted by Jeffrey Schwartz on 04/15/2010 at 4:01 PM6 comments

VCs Set Expectations

If you're looking for VC money, don't presume no one else has considered your unique idea, be prepared to show you have a solid customer roster and don't expect to find the easy money of yesteryear.

Those were among the takeaways of a panel presentation I attended earlier this month with five VCs and a company that received venture funding. It was moderated by Bloomberg TV's Taking Stock anchor Pimm Fox. 

As a prelude to the panel, PricewaterhouseCoopers' partner David Silverman revealed PwC's annual MoneyTree report, which gave the lowdown on last year's dismal year for venture funding that was tighter than ever. Investors only pumped $17.7 billion into companies, down 37 percent over 2008's $28 billion.

There are indications that it is starting to bounce back incrementally this year, with signs trending toward $20 billion, Silverman said. As reported, funding remains tight -- but VCs still see opportunities in areas such as cloud computing, smart phones and green technology. VCs are looking at smaller deals and companies that have proven and viable customer bases.

The takeaway: Those seeking big payouts of yesteryear should reset their expectations, the VC's warned. "I think the classic VC model is broken," said First Round Capital founder and partner Howard Morgan

"The mathematics are simple; if you raised a billion dollar fund and you wanted it to return 20 percent, you needed to return $3 billion. If you own 20 percent of your companies that exit, you needed to create $15 billion worth of market cap. If you were in YouTube and Skype and MySpace and a few others, you may be halfway there. That part is broken. What's not broken is that companies need capital."

Vytas Kislieulius, CEO of Collections Marketing Center, a software-as-a-service startup that runs a collections exchange and describes himself as a "serial entrepreneur," said it is important to be realistic when making your case to potential investors these days.

"I have never been one to believe that the investors are here for my benefit but for our benefit. If I make it good for them they'll make it good for me," Kislieulius said. “If I can't make it good enough for both of us, I know who’s going to win. It's not me. That's the way the deal works."

That also means startups should go to investors with a solid business case. "There's less willingness to let it ride now than there used to be," Kislieulius said. "It takes so much more proof that there's a real market and that there's real customers."

Finally, he warns, those seeking funds should scope out potential investors carefully. "You have to choose them as carefully as they choose you because if you just take the money and it's a mismatch, it's brutal, I can promise you that."

Have you reached out to the venture community for funding? Or are you seeking alternative forms of funding your business? Drop me a line at jschwartz@1105media.com and follow me on Twitter @JeffreySchwartz.

Posted by Jeffrey Schwartz on 03/31/2010 at 11:44 AM0 comments

Should Microsoft Fear Google Apps?

Can Microsoft convince customers to upgrade to the full version of its forthcoming Office 2010, due for release May 12?

While that question has been looming large for awhile, today The Wall Street Journal's Nick Wingfield once again raises that specter focusing on the formidable challenge from Google. Wingfield said "Microsoft seems to be staring down the Google threat," pointing to wins by General Motors and Starbucks.

Google has 25 million Google Apps customers, though Gartner says only 1 million are paying customers. The report says there are 40 million paying Microsoft Office online customers, a small but noteworthy fraction of the hundreds of millions of Office users.

With Office 2010, Microsoft is adding its own Web-based client that will extend the use of apps such as Word and Excel to the browser. Moreover, Office 2010's ability to link to the forthcoming SharePoint Server 2010 will make the two a unique pair of products that will enable new levels of collaboration within enterprises and among extended work groups (for a deep dive on Office 2010 see the cover story in the current issue of Redmond magazine).

Microsoft appears to be shrugging off Google Apps as a threat to its Office franchise. But Silicon Alley Insider editor Henry Blodget begs to differ, writing "Microsoft Should Be in Major Panic Mode." Why? Blodget argues that Google has improved the capability of its offering and that many Office users will migrate. Microsoft can add more features, he argues, but those will appeal to a small subset of overall users.

"So don't take the puny size of Google's App business and the fact that big companies aren't seriously considering Apps as an alternative as a sign that Microsoft is safe," he writes.  "Microsoft isn't safe.  Microsoft is very exposed."

Since launching its partner program last year, Google recently reported that it has signed on nearly 1,000 solution providers. One of them is Tony Safoian, president and CEO of SADA Systems, who is both a Microsoft Gold Certified Partner and a member of Google's program. Safoian appeared last week on a Redmond Channel Partner Webcast hosted by editor-in-chief Scott Bekker.

"We feel like there are customers that are a great fit for Google and culturally they may be a little different," Safoian said. "And there's customers who will never get away from a desktop oriented experience or they just love the Outlook interface and they've invested a lot in that technology. We are just being honest and faithful to the market in being able to speak intelligently about both solutions and being able to offer whichever one makes the most sense."

Are you looking to upgrade to Office 2010? If so, why? Or should Microsoft be in panic mode? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 03/29/2010 at 1:59 PM4 comments

Is Windows Phone 7 Following in Palm's Footsteps?

While many loathe writing off Palm, the company responsible for creating the first generation of PDAs, the prognosis isn't looking too good. At the moment, those predicting Palm's demise seem to be heavily outweighing those who believe the company is going to regain its former glory.

Palm's sustainability came into deeper scrutiny late last week when the company said it shipped 960,000 units and only sold 408,000 of them. That suggests the company has stuffed its channel with a ton of unsold inventory. The news caused its shares to drop 30 percent Friday. Though the shares rallied early on the news that AT&T would start selling its devices, the company's shares closed down half a point.

Critics point to a number of missteps by Palm, from choosing Sprint as its exclusive launch partner (it added Verizon in January)  to releasing the new device last summer -- days before Apple started shipping its next generation iPhone. But the biggest mistake has been how the company treats its partners and developers.

Despite the promise of delivering a software development kit that would be friendly to any JavaScript or HTML developer, the tooling failed to arrive in advance of the device. This dampened the prospect of it building a rich partner ecosystem. And now there are only 2,000 apps that support Palm's WebOS, compared with 170,000 for the iPhone, 30,000 for Google's Android and 5,000 for Research in Motion's BackBerry, according to data compiled by Silicon Alley Insider.

The 1990s saw Palm building a vast developer ecosystem with its PalmOS. "Back in the early days, Palm could do no wrong and was an unstoppable force, it dominated the PDA space…" recalls longtime Palm devotee Mark Nielsen in a blog posting last month.

But a key problem this time around was that Palm lost the developer ecosystem long before WebOS, Nielsen continued. Under that backdrop, Nielsen begs the question: is Microsoft following in Palm's footsteps with its Windows Phone 7 Series strategy, which effectively scraps the old Windows Mobile 6.x code in favor of the Silverlight RIA-based architecture and Zune interface? In other words, just as PalmOS apps were useless to WebOS, will the same come true for .NET Windows Mobile developers?

"I have nothing against the Zune. I own one but it's not Windows Mobile and its navigation UI is not very flexible. On top of that, they choose to not support past apps, which once again I believe was a huge mistake for Palm," Nielsen notes.

"So like Palm, they have chosen to start over and play catch-up on third-party apps when they didn't really have to," said Nielsen. "You've alienated your past developers while hurting their customer-base which is your customer-base. In the meantime, you've positioned your new OS to 'wow' the home consumer and downplay your enterprise strengths. Microsoft, it's not too late to correct some of your decisions. Just look at Palm and see how it has worked for them."

Giovanni Gallucci, organizer of last year's Windows Mobile Developer, says that's not a fair comparison. "The PalmOS ecosystem was dying or dead," he said in an interview. "The Windows Mobile team learned by watching Palm and realized they have to get their code out there fast, early and into everybody's hands. Clearly Palm's approach that no one would get the SDK until after the device shipped was a strategy that failed."

Gallucci dug himself into a hole in early 2009 when he and others launched the Palm PreDevCamp effort. He shortly walked away from it last year after its apparent demise. It should also be noted that Apple wasn't quick to make its SDK available before the iPhone came out. However, this didn't hurt them as it did Palm.

"Microsoft is going to the opposite extreme saying 'we're going to give you the SDK well before we even call this an alpha,'" he said. "They are taking a risk, much more than any other company does in giving developers access to their code, long before it's fully baked. But it's a risk that's paid off for them in the last three decades."

What's your take? To learn more about Microsoft's new mobile strategy, see: Top 7 Windows Phone 7 Highlights from MIX10. Share your thoughts by droping me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 03/23/2010 at 10:38 AM4 comments

Remembering Jerome York

Jerome York, best known for his association with the billionaire and activist investor Kirk Kerkorian, passed away late last week just days after suffering a severe brain aneurysm.

York, 71, was best known for playing a key role in helping save Chrysler and later IBM. He was brought in to both companies as CFO when their survival was very much in question. York instituted major cost-cutting initiatives and is credited with contributing to their respective turnarounds.

At the time of his death, York was still sitting on Apple's board, where he was a director since 1997. York joined Apple's board just prior to the return of CEO Steve Jobs. "He has been a pillar of financial and business expertise and insight on our board for over a dozen years," Jobs said in a statement. "I will miss him a lot."

More recently, York was in the spotlight for his efforts to lead Kerkorian's initiatives to salvage General Motors before its meltdown last year that resulted in its filing for bankruptcy. As his obituary in The New York Times noted, he foresaw much of GM's problems years before they played out, though his warnings were largely ignored.

His obituary pointed to "one rare miss" when he and some investors bought direct systems marketer Micro Warehouse for $275 million, looking to capitalize on the boom for selling IT goods online. I recall sitting down with York at Micro Warehouse's Norwalk, Conn. headquarters. At the time, York was still treading water, trying to transform the company from an inbound seller to an outbound marketer of systems. But Micro Warehouse ultimately filed for bankruptcy and was snapped up by rival CDW.

Posted by Jeffrey Schwartz on 03/22/2010 at 7:05 AM1 comments

Microsoft Plunges Into VDI Pool

While client and desktop virtualization was always something Microsoft knew it couldn't ignore, it has always loomed large as a threat to Redmond's Windows franchise. But a group of coordinated announcements today suggests Microsoft is going to put more emphasis on both application virtualization and virtual desktop infrastructure (VDI) technology.

Microsoft has taken several key steps to make its Application Virtualization (App-V) and VDI stack both more appealing from a licensing perspective, as well as from an implementation standpoint.

"It's a coming out party," IDC analyst Al Gillen said in a telephone interview. "Microsoft had been very disinterested in client virtualization, or at least in promoting client virtualization. This represents a fundamental shift of strategy for them. They really have not endorsed client virtualization anywhere near the level of sincerity that they needed to. It's ground-breaking from my point of view for Microsoft to do this."  By not putting emphasis on VDI, Microsoft risked seeing VMware and Citrix continue to expand its presence, Gillen points out.

Microsoft kicked off its announcement with a Webcast talking up its added focus on VDI with a panel of customers, along with Gartner analyst Mark Margevicius, to extol VDI in general and Microsoft's place in the equation.

The popular travel site Expedia Inc., for example, is well into the rollout of a catalog of 600 applications to 7,000 distributed desktop users as part of a migration from Windows XP to Windows 7, and is now doing a proof-of-concept on VDI, said Chaz Spahn, a senior systems engineer at Expedia in a telephone interview.

"We looked at SCCM [Microsoft's System Center Configuration Manager] or application virtualization technology and saw it gave us faster time to delivery," Spahn said of the App-V decision, noting it is appealing for use with call center agents and remote developers, who are typically contract workers distributed worldwide.

"We find at Gartner that the level of interest in desktop virtualization without exception is very high right now," Margevicius said on today's Webcast. Customers across sectors ranging from health care, government, finance and manufacturing are all interested in it due to its potential to ease administration and deployment as well as address concerns about compliance and security. "The distributed nature of PCs is very much at risk in terms of data being compromised," he said.

What is so noteworthy about today's announcement?  Microsoft said customers no longer have to purchase separate licenses to access Windows in VDI environments. For non-Software Assurance customers, Microsoft has added a "Windows Virtual Desktop Access subscription" priced at $100 per year per PC or thin client device.

Meanwhile, Microsoft is upgrading its VDI stack, adding support for Remote FX graphics acceleration platform into Windows Server 2008R2, support for dynamic memory enabling memory on VMs to be changed on-demand and the elimination of the need for hardware-based virtualization. Also today, Microsoft added to its longstanding partnership with Citrix Systems, where it will extend Citrix HDX technology in XenDektop to RemoteFX.

"While some if it isn’t quite ready yet, from a competitive perspective they want the market to know what's coming and get the market excited about their portfolio," said Jeff Groudan, director for thin client computing at Hewlett-Packard, in a telephone interview. HP used Microsoft's launch to announce its Remote Desktop Client (RDC) add-on for its portfolio of Windows Embedded Standard (WES)-based thin clients.

Today's announcements also follow Microsoft's recent release of App-V 4.6, an add-on to the Microsoft Desktop Optimization Pack and Microsoft Application Virtualization for Terminal Services. Key to that upgrade is that it allows organizations to deploy applications in a single storage area network (SAN), rather than require them to be spread out across VMs.

Microsoft had no choice but to take the plunge into the client virtualization pool, observers say. Among other reasons, it's critical to Microsoft's effort to become a player in the overall mobile computing space, Gillen says. "Mobile devices are becoming important and it’s a space that Microsoft doesn't own," Gillen says. "Client virtualization is one of the things that really marries together traditional client computing together with mobile computing and Microsoft was going to be a non-player if they didn’t get in their and compete."

If you're a customer, are you looking at VDI and application virtualization for your organization? And for partners, do you see a rich opportunity for services dollars here? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 03/18/2010 at 12:54 PM0 comments

Are Microsoft Partners 'All-In' the Cloud?

A week after trying to sell customers on its "we're all in" campaign to the cloud, Microsoft is now trying to bring its vast network of partners onboard.

Allison Watson, the corporate vice president of Microsoft's Worldwide Partner Group, made her pitch Wednesday in a prepared and edited video presented via a 10-minute webcast.

"The cloud is here, the cloud is now, and it is important that each of you embrace understanding what it is," Watson said, after reiterating CEO Steve Ballmer's five "dimensions" about how the cloud will embody all of Microsoft's computing efforts.

But if the number of views tallied on the video is any gauge (less than 100 nearly 24 hours after the webcast), it leads me to wonder whether partners are feeling the buzz about Microsoft's cloud campaign. As I was watching the video, available on-demand, I was wondering: where's the beef?

And without further adieu, Watson explained how 1.5 million McDonald's employees at 31,000 stores are using Microsoft's Business Productivity Online Suite (BPOS). "They needed a cloud e-mail solution and Microsoft online services became their choice." (Yes, I know that "where's the beef" was a campaign by McDonald's rival Wendy's, but you get my point).

Watson used the McDonald's example to explain how BPOS can be integrated with customers' internal systems and partners' own offerings. "I would highly encourage you to actively integrate these offerings within your own larger stack today so you don't miss out on this cloud opportunity now," Watson said.

Microsoft has 7,000 partners offering BPOS with 20,000 active trials under way, she said. And since its launch last month, 200 customers per day are signing on to use Windows Azure, she added. "In many ways, it's still a green field with an upside in trillions of dollars," she said.

Indeed, according to our own survey of 500 Microsoft partners, 18 percent believe cloud computing will have an impact on their business this year. Twenty-six percent believe the impact will come next year, and 16 percent say it will arrive in 2012. Another 10 percent predict it will come after 2013, while 8 percent say it has already arrived.

But in response to a blog post by Watson following the video that effectively reiterated Microsoft's five principals, one partner asked, "Where can I get information on partner opportunities now?" Watson replied that more information will come at the Worldwide Partner Conference (WPC) in July.  

There are some actions partners can do in the meantime. She suggested working with the Bing APIs because search will embody the need for partners to help customers find and aggregate data in new ways moving forward. "We're developing search technologies that integrate information seamlessly from the cloud from users, from developers, and we are bringing all of those things together in an integrated way," she said.

Another key area where partners will be able to add value is helping customers address security and privacy, she noted.

OK, so Watson has primed the pump. But many partners are still wondering how this will change their business. What's your take on Microsoft's "we're all in" cloud campaign? Are you "in" or are you still wondering, "Where's the beef?" Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 03/11/2010 at 10:17 AM0 comments

Will Novell Finally Be Acquired?

In more than two decades of following Novell, I've had many conversations with experts about who might someday acquire the company. In my mind, it was never a question of "if" but "when" Novell would be snapped up. But the company just chugged along.

Could that acquisition finally be arriving?

New York-based hedge fund Elliott Associates LP on Tuesday made a bid for Novell for $2 billion -- a 49 percent premium over Novell's share price Tuesday night before it catapulted yesterday by 28 percent. Elliott already holds an 8.5 percent stake in the common stock of Novell. The hedge fund was vague about its intentions with Novell but believes the company is underperforming.

Indeed, Novell has underperformed compared to key rivals Red Hat, Microsoft, Citrix Systems and IBM, wrote Anders Bylund, an analyst and contributor to The Motley Fool. But what will a hedge fund do to turn the company around? Potentially chop it up and sell off the pieces? Might another player -- such as one of its rivals -- be able to add value to its offerings?

"Over the past several years, Novell has attempted to diversify away from its legacy division with a series of acquisitions and changes in strategic focus that have largely been unsuccessful," wrote Elliott portfolio manager Jesse Cohn in a letter to Novell shareholders. "With over 33 years of experience in investing in public and private companies and an extensive track record of successfully structuring and executing acquisitions in the technology space, we believe that Elliott is uniquely situated to deliver maximum value to the company's stockholders on an expedited basis."

Elliott declined to elaborate further and it remains to be seen if a bidding war emerges.

Novell was once a kingpin in the software industry. Its founding CEO, the late Ray Noorda, was a legend in the 1980s and early 1990s, and was perhaps best known for coining the term "coopetition."

Once Microsoft's nemesis, Novell was the first major player to provide the technology for enterprises to interconnect their PCs. These days, though, you'd be hard pressed to find an enterprise of any size still relying on Novell's NetWare.

After a failed bid to acquire Lotus in 1990, Novell later acquired WordPerfect, ultimately selling most of those assets to Corel. The one vestige of WordPerfect still owned by Novell is the technology that is now the basis of GroupWise, also a minor player in messaging compared to Microsoft Exchange and Lotus Notes.

These days, of course, Novell is best known as the No. 2 Linux distributor. But it also has virtualization, systems management, identity management and services offerings.

And ironically, Novell today is a Microsoft partner as Noorda's philosophy of coopetition has come full circle -- much to the consternation of many in the open source community.

How important is Novell's fate to your business, and what are the implications of where the company ends up? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 03/04/2010 at 9:58 AM0 comments

Will XP Users Upgrade Existing PCs to Win 7?

With today's deadline to sign off of the Windows 7 RC, many users have to decide whether to go back to Windows XP or Vista, or whether to pony up and upgrade to Windows 7.

Providers of PC migration software like Laplink and Detto Technologies can capitalize on that decision either way. In my news story, I described how I used Laplink's PCmover to upgrade to Windows 7 from the release candidate, but the software is really intended for those with XP or even older versions of Windows looking to a) migrate those systems to brand-new ones, or b) do in-place upgrades of existing PCs from older versions of Windows to Windows 7.

Systems with Vista don't require a clean install when upgrading to Windows 7, though in many instances it might not be a bad idea. But those with XP have no choice other than to perform a clean install. And that's where Laplink has its sights. While PCmover is a retail product, Laplink is also is trying to extend its reach to the enterprise. Laplink has OEM arrangements with Dell, Hewlett-Packard and Lenovo, as well as 1,000 channel partners.

Why would a channel partner want to bother with a low-cost tool like PCmover? A $500 starter kit for 25 licenses is a good way to offer small businesses PC migration services, said Mark Chestnut, Laplink's senior VP of business development.

"For someone who is in the business of delivering PC migration as a service, we lower their cost of delivering that service and allow them to make better margins," Chestnut said.

Many small businesses may not have the patience or the resources to re-image their Windows 7 systems, Chestnut said. That offers a services revenue opportunity for solution providers, he added. Microsoft insiders tell him there are still 20 million machines running XP that are eligible to be upgraded to Windows 7.

"The current economic environment being what it is, companies are really obviously clamping down on IT spending, yet Windows 7 has some huge advantages," Chestnut said. "I think they will take a closer look at keeping as many of the old PCs and preserving their previous investments longer, than in the past."

Are you considering upgrading your older hardware to Windows 7? Or, if you're a solution provider, do you see an opportunity? Drop me a line at jschwartz@rcpmag.com.

Posted by Jeffrey Schwartz on 03/01/2010 at 5:39 AM0 comments

Look Who's Tweeting: Microsoft's Channel Chief

Microsoft channel chief Allison Watson last week joined the Twitterati and has launched a new blog called Redmond View.

Watson, corporate vice president of Microsoft's Worldwide Partner Group, has invited partners to follow her on Twiiter @Allison_Watson or on Facebook "so I can get your feedback and chat with you about what's going on in the marketplace and in your business," she wrote in her inaugural blog post.

Getting right down to business, Watson focuses on a subject near and dear to partners and Microsoft: the Business Productivity Online Suite (BPOS). Pointing to over 1 million BPOS seats, Watson calls on partners to go deeper.

"It's important that you internalize our offerings in your unique business requirements, and then give us feedback about what you need to capture the opportunity," she said. "A lot of partners are asking me, 'How do I make money in this deal?' It depends on whether you're a reseller partner, an ISV partner, or an integrated partner. Based on all the deals we've done to date, we're hearing that the average partner opportunity is about $167 a seat. That includes partner referral fees, the initial setup and migration fees, as well as factoring in some of your managed service fees. That's a pretty big opportunity."

Watson points to four tools Microsoft is offering: the profitability modeling tool, a partner link tool that lets partners embed direct quoting, a tool that allows co-branded billing and a commerce dashboard to help understand the success of sales trials.

Watson's call to action comes as some Microsoft partners are voicing frustration over its pricing moves, and as Google appears to be gaining momentum in the enterprise with its own Google Apps offering (Google this week said it has nearly 1,000 partners in its Google Apps Authorized Reseller program).

What's your take on Microsoft's tools and Google's momentum?. Are you looking at Google Apps as an alternative to BPOS, or perhaps an adjunct? Drop me a line at jschwartz@rcpmag.com. And you can follow me @JeffreySchwartz on Twitter, as well, for other short updates.

Posted by Jeffrey Schwartz on 02/24/2010 at 1:35 PM1 comments

Cisco Declares War on HP

Cisco's decision to pull the plug on its partnership with HP was a major salvo in tensions that have been brewing between the two companies over the past year. Cisco last week said that it's cutting HP off as a Certified Channel and Global Service Alliance partner, a move that could force the companies' respective partners to make some tough choices.

"There may be a push by one or both companies to push channel partners to an either/or situation," said Mark Amtower, a marketing consultant with expertise on selling IT to the federal government, in an e-mail. "Many companies carry both as partners right now -- I don't think that will continue. If you push HP, marketing support from Cisco will disappear and vice versa."

The two companies have been encroaching on each other's turf for some time, with Cisco last year saying it would offer its own blade servers and HP becoming more entrenched in networking by bolstering its ProCurve line and agreeing to acquire 3Com Corp.

With the partnership set to expire April 30, Cisco took the unusual move of publically announcing it was cutting HP off. HP quickly shot back, accusing Cisco of not working to "best serve clients' needs."

Does this move signal an end to co-opetition? It raises the question of whether we will we see more partnerships unravel or, at the very least, become more diminished as companies look to become single-source providers.

Or maybe, as Directions on Microsoft analyst Paul DeGroot suggested, the current partnership has become "too all-or-nothing." Perhaps they needed "a more nuanced approach to ensure that joint customers get the support they require, while the other partner doesn't get privileges that it doesn't need for mere interoperability purposes," he said.

Gartner analyst Tiffani Bova agreed. "I wouldn't be surprised if a new arrangement doesn't follow closely behind where they meet each other half way in order to continue to service their joint customers and partners," Bova said.

Indeed, that may happen. On the other hand, what if Cisco means business and wants nothing to do with HP? If indeed these two companies go their own way, we could see Cisco getting closer with IBM and perhaps Oracle/Sun while HP could forge closer ties with the likes of Brocade and Juniper Networks.

Certainly, for Microsoft partners, this also raises some questions since most also carry gear from Cisco, HP or both. What's your take on the implications of Cisco and HP going separate ways? Will we indeed see others follow suit? Among other things, could this lead Microsoft to rethink its strategy of working closer with the likes of Novell, Red Hat and Zend? Could co-opetition as we know it be on the line here, or is this just a case of Cisco playing hardball?

Drop me a line at jschwartz@rcpmag.com.

Posted by Jeffrey Schwartz on 02/22/2010 at 10:00 AM0 comments

Seeking Funds for SMBs

Small and medium-size businesses have long been the salvation of IT recoveries, but this time that conventional wisdom may be falling flat.

The good news, as I reported earlier this month, is the economy surged last quarter by 5.7 percent, the largest such expansion in six years. Adding to that optimism, the Federal Reserve yesterday said business equipment output was up 0.9 percent in January, slightly higher that December's 0.7 percent.

IT output jumped 1.7 percent, marking the third consecutive monthly gain of more than 1 percent for IT gear. That has reflected in strong earnings reports from Cisco, Intel, Microsoft and, yesterday, HP, which posted an 8 percent increase in revenues and boosted its outlook for the year.

That should bode well for SMBs, which are typically the first to lead recoveries from recessions. But a troubling report in BusinessWeek underscores the fact that SMBs this time aren't leading that recovery. Instead, SMBs are continuing to let go of employees and reduce capital spending.

Only 20 percent of those surveyed by the Federation of Independent Business plan to make capital outlays. Even more concerning, 3 percent see sales increasing, -1 percent say they plan to hire more employees, 1 percent expect the economy to improve and 5 percent believe it's a good plan to expand, according to the FIB survey (PDF). And -13 percent expect credit lines to open up.

Small businesses continue to hurt, that same BusinessWeek piece said, noting a Feb. 1 report by the Federal Reserve saying that banks continue to hold back on offering credit to them.

Probably none of this is surprising, but it is rather sobering. How is this affecting your ability to sell solutions to prospects? Have you found avenues of financing for your own business or that of your clients? Perhaps you've turned to leasing, private equity or even the venture capital community? Please share them with us. Drop me a line at jschwartz@rcpmag.com.

Posted by Jeffrey Schwartz on 02/18/2010 at 10:08 AM0 comments

Will Partners Embrace New Win Phone 7?

Now that Microsoft has revealed its mobile ambitions, partners must wait to see what's underneath the covers.

Microsoft began its orchestrated rollout of the new Windows Phone 7 Series this week at the Mobile World Congress in Barcelona. The new platform replaces Windows Mobile 6.x with a completely revamped user interface that incorporates Microsoft's Metro, the basis of Zune and Windows Media Center.

Windows Phone 7 Series licensees must adhere to specific integration requirements such as defined screen sizes, support for touch and GPS, among other things. The goal is for Windows Phones that come out later this year to be more architecturally consistent like the BlackBerry and iPhone, while offering a broader ecosystem of devices and form factors.

If you have a vested interest in the current Windows Mobile, you should take a look at the changes that lie ahead. They're not trivial. This 20-minute Channel 9 video provides a good overview of what Windows Phone 7 Series will look like.

But Microsoft is tight-lipped about the underpinnings of its new platform. While company officials say that's by design – to keep focus on the new UI -- it has some wondering whether that portends portability issues.

"I think probably what's going on is it’s a complete break with Windows Mobile 6.5," says Directions on Microsoft analyst Matt Rosoff. "They know that news might not be received well by application developers so they are trying to figure out what the portability story will be."

If Microsoft is headed in a different direction architecturally, it's going to have to shim the old apps to get them to run, says IDC analyst Al Hilwa. "We're talking about various subsets of .NET underneath so it's not that difficult, but the question is whether they have the time to do that," Hilwa says, referring to the planned holiday season release. Partners will get a better picture of what development challenges they face when Microsoft releases the Windows Phone 7 tooling and bits at next month's MIX 10 conference.

"Windows Mobile has a portfolio of business app extensions and, given the new interface, those folks may very well have to re-architect their apps," Hilwa says. "I think they will be more than willing to do that, that’s my sense. They are already partnered and invested in Microsoft technologies. I think they will make that judgment and take the time to refurbish their apps. But as usual with application vendors, not everyone always will, there will be those that can't invest much but I think that's a minority."

More curious: can Microsoft attract those partners who have passed on Windows Mobile but have already built apps for the Apple iPhone, Research in Motion BlackBerry and devices based on Google's Android platform?

For now, Microsoft is emphasizing the consumer aspects of Windows Phone 7 – the Zune interface, the ability to aggregate social networks, photos, games via Xbox Live, and media into a common user interface. Though Microsoft hasn't played up the business capabilities, officials say it will support OneNote, Exchange, Word, Excel and access to Sharepoint. But at this week's debut, Microsoft gave mere lip service to those features. "The amount of time devoted during the presentation to "Productivity" was disappointing," writes Philippe Winthrop, an analyst at Strategy Analytics, in a blog posting.

Enterprises for the most part don't develop mobile apps internally, they rely on the partner community, Hilwa says. The question is will Windows Phone 7 Series win over the partner community? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 02/16/2010 at 7:12 PM1 comments

SAP Seeks Happiness

It's been a dramatic week for SAP, whose software runs the operational underpinnings of some of the largest enterprises. The company shook up its executive suite, replacing CEO Leo Apotheker with co-CEOs Bill McDermott and Jim Hagemann Snabe. SAP today also disclosed the departure of former SAP CEO John Schwarz.

Listening to founder and chairman Hasso Plattner speak on Monday during a press conference that was webcast, it was a day of reckoning for the company to acknowledge its missteps and apologize to its customers for gouging them.

Those weren't his exact words but he tacitly acknowledged SAP has to find a new engine of growth besides imposing heavy maintenance and licensing fees. "We are a public company, and profit is everything," Plattner said. "But in order to be profitable, it needs to be a happy company. I will do everything possible to make SAP a happy company again. And in order to be profitable and please the shareholders, we have to focus on our customers, and we have to make the customers and their employees happy, as well."

During the Q&A portion of the call, a reporter asked if Plattner was acknowledging that SAP was an unhappy company. Clearly resenting the question, Plattner responded, "Please don't turn it around that we are unhappy. Take it that we have to be happier. Happy companies are companies who enjoy their success, their strategy, and are marching forward at the highest possible speed without complaining. SAP has the capacity, has the strategy, has the development on its way, and it takes unfortunately some time with our huge customer base."

Forrester Research analyst Paul Hamerman said in a blog post that Plattner said the right things. "He's got this right: taking care of your customers makes your company successful. Forcing profitability via price increases and sales tactics is not a sustainable recipe for success," he wrote.

True happiness for SAP, of course, will come when it can -- among other things -- address its stalled cloud strategy. The company launched its Business ByDesign, a SaaS-based application suite, in 2008 but angered larger enterprise customers by saying it was targeted at organizations with 100 to 500 employees, according to a research alert released by Saugatuck Technology today.

"SAP's strong prevailing culture and its need to protect its R/3 cash flows fundamentally forbade the company from pursuing offerings that could replace it," the report said.

I spoke with one of the report's authors, Saugatuck founder and CEO Bill McNee, who described four challenges facing SAP.

The biggest changes SAP must face are cultural. "They have a very significant cultural transition where they have focused historically on the large enterprise customer almost to a fault and a legacy around the big deal, to a technology-not-invented-here syndrome," McNee said.

Second, the company needs to accelerate cloud strategy. "They need to better articulate their cloud vision," he said.

Third, the company needs to figure out how to bring forth the right technology and monetize it.

And finally, if SAP really wants to succeed in targeting the small and medium business market, it needs to come up with an accelerated go-to-market strategy. That also means shedding its legacy of primarily selling direct to customers. "SAP has less experience building partner networks that will enable them to succeed in the small to medium market," McNee said.

If SAP is successful with its Business ByDesign offering and building up a partner eco system, it is likely to butt heads with Microsoft's Dynamics business, McNee said. "Microsoft's channel should stay alert to changing customer requirements, and evolving offerings from Microsoft, going forward."

What will it take to bring happiness to those buying and selling ERP, CRM and other business solutions? Share your thoughts by droping me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 02/11/2010 at 1:29 PM0 comments

Feeling the Google Buzz?

Google's latest stab at social networking is creating a lot of "buzz," but it remains to be seen whether it will become as dominant as Facebook or Twitter. Based on initial reactions, it doesn't appear to be a threat. The real question, though, is whether it will make Google Apps Premier Edition (GAPE) a stronger contender in the enterprise.

Make no mistake: That's one of the company's goals with Google Buzz, which uses the inbox as a way of bringing together all of one's social networking activities.

Buzz got off to a curious start, rattling some of its Gmail users. "OK, Google Buzz, you've made your point. Now how do I shut [you] off?" tweeted Jeffrey McManus, CEO of Platform associates, the developer of Aprover.com and a Gmail user.

I asked McManus, a longtime user of social networks and well-known in the .NET development community, for his thoughts on Google's long-term prospects in the enterprise.

"Buzz brings very little that's new to the table," he responded.

Burton Group analyst Guy Creese agreed in a blog post this morning. Creese and others believe that Microsoft already has a superior answer to Buzz in its Outlook Social Connector, which will appear in Office 2010, due for release this spring. While it remains to be seen how well Outlook Social Connector will be received, Creese believes it's a good start and will appeal to those comfortable with Outlook.

Not surprisingly, Microsoft seems to feel the same way. ZDnet blogger and Redmond columnist Mary Jo Foley said in a blog post yesterday that Microsoft doesn't appear to be concerned. "Are the Softies quaking in their boots? Not exactly," she wrote.

However, some analysts suggest that while Buzz may not displace Facebook and Twitter, it could gain traction. "Despite mediocre past attempts at social networking products such as Orkut or Dodgeball," wrote Interpret analyst Michael Gartenberg in a blog post, "Buzz is likely to attract a strong following by virtue of its tight integration into Gmail and the ability for Google to expose the service to advanced as well as novice users immediately."

I'd like to hear from those who've used Outlook Social Connector and Google Buzz and get your thoughts. And for those in the channel selling Office and SharePoint, what's your take? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on 02/10/2010 at 1:31 PM0 comments

Microsoft Clams Up on BPOS-Lite Rumor

Microsoft has removed a job posting seeking a manager for a new hosted offering intended to bring e-mail and collaboration services to SMBs.

The service is code-named "BPOS-Lite," according to text of the posting, which was revealed Monday by ZDNet.com and Redmond columnist Mary Jo Foley. "BPOS 'Lite'...is part of the 'next wave' of services targeting professional individuals and smaller organizations, offering Microsoft's best collaboration, communications and productivity services," the now-removed posting said.

The manager hired for the position will be charged with developing business strategy, including creating a go-to-market model, launching services and developing service enhancements, according to the posting. The manager will "act as strong advocate for BPOS-Lite with corporate, field and partner teams; with analysts; and at industry and customer events," according to the post.

Microsoft isn't commenting, though its partner group has tweeted Foley's post. "We are always working on the next wave of Microsoft Online Services, offering Microsoft's best collaboration, communications and productivity services to businesses of all sizes," said a prepared statement e-mailed by a company spokesperson. "Although we do not have details available to share today, we look forward to sharing more at a later date."

Perhaps that later date will land during Microsoft's Worldwide Partner Conference in Washington, D.C. that's slated for July, speculated The VAR Guy.

One person who's heard rumblings about BPOS-Lite is Bob Leibholz, vice president of business development at New York-based Intermedia, a Microsoft Gold Certified partner and one of the largest BPOS hosting providers with over 250,000 Microsoft Exchange seats. Leibholz said Microsoft hasn't given him any information about the service and he's wondering if it may put a tighter squeeze on him and his partners.

Leibholz made his displeasure known last fall when Microsoft cut the pricing of BPOS from $15 a month per subscriber to $10.

"From my perspective, they devalued BPOS last year when they decreased the price, and a concept of BPOS-Lite, which is basically another price concession, fundamentally continues to miss the understanding of value and rather compete purely on price," Leibholz said in an interview today.

Meanwhile, Microsoft has experienced scattered outages with its BPOS service over the past week, most recently yesterday. According to a letter to customers last week from Microsoft's Online Services team, the root cause of the outages were issues with networking. "We hold ourselves to the very highest standard," the letter said. "And yesterday, we didn't meet it."

Posted by Jeffrey Schwartz on 02/02/2010 at 1:29 PM0 comments

Will Apple's iPad Define Slate Computing?

While there's no shortage of opinions as to whether Apple will catch lightning in a bottle for a third time with its new iPad, there's a good case to be made that the initial entry could be a boon to those developing PC-based slates.

As media critic David Carr reports today in The New York Times, the iPad "is a device for consuming media, not creating it." That's not to suggest that future releases won't raise the bar, but as many observers suggest, Apple also has to make sure not to offer too much and risk cannibalizing its MacBook product line.

Ironically, this is the same issue Microsoft faced in its initial hesitation to embrace netbooks. But the real potential of the iPad and similar Windows 7-based devices, such as one anticipated from Hewlett-Packard, is for them to let individuals consume content as a companion to one's computing experience, not a replacement. That's where the concept of the iPad and Windows 7-based slates could shine.

Among the biggest criticisms of the iPad is that it can't multitask and won't support Adobe's Flash (nor are there known plans for it to support Microsoft's Silverlight). In a Wired magazine report, Apple CEO Steve Jobs was reported to have told employees in a profanity-laden rant that Flash is too buggy and that Adobe is lazy. "No one will be using Flash," Jobs reportedly said. "The world is moving to HTML 5."

Adrian Ludwig, general manager for Adobe's Flash platform product organization, suggests in a blog post that he believes Apple's real motive is control over content. "It looks like Apple is continuing to impose restrictions on their devices that limit both content publishers and consumers," Ludwig wrote. "Without Flash support, iPad users will not be able to access the full range of Web content, including over 70 percent of games and 75 percent of video on the Web."

Several content producers tell The Times that the stalemate could indeed hasten acceptance of HTML 5. John Gruber, author of the popular Mac blog Daring Fireball, wrote that it "used to be you could argue that Flash, whatever its merits, delivered content to the entire audience you cared about. That's no longer true, and Adobe's Flash penetration is shrinking with each iPhone OS device Apple sells."

Meanwhile, as Windows 7-based slates come out this year, it is possible that OEMs will play both sides of the coin. Those that support Windows 7 already effectively support Flash, Silverlight and other runtime environments, presuming they don't strip those capabilities out. Because of the broader ecosystem of devices, some will purely access content, while others will both create and view it.

But regardless of how you view the iPad or slate computing in general, Apple has put a stake in the ground for a class of devices that potentially can redefine how we consume content, advancing on what Amazon has done with the Kindle.

Let's see what HP and the rest of its Wintel brethren bring out.

Posted by Jeffrey Schwartz on 02/01/2010 at 11:09 AM0 comments

Undoing a 'Disaster,' Oracle Plans To Take Sun Sales Direct

Today could be a big day for those who implement data center technology, databases, applications and software based on Java.

As reported, Oracle today will outline its plans for integrating Sun Microsystems. Part of that plan includes hiring 2,000 engineers and sales people to sell integrated appliances that include provide integrated databases, app software, servers, storage and network gear, according to published reports. The integrated appliance model could be a multi-billion dollar business, Oracle CEO Larry Ellison tells The Wall Street Journal.

However Oracle will sell its products direct to Sun's top 4,000 customers, Ellison tells The New York Times. Those 4,000 customers account for 70 percent of Oracle's revenues. Ellison indicated Oracle will move away from relying on Sun's partners to serve those customers.

"The partner model was disastrous, and we are immediately changing that," Ellison tells the Times. Such a move could leave a lot of partners out in the cold. Will those displaced partners move to pushing gear from Hewlett Packard, which earlier this month inked a $250 million agreement with Microsoft to jointly develop their own next-generation data center technology?

Or will Dell, which is looking to build its own partner ecosystem, become an attractive haven? How will Oracle's move affect the way all those players treat partners in the future?

Drop me a line at jschwartz@rcpmag.com.

Posted by Jeffrey Schwartz on 01/27/2010 at 1:35 PM0 comments

Accenture's Mistake with Tiger Woods Transcends Fiasco

When Accenture last week ditched Tiger Woods as its sole pitchman, it served as a key reminder of what happens when you put all your eggs in one basket.

Accenture is one of the largest independent providers of IT consulting, integration and outsourcing services with annual revenues of $21.58 in fiscal year 2009. The company, which had blanketed Woods across all media in its "We Know What it Takes to be a Tiger" campaign last week scrubbed all vestiges of Woods from its Web site and removed all posters and other collateral from its offices, according to a front page story in The New York Times.

Until last month, the golf champion had an unblemished image. It all came apart with daily allegations of indiscretions and infidelities that have since dominated the news. Accenture last week issued a statement saying "the company has determined that he is no longer the right representative," and that it will roll out a new campaign in 2010.

The new campaign will continue to carry its High Performance Delivered” message, Accenture said. While Accenture and its ad agencies are undoubtedly scrambling to come up with a new strategy, it might be advisable not to have that message riding on one point of failure, especially considering the fact that enterprise customers expect their services providers to avoid that very thing from happening in their IT environments.

According to the Times report, Woods appeared in 83 percent of Accenture's ads. Besides having so much riding on Woods, columnist Frank Rich yesterday pointed to a conversation he had last week with New York Daily News sports columnist Mike Lupica. "If Tiger Woods was so important to Accenture, how come I didn’t know what Accenture did when they fired him," Lupica asked Rich, in his weekly column.

Granted most buyers of IT consulting and integration services are familiar with Accenture, its revenues and profits have declined over the past year. So maybe it was time for the company to reshape how it delivered its value proposition. Even if Tiger Woods fiasco hadn't unfolded, perhaps he wasn't the best representative for a company providing IT services after all, notes Directions on Microsoft analyst Paul DeGroot, during an e-mail exchange we had last week.

"If you want to come across as hip, fast, physically gifted, by all means hire Tiger Woods," DeGroot said. "The lesson is, align your [message] with your company image."

Posted by Jeffrey Schwartz on 12/21/2009 at 8:37 AM0 comments