Microsoft Security Chief Transferred

Cushman has now been replaced by Mike Reavey, who has been closely involved with the Patch Tuesday plan, of which I'm also a fan. Cushman isn't being bounced out on his butt, but is instead getting broader responsibilities for overall security initiatives.

Posted by Doug Barney on 01/26/2009 at 1:16 PM0 comments

Microsoft Suffers While Big Blue Blows It Out!

So, were rivals hit by the economic tsunami, as well? Not all. IBM had a terrific quarter with profits up 12 percent to a tidy $4.4 billion. (While Redmond's profits were down, it still raked in an impressive $4.1 billion, and did so on far less revenue than Big Blue).

Posted by Doug Barney on 01/26/2009 at 1:16 PM0 comments

Microsoft Tackles Tough Times

That is, until this beauty of a quarter.

To get the bad news out of the way fast, Microsoft pre-announced its numbers. Profits are down 11 percent, but total sales are up 2 percent. For Microsoft, this is dismal, and is leading the company to lay off some 5,000 people. But for anyone else, this would be cause for celebration.

I expect a few more rough quarters, but I also believe that Microsoft has the best technical lineup in its history. Azure and Mesh are looking great, Windows 7 appears to be the killer operating system that Vista should have been, and the company's server tools are solid and respected.

Should I take off my rose-colored glasses? Where do you see Microsoft heading in '09? Prognostications welcome at [email protected].

Posted by Doug Barney on 01/23/2009 at 1:16 PM0 comments

Mailbag: Government and the Economy

Cut spending by government (we all know that there is abundant waste). Cut the size of government agencies (they are bloated and inefficient). Cut taxes to entrepreneurs who are starting or expanding businesses. Light a fire under research for renewable energy sources.
-Bernie

I know it is very popular to demean government and public employees (Ronald Reagan made it a national sport), but I think your question misses some important points. As a 35-year worker for various government agencies, I can tell you it is a myth that our ranks are bloated. With economic downturn comes increased demands on unemployment offices, social service agencies and government services of all kinds. Even in normal times, population growth and demographic changes increase our workload. I cannot remember the last time we were allowed to add staff to meet these increasing workloads. In fact, we have repeatedly cut staffing levels over the years.

I am here, working on an official holiday, without pay, just to keep things running. And I'm one of several in my agency alone who do this routinely. We do this mostly because we believe the services we offer are vital. So, I am very resentful when we are so unfairly stereotyped.
-Anonymous

The government should be cutting spending and its work force just like everyone else is having to. Then it would not have to collect as much from the average American taxpayer and businessmen. The businessmen of America should be able to be competitive in the world market. With the high taxes that we Americans pay, it keeps our prices high and makes our products not attractive to the world. We were doing just fine until the government got involved in the economy and now look what it did and is doing. Maybe we Americans can pull out of this despite the government.
-Kent

Talk is cheap! It's easier for companies to downsize; they can make those choices. They exist only for profit and they have no responsibility to the citizens of the U.S., only to the company owners. But the government is not for profit and (when it isn't being corrupted) exists solely to serve the people of the U.S. The government is not a company, so it can't be run like a company. And when times are tough economically, internationally or socially, we generally ask more of the government, not less -- more people ask for unemployment, more people ask for jobs, more companies ask for bailouts, more people bring lawsuits, more people demand action from the military.

It would be nice if we could just send someone to Washington to solve all our problems with zero funding (zero taxes) and zero resources. But how many companies have been successful at putting out a new product or service by devoting no resources to it? You can't ask the government to solve your problems without paying for a solution.

How to solve the problems? Pay your taxes. Demand responsible and smart spending, a balanced budget, intelligent ideas, and qualified people. If you get somebody who says the solution is to lower taxes, show them the way out. And most important, get involved, not by complaining, but by helping to solve the problems.
-Dan

You asked, "If Microsoft and others can run fine with smaller budgets and workforces, why can't government...do the same thing?" Well, as someone who works for local (county) government, I can tell you that we are! We have to. Our county runs primarily on property tax revenues and those are down significantly and getting worse. We already lost 10 percent of our IT department and may lose more this year. As an example, we take care of 300 servers with only three techs, and our two DBAs take care of 600-plus databases. We now have to get five to six years out of our hardware.

We are very fortunate to have a great dedicated team. We are being worked harder then ever before with no raises in sight. So before lumping all of "government" together, be careful -- only the feds can print money.
-JB

The issue is not whether the government can do with less. (And by the way, all of the my non-profit clients are having to do just that. Government contracts for the current year are being shaved by 20 percent and N.Y. state is cutting state budgets right and left.) The real issue is whether the economy can do with less. If you remember the Great Depression, you will remember that two things happened: First, the credit markets seized up, which was exacerbated by the Federal Reserve's tightening of credit. Second, prices plummeted, incomes went down, companies that couldn't market their products cut back on employment and the economic spiral went down from there.

Now, I think the banks are getting away with murder and acting outrageously, but doing nothing could trip us back into the 1930s. That's why most reputable economists, whatever their differences on particulars, realize the need for the government to do something to prevent a catastrophic collapse. Will it be enough? Well, FDR's New Deal only got unemployment down to 12 percent from 25. If the new administration's policies can keep it below that level, we will have missed a very bad bullet.
-Gary

Why can't governments run more lean and mean? It depends. Microsoft is out to make money, but governments have a different goal. Let's say you are a quasi-governmental agency who is providing bus and subway service. Can you cut costs and "make" more money? Well, of course you could -- just cut the least profitable runs, like the ones with very few people on them. Except that making money isn't what a public transportation agency does. The job of a public transportation agency is to get the public to where they need to go. The largest proportion of the costs of such an agency are those directly tied to providing bus and train service. So cutting the least "profitable" runs is out of the question.

Can government do things more efficiently? Absolutely. But consider this: Do folks in government get rewarded for doing more with less? Do governments go out of business because they aren't as efficient as they can be and their 'competition' survives while they don't?
-Anonymous

Is massive debt/stimulation the answer? NO. We need FACTORIES with JOBS inside them. Roads to empty factories and welfare offices aren't going to get us out of this race to the bottom.

The Answer: No more H1B workers. No more illegal foreign workers. WE need those jobs. I used to make $90K per year in the computer industry (after 25 years of steady employment). Now I work for $9 an hour, temp, part-time. That's all I can get with two bachelors degrees and 25 years of experience. With all the H1B workers coming over and working for cheaper labor rates, my career is over. Now it's all about downsizing labor rates and supersizing CEO and BOD bonuses and salaries. Unfortunately, this is the evil outcome of ultimate capitalism: One guy owns everything and everybody else has nothing.
-Win

A lot of right-leaning people will say that government doesn't create anything except bureaucracy. That is not entirely true. Government pools resources and creates things like roads, bridges and interstates that have a payback over the years. However, I do not know of any useful product that it aggregates to create that employs people in the "new" economy (i.e., white-collar employees).

Bureaucracy for the sake of creating jobs is a waste as it will consume resources without ever providing a payback. Stimulus to businesses that are already failing seems to be a double-waste of resources. If the government is going to fix the economic mess through stimulus, it has to be by creating jobs that provide value. In the past, this has been achieved through research and development that brought about a new level of commercialization of that research. Unfortunately, I don't know what the next step of advancement is going to be or I would be a really wealthy person.
-Joe

It is the nature of government to grow and expand and usurp more power and resources; it is what government does. When people held the cherished ideal that government should not do for people what they could do for themselves and their fellow man, we had true charity and government was held in check. Now that we look to government to solve our problems and use the force of law to do so, the beast has been released from the cage. Rather than charity, we have coercion through taxation and redistribution of wealth through social programs, ideals that sound good on paper but in practice leads to economic and social turmoil and a further excuses for government to take on more and more. As revenues fall and the economy contracts, self-seeking politicians and bureaucrats have ample opportunity to save us with more government programs and bailouts. This in turn feeds the cycle of dependency on and growth of government, despite the fact that we are bankrupting our nation and its future.

The only thing that will change this is for the American public to demand real change and a return to the practice of limited government and adherence to the Constitution,rather than change for the sake of change, patriotic rhetoric and lip service. If history is any indication, I do not think this change will come from either side of the aisle as both Republicans and Democrats are equally responsible for maintaining and expanding the status quo.
-Kurt

More reader letters coming your way on Monday. In the meantime, share your own thoughts with us by leaving a comment below or sending an e-mail to [email protected].

Posted by Doug Barney on 01/23/2009 at 1:16 PM0 comments

Lotus and Microsoft: Still Hateful After All These Years

In the '80s, the fight was over spreadsheets, word processors and databases. Lotus got its clock cleaned in all three areas. The '90s brought a battle over messaging and collaboration. Lotus took a quick lead, but ultimately its clock was again cleaned by the boys in Redmond.

Lotus, now owned by IBM, hasn't given up. It's still pushing Notes and Notes-like products, such as the recently announced LotusLive, a hosted messaging tool.

Microsoft has two reasons to be irritated by this announcement. First, LotusLive sounds an awful lot like WindowsLive. Second, Lotus has been telling the world that Notes has a majority share of the Fortune 100 messaging and collaboration market. Notes may be alive and well in many big IBM shops, but the market as a whole has clearly moved to Outlook and Exchange.

Are you an IBM shop? Why are Notes and related products better than Exchange and Outlook? Honest answers readily received at [email protected].

Posted by Doug Barney on 01/23/2009 at 1:16 PM0 comments

Microsoft Earnings: So What Went Wrong?

The result? PC sales are flatter than a squirrel on Highway 40 in Tennessee.

My guess is that PC sales will stay sluggish for the rest of year, then literally explode when Windows 7 ships. Why do I think this? Because you, the Redmond Report, reader told me so!

Posted by Doug Barney on 01/23/2009 at 1:16 PM0 comments

Seeding the Microsoft Cloud

The key to exploiting Azure is to first know Visual Studio. A big part of the Azure test release is actually a set of Visual Studio programming and testing extensions.

Posted by Doug Barney on 01/21/2009 at 1:16 PM0 comments

Cloud Data Sharing Gets New Beta Release

More Live Mesh details will be out in March at Microsoft's MIX09 show. I've looked into Live Mesh and found the approach a bit complex. But in terms of features, if all my files can be accessed from any of the 10 or so PCs in my house, I'd be a happy camper.

Do you use online data sharing and storage? If so, what is it and how does it work? Advice welcome at [email protected].

Posted by Doug Barney on 01/21/2009 at 1:16 PM0 comments

The EU Can't Leave IE Alone

I thought I was having a '90s flashback when I heard that the EU has filed a formal complaint about Microsoft's practice of bundling the browser with the operating system. But there it was again, charging Redmond with illegal bundling.

Haven't any of these ministers looked at Firefox's market share lately? Plus, bundling the browser may or may not be legal, but hasn't Microsoft been doing this for nearly 15 years?

Posted by Doug Barney on 01/21/2009 at 1:16 PM0 comments

Mailbag: Who's Cooler?, Saving the Economy

I am not a great Apple fan. I have always worked the Intel processor line. But I have to admit that Apple is way cool. The Mac was a super cool computer -- great operator interface and real user appeal. The entire product line calls out to the users. The biggest reason we aren't all driving Apples is the upfront cost and the big push IBM put on the PC as an enterprise machine. Most of our current GUI ideas first appeared on Apples. Apple reached out to the education market very early and still has a major presence there.

If I were a computer, which I am not, I think I would want to be an Apple. Even Forrest Gump thought Apples were cool.
-John

Microsoft is "cooler" because you know upfront that it's a competitive company. Apple is less cool because it's a "secret" monopoly.

My workplace? Very uncool.
-Anonymous

I feel Apple's coolness is trending downward and Microsoft's is trending up, although I'm not sure where each lies in relation to the other. When I interpret coolness, I view it as a personal thing. Some people have it, some don't. Apple has many great products that enable the individual to be cooler than their peers. Microsoft generally focuses on making great products that appeal to the business user. I feel in the last couple of years, Microsoft has taken great steps toward recognizing the individual. I also think that Apple will begin to experience many of the problems a larger, more mainstream company faces.

I personally think Microsoft is cooler.
-Lee

There are really two questions embedded in this question: Who's cooler to work for, and who's got cooler products. Apple wins the second question hands-down. Only if you like messing with the internals of your technology (like Linux lunatics) would you think that MS products are cooler.

The first question is much harder. If you've seen the docudrama "The Pirates of Silicon Valley" (tag line: "Good artists create...Great artists steal"), you would probably make the conclusion: Not only is neither cool to work for, they're probably both pretty uncool to work for. I've never worked for either and I've only known a couple of people who have worked for MS, so I can't answer that queston.
-Bill

Microsoft is very cool in many ways, and not so cool in others. It's cool in terms of its small pockets of teams who are enabled to dream big and applauded for their innovation. It's cool in its vision of what the world would be like if everyone just used their software for everything. It's cool in its philanthropic efforts, which are obviously led by Gates' work, but the culture is hyper-supportive of giving and will match not only money that is given, but time volunteered. It's cool in what its doing with SharePoint; most people, even in the industry, don't fully understand how far-reaching this platform is. And nearly every company has enough SharePoint in the form of WSS that is at no-cost, that they all need is MOSS. You don't have to be much of a business person to see why this is brilliant -- and thereby cool.

Apple is very cool in a much different way. Its coolness is much more felt by the general consumer public. I'll let somebody else comment on why that is, but hey, bottom line is it has some pretty cool products. And Steve Jobs is very cool. The guy just comes up with amazing stuff and inspires his people and the marketplace. That's very hard to do.

So, I guess I'd have to say both companies are cool. They have their warts, though. I've seen them first hand at Microsoft through the types of managers who get promoted. There are too many decisions made at levels that don't see it first hand in front of the customer and also aren't high enough to see the big picture. It leaves a middle-management crisis which results in constant turnover. This creates a culture where virtual teams become more important than formal chains of command -- which would be great if it were managed that way. However, it is not. It creates an odd culture that often leaves people feeling little trust in mid-level management. I'm sure Apple has its own problems, but not being an insider, I can't make any particular assertions.
-Brian

It never ceases to amaze me that the people that blast Microsoft for its money-grubbing ways and the fact that it is not open source like Linux are, many times, the same people that have a love-fest with the proprietary Apple.
-Joe

Frank challenges the notion that major companies like Apple live and die by their CEOs:

This industry and its media have an inappropriate (nearly cultish) habit of attributing the entirety of the successes and failures of multi-thousand-person organizations to single individuals (i.e., "Jobs' real talent is his unrelenting attention to detail"). The notion that the "best CEOs" are the ones who know every minute detail about technical implementations or even that they are somehow the Uber Human Factors Engineer for a 2,000-, 5,000- or 10,000-person company is a sign of a positively abysmal CEO or the most ridiculous of simplifications. Should any CEO attempt to be that Uber Engineer, then they would have failed before they have started -- in my opinion and that of pretty much every piece of MBA-related writing in the last 50 years. It is the fool's errand of all fool's errands to even attempt such a thing.

Organizational talent, I get. The ability to build, extend or direct great teams, I get. But the notion that these CEOs are somehow THE only significant creative nucleus or the only capable overseer of quality is totally ludicrous. What typically happens is one of two scenarios: Either the CEO as Godhead is mostly PR and they really have a great organization that can survive just fine without them (as long as the next guy doesn't basically screw it up), or you have someone who has managed to handicap a multi-thousand-person organization greatly by holding too much decision-making too close. Whenever an organization, which has already been hobbled, does topple shortly after the CEO leaves, is it a sign of the CEO's greatness, or one of their criminal negligences -- to the stockholders and the thousands who work there? If the U.S. collapses shortly after eight years of Obama-inspired Golden Years, is he a success?
-Frank

And readers share some of their ideas for getting the economy back on track (more to come on Friday):

My solution for the economy is for the government to get the media to lie to us. What if the mainstream media announced that jobless claims went down and the stock market closed up 400 points three days in a row? People and companies would go out and start spending again.
-Craig

Americans will not be able to contribute to the restoration of the economy without being gainfully employed. It seems that a company such as Microsoft, with large amounts of cash on hand, could invest in its current employees for additional training and eliminate all H1B visas. Microsoft would make a greater contribution to the U.S. by not laying people off. America needs to pursue a policy of greater self-sufficiency across the board for a while in order to recover. It is said that isolationism does not work, but I don't suggest it has to last forever; just setting up the manufacturing of, say, personal computers here at home would stimulate the economy, put people to work and encourage kids to pursue careers in computer science and related disciplines.

And nationalization of the health care system should provide all Americans coverage, relieving cost and decreasing the burden on employers. Hopefully, it would also allow greater retention of workers in these troubled times.
-Johan

My thinking is that the problem we're in is one part fundamental and one part psychology. In order to fix this, we need to play to both ends. In my opinion, any kind of drastic, palpable action done by the government that appeals to most or all will do the trick, such as:

1. A dramatic rise in projects ('New Deal'-style spending).
2. A dramatic cut in taxes will have the same affect in No. 1.
3. Bill Gates as treasury secretary.

It won't matter whether it's a right- or a left-wing action, just as long as it's seen as the government trying to do the right thing.
-Gregory

More of your thoughts on the economy -- and how to fix it -- are coming on Friday's installment. Want to share your own ideas? Leave a comment below or send an e-mail to [email protected].

Posted by Doug Barney on 01/21/2009 at 1:16 PM0 comments

Microsoft in the Pink

My take? Microsoft can still be highly efficient and productive with a smaller workforce. After all, it's an aggressive capitalist enterprise; competition is in its DNA.

So the question is: If Microsoft and others can run fine with smaller budgets and workforces, why can't government -- local, state or federal -- do the same thing? Seems odd to me that as tax revenues fall and the economy contracts, government's answer is to grow larger. As an economics major, I understand the multiplier effect, but this still makes no logical sense.

How would you solve our economic mess? Is massive debt/stimulation the answer? Right- and left-wing answers equally welcome at [email protected].

Posted by Doug Barney on 01/19/2009 at 1:16 PM0 comments

New Redmond Virt Tool Rankles Top Journalist

Virtualization is another area in which I'm far from expert. Here, I lean on Keith Ward, editor of Virtualization Review. Case in point is when I read about Redmond's beta release of Microsoft Enterprise Desktop Virtualization (MED-V).

When I first read Microsoft's breathless announcement of this amazing new breakthrough, I had a few misgivings. For one, MED-V sounds like some kind of new ambulance. More important, Microsoft's desktop virtualization strategy at this point is overly complex. You can use Windows Terminal Services (I'm sure this has been renamed) to run apps from Windows Server. You can also use the application virtualization wares Microsoft got from SoftGrid. And you can use Virtual PC to give your PC multiple OS personalities. Or you can run apps from the cloud. (I'm sure I'm forgetting a few more options.)

MED-V is based on Kidaro, which Microsoft recently acquired. It works with Virtual PC and lets you run legacy apps on newer operating systems such as Vista. I thought I had all the negative angles well in hand until I read Keith's recent blog, where he points out that the only way to get MED-V is to buy an expensive Software Assurance (SA) contract. The same is also true for the application virtualization tech acquired from SoftGrid.

SA is no picnic. You pay a lot of money for benefits you may never use, and for upgrade rights to software that may not ship on time. Want to know if SA is right for you? Check out this special report I put together a few years ago (it's just as relevant today).

Posted by Doug Barney on 01/19/2009 at 1:16 PM0 comments