Microsoft To Push Office SP3

Posted by Lee Pender on 01/30/2008 at 1:21 PM0 comments

VMware Comes Down to Earth

First of all, VMware's quarterly revenue number and its projections of revenue growth for 2008 both missed analysts' estimates. And, even though everything else for Q4 and 2007 actually looked pretty good, those two numbers coming up short was enough to scare off investors.

Beyond that, with a recession possibly looming -- and maybe even already upon us -- it doesn't take much to spook investors these days. Just ask Apple and Google. So, despite the fact that VMware continues to rake in the dough, its stock price is taking a hit.

Here at RCPU, we get all that, and we don't want to jump to conclusions. But, we do sometimes speculate a bit, and we wonder whether maybe, just maybe, Microsoft's concretization of its own virtualization strategy might have played in the backs of investors' minds this week. Oh, sure, Redmond has a long way to go to catch VMware technology-wise, and VMware itself is no sputtering start up -- it's 10 years old, majority owned by tech titan EMC and, stock-price catastrophe aside, still very, very profitable.

Still, we all know that unless it's consumer search or personal music players -- neither of which represents an enterprise-focused market -- Microsoft, when it gets good and ready, tends to make room for itself in new markets at the expense of incumbents. Obviously, that's not happening in virtualization...yet. It's the "yet," though, that intrigues us and might have given investors pause, as well, this week.

Or maybe not. In the current parlance of America's youth, we're not sayin' anything...we're just sayin'.

What's your take on VMware's stock-price tank? Let 'er rip at [email protected].

Posted by Lee Pender on 01/30/2008 at 1:21 PM0 comments

HP Unveils Mobile Thin Client

Well, sort of mobile. It's not for the road warrior with millions of frequent flyer miles, Tad Bodeman, director of blade PC and thin client solutions for the HP Personal Systems Group, told RCPU. It's more for folks jumping from meeting to meeting.

"Folks that are working in a wireless campus environment -- this is targeted at them," Bodeman said. "They want to have a mobile device because they want to work at their desks, go from conference room to conference room for their meetings."

Sounds useful. Tad adds: "When you're not connected, there's nothing running on this mobile thin client," so a machine that's lost or stolen won't end up giving, say, thousands of Social Security numbers to somebody who really shouldn't have them.

All very good. But then, Bodeman said this of the new mobile thin client's users: "They want to go home, have dinner, log back in and do some more work at night or on the weekend."

Grr. Well, thank you very much, HP, for making that easier and safer to do. There go our weekends -- and weeknights!

Posted by Lee Pender on 01/30/2008 at 1:21 PM0 comments

Microsoft Makes More Money

And so it came to pass last week, as you probably know by now, that MSFT (cool financial writers love to refer to companies by their ticker symbols) tore through Wall Street expectations again and reported another blockbuster quarter for the period ended Dec. 31, 2007. Plus, the company said that fiscal 2008 will also beat the Street's expectations. Microsoft makes more money. And, hey, for partners, that's a good thing.

(By the way, a parenthetical note here not specific to Microsoft or its earnings release: Don't be too impressed when companies -- and most of them do this -- talk about reporting "record revenues" for a quarter. All growing companies should report higher revenues for their most recent quarters than they did for the quarter before or for the year-ago quarter. If they don't, that's a sign that the company is shrinking, not growing -- and that's usually a very, very big problem. Record revenues just means that a company is still growing -- which is totally normal and healthy, but not always terribly impressive.)

In case you missed them, there were a few interesting little tidbits from last week's earnings report. First of all, SharePoint is now a $1 billion earner for Redmond, which goes some way toward muting claims from competitors (hello, Salesforce.com) that nobody really wants it or likes it. (We always suspected that the folks at Salesfoce.com were engaging in a little hyperbole when they said that, anyway -- although, to be fair, the exact phrase we heard was that SharePoint was "owned by millions, used by few and loved by none," which could still be true, although we kind of doubt it.)

Also, the Entertainment and Devices division -- the much-maligned (sometimes in this space) folks who bring you the Xbox and Zune -- finally came up profitable for a quarter, and Microsoft says that the division will turn a profit for the fiscal year. The one technology division that's still in the red is the infamous Online Services Business, which actually lost more money in the last quarter than it did in the same quarter a year ago. Yes, that's the stuff that competes with Google.

Perhaps the most interesting feature of the earnings news -- and it hasn't escaped the notice of the press -- is that Microsoft brought in $77 million through anti-piracy activities. It's a drop in the revenue bucket, but it's some quantification of how much piracy actually costs Microsoft (and partners) and how much the company can regain by fighting it.

So, Microsoft's making more money, but are you, partners? Are you reaping any of Microsoft's windfall? Sound off at [email protected].

Posted by Lee Pender on 01/29/2008 at 1:21 PM0 comments

SQL Server 2008 Delayed

Posted by Lee Pender on 01/29/2008 at 1:21 PM0 comments

So, Just How Evil Is Microsoft?

Posted by Lee Pender on 01/29/2008 at 1:21 PM0 comments

Vista SP1 on the Way, XP on the Way Out

Posted by Lee Pender on 01/29/2008 at 1:21 PM1 comments

Reader Feedback: You Are Preparing for a Recession

"We are definitely preparing. Many of our customers appear at the moment to be scaling back on new purchases; luckily we provide managed services to many of our customers, which will allow us to maintain a steady revenue flow, since it would be difficult for those customers to do without our support services as we basically are their IT department. However, the scaling back of the purchases of new machines and other equipment does also hurt our bottom line."

That's the beauty of managed services -- that steady revenue stream. Perhaps feeling a tad less confident than Joseph, James proposes some more radical suggestions:

"As the economy slows down, people are not going to be able to pay for legal software and the high costs of IT repair, nor do constant changing of operating systems. We need to take a step back so that we may go forward again. I feel that we should continue to run Windows XP and that Microsoft should produce plug-in modules for Windows for people to try out. These modules should be free and not on a trial basis only. These modules should have the ability to be uninstalled.

"I say make Win XP run more stable and make XP Pro the standard. This will remove issues between the home and office worker and the driver being written for the OS. Once we have reached a plateau, then we take on a new operating system with the new improvements that consumers like the most and need the most. Too many options of operating systems have caused an industry-wide lack of drivers and usable application software. We are trying to drive forward too fast. Today's operating system uses far too many system resources, causing a major lack of speed."

So, James says, as the economy slows down, maybe we should, too. Or maybe we'll have to. We'll see.

While we're here with reader feedback, let's throw in a response from Michael in Australia, mate, who writes about Microsoft's shifting executive roster and the shifting strategy that seems to be going with it:

"I personally went through some of what you are describing with Microsoft, though on an infinitely smaller scale. I purchased and built up a small, regional IT shop and opened a second shop in another thriving regional centre. Then there were some changes in my life that required me to scale down my business interests, so I sold the business. I worked with the new owners for six months; the business was healthy and profitable for those six months. Then the new owners made the decision to chase the consumer market at the expense of their corporate clients, and within 18 months the business was gone.

"Now, one of the points that I'm going to make with this story (be it far removed from the scale of Microsoft) is that there was absolutely nothing wrong with the business skills of the new owners. One of the new owners was a regional manager for a financial company with many years of experience in various small businesses in his past. The other was a seasoned IT manager. The parallel I'm trying to draw here is that regardless of the experience and skills of the management and the health of the business now, if your business gets too focused on pursuing a particular market you may end up in a dry creek (isn't Microsoft currently trying to woo the small business market?).

"Before anyone replies and says, 'Microsoft has sufficient resources to ride out such a mistake,' you've got to ask yourself the question: 'Would you invest in a hydroelectric power station that has cracks in its dam wall and gets its water from a desert catchments area?' Yeah, sure, they've got a diverse portfolio of electricity (read: OS), water (read: Office), shares (read: shares), etc., but..."

Michael, that's why we suspect that Microsoft is trying to move the market rather than be moved by it. Chasing the rabbits of SaaS could end up being costly and counterproductive. But developing your own (or, in this case, Microsoft's own) strategy and using your considerable size and influence to "help" customers conform to it on your schedule could be a successful blueprint for riding out the eventual decline of fat-client, on-premise computing. It's all about using influence rather than being influenced.

Oh, and while we're here, there was one more reader comment we enjoyed this week. Pete took issue with our reference to the "perfect" New England Patriots:

"Don't you mean the CHEATERS from New England? I wonder if there will be an episode of that late-night TV show, 'Cheaters,' with Bill Belichick being surveilled and confronted by Joey Greco and his band of investigative thugs with video cameras?!"

If anybody's going to do any surveillance, Pete, it'll be Belichick himself. And, as LaDainian Tomlinson (RCPU's favorite player and fellow TCU alumnus) said -- about the Patriots -- not so long ago: "If you ain't cheatin', you ain't tryin'."

Thanks to all who took the time to write. The mailbag is always open: [email protected].

Posted by Lee Pender on 01/24/2008 at 1:21 PM1 comments

Infusion Starts Channel Program

Posted by Lee Pender on 01/24/2008 at 1:21 PM0 comments

Microsoft Stuffs Partner Pockets with 'Big Easy' Program

Keeping track of the customer promotions and partner subsidies on the Microsoft Incentives page used to be a full-time job for Microsoft partners. Maybe not anymore. Next month, Microsoft is launching a single partner subsidy program called the Big Easy Offer. Microsoft is putting $10 million behind the program, which offers partner subsidies for customer purchases of nearly all of Microsoft's main SMB-targeted products, with the exception of Windows Vista. Partners who can upsell, cross-sell or sell more expensive licensing options see the subsidy go up on a sliding scale.

According to Microsoft, the subsidy checks, which are sent to the customer but made out to the partner of the customer's choice, often lead to secondary purchases of hardware, services, training or additional software from partner companies ranging from five to eight times the value of the subsidy itself. Granted, a program with sliding benefits covering dozens of SKUs against a handful of licensing options is, itself, fiendishly complicated, but Microsoft is providing an online calculator so partners can just enter the numbers rather than learn all the rules.

Bekker talked to Christopher Large -- who should be a rapper of some sort with a name like that but is, in fact, Microsoft's group manager for U.S. Sales Programs -- to get all the details on the Big Easy promotion. They are here.

Posted by Lee Pender on 01/24/2008 at 1:21 PM0 comments

New EMC Product To Mozy into Fortress

Posted by Lee Pender on 01/23/2008 at 1:21 PM0 comments

Microsoft Money: More Big Profits in the Way?

Times look tough, financially, and they might be getting tougher soon. So you know what that means: As always, Microsoft makes more money. Redmond is due to reveal its financial results on Thursday, and already the press and Wall Street watchers are using phrases like "sharp rise in profits."

Now, as the Reuters story linked explains, part of that "sharp rise" stems from Microsoft's deferral last year of more than $1 billion in revenue. Still, while the rise might not be as sharp as it first appears, it's still a (potential) rise, and a pretty impressive one at that. Hopefully it bodes well for Microsoft partners, too, who should, in theory, benefit from Redmond's success.

Last week, we asked you what you're doing -- if anything -- to prepare for a recession. We'll have your responses in RCPU tomorrow. Since Microsoft won't announce earnings until Thursday, and since we no longer have a regular Friday edition, we'll have to save analysis of Microsoft's earnings for next Tuesday's edition.

There's still time to send us your thoughts on how a recession would affect you. The address, as always, is [email protected].

Posted by Lee Pender on 01/23/2008 at 1:21 PM0 comments