Microsoft Loses the Conviction of Goldman Sachs
**Today's guest columnist is Ed Scannell ([email protected]),
editor of Redmond magazine. Doug Barney will return to Redmond Report
on Monday.**
Given what they describe as uncertain spending plans among IT shops over the
next year, coupled with the expectations of jittery investors over the second
quarter earnings report, Goldman
Sachs has removed Microsoft from its America's Conviction Buy list, although
it is keeping a "Buy" rating for the company.
Despite the arrival of Windows Vista and Office 2007, Goldman Sachs sees the
delivery of these products as the end of an era. The Wall Street investment
firm believes that several trends including Software as a Service (SaaS), virtualization
and the growing specter of open source will loosen the iron grip Microsoft has
held on the desktop market for well over two decades, cutting deeply into the
revenues of its two cash cows.
Apparently, the delivery of a raft of other best-selling products Microsoft
has promised over the remainder of 2007 and into 2008 -- including Exchange
Server 2007, Longhorn Server, the Forefront line of security products and System
Center Operation Manager -- has had little or no influence on Goldman Sachs'
economic view of the company. Goldman believes the tentative spending plans
of many larger companies into fiscal year 2008 will keep a lid on sales of products.
Speaking of Longhorn Server, the long-awaited successor to Windows Server 2003,
Microsofters are expected to trot by next week with a new Community Technology
Preview (CTP) of the product, which should shed some light on what to expect
in beta 3 of the product. Some developers who have seen the preview are reporting
on some sites that the product is looking very solid. As well it should. It
feels like the company has been working on it since the first Bush administration.
Start Me Up (While We Are Still Young)
It's all over forums this week -- a growing dissatisfaction
among users with Vista's slow startup and shutdown times, compared with
those of Windows XP. And they aren't jumping for joy over the load times for
applications, either. Many are saying it takes 10, even 15 minutes for the system
to fully boot. One poor soul complained it took over a half-hour to come up
(clearly, his machine was not built in this decade).
Microsoft from the start has been saying that your system's performance with
Vista heavily depends on how much processing power and memory muscle your machine
has. It's looking like some Microsoft officials (but not necessarily the hardware
requirements on the side of the Vista retail box) really are telling the truth
on this one: If you want to play Vista, come with a 2GB system and a fast (if
not dual-core) processor.
Barring that, to avoid the long boot-up and shutdown time, users should seriously
consider using the operating system's new sleep mode, a combined hibernation
and standby mode borrowed from XP, as the permanent way to shut Vista down.
This is something Microsoft has been recommending to users since at least December,
more than a month before its official launch. Hmm...seems they knew something
we didn't about starting up and shutting down Vista.
In an interview with Redmond magazine, David Pogue, New York Times
technology writer and author of Windows
Vista: The Missing Manual, said sleep mode is a rather clever piece
of work by Microsoft.
"When you close the lid [of a laptop] Vista does a quick backup of everything
that was on the screen and opens an invisible file on the hard drive. It then
leaves a small trickle of power to keep alive everything still in memory for
18 hours. If the battery does die, the next time you open the lid it is still
there -- everything you had open on the screen. It might take 30 seconds to
wake up instead of two minutes," Pogue said.
The Missing Vista Manual Found
Speaking of David Pogue, we had a chance to talk with him about the latest addition
to his Missing Manual series, which now has 30 titles including several
on different versions of Windows and the Macintosh operating system. Pogue talked
about the value of books such as his that offer users an objective (that is,
not influenced by Microsoft) evaluation of the product's capabilities along
with plenty of inside information about how to use those features, what it was
like working with Microsoft and third-party developers as part of the research,
and what his career fallback plan is in case Microsoft ever produces software
easy enough to use that obviates the need for books like those in the Missing
Manual series.
Redmond: Why doesn't Microsoft include a book like this on CD
in the retail version of Vista?
Pogue: I have researched this quite a bit. There are three reasons.
One is money; it is a dollar a box to put some literature in there. Two is time.
When they finish that software, they want to ship it. They do not want to wait
around for something to be edited and printed and bound. Third, their research
shows that a lot of people don't even look at it when they do give them a book.
The trend in the industry has been to eliminate printed manuals and I guess
most people just fumble along with the online help. But that means you can't
underline important sections, you have no illustrations and you can't read it
in the bathroom.
Redmond: When I get a new OS, the first thing I am looking for
is an insider's guide to features Microsoft typically does not tell you about.
Does Microsoft purposely not put in such a guide to give book writers a chance
to make money?
Pogue: I think that is true. For example, they have a sleep mode in
Vista but the real story behind sleep is much more technical. The problem with
standby was there were drivers and dialog boxes that would prevent the laptop
from actually shutting off. So you could fly across the country and lose everything
on the screen once the battery died thinking it was off and you end up carrying
a 1,000-degree carrying case because it was on the whole time. But sleep does
something very clever: When you close the lid, it does a quick backup of everything
that was on the screen and opens an invisible file on the hard drive. Then it
leaves a small trickle of power to keep alive everything still in memory for
18 hours. If the battery does die, the next time you open the lid, it is still
there -- everything you had open on the screen. It might take 30 seconds to
wake up instead of two minutes. You won't get that in help or brochures.
Redmond: More generally, what advantages can you provide in a
book like this compared to Microsoft's own Inside Out?
Pogue: As an outsider I feel free to criticize. I can point out features
that don't work well and ones that do, or ones that are put in at the request
of the marketing people that are not very useful, or features that are just
very stupidly done. For instance, there is this new photo editing program that
is modeled on iPhoto for the Mac and it can do beautiful full-screen slide shows
of your pictures -- just not with music. Well, what sort of slide show program
does not let you put music to it? Or their new backup program. For the first
time Windows comes with a preinstalled, ready to use backup program except you
can't pick which folders you want it to back up. It will only say what types
of files you can back up. For instance, you can say what e-mails or photos and
music can be backed up but you can't say to which folders. There are some brain-dead
stuff in there.
Redmond: Did you talk with beta users and developers as part
of your research?
Pogue: Yes, I went nuts on this book. It was made clear to me both by
common sense and by my publisher that this book is a once-in-decade opportunity
because this version [of Windows] is so different. A lot of people will be needing
a book like this and whoever has the best book stands to be rewarded handsomely.
So I did tons of cruising blogs and the Web. Interestingly, this is the first
version of Windows where Microsoft permitted the actual engineers and product
managers to keep blogs on their areas of expertise. So there were digital photos
blogs, a Windows Explorer blog and an Internet security blog. So you could keep
in touch with these things as they designed them and why features went in or
out during the betas.
Redmond: With search engines getting better and better, is this
even more competition for book writers like you?
Pogue: Well, yes and no. The person who does that [uses search engines]
is obviously the person who would not be shopping for a book anyway. Book people
are book people -- people who realize they can read a book when they are away
from the computer, which you would not be able to do using Google. Plus you
have to factor in your time. When you use Google you are going to have to wade
through three or four different things hoping to find the info you need. And
many times you have zero percent credibility of the facts you are reading. You
have no idea how reliable the information is in someone's blog. To ensure credibility,
I did a very expensive thing. When the manuscript was finished and right before
it was published I hired a beta reader to sit to read the entire book and test
every single step on every single page to make sure the wording of something
had not changed during the beta program or that I had not left out a step.
Redmond: You have done books on Mac operating systems as part
of the Missing Manual series. Do those books tend to be a lot thinner?
Pogue: (Laughs) Yes, well, I am the author of the best-selling Mac book
called Mac OS X: The Missing Manual.
Redmond: Is doing a book on the Mac OS more fun or interesting
than a book on Windows?
Pogue: I used to think so. I did a Windows XP and Windows ME book, and
I didn't enjoy those as much because a lot of what was in those versions of
Windows was so illogical. It was like trying to defend somebody who I didn't
feel deserved it. I was trying to help people understand why these features
and check boxes were in there. Even I could not justify it. I felt awkward.
Redmond: As long as Microsoft continues producing software that
is difficult to use, it means job security for guys like you?
Pogue: Yeah, that's right. I always joke that the day they start including
decent manuals with these products, I will happily go back to my old career
as a Broadway conductor. I am not necessarily going to starve if they start
doing it, but at the same time I am not holding my breath waiting for them to
do it.
Redmond: What Broadway shows did you work?
Pogue: The best one was Kiss of the Spider Woman. And I also
worked on a Cy Coleman musical that only ran for six weeks called Welcome
to the Club. That was a big flop.
Money Can't Buy You Love
The vast sums Microsoft has spent so far this year in promoting Vista has been
effective, in terms of creating greater awareness of the operating system, but
they're not necessarily driving sales. According to the latest Harris Poll conducted
among consumers, some 87 percent said they were aware of Vista compared to only
47 percent back in December, one month before the product's official launch.
However, when asked if they were going to upgrade to Vista this year, only
12 per cent said yes compared to 20 percent who were asked that question in
December. It appears the
wait-and-see attitude, among consumers at least, will remain in place through
most of this year.
Quote (and Prediction?) of the Week
"We've got a three-year lead, and we've never lost a game where
we had a three-year lead."
-- John Chambers, Cisco chairman,
talking about the advantages of his company's unified communications products
and strategies compared to the products and strategies of the same name owned
by Microsoft.