More Thoughts on Microsoft

So, my earlier blog post prompted some interesting discussions around the office. (See Microsoft Has So Much Promise…But Can’t Seem to Deliver). Many thought I was a bit too harsh in chastising Microsoft for their direction and business sense. Here are a couple of quotes that typify the “pro-Microsoft” side of our office:

I’m glad Microsoft isn’t rushing. If the next release is anything but perfect they’re done. iOS 8 being rushed is the reason it sucks so bad.

I think it’s an overstatement to say they’re [shooting themselves in the foot] when they make record revenue and profits just about every quarter. They have been reactionary since Windows 95 but it’s tough to argue with their bottom line.

I like a good debate as much as anyone, but let’s look at a few things:

First off, Microsoft’s revenue is up, but overall profits are down for 2014. The corporate side of their business is doing fine and because Windows XP is no longer supported, more and more business and consumers are having to upgrade, which is helping increase revenue Ironically, most of those upgrades are to Windows 7. More on that in a bit.

Secondly, although the XBox One hasn’t really done what they wanted it to do, it has increased revenues compared to the XBox 360 volume. OF course, growth of the XBox One is partly driven by some tactics unheard of from Microsoft in the past: lowering of its price in the UK to help drive sales.

Next, Microsoft’s services business has done well and their advertising revenue has jumped 15%. This is driven by the Azure platform, which, by all accounts I’ve read, seems to be a very robust and reliable platform. We’re hoping to have more info on this in a future blog post. Their ad revenue is growing due, in no small part, to the fact that its about all that’s available for Windows mobile. Ad networks like Google’s AdMob, RevMob, Vungle, AdColony and others don’t offer Windows SDKs for their services. AdMob has one for Windows 8, but with the push to Windows 8.1 on mobile, and no indication that Google is modifying their SDK to support 8.1, Microsoft’s PubCenter is about the only game in town.

Finally, about 15% of Microsoft’s stock value is based on its Windows operating system and desktop sales. Overall revenue has declined about 8% in this area.

Microsoft is a very diverse company with a significant amount of revenue coming from the enterprise, and that side of the house is doing fine. What is kind of funny is that the slow and steady transition of enterprises from Windows XP to Windows 7, and eventually to Windows XXX, has really helped Microsoft avoid a giant catastrophe. The current model corporations follow for the upgrade of their infrastructures is about every 5 years. That means that, essentially, the enterprise gave Microsoft 5 years to get Windows right.

However, the consumer market is struggling and Microsoft just can’t seem to get any traction in it. If Microsoft continues to stumble and not win the consumer market, it will start to impact their enterprise business. Microsoft’s initial entry into the enterprise was because they won the desktop. The question is, about 2 years from now when that 5 year cycle hits, will Microsoft have done what they needed to do to encourage upgrades enterprise level?

Over the years, Microsoft had the luxury of selling Windows to the consumer in the same way they sold it to the enterprise, using the same update systems, the same software life cycles, etc. With OSX, Apple changed all that, pushing free upgrades to their core OS, across all devices, and making sure the vast majority of their users are on the latest and greatest. And, that philosophy and strategy has been successful for Apple. So much so that it’s making Microsoft now have to re-think how they market, sell, distribute to the consumer while still managing the enterprise. Clearly this has been a struggle.

On the flip side, Apple has no idea how to manage the enterprise. Apple’s release philosophy is counter to the enterprise model. Therefore, there is very little threat to a substantial portion of Microsoft’s revenue in relation to the enterprise but they are at risk of losing the consumer market. So we come full circle and back to my initial blog post;

Microsoft should be releasing an updated Windows, complete with the UI changes, prior to the holidays or they risk losing the consumer market entirely.

The Windows Experience is impacting the entire Microsoft brand and making it very difficult for the Windows Phone or Surface to get traction. Over the holiday season Apple will sell 50 million iPhones. About 50 million PC’s will be sold over the holiday season as well. A new, exciting Windows release that focused only on usability would align very well with the $400 million Microsoft spent to promote the Surface with the NFL and would give the Windows Phone and the Surface Tablets a much needed boost! Instead, Microsoft blew their NFL marketing campaign by not coordinating some of the Windows improvements. Maybe if they had done this, NFL analysts would start referring to their tablets as “Microsoft Surface” tablets and not “iPad-like devices.”

Day 1 With Windows 10 on a Surface Pro 3

Image courtesy of Neowin

Image courtesy of Neowin

Even after the criticisms put forth in my last blog post, I was still chomping at the bit to get my hands on the tech build of Windows 10, and today was the day.

As a precursor, I should mention that I’m currently using a Microsoft Surface Pro 3 at work. I initially wasn’t sure I’d be able to run the tech preview on the Surface, but suffice it to say it runs pretty well. Also, I don’t believe any of the issues I discuss below are due to the hardware, but more to the fact that Windows 10 is a work in progress. Most of the little things will probably get worked out at some point. Regardless, I’ve spent most of the workday using it, so here are some thoughts…

Click for larger image

Click for larger image

Prior to running Windows 10, I preferred having the icons that were on my taskbar to be desktop related and left all the Windows UI applications on the start screen. Basically, I had two different configurations and, and ways to use, the Surface Pro 3, which wasn’t what Microsoft was going for. However, it feels natural to click Windows UI applications on the taskbar alongside the more traditional desktop applications. They coexist seamlessly.

No longer will there be a need for two different applications that serve the same purpose because one works better for desktop while the other works better for the tablet. For example, I had IM+ as a Jabber client connected to our SmarterMail server when in tablet mode. But when in desktop mode, I would use Pidgin. Now, IM+ works in both environments. What does this mean for the Microsoft Store? It’s going to EXPLODE because the audience is going to be so much larger! In addition, Windows is going to be much more secure. Instead of finding .EXE’s or .ZIP files to download, users are going to look first in the store. It’s amazing the changes that can be made and should have been done in the first place that would have put Microsoft in such a better position.

There are some bugs, however. There is some interface and compatibility stuff that is expected from a working build. For example, Windows Defender getting repeatedly stuck and using a significant percentage of CPU, which prevented some Windows UI applications from running until Defender was disabled. However, so far nothing has prevented me from getting work done.

I REALLY, REALLY, REALLY hope that Microsoft finds a way to seamlessly integrate the Start Screen and the Start Menu layouts. It’s a real pain to have to manage the look and feel of both. I want them to be in sync.  Now that Microsoft made it possible to use all the same Windows UI applications in the Desktop, they should encourage us to use them by utilizing the Start Screen’s layout.  This is an absolute must! Right now it just feels broken and disconnected.

Click for larger image

Click for larger image

A quick note to users of the Surface Pro 3 or a HP Yoga, or other Windows devices that double as a tablet and a desktop: be aware with this first preview that you will need to manually change the settings to show the Start Screen when running as a tablet. To do this, right mouse click on the task bar, choose properties, go to the Start Menu tab and un-select “Use the Start menu instead of the Start Screen.”

The Microsoft Store is going to explode, and in a good way! Now that Windows UI applications run a regular application the the desktop, users are going to go to the store for apps.  No longer will users search the web and download EXE and ZIP files.  What are the benefits of that?  Fewer and fewer machines infected with malware and viruses.  Windows will be more secure!  It’s amazing the changes that can be made and should have been done in the first place that would have put Microsoft in such a better position.

Of course, with every new change comes additions requests from users. Microsoft had better get their network and support teams ready for a deluge! For example, now that I can utilize the native Mail application provided with Windows I needs to be able to simply drop files and attach them to new messages. I was also hoping to see some scaling options in the tech preview. One of the drawbacks of having the Surface Pro 3 connected to nice 27-inch monitors is that using the 100% DPI option in Windows makes everything incredibly small on the Surface but look normal on the monitors. Oh how software development never ends! (And how nice to be able to be on the giving end of suggestions rather than the receiving end of suggestions).

I must also say that the virtual desktops are so long overdue! It’s such a nice feature in OS X and it feel really good on Windows. Major thanks for this!

In the end, Windows 10 is on the right path. People will feel more comfortable using it as a desktop, which will go a long way to gaining traction in the consumer market. If they implement the “detection” of a keyboard and/or mouse and automatically switch from tablet view to desktop view, they could nail it.Of course, I still have to mention this: What they shouldn’t have done is delay the release.  As I mentioned in my previous post, Windows 10 should be out by the holidays so Microsoft could capitalize on the $400 million spent with the NFL to market the Surface. If I say it more and more often, maybe it will come true.

Microsoft Has So Much Promise…But Can’t Seem to Deliver

I really had high hopes that today was going to be a great day. Not that other days AREN’T great, but today Microsoft was releasing information on its new version of Windows. I had high expectations for the event and when all was said and done, much of the interface elements were exactly what I was hoping for. I even think that naming the release Windows 10 is a BRILLIANT move by Microsoft as it signifies NOT a new version of Windows 8, but a new version of Windows! By skipping the Windows 9 moniker, Microsoft is truly showing, in a most basic way, that they’re starting fresh and looking at the Windows operating system in an entirely new way.

And then all my hopes, high expectations and overall excitement at what was presented and discussed were shattered: Windows 10 won’t be available until “mid 2015”.

What?! Wow…what a lost opportunity!

Why do I think that? Well, let’s take a step back and look at what’s happened over the last 45 days, just to put some things in perspective.

First off, Apple has suffered a number of mistakes and missteps.

  1. The Apple Event to announce new iPhone’s and the Apple Watch was less than spectacular. (When the live video feed would actually work).
  2. The Apple Watch didn’t seem to strike the same chord as some of their past product announcements.  It’s hard to know if it is because Steve Jobs and his passion wasn’t there, telling us why we needed it or it it’s because, at Steve Jobs’ Apple it would have been available in a week not MONTHS.
  3. Then we had the releases of the iPhones and iOS 8. It seemed every other day there was something going wrong. Health Kit was being delayed…iOS 8 issues and then 8.01 and now 8.02 seems to have problems….the iPhone 6 Plus bending issues…and now iCloud Storage is deleting files.
  4. And if all that weren’t enough, let’s not forget about the iCloud security issue that has led to what the Internet has dubbed “The Fappening”, an issue that Apple apparently has been aware of since earlier this year.

Boy oh Boy! One of these types of issues can hurt a company. Two or three can cripple a company. Three or more? Forget it. However, Apple has survived. Is this because it’s Apple? Or, is it because everyone else is failing to capitalize on Apple’s mistakes?

I would argue the latter.

In a recent article Eric Schmidt made a comment that Apple and Google are more competitive than ever right now, and that in a the fast-paced world of technology, the speed with which both companies are moving means that we, as consumers, are benefiting from that competitive spirit. But are we, really? Because I really feel that some of the issues Apple is having might be the result of this FAST environment.

As for not capitalizing on this, Microsoft really missed the boat, and it seems like no matter how good their intentions are, they just can’t seem to get their house in order.

The Windows Event held earlier this year was Satya Nadella’s introduction as the new CEO and his time to tell the world: Things are going to change.  We are the NEW Microsoft! And yes, he did imply that, but it hasn’t really happened. Microsoft is still Microsoft, with the left hand making questionable decisions that the right hand isn’t aware of.  For example, they’re going back to the MSN Brand? Does anyone really think that highly of the MSN Brand?

Today’s Windows Event was going great: Windows 10? As I said, a brilliant decision to start fresh while avoiding all the negative publicity that went with a lackluster Windows 8 release.

All the changes in the UI and its evolution into a really nice hybrid desktop / tablet solution, a unified platform across all device types (which we are working with today for some new projects)…And then the kicker to really ruin all of the good news and great ideas: a mid-year 2015 release target.

Why?! What are the issues that are preventing Microsoft from taking advantage of Apple’s missteps? Why aren’t they leading rather than continually playing catch-up? How can you fight the “war for mobile” if you can only update 40% of your phones and it takes over 4 months to do it? (One of our staff has a Samsung device that STILL hasn’t received the 8.1 update, and there’s zero indication it ever WILL get the update). To Apple’s credit, they have a great model for distributing core operating system updates. Android has a similar issue to Microsoft, sure, but Google OWNS the mobile market! Plus, many people don’t realize that a majority of the functionality in Android is handled via apps, not from the core OS. Therefore, Google can update their functionality almost immediately for most Android users and can introduce new apps and or services with ease.

Microsoft really let me down today, and they didn’t just shoot themselves in the foot, they blew the darn thing off. Windows 10 should have been released before Christmas. There are some great and very cost effective tablets, laptops and mobile phones that should be flying off the shelves this holiday season. I feel bad for the hardware vendors trying to rely on Microsoft.  It’s amazing we haven’t seen more damage to the likes of HP, Acer, ASUS, and Toshiba, who have hitched their businesses directly to the success, or failure, of Microsoft. If it weren’t for Android, some of these manufactures wouldn’t even be relevant right now.

The question is, can Satya Nadella make Microsoft relevant again?  Apple’s lost some of its polish the last couple months, but Microsoft has nothing in the pipeline that could really put the pressure on Apple. When you’re an organization that has 24% of your market share using an operating system that was released in 2001 (Windows XP) and you have failed with your two most recent updates (Windows 8.0 and 8.1), you simply can’t announce what looks to be all the right moves for that operating system, and a huge improvement to the direction of your company as a whole, THEN say NONE of this will happen for at least 8 months. In a fast-paced world, people simply won’t wait.

How Google Drive beats Dropbox and SkyDrive

As your company grows, so does the necessity to better manage company documents and files. Like many companies, SmarterTools utilized file servers at our data center and created shares for various departments. This was, of course, a decent solution, but one that required a bit of maintenance by our IT staff and required our employees to use VPN in order to access the server, and this wasn’t a good solution for the up and coming tablets. So, in 2010 we decided to evaluate “cloud based storage” solutions. We looked at, Dropbox, SugarSync and a few others and eventually settled on Dropbox. We have been a long time customer and supporter of Dropbox and we’ve used them through thick and thin, like their security mishaps and some terms of service issues. We weathered these storms because the service is robust, it’s reliable and its sharing and team features keep the management of our documents and files simple and secure. However, the recent updates and rebranding of both Microsoft SkyDrive and Google Drive has made us re-evaluate the functionality and pricing of Dropbox. Through this re-evaluation we discovered that we can decrease our file storage costs approximately $3700.00! You read that right – a $3700.00 savings!

Why use a cloud storage solution versus a file server?

Apart from the savings we see from an IT standpoint, there are some personal and technical savings as well. SmarterTools employees need access to documents and files whether they’re online or offline.  We work all hours of the day and from anywhere; some of us travel, some work better at night, some work better from home and several are responsible for 24 x 7 x 365 emergency support incidents. In addition, we use many different mobile and desk-based devices. While everyone is provided a laptop, that laptop may be Windows or Mac. We use tablets such as iPads or Asus Transformers and use a variety of mobile phones as well, including Windows-, iOS-, and Android-based devices. With an internal file server, in order to get to a file we’d have to deal with all of these personal, geographic and technical variables and use a number of different methods, applications and protocols to reach our company documents and files. Sometimes that became a huge hassle. For example, many tablets and phones don’t support VPN well and that’s a critical component for reaching a networked server. IN addition, some devices, like the iPad, aren’t file based.

Ultimately, we ended up with Dropbox because every situation, platform, location and device mentioned above is fully supported and we’ve found that everything synchronizes quickly and completely, and while we were paying close to $4000.00 a year to use the service, the price was worth it considering how it made things so much easier on the entire team.

So, why move to another provider? One of the things that makes SmarterTools a successful business is that we are never really content with how things run or with how we do things. We always look for improvements. With the recent announcements from Microsoft about SkyDrive and the rebranding and added features of Google Drive, we felt it would be worth our time to evaluate these new developments. I have to say, we’re pleasantly surprised with the results.

Doom for Dropbox?

First things first: Dropbox is a wonderful service. Even though they’ve had their share of adversity and public brow beating, we were very happy with the service they provided. The unfortunate thing for Dropbox is that their Team feature, which is what we had to use in order to be able to share department-level access across multiple users, secure access to folders and files, etc. requires adding additional “users” to the team account, and this can be very pricey. The pricing for our Dropbox usage is as follows: $795.00 for Team sharing, which includes 1TB of space and 5 users.  Additional users are $125.00 each, so for 25 more users we pay an additional $3125.00. All together, that’s $3,920.00. In addition to the cost, when using the Team features of Dropbox, each users’ Dropbox account is converted into your Team account. So, when an employee leaves, you must email Dropbox support and have their user turned into standard account. Otherwise, users wouldn’t have access to any files they’ve put into their personal Dropbox space.

Looking at Google Drive and Microsoft SkyDrive, their services are based solely on space. That means that only a main, corporate account needs a paid plan. Accounts that have shared access to folders on the primary account can be free! Using SmarterTools as an example, we only need one account that has 200GB of storage. We want to share this 200GB of content so our employees can sign up for a free Google Drive or Microsoft SkyDrive account and then accept invitations to the shared resources that are created on the primary account. As of now, accepting a shared resource on a free account does not impact the 5GB or 7GB allotments that Google and Microsoft respectively provide. That is a huge cost saving advantage! In addition, when an employee leaves the company, all that needs to be done is that the main SmarterTools account needs to remove that individual’s access to any shared resources. For Google Drive, those files and directories on the users’ machines are then automatically, and instantly, removed.

Let’s look at a pricing comparison for Google Drive and SkyDrive. Again, with 30 accounts on Google Drive we’d need a primary account and pay $120.00 per year for 200GB of storage. The additional 29 users would be free accounts. With SkyDrive the cost is $100.00 per year for a primary account with 200gb of storage, and the additional 29 accounts would be free! Compare either of these to the $3,290.00 cost at Dropbox for users and and the $795 Team feature and you see the overall savings!

How do we protect our documents and files from a cloud storage disaster?

When you’re in the software and services business, you understand the risks associated with having tired programmers and network administrators. No matter how many policies or procedures you put in place, something can happen. Because of this, we don’t rely solely on the cloud storage company for backups. Even though Dropbox, Google Drive and Microsoft SkyDrive support file revisions there is still the possibility of file loss. To alleviate some of that concern we also have a server configured with an account which pulls down all documents and files. This server is then backed up in our datacenter as all our other servers are and can be used in case of a cloud storage disaster. Now this isn’t a “file server” per se, so we’re not accessing the server for access to files, etc. It’s a server that we use for other things that also acts as our backup server. Therefore, the maintenance and other costs associated with a standalone file server are not issues.

Ultimately, we chose Google Drive because…

So the question is why did we decided to go with Google Drive versus SkyDrive? The answer is really simple: just like Dropbox, Google Drive’s clients for Mac and Windows desktops download shared files to machines. As of today, Microsoft SkyDrive clients do not work like this. The shares are available in the SkyDrive Web interface, but their desktop clients and tablet/phone clients does not support shared folders and files which is a necessity.

Taking all of this into account, things are looking a little grim for Dropbox. Google Drive and Microsoft SkyDrive are incredible offerings at incredible prices. Apart from the cost savings, the effort both Google and Microsoft are putting into cloud storage gives us a great deal of confidence in their offerings, in the progress they’re making and that any issues we’re currently seeing will be quickly resolved. On the other hand, Dropbox seems to be screwed!

Read this blog post in Spanish language thanks to Maria Ramos from Webhostinghub.

Microsoft building an ecosystem with Barnes and Noble investment

Microsoft is one of the largest players in the next generation of platforms and operating systems but it’s the only one with out an ecosystem. That is, it’s the only one without revenue generating services that can help power and guide those platforms

In a previous blog post, “Windows 8 will succeed, but Microsoft could still fail“, I talked about Windows 8 and the impact it could have on the antiquated business model Microsoft has for their Windows Division. Specifically, I talk about how their business model is in trouble due to pressures on providing free upgrades like Apple and Google do for the iOS and Android platforms. I further propose that, without additional revenue generating services, Microsoft is going to have a difficult time competing in the platform space moving forward. In order for Windows to succeed in the Post-PC era, Microsoft needs to build an ecosystem that provides their main source or revenue in the consumer space.

Oddly enough, it seems Microsoft understands this and its recent injection of money into Barnes and Noble is proof.

It’s no great secret that Microsoft is years behind Apple, Amazon, and Google in providing online services. In addition, Microsoft will not be able to build these services in a reasonable amount of time and, to be honest, their track record has proven they aren’t necessarily very good at it. They have attempted multiple music services, either through building it themselves or via partnership, and none were very successful. In addition, their implementation had a long lasting impact on users because they took down DRM servers making some music no longer able to be played.  Bing has been somewhat of a bomb and continues to cost Microsoft money.

The “funding” of a new Barnes and Noble digital and educational company is brilliant. This allows Microsoft to complete against all three major e-book players on a fairly level playing field very quickly. Without Barnes and Noble, Microsoft would be in a world of hurt, plus they have added another piece to their ecosystem.  Microsoft is already planning to come out with an App Store for Metro, which will provide some decent revenue opportunities, but having access to the Barnes and Noble customer base and providing their e-reader on all Windows 8 versions is a step in the right direction.

Now the question is, where is Microsoft going to get video?

A friend of mine, Jeff Hardy, sent me an email and suggested, albeit sarcastically, that Microsoft buy Netflix. The funny thing is, I agree 100% with the idea.  Netflix is in trouble. They don’t have enough money to get enough content and they’re stuck.  Companies such as NBC, CBS, FOX, Showtime, HBO, etc. don’t like the Netflix model. Plus, Netflix has another issue: their model works great for older content but you can’t sell customers on older content. New and ever-changing content drives revenue. That’s why CBS, NBC, et. al. have their own apps and websites for customers to consume “new” content.

Microsoft has the perfect opportunity to get into the TV and movie service, immediately and across ALL platforms.  Microsoft could go from zero ecosystem to a complete ecosystem, across every device and platform available, practically overnight. Once Microsoft has their new media service (i.e., post-Netflix), they will have the money and the leverage to bargain with the NBC, CBS, HBO and other media companies. Microsoft will now own the platforms – Windows Mobile and Windows for desktops and tablet – and will have the ability to extend Netflix into a rental service as well, just as Apple has with iTunes and Amazon with their Prime service. The Amazon model is really the one everyone needs to move to. What’s holding Amazon back is that their video can only be played on limited devices and the service is very dependent on Flash.

So that leaves Microsoft with a need for a music service, and it sounds like they’re going to try to develop their own solution again. This time it should be simpler both because they’ve tried it before, and this time there are a few good models to use moving forward.

Investors, and even politicians, are giving Microsoft a lot of heat for sitting on nearly $60 billion in cash. This might have been a very smart decision and will give Microsoft a lot of flexibility in their direction and development of online services as there are some very well established companies that can make Microsoft very relevant very quickly, for the right price.

It would be a pleasant surprise if Microsoft could erase their consumer failures over the last 5 years. Apple’s iOS has had the same look and feel for the last few years and I don’t think Apple has felt pressure from Google and Android from a “user experience” standpoint. Microsoft, especially with there Metro interface, might be the nudge that Apple needs to evolve their very functional, but somewhat boring, mobile platform.

After all is said and done, what do you think of a Microsoft acquisition of Netflix? Does it make sense? Do you think Microsoft has what it takes to build a comparable ecosystem to Apple, Amazon and Google?


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