Windows 8: Microsoft in a Post Microsoft Era

Like a lot of people I am watching the launch of Windows 8 in the market unfold in real time and find it one of the most fascinating shows in tech right now. There are few moments in our industry’s history that combine such a wide array of transformational disruptions on a company, while at the same time the company itself is positioning itself to break with it’s entire history and embrace change.

Here’s what I know:

  • Windows 8 is a fundamentally different approach to the Windows user experience.
  • From the ground up Win8 fully embraces a touch driven user interface.
  • Win8 features a rich immersive audio and video capabilities.
  • Built for the cloud with integrated services via SkyDrive.

Let’s run through some of the criticisms that I am reading, and contrast with how other companies are treated.

1) It’s a confusing user experience. 

Maybe, time will tell but the context this criticism is usually presented in is that of existing Windows users who are struggling to adapt to a new UX. This is the most unfair criticism that Windows 8 is subjected to because were it any other company the criticism would not be offered, instead what would be said is that the company is question is positioning for the future. How many times has Apple unilaterally changed something about their products to the sound of crickets among the chattering class?

Microsoft is at the forefront of a post-PC landscape and they are doing something about it. It’s not that desktop computing will go away, but it clearly – by any measure – isn’t driving growth and Microsoft is responding by drawing on their considerable experience in gaming, media, and mobile technologies to offer a next generation platform. I, for one, am looking forward to being confused by a new generation of Windows…

2) Companies will hold off on upgrading.

No shit, seriously is this what passes for tech journalism? We are in the midst of a recession (whatever you want to call it, the economy sucks) and companies are in no mood for an upgrade cycle. It’s also worth pointing out that Windows 7 is well supported in the modern enterprise and does what companies want it to do.

There is a bigger issue to take into account, which is that for Microsoft the future will always hinge on supporting businesses using Windows (and Office) but for the company to adapt to a bigger competitive landscape they have to change the dynamic of selling predominately through companies and OEMs.

We have been talking about consumerization of the enterprise for 10 years and it has already happened. New technologies don’t leak into companies through individuals, it is a primary path through which technology products now enter the enterprise. For Microsoft this means they need to appeal to individuals more strongly and draft on that to drive uptake with CIOs.

3) Windows 8 is a tablet experience forced into a desktop/laptop paradigm.

Perhaps, but to accept this blindly also means that we are not imagining a hardware convergence between tablets and ultra portable laptops. How many people use a bluetooth keyboard with their iPad to, effectively, use it as a Macbook Air? This convergence is already happening and Samsung has already announced a laptop with a touchscreen display…

4) OEMs are unhappy with Windows 8.

and the problem is….? Why should I care if OEMs are unhappy? The PC supply chain has stagnated, driving little innovation in recent years as consumers have put design and usability values ahead of low cost commoditization. Microsoft has allowed their OEM partners to crapify the initial user experience and force to the forefront mediocre applications that people don’t want and didn’t use. Microsoft has the chops to be a force in hardware manufacturing, they should embrace this and let Surface be a shot across the bow to companies like Dell and HP that design matters and if they won’t deliver it then Microsoft will.

In the process of writing this post I pretty much decided I am going to order one of the new Win8 devices when they become available. As much as I like my Macbook Air I am also objective enough to point out that Apple has been neglecting the Macbook product lines, substituting incrementalism for real innovation while they put the brunt of their efforts on iOS development and device support. I’m ready to give Microsoft another shot..

PS- I deliberately titled this post to reflect a “post Microsoft era”. This is not a typo from the oft heard “post PC era”. Microsoft needs to completely reinvent the platform that got them to where they are, just prettying up Windows and adding some cool features isn’t enough to capture customers like me.

Read My Lips: We Are Not Walking Away from WebOS

Today comes news leaked from an internal HP all hands meeting that the company is not abandoning WebOS, 15 months after acquiring it for $1.2 billion. This is how we get all our news about HP these days, leaked memos and meeting soundbites.

Watch for two main arguments being presented, the first by the tech pundit community and the second by HP itself in an effort to salvage whatever dignity remains after spending a lot of money on an acquisition that many people, including myself, said makes sense but then completely failing on the follow through.

First the tech pundits, who are centering on the IP is the main asset argument. In light of Googola that’s all we have been talking about for 2 weeks, right? So this simply has to be a no brainer for why WebOS is worth buckets of money… well maybe buckets of loose change.

It may well be that the remnants of Palm are sold off as a patent library but I have an impossibly hard time believing they will salvage even a symbolic victory from this. Estimates put HP’s acquired patent library at about 1,700 and for the sake of argument we can assume that they are predominately in the smartphone arena given Palm’s history.

Let’s say that 25% of those patents are coming up on end of life and another 25% are highly specific to Palm’s early devices and no longer relevant. So we’ll discount it by half and using Google per-per-patent benchmark of $550k per patent we arrive at a valuation of $467m, which is really dependent upon there being some competitive bidding for the assets otherwise it’s a complete fire sale. Not chump change but certainly a black eye for HP considering how much they paid for Palm last year, and then supported it through where we are today.

We also hear talk of licensing the WebOS… really? HP expects us to believe that HTC and Samsung are going to license an OS for which there is little app support, runs on hardware they don’t use (Qualcomm), is directly competitive with their other partners, predominately Android and Microsoft, and for which no hardware market success has been demonstrated? That’s the strategy?

I’m going to go out on the limb and just say right now that we have seen the last of WebOS (and when they go on clearance at Best Buy I am going to be in line to get one!).

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Google Going All In on Mobile

The tech media, and general media as well, is all a flutter about Google acquiring Motorola Mobility (note that this is one part of Motorola, the other being their Solutions group which is 2x the size of Mobility in terms of revenue).

Henry Blodgett thinks it will end as a disaster for Google and my good friend Larry Dignan provides 6 reasons why it makes sense.

I’m with Larry… this is about IP and what Google is doing is acquiring a massive IP war chest that they can use as currency for access to other people’s IP as well as protect their hardware partners with. If I’m HTC and Samsung this will ultimately be a good thing because the IP equivalent of the Allied Powers has just been formed.

Sure the hardware business is very different than software but Microsoft has proven they can co-exist so why can’t Google pull it off? Channel conflict will exist and the onus is on Google to demonstrate to key partners that they are not favoring Motorola but at the end of the day it’s not like these companies were competing on the basis of access to Android features, their competitive position is solely a function of their hardware and integration innovations.

In the end, I like this acquisition for Google and now all attention shifts to Microsoft and RIM.

 

Facebook Questions

Facebook launched a really interesting Questions product a few days ago and after trying it out I have a couple of thoughts on it that I would like to share. Simply put, this service builds on a well documented user behavior exhibited by millions of Facebook users who on a daily basis poll their “friends” using status updates that are questions.

Facebook Questions enables individual Facebook users to ask questions that are then displayed in the public news feed. Replies to the question are threaded under the originating question and the whole feature area is exposed to Facebook’s search function. Anyone viewing the question and the threaded answers can click on buttons to indicate whether or not the question was “helpful” or “not helpful”.

The integration of the feature (service?) is in the sidebar, the news feed, profile area, and a new Questions feature area devoted exclusively to Questions content. BTW, I really don’t know the vocabulary that Facebook uses in reference to their user experience, any online links that lay it out would be appreciated.

Question is not something that companies can readily take advantage of because Questions is not integrated with Community Pages. Each question that is launched also exists exclusively within in full public view, meaning questions cannot be directed exclusively at the follower community for a particular profile.

More significantly, Questions focuses on questions with light, short-form answers, and what that means is that Questions is not applicable for use cases like customer support and social commerce and while there is a “helpful” and “not helpful” button on each reply the fact remains that this is not outcome oriented and no “official answer” capacity exists. In other words, there is no capacity for a customer service rep for a company, in the case of a service and support use case, to act as a moderator for content concerning their products.

While the above is all true I don’t think it really matters to Facebook because they clearly have not conceived this service to be a company-to-person communication tool but rather a person-to-person one. They are committing that Questions will be available in community pages and have an API, but that is a future deliverable and if history is any guide… subject to change.

Facebook has two very distinct competitive targets with Questions, the first is obviously Google. A significant percentage of the searches performed on Google and other search engines are short form questions, as in “what the best taco truck in the Mission?” and “who is the guy in the Dos Equis commercials?”. By excluding Questions from search indexes Facebook is clearly indicating that they want that search traffic to occur inside Facebook rather than in a search engine that brings a Facebook user in.

Facebook’s product roadmap is an all out assault on search engines and by establishing a primary objective of diminishing search engine importance in connecting people with Facebook content. They very clearly has stated that they want people to dwell inside of Facebook longer and use Facebook’s search capability to find content, Questions is a powerful weapon in their arsenal.

This product also represents a symbolic defeat for Microsoft with their very highly regarded Bing search service… it was Bing who first went all out with an ad campaign highlighting the weakness of search as a “decision engine”, which is another way of highlighting the importance of the Q&A search behavior. If anyone should have launched a large scale Q&A service around a search engine it should have been Microsoft… once again snatching defeat from the jaws of victory.

The second category of competitor is the dedicated Q&A site, of which Quora and Hunch figure prominently as well as Google’s Aardvark and Yahoo’s relaunched Questions service. it’s not unexpected that the Q&A sites have articulated a spectrum of reasons why what Facebook is doing is not competitive with them but I really don’t think they believe that because it very clearly is competitive.

I really like Quora because they have a kick ass user experience and some remarkably good algorithms for suggesting people I should follow as well as building my own follow community. However the thing about Quora that wins hands down is the quality of the content, which is no doubt a reflection on the quality of the user community that they have attracted. Over time this is harder to sustain while at the same time Facebook’s Questions corpus will feature higher quality providing they work on the mechanisms for enabling efficient surfacing of good content.

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I like Facebook Questions a lot but am also pragmatic enough to recognize that it has some pretty big limitations when it comes to anything but person-to-person Q&A interactions, and their strategy of excluding external search from the content is also a risk because even the most die-hard Facebook users have ingrained behaviors that involve external search for finding content. Facebook’s search is good but it’s not the one I reach for first when looking for something.

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Dear Microsoft, Why Do You Make It So Difficult?

Like a lot of people I paid attention when Microsoft updated Hotmail and declared war on Gmail. That’s a bold move and to pull it off they must be confident that the features they are delivering really are transformative… but having done it with Bing (love it, don’t use Google much at all anymore) I figured maybe they were on a roll.

Many commentators agree, saying Microsoft has delivered the goods with “quick views”, better attachment handling, a Gmail-like conversation view (which itself is nothing new, many wonder why it took them so long to do this), and more. I thought I would revisit my old friend, having not used anything other than Gmail (for public email) since 2004.

SafariScreenSnapz008.jpgFor whatever reason my old hotmail email address is no longer available (which kind of pissed me off because I had jnolan@), having been subsumed by my Live.com account which, ironically, is my jnolan at gmail dot com email. When signing into my Live.com account and clicking on the “mail” tab I am told I don’t have a mailbox and must create one. There doesn’t appear to be any way to get to Hotmail other than going through the Live.com frontend.

SafariScreenSnapz006.jpgI understand that it is pretty difficult for a Live.com account identified by my gmail address to have a corresponding email account via Hotmail, but I have to wonder why the hell nobody thought about this back when they were building the Live.com identity system? It’s not like Live.com predates Hotmail. While mildly annoyed that I must create a new inbox I figure it’s no big deal so I click on the sign me up button.

SafariScreenSnapz007.jpg Upon clicking the “sign me up” button I am presented with yet another roadblock, this time telling me it could not sign me out of Live.com to move on to the Hotmail new account creation workflow. Furthermore, it’s telling me I have to enable cookies but I know for fact that I have cookies enabled so now I am at a roadblock which after investing the time to get this far I am not willing to go farther. No new Hotmail account for me, moving on and not going to bother trying again. #FAIL.

I am not writing about this to beat up on Microsoft although I think they deserve it for creating that maddening Live.com identity system with inherent and intractable conflicts with how Hotmail handles identity, but rather to point out that consumer online services have a very fragile relationship with new users where every single interaction adds or detracts from the experience and when it breaks you have lost that user forever. When you get me and build up a track record I am willing to put up some hassle because I have invested time in the relationship, as is the case with Gmail and performance at the moment, but when we are just starting the relationship is more like speed dating, you get 5 minutes to impress me or I move on. Microsoft, you wasted your 5 minutes with me.

Lies, Damn Lies, and Research Reports

Microsoft’s PR group sent out this research note this morning and while I don’t normally respond to such outreach this one caught my attention. IDC prepared it and makes some pretty bold projections like technology spending will grow at 3x the rate of GDP growth for 52 countries surveyed (no word on who those 52 countries are… if Zimbabwe, the Johnston Atoll and the Vatican are included, I guess this forecast would be plausible), and then there was this gem:

IDC predicts that between now and 2013, IT and software spending in the 52 countries it surveyed will help create nearly 5.8 million new jobs and 75,000 new IT companies.

[From Software Investment Drives Continued Growth in Local Economies: IDC estimates that Microsoft’s partners worldwide will generate US$537 billion in 2009 despite global economic turmoil.]

Does anyone really believe that IT and software spending will create 6 million new jobs in 4 years? If you parse the statement you could conclude that a rather liberal definition of what entails new software and IT spending could in fact create that kind of growth, but I don’t think organic business expansion is a consequence of IT spending but rather the other way around. This is like that well worn talking point about “jobs saved” that the Administration is using to justify the Stimulus bill… nice try but it’s not a real metric.

Research reports from esteemed groups like Gartner Group and IDC are great fodder for company marketing initiatives but does anyone really put much stock in them? If not, which I suspect is the case, why do vendors continue to support these relationships when even their staunchest supporters relegate reports to the circular file and Powerpoint bullets? If you are a marketing or public relations professional, how do you deal with skepticism when you are promoting positive research about your client?

Lastly, I do want to commend Microsoft on their communication about this report for focusing so much attention on their partner network. More than any other company in IT, Microsoft understands and lives by the idea that when their downstream partners make money, they make money.

Sony Risks Losing Game Developers

Sony didn’t see this coming 4 years ago when they first announced the PS3. At that time the competitor was Microsoft and price points were footnotes on slides detailing world domination of the digital home, today the company has faltered so badly on the PS3 that not only are they are risk of continuing losses well into the future but 3rd party game developers may abandon the platform as R&D budgets inevitably tighten, which would put the PS3 platform into a death spiral that would be exceptionally difficult to overcome without a reset, a do-over, that takes them back to square one.   

Three years into the latest generation of game consoles, Sony is stuck in third place, data from the manufacturers show. The Tokyo-based company, once the dominant player, has half the worldwide users of Wii, even though the PS3 has earned praise for its processing power, graphics and Blu-ray movie player. U.S. sales of the PS3 have declined for three straight months.

“If they can’t meaningfully increase their install base, then you will likely see a capital reallocation,” Hickey said.

[From Sony Faces Heat From Game Publishers to Cut PS3 Price (Update1) - Bloomberg.com]

What killed the PS3? Two factors, the first being over confidence as a result of dominating the market with the PS2 for so long, which resulted in ambitious tangental strategies around home entertainment and technology adoption that were not linked to the gaming experience. The second being Blu-ray which pushed the bill of materials cost up beyond what the market would support and was responsible for critical delays in 2006 as Sony dithered around with DRM details unrelated to gaming which had the effect of giving Microsoft a full year head start in the market. More critically, the Blu-ray delay caused Sony to launch the PS3 during the Wii launch, literally a few days apart just before Christmas 2006, drawing contrast to the significant price delta between the two consoles.

While you can’t ever count Sony out of the game, the fact remains that the PS3 development and launch has been so badly executed that it could set the company’s game division back 5 years as they try to recover lost ground. The gaming market has long operated as a duopoly, if you are not in first place you are last, and right now the market dynamics are around Nintendo and Microsoft. As developers make hard choices about where to focus their limited budgets, it’s unlikely that Sony will retain the library of popular titles available on the PS3, much less grow it.

Sony has two choices and neither are good, they can subsidize the PS3 with a retail price that essentially gives it away and recover the losses from game royalties, or put the PS3 on life support and focus their resources on developing a PS4 platform that serves as the base from which to expand. The former is a defensive strategy and you don’t win by defending, while the latter is fraught with risk as it relies on completely unpredictable factors and a lot of luck.

Jive SBS Launches

I spoke with Sam Lawrence at Jive about their new Social Business Software (SBS) product and came away impressed on two fronts, the first being that the product is wicked cool and perhaps more significantly they are skating to the proverbial puck rather than following in the footsteps of other companies.

Longtime Jive followers will notice something immediately, Clearspace and Clearspace Community have been retired as naming conventions. For SBS, the technologies represented in both of these products are now referenced as “Jive Foundation” which forms the underpinnings for the new products and initiatives.

200903100946.jpg Jive is looking at the market opportunity from the standpoint of what people do with the software, and that represents the work centers which map to a neatly presented perspective on what happens in all companies. Within each of these centers is a business process in which a social component is integral. Based on my own experience in very large companies, I think this is a realistic perspective and it’s worth noting that the overlap between centers is probably proportional not by design but based on what actually happens.

In addition to process centers there are cross application modules that allow for top down functions across the entire suite of services. Analytics represent an obvious cross application module but it was the Bridging Module that really captured my attention.

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What the Bridging Module enables is a federation of related communities for an integrated view. As an example, Kaiser is a Jive customer and with the Bridging Module any Kaiser user could add components that represent content and functionality in the American Heart Association community.

To be clear, this federation capability works exclusively with other communities that are built on Jive technology, but with 2,500 customers this is a significant list and represents the greatest strategic opportunity for Jive, to become a vertical industry standard where they have strong representation. This is class Law of Accelerating Returns stuff, a vendor will win more new business as a consequence of being perceived as the accepted standard by a group of competitors within a specific vertical industry.

In the “old days” we would have called these things portals but it’s really an understatement to reference any of these products that way now. Portals relied on a single vendor or approved partners to supply functionality that was unavoidably focused around a single vendor’s products and was also typically transactional data focused. With the emergence of unstructured content and social interactions being the bigger drivers of user focus, portals were poorly equipped to deal with this and it opened the door for a menu of competitive products to emerge, Jive being one of the more successful offerings.

A further data point that underscores the point above is that the technical specifications for what constitutes a portal component are less of an issue today, and as Jive and Socialtext both demonstrate, an OpenSocial widget is just as accepted as a native component. The evolution of widgets demands that they move beyond content and creative to social awareness, in other words, how the widget or component interacts with other components is of equal importance to what the widget or component itself does.

This is a pretty competitive sector and there are firm lines that are developing. Microsoft and IBM offer the biggest footprint enterprise social software stacks and as can be expected they are expensive and timely to implement but on the other hand they offer a lot of functionality and demonstrable ability to scale to very large user numbers while also offering strong integration options to other important enterprise products. Other vendors have emerged that challenge Microsoft and IBM, such as Jive, while another class is extending the big enterprise offerings (most significantly what NewsGator is doing on Microsoft Sharepoint). With a flight to quality as a consequence of current economic conditions, the large vendors will continue to dominate while challengers like Jive with extensive customer lists and mature product offerings will close the window for new startups to establish a foothold.

Today the focus in on what users are doing rather than what companies want them to do and Jive’s SBS is well positioned to take advantage of that with a compelling user experience, strong social functionality, a “marketplace” for third party components and federated community sites, and lastly, advanced functionality (e.g. analytics) that grow in importance as usage grows.

Sony PS3, Just Call a Do-Over. Please.

I could make a career writing about how much suckage the Sony PS3 represents. Almost 2 years ago I wrote a detailed list of things that were wrong with the PS3 and it still applies today, except Sony was forced to accept market reality and drop the price from $600 originally and there are much better game titles available today.

It’s still tough rock for Sony to push, as console sales figures out today reveal, given that they haven’t changed the marketing focus and there is still no strong online offering. Even without the Wii, Sony is getting their ass kicked by Microsoft who is selling Xbox 360 consoles 2-to-1 against the PS3, despite having a serious quality issue that set them back recently and essentially the same game title library.

# Wii: 803,000 consoles
# Xbox 360: 370,000
# PS3: 190,000
# PS2: 136,000 (People are still buying PS2s?)

[From October Game Sales: Nintendo Wii Kicking PS3 Butt]

Compounding Sony’s problems are the PSP, which has not had a meaningful upgrade/redesign in far too long, is underpowered, doesn’t have the equivalent of an “app store”, and doesn’t have any new compelling game titles. So now Nintendo is parlaying their success with the Wii for further success in the handheld category where the DS is outselling the PSP 2.5:1.

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