Microsoft acknowledges the long and winding road ahead
Still blames OEMs for lack of touch
Microsoft's latest quarterly results are a mixed bag; record revenues, a slight fall in profits and Windows going full steam ahead – but CFO Peter Klein was taking a cautious tone at Thursday's analyst call.
"It's early days, an ambitious endeavor like this takes time," he said. "We've learned a lot over the past quarter and reimagining the computer landscape takes time. We've taken the first of many steps."
On the face of it things look pretty good. Windows 8 sales are running at around the same level as those shown after the launch of Windows 7 he said, and the Windows division was Microsoft's star performer, even accounting for upgrade offer costs. Once those end for Windows 8 next month Microsoft will be looking for even more revenues to come.
Enterprise is spending to upgrade XP and Vista systems and over 60 per cent of enterprise PCs now run Windows 7 he said, with plenty of upgrade opportunities out there for the channel. Based on Redmond's feedback, enterprises like the slim PCS offered with Windows 8 and its manageability, but there was no specific data beyond the 60 million licenses sold figure.
Klein said Microsoft had underestimated the demand for Surface RT fondleslabs, to the extent that supplies had run short. The Surface Pro will launch next month, the RT tablet will go sale in an additional 14 countries and Microsoft is expanding its use of third-party retail channels.
The CFO acknowledged that a lack of apps is holding back the current Surface platform, as El Reg has pointed out, but said that Microsoft was addressing the issue. Redmond also faces a hardware issue, with not enough touch screen devices running Windows 8 on sale.
Klein was diplomatic enough not to blame OEM manufacturers directly for failing to build enough low-cost touch devices for consumers – he left that to Chris Suh, general manager of Investor Relations. "The consumer segment was most impacted," Suh said. "Demand exceeded supply for the limited amount of touch-screen devices available."
Microsoft can use the OEM market as a whipping boy all it likes, but the HPs, Dells and Lenovos of this world are understandably unwilling to spend too much time producing expensive kit no-one's buying while cash-strapped consumers are happy with cheaper, non-touch alternatives.
The PC-buying public still expects computers to get less expensive each year and shows little inclination to start paying more for their hardware. Having a touchscreen PC is nice, but there's no absolute reason to have one and Windows 8 isn't enough to get people thinking different on the matter.
As for Office, all eyes are on the forthcoming launch of the new build. Klein promised Office 2013 will add social tools to productive tools and throw Skype into the mix. The new version has aspects of the not-Metro interface that would prove popular he said, although that does rather depend on the number of people who choose to use the latest operating system.
On the enterprise side things look more cheery. Klein reported that moves towards hybridizing the server market were going well and that System Center and SQL Server saw impressive growth. Azure integration is going well and demand is strong on the communications software side he said.
Klein became particularly enthusiastic when talking about the number of multi-year licenses Redmond has signed. This comes in part from the aforementioned enterprise users building themselves around Server 2012 and gives Microsoft long-term revenues he said.
On the mobile phone operating front Microsoft had little to report. Sales of smartphones using the OS are four times last year's levels, but that's hardly a unanimous vote of confidence in a market or the growth rates Microsoft, and Nokia, are looking for.
All in all, then, it's a wait and see quarter. Microsoft's still very profitable, Windows looks somewhat promising and the back-end is holding up well. The markets will watch how well things develop with Windows 8 and the new Office platform, but Klein made clear Microsoft is playing the long game on this one.
"We delivered solid financial results for the second quarter. We have good product momentum in the market, and are excited about the opportunity to help our customers take advantage of the advancing trends in technology," he concluded. ®
Touch Screens in the office? Forget it.
I have four 27 inch screens on my desk (at least on a bracket on my desk) and if anyone touches them, to make a point, they leave smudges and fingerprints and then I have to clean the screens all over again.
Who wants PC touch screens, except MS, on my Samsung a swipe or other motion is a nothing, on a 27 incher it's more like callisthenics.
Re: Touch Screens in the office? Forget it.
Maybe instead of touch screens, the next big thing in Hardware should be No-Touch screens: screens that are configured to deliver a nasty electric shock to anyone putting their greasy sausages on your display area.
Constantly failing user experience...
... and it only gets worse :-(
I guess I'm a bit of a "Microsoftie"; now almost 2 years ago I upgraded my Vista box to Windows 7, started using it as desktop and started experimenting with Office 2010 several months later, so far I really enjoyed that ride. Sure; Windows has its twirks and oddities, but it also has plenty of key strengths in my opinion.
And I liked the extra's too. For example; I quite often use Messenger on both the desktop and my Winphone which is quite nice. Not for video chatting mind you; but simply text messaging. I also discovered other products, for example; although I'm not a die-hard (web) developer I do enjoy working with programs such as Expression Web 4 (web design software) or even the free (Express) versions of Visual Studio.
But I think Microsoft is totally losing focus on several fronts, and is even ignoring possible revenue.
For example; I bought Expression Web 4 (approx. $160,-, say E 100,- at that time) and liked it. Even recommended it to others. Now I discovered that they're going to discontinue the product (link to official Expression product page). Because web applications are rising they're "consolidating": "As part of this consolidation, Microsoft Visual Studio 2012 provides the leading web development tool, which enables you to design, develop, and maintain websites and web applications.".
Now; I haven't tried VS 2012 (Express) yet because I'm not looking forward to the new Interface but also because I'm happy with the current version. But solely based on my Visual Web developer 2010 (Express) experiences I really wonder if the same functionality is being provided. Its main aim is after all web applications. And that's not mentioning that getting a regular Visual Studio license is a LOT more expensive than Expression web was.
Good news for others is that you can now pick up Expression Web & Expression Design for free.
Messenger? Its being discontinued in March and so I decided to perform the advised upgrade last evening. What a disappointment.... Skype is SO not Messenger. Now; I'm not "dissing" Skype here (not perse anyway) but if the first thing you're greeted with is "Buy skype credits" and "You don't have a premium account!" you know you're in for a commercial ride. I thought GoDaddy was bad by trying to provoke me into buying all sorts of extra stuff...
I want to check my profile? The first I see is "Go premium". I don't WANT to, I want to check my fscking profile. And the last thing I need is a subscription. Yet that constantly gets shoved in my face. Not even Messenger was this intrusive!
And well; how I should logon to my new Skype account on my Windows Phone 7.5 is something not even the Skype community can tell you. I was about to ask when I came across that thread.
So basically a good working environment is being replaced for another although it doesn't provide all the functionality yet (for example; I can't receive incoming text messages on Skype while my Winphone is locked).
Way to go Microsoft!
And they remain totally clueless it seems. The new Surface RT? You can do a lot; but if you read closely you'll see that you won't be able to sync your todo items with a desktop Outlook version. Just like you still can't do this for Windows Phone. The main reason why this is so is because the Outlook 2010 (and 2013) connector plugin doesn't support synchronizing todo items with your Hotmail (or Outlook.com) account. Thus also rendering it unusable for external devices.
And so in a few months I also won't be able to receive incoming chat messages which my gf typed on her computer. Simply because the Skype client on Windows Phone 7.5 stops running the very moment the phone is locked.
Microsoft really needs to realize that customer experience is key in a market where you actually have to compete. At this point I'd still advice to go for Windows and Office in several cases because those products have several advantages to them. But... No; Not Windows 8 and Office 2013; my advice is to get Windows 7 and Office 2010 now that its still available.
And at this point the only thing I can say about my Windows Phone is that I still like the experience (not too sure after March), but now I wouldn't recommend it to others any more nor am I that sure if my next phone will be a Winphone. Which is somewhat of a shame, because in my opinion they started so good (link to Youtube Windows/Winphone commercial).
But THAT is IMO the real problem Microsoft is facing. Because you see; I'm sure that I don't stand alone with this. Its happening on all fronts. I see gamers on Youtube getting fed up with a totally non-functional Kinect in certain games, where the promise is always that "its going to be fixed".
I still see complaints in Visual Studio forums about new changes and removed features from the VS 2013 version. And it seems that a large part of the Windows phone community also gets the feeling that they're being left in the dark.
People are actually "fighting" Microsoft because they see that MS is ruining the product they came to love and enjoy so much. Surely it shouldn't be THAT hard to recognize that this is a totally unhealthy situation for any firm which is trying to be better than its competitors ?
Because the moment those people give up the "fight" is also the moment where you may very well have lost them as a customer. And big changes often start very small....