A Final Word on Why the Debut of a New Windows O/S Should be a Very Positive Event for Microsoft

A surprising portion of analyst commentary on what the impact may be from Microsoft’s scheduled late September announcement of a new operating system has been decidedly pessimistic. But these analysts may be missing some points worth considering.

A recent example of some of this negative predicting can be found in an article published on August 19, 2014 to the Seeking Alpha web site. This article, written by Onuora Amobi, titled Microsoft Investors Need to be Skeptical About Windows 9 (http://seekingalpha NULL.com/article/2435845-microsoft-investors-need-to-be-skeptical-about-windows-9), contends “Windows 9 will probably be a stop-loss Operating System, as opposed to true innovation.”

Anyone listening to Microsoft’s most recent earnings conference call would likely be very skeptical of Amobi’s contention. If Satya Nadella’s comments can be taken as reliable pointers as to where Microsoft is headed with this next release of its operating system, then we are looking at a piece of software incorporating an enormous amount of innovation. How else to explain the future promise of substantially less effort to upgrade systems or to add new functionality, which will be represented by the debut, perhaps in late September, of one operating system to service all of the device form factors marketed by Microsoft, from PCs, to tablets, to smart phones and even game controllers?

At the same time, the critically important question of quality of user experience, which Microsoft has always fought very hard to ensure, will certainly be made easier to achieve with Windows Threshold, or whatever, ultimately, Microsoft decides to name its new O/S.

Beyond Nadella’s remarks, there is ample indication Microsoft is entirely capable of delivering on this promise. As published recently to this blog, there have been a couple of recent examples of solutions, for developers working with C#, capable of delivering on this objective. One of these can be found in a partnership between Xamarin (http://xamarin NULL.com) and Microsoft’s MSDN developer subscription business unit (Xamarin, in fact, is actually being promoted to the Android and iOS developer communities, as well), and the other in something called a “universal App”, which was introduced at Microsoft’s Build 2014 developers conference. In both cases the objective is to provide developers with tools to substantially reduce the amount of effort required to apply the same code to multiple computing device form factors.

In this writer’s opinion, the impact of a new operating system meeting the specifications Nadella spelled out will be very great, indeed.

Ira Michael Blonder (https://plus NULL.google NULL.com/108970003169613491972/posts?tab=XX?rel=author)

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

Has Microsoft Alerted Media As To Its Target Market And Its Niche for Windows Phone?

A recent review of a new HTC One, this one running the Windows Phone 8.1 O/S, points to more work for Microsoft Public Relations (PR).

The title of this review is HTC One for Windows: Another Great Phone You Probably Won’t Buy (http://online NULL.wsj NULL.com/articles/htc-one-with-windows-phone-another-great-phone-you-wont-buy-1408459355?mod=WSJ_hpp_MIDDLENexttoWhatsNewsTop). The writer is Joanna Stern, and the publication is the online Wall Street Journal.

Readers unable to read the entire article are encouraged to watch the 3 minute video embedded in the article. Why the writer would choose Time Square as a fair location to collect a sample of public opinion as to the popularity of Windows Phone (or the lack of it) eludes this writer. But, to give Stern the benefit of the doubt, perhaps someone in Microsoft’s PR team has identified mass market smart phone consumers as the target market for the Windows Phone 8.1 O/S.

If this is the case (and one must ask, with so many of these “reviews” producing nothing more positive than “it’s a great phone, but no one will buy it”, over and over again) then someone at Microsoft should take corrective action to ensure PR communicates the right message to the media.

In this writer’s opinion, the target market for a comparatively expensive smart phone like the HTC One, with the Windows 8.1 O/S, is enterprise business users (inclusive of the “fringe” created by the consumerization of IT and the BYOD structures enterprise businesses have constructed to support it). After all, what’s a tourist in Times Square going to do with Office? Office 365? Enterprise Search (for which Cortana will play a big role)? Yammer?

One can argue these consumers will be attracted to the camera on the phone, but the camera is not one of the “mission critical” features of this smart phone. The Apps we just mentioned, and to name but one more, Remote Desktop Connection, make up the solution for the burning need this target market has for the Windows Phone. In this writer’s opinion, making the rounds of mass media every time a new feature is added to the Windows Phone O/S, or even to inform them about the debut of the Surface Pro 3, only serves to render Microsoft’s products something less than what they ought to be.

Ira Michael Blonder (https://plus NULL.google NULL.com/108970003169613491972/posts?tab=XX?rel=author)

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

Have We Crossed the Windows Threshold?

On August 15, 2014 Mary Jo Foley published an article on ZDnet titled Microsoft to deliver Windows ‘Threshold’ tech preview around late September (http://www NULL.zdnet NULL.com/microsoft-to-deliver-windows-threshold-tech-preview-around-late-september-7000032668/).

Subsequent to the release of Foley’s article, a lot of follow up articles were published on the same topic on familiar PC computing hardware blogs, including PCWorld, Computerworld, CNET and more.

But a core point of interest for most commentators, a rumored capability of this new Windows O/S to auto discover the computer hardware upon which it is running and to serve an optimized User Interface (UI) for it, popped up in the press months before Foley’s article was published.

This post is not a history lesson about rumored features of Microsoft’s next O/S, so it makes sense to take a moment to provide backdrop for why this topic is worth commenting about here.

Bottom line: “Windows Threshold”, and its capability to auto-sense hardware, promises to deliver substantial reductions in Cost of Goods Sold (COGS) for Microsoft. Satya Nadella, CEO, alluded to the promise of a reduced COGS based on one version of Windows for any/all hardware platforms during Microsoft’s most recent earnings conference call.

We assume our readers will be interested in any feature powerful enough to enable Microsoft to preserve gross margin, but still substantially reduce COGS. After all, without this feature Microsoft would continue to require separate versions of its O/S for different hardware platforms — Windows Phone, Surface, XBOX, and PC.

Back on April 2, 2014, in a video webcast of an interview between Charles Torre, a Senior Quality Engineering and Designer at Microsoft and Kevin Gallo, Director of Program Management, Windows Phone, Microsoft, mention was made of a “Universal App” process.

This webcast, titled What’s New for Windows and Windows Phone Developers (http://channel9 NULL.msdn NULL.com/Events/Build/2014/9-001), is devoted to a discussion of this new App development process, which Gallo defines as “an App designed to run across many different form factors, PC, tablets, Phones. The App adjusts itself so that the UI and the interfaces work across all of those different devices . . . ” (quoted from the webcast of Torre and Gallo’s discussion, which was held at Build 2014).

As we noted above, the big deal about this feature is the room it may provide to Microsoft, and to its OEMs, to offer consumers PCs at substantially lower cost, perhaps on par with the street price for typical examples of the Chromebook platform Google has developed and most prominent PC OEMs have opted to produce.

If this holiday season does provide the venue for a market debut for these lower cost computers, it may not be a stretch to see Microsoft reclaim some of the ground it appears to have lost to Chromebooks at the low end of the consumer PC computing market.

Disclaimer: I’m long Microsoft and have no position in Google as of the time of the publication of this post

Ira Michael Blonder (https://plus NULL.google NULL.com/108970003169613491972/posts?tab=XX?rel=author)

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

Microsoft Appears More Comfortable When Promoting Products to Developers

While one can argue Microsoft’s marketing communications targeting computer tech consumers often miss the mark, their promotional efforts targeting developers fare better. A good example can be found in a recent entry to the Office Blog, titled Connect and collaborate with the powerful tools in Office 365 for Enterprise (http://blogs NULL.office NULL.com/2014/08/12/visionaries-need-great-productivity-collaboration-tools/).

Where the current video advertisement campaign for Surface Pro 3 fails to marry the showcased product with the human archetype a lot of the advertisement’s audience dreams of becoming, this short post does a better job of connecting these marketing dots.

The “dreamer” aka “Human as visionary” is certainly an attractive archetype for developers who build applications, and the business stakeholders sponsoring them. The editorial content of this ad explicitly presents the connection between this personality type and its various iterations across a presumed organization (or business), all the way from the CEO at the top, through the developers responsible for building the solution, and, finally, to the “workers” (perhaps end users?) who will consume the solution as they go about the task of successfully completing their work.

While the editorial content explicitly presents this connection, the method leaves something to be desired: “The CEO has a big dream. He is passionate about towers and wants to build the tallest one possible. He needs help to collect and share his ideas, and he needs a way to unite people under his cause. The CEO could benefit from Yammer.” The presentation is clearly a simplification. The reader can’t be expected to do much more than smile at such an attempt to present a rationale for collaboration.

But one of the videos embedded in this post, Office 365: Visionaries need great productivity and collaboration tools (https://www NULL.youtube NULL.com/watch?v=Ry5VooSZTEs) saves the day, for this writer, and provides the subtly the complete communication piece requires to make a lasting impression on readers.

It is a pity this same finesse could not have touched the video advertisement campaign for the Surface Pro 3. Regardless, it is highly likely Microsoft’s prime audience — enterprise business technology consumers — will find this post, which is good news. After all, this prime audience is more likely than average computer tech consumers to subscribe to Office 365.

Ira Michael Blonder (https://plus NULL.google NULL.com/108970003169613491972/posts?tab=XX?rel=author)

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

Microsoft Struggles to Promote the Surface Pro 3 to a Mass Market

On August 10, 2014 Microsoft debuted a new set of video ads for the Surface Pro 3 (http://www NULL.youtube NULL.com/watch?v=1jP4O7rEHQ8). A lot of the ad content is comprised of a feature comparison between the Surface Pro 3 and Apple’s MacBook Air. A lot of opinion has been expressed about this set of ads as simply the latest example of an ongoing comparison, dating back to the late 1990s, when Apple kicked it off with its infamous Mac vs PC ads.

Does Microsoft stand to benefit from this approach? In this writer’s opinion the answer is “no”. The original Apple campaign was likely effective as the result of a successful effort to bridge the gap between product and consumer. The “Mac” of the ad amounted to one type of person (consumer), while the “PC” was a radically different type of person. The ad then left the viewer to identify with one, or the other. Much has been written about the success of this campaign, so there is no need for us to spend time exploring it further here.

The current comparison is strictly product to product. One can argue the music background on the first of the new ads, with its female vocalist, is suggestive of a personality type, but the actual content is strictly feature to feature review. But, this writer would argue, PC consumers buying Macs are buying them more for what a Mac says about someone who owns one, than the actual features of the device. Sadly, the round of ads from Microsoft fail to speak to this human behavior pattern.

These ads may run against the grain of enterprise IT organizations, which would be very unfortunate. These organizations are most likely to motivate corporate users to scrap orders for MacBook Air laptops and replace them with orders for the Surface Pro 3. Enterprise customers are accustomed to evaluating products head to head (so-called “best of breed” comparisons are the norm), but strictly on a feature basis, without any attempt to add tone to the presentation by associating buyer type to products.

Bottom line: these ads attempt to plant one foot on either side of a gap between consumer and enterprise IT. This posture is not sustainable. The next round should position the product on one side of the gap, and preferably the enterprise IT side, where Microsoft has more friends.

Ira Michael Blonder (https://plus NULL.google NULL.com/108970003169613491972/posts?tab=XX?rel=author)

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

Microsoft Provides Incentives for iOS and Android App Developers to Implement Xamarin with Visual Studio as their Platform

iOS and Android App Developers comfortable building solutions with C# should consider adopting Xamarin (http://xamarin NULL.com/) with Visual Studio as their coding platform. Microsoft is offering some financial incentives for these early stage ISVs to adopt Xamarin. Additional information about these incentives can be found on a page of the Xamarin site, titled “MSDN” (https://xamarin NULL.com/msdn), which publicizes the Microsoft offers.

Xamarin is one of a number of cross platform development offers. The biggest difference between Xamarin and its competitors, in this writer’s opinion, is the role C# plays for the Xamarin solution. C# sits at the center of the Microsoft application development paradigm. But from the promotional content on Xamarin’s site, one would also think C# is the best method App Developers can implement to maximize the value of App architecture by reducing the time required to implement the same App functionality for iOS, Android, and Windows.

The Mono (http://www NULL.mono-project NULL.com/) Open Source implementation of Microsoft’s .NET framework is also sponsored by Xamarain, so the role Xamarin can play for Microsoft, should they magnetize critical mass across the App developer community, should be very clear. Without developers it is not likely Microsoft will successfully capture more of the mobile App market than it currently has (generally acknowledged as somewhere under 5% of the global market).

Xamarin appears to be winning over some important adopters. A quick glance at the corporate icons on the bottom of the first page of the Xamarin site attests to adoption from some very large enterprises, including Dow Jones, Kimberly Clark, McKesson, Bosch Siemens, and NBC Universal. Quick adoption on the part of enterprise business and comparably sized organizations in the public sector would make sense given the dominance of the “Microsoft stack” across these organizations.

Of course, magnetizing significant numbers of App developers from IT, and their partners servicing Line of Business (LoB) units within the same enterprises with Xamarin may ultimately prove to be good news for Microsoft’s latest product with a claim to a fast launch — the Enterprise Mobility Suite (http://www NULL.microsoft NULL.com/en-us/server-cloud/products/enterprise-mobility-suite/default NULL.aspx).

At a minimum, anyone harboring deep skepticism about Microsoft’s chances of establishing a legitimate position in the mobile App market may want to re-think his/her position.

Ira Michael Blonder (https://plus NULL.google NULL.com/108970003169613491972/posts?tab=XX?rel=author)

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

Do Better Informed Consumers Deliver More Sales Than Their Less Informed Peers?

Implementing a strategy to better inform customers about specific differences between one’s product and a product manufactured by a competitor includes a tacit agreement to compete to be the best. ISVs should carefully consider the ramifications before implementing this strategy. With the exception of clones and direct copies, no two products are the same, nor are they ever targeted at the same consumer. So this strategy may not pay off as expected.

Anyone visiting Microsoft.com recently will notice a number of direct comparisons between the Surface Pro 3 and Apple’s MacBook Air, and the soon-to-be-released (this writer, who owns a Windows Phone 8.0 Nokia Lumia 925, would hope) Cortana personal assistant and Apple’s Siri. The underlying premise supporting this type of marketing communications is product equivalence. The Surface Pro 3 and the MacBook Air are two versions of the same solution, as are Cortana and Siri.

But, we argue, this underlying premise is a fallacy. Dr. Michael Porter has written about this competitive approach, and unfavorably. Dr. Porter’s ideas on the topic have received commentary in this blog before, so there is no need to revisit them. It may suffice to simply equate this approach with a “zero sum game”. One competitor wins everything, while rivals receive nothing at all. When the results are combined, the total is a zero — no one really wins.

One may argue this effort has a highly successful ancestor — the television ad campaign Apple undertook in the first year or two of the new century. This campaign purported to be a competitive comparison between Mac and PC, albeit in the form of two personae — one guy representing the Mac, and another, stiffer, bespectacled, stouter, more formal guy representing the PC. Regrettably, this argument doesn’t work.

The ad is actually a caricature of the “head to head” product comparison communications method. The subtle suggestion, of course, points back to the presumed male viewing the ad, to whom a question will likely appear (seemingly out of the blue), “do I want to be the Mac, or do I want to be the PC?”.

Unfortunately, the comparisons on Microsoft.com do not possess this same subtly and can only be construed as direct product to product comparisons. In the opinion of this writer, they are not likely to be persuasive and, even if they are, they will not likely lead to a lot more profitable sales.

Ira Michael Blonder (https://plus NULL.google NULL.com/108970003169613491972/posts?tab=XX?rel=author)

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

Telemarketing Continues to Provide Very Strong Returns Against Investment As Compared to eMail, or Social Media Approaches

Despite an enormous amount of material arguing to the contrary, in this writer’s opinion, telemarketing continues to provide the best return on investment of any sales lead development approach. Recent conversations with personnel from a number of prominent ISVs (active in markets related to Microsoft’s Office platform) indicate these organizations share the same opinion.

Perhaps it can still be argued online product promotion (web content in all its forms — online press releases, web site editorial content, blog articles, status updates to prominent social media venues, etc) is, nevertheless, the best method of driving prospect interest in a product. Further, it may be the case the best method of nurturing prospects through a series of interactions leading up to a purchase interest in a specific solution is to periodically contact these people via email messages. But, ultimately, as these leads transform into consumers with a defined appetite for a specific product, the best method of engagement available to ISVs remains telephone contact, meaning telemarketing or teleprospecting.

To provide some sense of how much more effective telephone contact can prove to be, at the right time, we refer to some work we recently undertook for one of our long standing clients. This ISV had recently exhibited at 3 prominent trade shows for its market. The initial effort to engage with booth visitors, after each event, took the form of a comparatively impersonal broad email message sent to each visitor, in HTML format. In each case the level of incoming activity from booth visitors, post receipt of this email message, was weak. Further, the follow up efforts we undertook immediately after the broad HTML email had been received by booth visitors, which took the form of a personalized text email message, produced equally anemic results.

In contrast, a serious effort to reach out to each booth visitor via a telephone call exposed healthy interest in our client’s solution. Approximately 5% of visitors contacted even expressed some serious interest in purchasing the solution albeit at a later point in time (for example, the next fiscal year).

Bottom line: telemarketing (and, by extension, cold calling) should play a prominent role in any ISVs lead generation planning.

Ira Michael Blonder (https://plus NULL.google NULL.com/108970003169613491972/posts?tab=XX?rel=author)

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

BlackBerry BES wins at U.S. Defense Information Services Agency

On August 6, 2014, Blackberry announced the U.S. Defense Information Services Agency (DISA) had approved its Secure Workspace for iOS(R) and Android(tm) solution at the level of DISA’s Security Technical Implementation Guide (STIG) (http://press NULL.blackberry NULL.com/press/2014/blackberry-further-expands-unparalleled-security-credentials-wit NULL.html).

In this writer’s opinion this win is notable for three reasons:

  1. The win demonstrates the strength of an entrenched device and its supporting platform for enterprise businesses and comparably sized organizations (such as DISA) in the public and not-for-profit sectors
  2. Despite BlackBerry’s position in the “Niche” quadrant of Gartner’s Magic Quadrant for Mobile Device Management (MDM), DISA opted to approve this solution, apparently unconcerned about the position of this platform, relative to its competitors in the market place. DISA’s decision may include important clues about how U.S. Federal agencies may buy technology solutions in the future
  3. The win is, perhaps, a blow to Samsung’s Knox Enterprise Mobility Management (http://www NULL.samsung NULL.com/global/business/mobile/platform/mobile-platform/knox/). Given the role Google apparently intends Knox to play in its efforts to repackage Android for enterprise consumers, this win for BlackBerry may have implications across a wider range of enterprise opportunities

1) It is very difficult to unseat an entrenched incumbent

The BlackBerry press release about this win does not include specific detail about how DISA decided to approve BlackBerry’s solution, but it is likely safe to surmise the large installed base of BlackBerry 10 mobile phones played some kind of role. On the other hand, the press release does mention BlackBerry’s Global Enterprise Services group. So the win may be emblematic of the quality of customer account management this group has achieved as it has worked with DISA

2) The Magic Quadrant May Not Be What It Seems When It Comes Down to Costs

Enterprise computing is highly complex, with a rich set of influential factors. As mentioned above, without further detail, it is no more than pure conjecture to posit answers to questions as to how DISA went about making its decision to approve BlackBerry’s solution. But it is likely cost had something to do with it, as is often the case. Perhaps the cost of implementing a best-of-breed solution for Mobile Device Management (MDM) far exceeded the cost of consulting with BlackBerry to bring its solution up to compliance with STIG. Bottom line: this win demonstrates how vulnerable an argument built on no more than authority (meaning pointing to the position of a couple of products in a market study like Gartner’s Magic Quadrant) can be when long standing customers weigh the pros and cons of making a platform change and funds are tightly controlled.

3) Samsung’s Knox is, perhaps, not as formidable as its namesake

As written in several older posts to this blog, Google’s I/O event for 2014 included the presentation of what this writer took to be a serious effort to repackage Android into a platform more worthy of serious consideration by enterprise IT organizations. A segment of the enterprise presentation at this event included an announcement of Samsung’s decision to make Knox available to the entire Android developer community. So this win by BlackBerry may put a damper on the enthusiasm driving this enterprise IT initiative for the Android developer community.

Ira Michael Blonder (https://plus NULL.google NULL.com/108970003169613491972/posts?tab=XX?rel=author)

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

NVIDIA Q2 2015 Results Point to a Healthy PC Gaming Market and More

NVIDIA’s reported results for its 2nd quarter, 2015 (http://www NULL.media-server NULL.com/m/p/ttmzdmy5) fiscal period exceeded management and analyst expectations. Based on NVIDIA’s results, the consumer market for PC Gaming hardware looks strong. The results also include a report of substantially larger sales of NVIDIA’s Tegra SoC platform into the automotive market.

The company also guided higher for likely sales for the 3rd quarter of 2015 and pointed to consumer GPUs as its most popular product line. There was no indication of any margin erosion in the near future. Jen-Hsung Huang spoke to very deep strength and health in the global PC Gaming market and likely increases in average sales prices (ASPs).

If one can extrapolate from these results to broader markets, perhaps the global consumer PC market has more depth than would otherwise appear to be the case. These game consumers are an entirely separate segment from business users who, one might argue, have been driving up sales to renovate older sets of Windows XP desktop computers. The NVIDIA results also included mention of the Chromebook PC as one platform likely to experience substantial growth. So-called “Wintel” OEMs (HP, Dell, Lenovo) all have entries to the global Chromebook market. It may make sense to increase expectations for sales volumes for these companies.

A hot PC gaming market may indicate increased consumer appetite for XBOX One and Playstation 4. This assumption looks reasonable given remarks by Jen-Hsun Huang during the earnings conference. He pointed to the release of a number of games, scheduled for later this year, which carry very high levels of consumer anticipation. It is likely these games will be offered not only to PC gaming hardware consumers, but to console owners as well.

Worth Noting: When Matt Ramsey, an analyst from Cannacord Genuity asked Jen-Hsun Huang to speak to the promise of the data center, cloud market for NVIDIA GPUs built on ARM architecture, Huang responded by identifying this market as the most promising emerging market for NVIDIA, going forward, and, further, the market with the best promise of increased ASPs for the business. If they can win here they will achieve an objective AMD has failed to reach.

As we have written earlier to this blog, in our opinion Intel has fortified its position in the Data Center through its support of Hadoop and OpenStack, to the detriment of ARM OEMs.

Ira Michael Blonder (https://plus NULL.google NULL.com/108970003169613491972/posts?tab=XX?rel=author)

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

Dansette