Microsoft earnings again buoyed by Windows 7

Microsoft said its new OS has been installed on 10 percent of the world's PCs

by Joab Jackson

Windows 7 has once again kept Microsoft's balance sheet healthy. On Thursday, the company announced strong income and revenue growth for its third fiscal quarter, thanks in part to continued brisk sales of the new OS.

For the quarter ended March 31, Microsoft reported net income of US$4.01 billion, up 35 percent from the same period a year prior. Third-quarter revenue was $14.5 billion, a jump of 6 percent. Earnings came in at $0.45 per share, beating analysts' expectations by $0.03 per share, according to a poll by Thomson Reuters.

As in the previous quarter, Windows 7 provided much of the boost needed to achieve the positive numbers, Microsoft Chief Financial Officer Peter Klein said in a statement. He also pointed to the company's Bing search, Xbox Live and emerging cloud services as areas of growth.

Overall revenue from Windows sales was up 28 percent compared to the same period a year earlier. Microsoft took the opportunity to note that 10 percent of PCs worldwide are now running Windows 7.

The Windows & Windows Live Division pulled in $4.41 billion in revenue for the quarter, up sharply from $3.45 billion a year earlier. Other divisions reported more modest gains: The Server and Tools group pulled in $3.57 billion, up from $3.49 billion last year; Entertainment and Devices was up slightly at $1.66 billion, from $1.63 billion a year earlier; and Online brought in $566 million, up from $507 million.

Only the Business Division did not report a gain, reporting revenue of $4.24 billion, down from $4.5 billion a year earlier.

The quarterly results factor in $305 million of deferral of revenue related to the Microsoft Office 2010 Technology Guarantee program, which promises Office 2007 customers free upgrades to Office 2010 when that software is released.


In a conference call with analysts, Bill Koefoed, Microsoft general manager for investor relations, articulated some of the buying trends the company saw in finer detail. Geographically, emerging markets, where sales grew 20 percent, drove stronger sales than mature markets, which had only "mid-single-digits" percentage growth, he said.


As in the past quarter, consumer demand drove Windows market growth. But business purchasing, which has been slow in the past year, is starting to rebound as well. Business purchases of Windows grew 14 percent for this quarter.


Overall, revenue from small and midsized businesses increased 15 percent from a year earlier. The enterprise sector also started to show signs of life, as delayed PC refresh cycles started to kick in, though the sales remain sluggish there, Koefoed said.


Microsoft saw bright areas of growth in some of its other still-budding endeavors as well. On the virtualization front, System Center Server revenue grew more than 20 percent. Online advertising revenue grew by 19 percent, driven primarily by search. Bing has experienced "10 consecutive months of [market-]share gain in the U.S.," Koefoed said.

have more than 40 million paid seats of our commercial online services," Koefoed said, adding that the company has added some big names to its customer list, such as Starbucks and McDonalds.


"We intend to build on this momentum," he said.

source: itnews.com

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Watching the creative destruction of the mobile industry at MWC

The mobile device and infrastructure industries continued their familiar yet increasingly complex dance at this week's Mobile World Congress in Barcelona: Consumers and enterprises receive ever more devices to choose from, while carriers scramble to figure out how to support, deploy and make money off the mix.

Check out our slideshow of innovations unveiled at Mobile World Congress 2010. 

New devices with yet more operating systems are aimed at creating a class of inexpensive smartphones designed for those still vast audiences that are not using either a BlackBerry, an iPhone or an Android-based handset.

At the intersection of soaring mobile Internet traffic, enabled by ever more sophisticated client devices, and of rising infrastructure investments, in both enhanced 3G and powerful 4G networks, is an industry-wide experiment to create new services along with new revenue models.

"Right now, the service landscape [from which] mobile operators actually are gaining revenue in mobile data is very thin, with most of the revenues coming from data service subscriptions that are flat fees," says Bettina Tratz-Ryan, a research vice president with Gartner Deutschland. "So, in order to justify the LTE deployments, which need more cells than in a 3G network to build out to higher bandwidths, mobile operators need to build out services with greater customer experiences. Those can be defined for instance in terms of quality, flexibility, and blended with social media for consumers or with unified communications for business users."

Windows Phone: risen from the dead?

On the device side, the biggest story out of MWC was Microsoft's radically redesigned Windows Phone 7 mobile operating system. The demonstration was only that – showing the new user interface – but it deftly blends typography and minimalist icon design in an easily navigable arrangement; applications, content, and information clustered in "hubs" that have common organization and navigation themes.

Microsoft deflected all questions about the kernel, new developer tools, Silverlight support, what kind of browser it has, or anything else deemed to be part of the "platform."

Nonetheless, the user interface impressed observers. "[T]his was the radical change for which consumers have been waiting in order to reengage with Microsoft," writes Avi Greengart, an analyst with Current Analysis, a technology advisory firm, assessing the news in an online post. "Windows Phone 7 series is competitive across the board – for entertainment, enterprise use, and personal productivity."

Microsoft didn't directly address changes or improvements aimed at enterprise users. But the demonstration showed the "Office Hub" for the Microsoft Office Suite, including the OneNote note-writing application, and important access to SharePoint, Microsoft's enterprise collaboration, workflow, and document management system. 

But there's still skepticism about whether the OS can catch up to Apple, RIM, and, increasingly, Android. Veteran Microsoft watcher Joe Wilcox wrote in a post that Windows Phone 7 was "dead on arrival." Microsoft has lost too much market share and mindshare, and faces too much successful competition from Apple and Google Android to resuscitate its mobile offering, he argues.

Both ZTE Corporation and High Tech Computer (HTC) unveiled lower-cost smartphones, making use of Qualcomm's silicon and its recently introduced Brew Mobile Platform (Brew MP) operating system, which incorporates its Brew application framework. Among other things, it supports Adobe Flash. Both companies continue to roll out Windows Mobile and Android phones.

The ZTE Bingo will connect via HSDPA, with 7.2Mbps download speeds, has a variety of built-in popular Web services and applications, a 3-megapixel camera, a 3.2-inch touch screen, and A-GPS. The HTC Smart will use HTC's Sense user interface, has a 300MHz processor, the same camera resolution, a slightly smaller screen. Via Brew MP, both can support Adobe Flash. No prices were announced by German mobile carrier Telefonica. The carrier said it will offer HTC Smart "at less than half the cost of smartphones today," according to a company executive. 

Carriers coping with change

The device innovation highlights the struggles mobile carriers continue to have in a rapidly changing industry. Google CEO Eric Schmidt told his MWC audience that Google software engineers now focus development first on mobile platforms, and secondarily the desktop. The reason for that shift points to the tectonic changes taking place in the mobile industry.

With its aggressive expansion of mobile search and applications, and linking these with location services and mobile advertizing, Google has the potential to recreate the mobile industry in its own image, where services are free to the end user and paid for by advertising, according to Jagdish Rebello, director and principal analyst at iSuppli.

"Like the rest of the mobile value chain, Google is actively seeking to uncover new user behavior patterns and to drive social networking services through the promotion of cloud storage and computing, mobile advertising, and a variety of location-based services," Rebello writes. "All of the free Google offerings are driving toward this goal."

In Barcelona, mobile carriers revealed the latest experiments to cope with change. Twenty-four carriers banded together to launch a single, unified platform for mobile application development to compete with Apple's App Store and Google's Android Marketplace. The intent of the Wholesale Applications Community (WAC) is to provide mobile software developers with a cross-platform open programming standard, intended to make it simpler and faster for them to bring applications to market.

But multiple operating systems and application stores will still have to be supported. Telstra, Australia's biggest mobile carrier, plans to create an online "shopping center" where subscribers browse through storefronts to select applications specific to their handsets. "We will build the shopping center environment, which means we won't be bypassed in the value chain," said Telstra CTO Hugh Bradlow at MWC. Telstra isn't currently part of the WAC.

The LTE advance continues

The movement toward a new mobile infrastructure based on the Long Term Evolution (LTE) standard continued:

- There was agreement on a voice-over-LTE specification, part of a push to standardize LTE services and ensure LTE devices can run on different networks.

- China mobile carrier CSL concluded the first phase of a commercial LTE trial in Hong Kong where prototype USB modems reached download speeds of up to 100Mbps. 

- Japan's NTT DoCoMo showed a prototype notebook computer with an LTE modem.

- AT&T recently announced its selection of two base station vendors for its LTE build-out

But these capital investments are not the endgame, analysts say. The key is services, often in partnership with Internet companies. Executives from Facebook made a MWC presentation on their joint experiment with British-based mobile carrier Vodafone UK, noted Thomas Wehmeier, principal analyst with British market researcher Informa Telecoms & Media, in a blogpost. The two companies experimented with offering free access to Facebook for Vodafone subscribers not currently using data services. "They saw an overwhelming success, with 20% of those testing out the trimmed down Facebook service adding data 'bolt-ons' to their monthly [service] plans," Wehmeier writes.

The Skype hype

Verizon announced at MWC that it will bring Skype's VoIP application to Verizon smartphones in March 2010, including a range of BlackBerries, Motorola Droid and Devour, and HTC Droid Eris. Users will need a Verizon data plan (and in all likelihood a Verizon voice plan), and will be able to make and take unlimited, free calls with other Skype users, and use Skype Out to make international calls to any phone at Skype's standard rates. But Verizon has released no other details.

"Those operators wanting to be serious players in the mobile Internet need to embrace openness and they need to allow Internet services on their devices, [and] this includes VoIP," says Drio Talmesio, senior analyst at Informa Telecoms & Media. "Probably the majority of users don't know VoIP, but those who use Skype are attached to it. It's about segmentation. Verizon can both reduce churn and subscriber acquisition costs by targeting customers that use Skype. And they can also increase the uptake of data plans by bundling Skype with specific tariff plans."

But beneath the flash of new user interfaces and consumer VoIP, is one nearly invisible vein of gold: machine to machine communications, a mobile network of things. The market research firm iDate estimated that the global cellular M2M market would grow from $15 billion in 2009 to $19.3 billion this year and then nearly double by 2013 to $37.3 billion.

At MWC, Sierra Wireless unveiled a new modem, the AirLink GL6100, with embedded SIM, for this market served by GSM/GPRS networks. France's Bouygues Telecom is already adopting as part of the "first pan-European pre-paid M2M airtime offer" aimed at industrial, sales and payment and security applications.

And Deutsche Telecom launched a new "competence center" devoted to machine-to-machine wireless solutions, with consulting and deployment services for nine markets, including transport and logistics, vehicle telematics, smart meters, industrial automation control and healthcare.

John Cox covers wireless networking and mobile computing for "Network World." Twitter: http://twitter.com/johnwcoxnwwBlog RSS feed: http://www.networkworld.com/community/blog/2989/feed

source : itnews.com

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Comcast offers online backup, sharing through Mozy

Subscribers automatically get 2GB of capacity and can buy as much as 200GB

Comcast will bundle online storage capacity from EMC's Mozy division with its broadband service and let residential subscribers share the content they store with friends -- or with the entire Internet. 

With the new Secure Backup & Share feature, users of Comcast high-speed Internet automatically get 2GB of space in Mozy's data centers for backing up any data from their home computers. They can also buy 50GB for US$4.99 per month or $49.99 per year, or 200GB for $9.99 per month or $99.99 per year, the companies announced Thursday. The feature is available now.

Mozy has been offering cloud-based backup capacity to consumers and businesses for several years. Consumers can buy unlimited storage for $4.95 per month. But the new offering with Comcast marks the first time Mozy has let users share the data they have backed up, according to Vance Checketts, Mozy vice president of operations at EMC. The company hopes to extend this capability to its own service as well as to the Mozy-based backup services already offered by Vodafone and China Telecom. 

For many consumers, a service such as Secure Backup & Share could be an obvious way to start protecting their data from disasters and hardware failures for the first time, said Charles King, an analyst at Pund-IT. 

"For most people, backup is something that they plan to get around to, like losing weight or eating right," King said. However, it's more critical than those users may think, he added. "Tens of thousands of hard drives crash on a weekly basis," he said. Ideally, consumers should also back up their data to a hard drive they own, both to have another copy for safety and because downloading 200GB of remotely backed-up content over a home broadband connection would take a long time, he added.

With the sharing feature, users could make any or all of the files they back up available to family, friends or the public. Theoretically, a user could copy 200GB of files onto Mozy and make them all searchable and available on the Internet, Mozy's Checketts said. In reality, users may designate some content as public but share the rest through invitations to specific authorized users, he said. Sharing is a natural extension to Mozy's backup service, and the business issues of adding it would be more significant than the technical ones, Checketts said. 

However, it could be a big undertaking just for Mozy to support the Comcast service. If all of Comcast's roughly 15.9 million high-speed Internet subscribers simply took advantage of the 2GB of free storage, Mozy would need 30 petabytes of storage to accommodate them. Mozy already has more than 25 petabytes of data under management. The company beefed up its data centers in advance of the Comcast offering and can rapidly expand its capacity if needed through contracts with suppliers of bandwidth, storage space and other components, Checketts said.

source : itnews.com

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Google gets US approval to buy and sell energy

The company says it wants easier access to renewable energy to power its operations

Google has received federal approval to buy and sell energy on the open market, giving it more options for the way it powers its data centers and opening the door to a potential move into the energy-trading business.

Google applied for the authorization last December through a wholly owned subsidiary called Google Energy. The U.S. Federal Energy Regulatory Commission (FERC) approved its application Thursday, granting Google "market-based rate authorization," or the authority to buy and sell energy on a wholesale basis.

"We made this filing so we can have more flexibility in procuring power for Google's own operations, including our data centers," Google spokeswoman Niki Fenwick said via e-mail. 

Data centers are big consumers of energy and Google operates several large facilities around the world -- it hasn't disclosed exactly how many. That makes ensuring a steady supply of affordable energy critical to running its business.

Google has also said it is committed to being "carbon neutral," in part by using as much renewable energy, such as solar and wind power, as possible. "FERC authority will improve our ability to hedge our purchases of energy and incorporate renewables into our energy portfolio," Fenwick said.

She declined to elaborate, but the company told the Wall Street Journal last month that FERC approval would allow it to approach producers of renewable energy directly to buy power for its operations.

The authorization also raises the prospect that Google may start to buy and sell energy as a business. Its application asked that Google Energy be able to "act as a power marketer, purchasing electricity and reselling it to wholesale customers."

Google didn't respond to a question about that Thursday. Fenwick told the Journal last month that the company has "no plans" to become an energy trader or to sell energy services, but she also acknowledged that the company was "not sure" how it planned to proceed.

FERC's notice shows that the California Public Utilities Commission filed a motion to intervene in the application. It was unclear what concerns the Commission had, if any, and a Commission spokesman could not immediately comment.

The approval is effective Feb. 23, as Google requested. The company told FERC it does not own or control any wholesale electrical generation or transmission facilities, so the agency determined that Google does not have "market power" or the ability to create barriers to entry.

source : itnews.com

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Google fights for ophaned books

Fending criticisms from multiple parties, Google once again made the case for digitizing millions of orphaned books before the U.S. District Court Southern District Court of New York, in a fairness hearing held Thursday.

A total of 27 different parties requested to speak before the court. Five were in favor, including Sony, the National Federation of the Blind and the Center for Democracy and Technology. The rest -- 22 in total -- opposed the settlement, including Amazon, Microsoft, the Open Book Alliance, and the Electronic Privacy Information Center.

Those in favor praised the idea of rendering hard-to-find books in electronic form, because they could be accessible to a much larger group of readers, and not be lost to the ages. 

The objectors, however, voiced strong concerns that the settlement case preempts U.S. copyright law altogether. Others voiced privacy and antitrust concerns.

The court will decide whether or not approve a proposed settlement to a class action suit waged by a number of author groups towards Google, for its actions of scanning out-of-print books.

U.S. District Judge Denny Chin, presiding over the proceedings, said that he would not reach a decision at the end of that day's fairness hearing, given the amount of feedback the court received.

The settlement, reached in October 2008, came out of a 2005 lawsuit brought about by the Authors Guild, the Association of American Publishers and other groups of concerned writers and content producers. 

The groups expressed outrage that Google was scanning millions of books, an act which they felt violated U.S. fair use rights. The company was planning to offer snippets of the books as part of their search results.

The resulting settlement allows Google to scan books that are still in copyright yet are out of print, provided that it sets up a registry of authors and book titles, and makes an effort to notify authors of these books that their works are being reused. 

In exchange, the company can then offer snippets or even fully downloadable versions of the books for a fee, from which they would pay the authors a percentage of the profits. Authors would be free to opt out of the program. 

Reacting to U.S. Department of Justice antitrust concerns, the parties revised the settlement and resubmitted it to the court in November, narrowing the scope of the agreement to U.S. books.

Despite the revisions, the Justice Department voiced concerns. Deputy Assistant Attorney General William Cavanaugh, who argued the settlement's opt-out approach preempts copyright law insofar that copyright law grants the copyright holders full control over how their works can be published. 

The proposed settlement "eviscerates the right to prior approval," Cavanaugh said.

This view was echoed by others. The settlement, in effect, allows Google to continue to infringe copyright law in the future by not obtaining prior approval, said David Nimmer, a representative for Amazon.

Google attorney Daralyn Durie argued that the opt-in approach would not work for the company, and so it is a non-negotiable part of the settlement.

Her reasoning was that Google cannot tell which of the out of print books will prove to be popular once made digitally available again, so finding each author and persuading him or her to be opt-in would be too cost-prohibitive, she said. 

She added that Microsoft tried this opt-in approach and has since given up on its efforts.

Durie estimated that there are about five million books in U.S. libraries that are out of print but still under copyright. In many cases the authors cannot be located, making them orphaned books. 

A variety of other criticism were also raised: Thomas Rubin, a Microsoft intellectual property strategy attorney, noted that the settlement gives Google an unfair advantage within the search industry, as it hands the company rights to digitize up to 147 million out-of-print books for its own search results, while other search companies would still need to procure the reproduction rights on a case-by-case basis.

Representatives from the Electronic Frontier Foundation (EFF), the Center for Democracy and Technology (CDT) and the Electronic Privacy Information Center EPIC) all voiced concerns at how Google could track what books people read, right down to the particular page numbers. 

U.S. libraries have been fierce protectors of people's privacy in terms of not divulging what books their patrons check out, said Marc Rotenberg, executive director of the Electronic Privacy Information Center. Because Google is a commercial enterprise that makes money by profiling users for advertising, readers could not expect the same level of anonymity, he said.

While the CDT and EFF offered a number of suggestions of how Google could put privacy controls into place that alleviate these concerns -- such as limiting the time Google would hold onto the tracking data -- Rotenberg maintained that the conflict-of-interest would just be too great to mitigate.

Not all companies were opposed to the settlement. Janet Cullum, representing Sony, said that the proposed registry would open a wider array of material for the electronic book market, being as how the registry will allow companies other than Google to track down authors and make their own arrangements.

Marc Maurer, president of the National Federation of The Blind argued that the settlement would be "good news for the blind," insofar that it could make a vast number of previously unavailable texts accessible, through the use of assistive technologies. This is a market now only served partially by the commercial market, he said.

Paul Courant, a librarian for the University of Michigan, noted that the digitization process could preserve countless academic and historic texts that are in fragile states and only available in a few libraries.

Cavanaugh and others agreed that digitizing such books would be a good thing, though ultimately it would be up to Congress to amend copyright laws to make provisions for preemptive projects such as Google's, rather than it being handled in a class action lawsuit settlement.

"You cannot use procedural rules to modify rights," he said.

source : itnews.com

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