By Joe Wilcox, Betanews The next former Microsoft employee story comes from someone I'll call Fred, which, of course, is not his real name. Fred took a job right out of college and might still work at Microsoft today, if not for the elimination of his group during layoffs last year. Like the former Microsoftie from the first post in this former employee "confession" series, Fred helplessly watched as the exciting and flexible workplace he joined bogged down in increasing layers of middle management.When Microsoft hired Fred nine years ago, the company employed a little more than 47,000 people. When he was laid off in May 2009, the number was around 93,000. That number is for full-time employees and doesn't include contractors. According to Microsoft's fiscal 2010 10-K, the breakdown on June 30, 2009: "56,000 in the United States and 37,000 internationally. Of the total, 36,000 were in product research and development, 26,000 in sales and marketing, 17,000 in product support and consulting services, 5,000 in manufacturing and distribution, and 9,000 in general and administration." How many more layers of middle management did Microsoft add when more than doubling headcount during the last decade -- before more than 5,000 layoffs? Fred has an answer for that.As I explained yesterday, following the last round of Microsoft layoffs, I asked former employees to tell their stories. Responses came from recent departures and others long ago. No identities will be intentionally revealed, although I have verified each one. Fred understands that there is enough detail in his story for Microsoft to possibly identify him. But he is willing to take the risk (and hopefully not risk work elsewhere).Fred's story is the second posted in this short series running for the next couple days. His account is first-hand, but I will string some other stories together as narrative for better readability and to protect identities.Something is missing from Fred's story that I would like to encourage some commenters to fill in. Microsoft hiring and compensation follows a scale of levels. While I have some information about the levels and associated salaries, I would prefer some existing or former Microsoft employees pipe in with current salary information for level 63. I ask in hopes of generating discussion. If no one does, I'll later add the information to this introduction or in comments. Four years ago, WashTech News offered an excellent review of Microsoft's complicated compensation system.Now for Fred's story:I started with Microsoft in June 2001, right out of college (I received a BS in information technology from Rensselaer Polytechnic Institute). I was hired as a level 59. My first role was with Microsoft Consulting Services as an IT Infrastructure Consultant based in the Mid-Atlantic region of the US. I stayed in that role for four years, traveling around the country (mostly on the East Coast, but with a few exceptions) to help large organizations design/plan/implement Microsoft technology -- mostly Windows desktops, Active Directory and Exchange. My clients included Fortune 100 companies in the retail, financial services, higher education and government sectors. Even a branch of the US military.In 2005, rather tired of the Monday-Friday travel schedule, I started searching for a new role. That June, I accepted a role in the MSDN & TechNet organization -- the part of the company responsible for communicating with developers and IT professionals. I was a level 61 at that point. Over the following four years, our business grew -- we were reaching millions of IT pros with high levels of customer satisfaction -- the team grew and my role grew as well. The role of the group was really one of audience marketing -- to take a post-sales approach to the dissemination of technical information, with the intent of making the job of IT professionals easier, and hopefully as a result making them more satisfied with Microsoft.Unfortunately, over the course of reorg after reorg, our group got buried in an IT infrastructure group. We were 15 people doing audience marketing, as part of a larger group of 450 responsible for the Microsoft.com web infrastructure. Our group had proposed a number of times to be moved into a more appropriate organization, like global marketing, that was better aligned with our mission. But our management chain, which grew deeper with every reorg, resisted the idea of giving up headcount or budget.At the time I was laid off in May 2009, I was a level 63. I had never received anything other than exemplary reviews (I received an "Exceeded" rating in the three consecutive review cycles leading up to the time I left.) The size of the company more than [doubled] in my eight years there. The number of managers between me and the CEO went from six to 10.Processes became more bureaucratic and individuals were less empowered to take action. In fact, oftentimes the incentive structure encouraged individual contributors not to do the right thing, but just to do what they committed to in their review the year prior. In other words, if you committed to include Feature A in Windows, and half-way through the year you realized that was a bad thing for Windows and Microsoft customers, the incentive structure actively discouraged you from trying to kill the feature, because then you wouldn't have achieved your commitments. That sort of behavior just got easier and more engrained as the organizations grew.Our entire group was laid off in two rounds. The first half were let go in January [2009]. Their roles were taken up by an outsourcing company based in India. The rest of us were let go four months later, and the remaining operation was outsourced. Four months after that, the majority of our work was dismantled. At the time I was laid off, I was given a choice of accepting a different role within the company, but it would have required my relocation, so I refused. My understanding is that I was the only member of the staff offered that chance (because of my technical background; the rest of the staff was purely marketing).There's a part of me that can actually understand our group being laid off. An argument could reasonably be made that non-Microsoft employees can be just as effective at fulfilling our mission and could do so at a lower cost (though that's proving to not be true in the aftermath; it was a disaster). Some of the other people I knew around the company who were let go, though, made my jaw drop to the floor. While areas like Search and Zune continued to received astounding resources, areas focused on customer satisfaction and connection, evangelism, and program management were decimated.One of the better examples where fat ended up cutting muscle, was someone like Steve Riley, who was a noted security expert and one of the best public faces Microsoft had to the IT Pro audience. He was the only person from his group let go. He never had anything other than stellar reviews, and [he] was one of the few people Microsoft had who could pack a ballroom and hold their attention for as long as he wanted. That one really shocked me.To be honest, as much as I miss many of the individuals I worked with -- and the steady paycheck and benefits, which were always great -- I'm glad to not be a part of Microsoft any more. It bares very little resemblance in my mind to the company I joined 8 years ago. It's hard to describe the atmosphere of excitement and innovation that existed when I first started. But over time, that certainly diminished, seemingly in an inverse relationship to the size of the company.The company as a whole seemed more and more focused on chasing competitors into any business where they might someday present a threat -- which to me always felt like ego on the part of SteveB [CEO Steve Ballmer]-- and seemed to completely lose sight of its core strengths and where it could deliver the most value to its customers (see the investment in Zune and Live Search as it correlates to Windows Vista).If I had to sum up my feelings about the whole experience though, it really boils down to sadness and disappointment -- not over the loss of my job, which, for the most part I enjoyed, but am happy to move past, but rather over the failed efforts, missed opportunities and wasted potential of Microsoft as a whole. I've never met so many talented, passionate individuals. But it felt like everyone was part of a deeply dysfunctional family, and in the end, that dynamic trumped what could have been astounding achievements.I'm still collecting stories. Please e-mail joewilcox at live dot com. Stories can be anonymous, but I will need to verify identity. Copyright Betanews, Inc. 2010
Continue reading...Friday, February 5, 2010
By Joe Wilcox, Betanews Yesterday's Dick Brass commentary, "Microsoft's Creative Destruction," the company's response to the op-ed and Tuesday's Don Dodge pro-Mac post have put Microsoft in the hot seat. The blogosphere is abuzz about the extent of Microsoft innovations. More former Microsofties are ready to speak out, and they will get their chance here at Betanews.After the last round of Microsoft layoffs, I asked former employees to tell their stories. I got plenty of responses and not just from people recently leaving the company. No identities will be revealed, although I have verified each one. Two main reasons: Either the former employees still work in the technology industry and don't want to risk their current jobs; or they're receiving severance from Microsoft and don't want to risk losing it. Some of these people have returned to working for Microsoft as contractors, which is another reason to remain anonymous.Over the next three days, I will present some of the stories in different ways. We start with a first-hand account, and it's more stream-of-conscious than the others I received. Please expect more first-hand accounts and some others strung together as narratives.What's most surprising about the stories received: Whether they left by will or layoff, most of the former Microsofties worked for the company for a long time, typically no less than eight years. This first account comes from a senior manager who willingly left Microsoft during the last decade after nearly 20 years:When I left, I told Steve [Ballmer] my reasons. Microsoft [had] lost its competitive edge. Too much politics, too much BS, too much 'what can I do to you today, to make myself look better tomorrow.'The strength of Microsoft has always been small, heavily empowered teams. Teams that could move fast, make lighting quick decisions and trust the people that made them -- and actually create real schedules, not what management wants you to tell them.In early 2000, and towards the end of Y2K, the corporate landscape was changing. All the small teams were being eaten up by these uber teams -- complete with politics, backstabbing and posturing. I wanted no part of it. Even today MS is mostly Windows, mobile and Office. Decisions I used to make in 10 minutes, took weeks in Office.I watched a revolutionary product killed over politics. The moment someone mentioned in a high level-meeting we were better than one of MS's cash cows, I told my [general manager] we were screwed. He didn't believe until the team was disbanded and moved where? Into that cash cow. Where 90 percent of the functionality was cut.I've watched over the years, [as] poor managers work their way up the ladder, merely because they could play the game. They didn't want the truth, they wanted the answer they wanted to hear.When Bill Gates first started the 'aggressive schedule' mantra to get people to work harder, [it was] tell folks we only had 2 months left, when we knew it was six. How could I as a manager look my people in the face and seriously tell them we're two months from shipping -- work your ass off -- knowing the bug count was high, the find rate was high and undercover dev work was still being completed?I finally had enough when my last reorg had me put under a brand new manager, with less weeks experience than I had years doing his job, telling me I wasn't doing my job properly. I asked him how many products he shipped. A couple was the answer. Meanwhile, I had three full Lucite blocks packed with ship-it awards on my desk. At that point, I gave my notice.How many [Microsoft] reorgs have ever benefited anyone except the folks on top? In all my reorgs, I only ever had one that actually benefited the troops; and that was a super good manager that said if you take me, you take my team. He was one of the best I'd ever worked for -- and, of course, he is no longer at MS either. To me, that speaks volumes.The people that need to be cut at MS are the managers that don't support their teams and only support their own careers. I've watched countless super visionary managers get bogged in politics and leave.While I love Steve [Ballmer] to no end, he's too removed from what's really happening, and only gets info from the politically motivated ass kissers that just want to keep their jobs, not do the right thing.I'm still collecting stories. Please e-mail joewilcox at live dot com. Stories can be anonymous, but I will need to verify identites. Copyright Betanews, Inc. 2010
Continue reading...Wednesday, February 3, 2010
By Joe Wilcox, Betanews Somebody at Microsoft should be fired for laying off Don Dodge. The list of reasons why his layoff was stupid gets longer by the day. Yesterday's Dodge blog post, "From MSFT evangelist to Mac enthusiast -- the other side of the road," adds another reason. This Silicon Valley insider, who for five years evangelized Microsoft, has taken on the true tone of conversion -- a man filled with new Apple and Google religion. His conversion to the new faith is nothing short of tech evangelism disaster for Microsoft.In my late-December post, "10 things Microsoft did wrong in 2009," "laid off Don Dodge" ranked No. 3. What seemed bad for Microsoft then is suddenly much worse."The move from Microsoft gave me the opportunity to try lots of new things," Dodge writes. "The move from Microsoft was complete. From Windows to Mac, from Outlook to Gmail, from Explorer to Google Chrome browser, from Office to Google Apps, from Windows Mobile phone to Android, from Zune to iPod." Whoa. "But this post is all about the move to Mac." The statement insinuates that Dodge will in the future share more about his other moves.Dodge may be the most high-profile Mac switcher ever. His previous role as Microsoft evangelist, now Google evangelist, and geek status among the tech community makes him a formidable and believable preacher. Besides, people love turncoats. Reformers. Perhaps even the converted. Dodge's status as former Microsoft true believer makes his conversion to a new faith all the more delicious reading.Most importantly, Dodge makes astute observations about the differences between the Microsoft religion and that of Apple or Google. All companies operate by a worldview. In December, I contrasted the Google and Microsoft worldviews. Dodge somewhat contrasts the Apple and Microsoft worldviews. He writes:The most obvious distinction between Microsoft and Apple is design. Apple is quite simply the best hardware/software design company in the world...My Windows machine was a Lenovo X301 with Windows Vista. It was light and small for travel, but I don't think anyone would classify it as beautiful. You see the design ethic in everything Apple does.Dodge concedes that Apple's design and functionality advantages derive from end-to-end control over software and hardware. As such, the Apple experience is "just easier and more elegant." He delights in the MacBook experience: "The first things I noticed about my Mac were: the touchpad, keyboard (backlit), the screen, battery life, start-up/shut down, power cord and appearance."Among the Mac vs Windows PC debates I often see a common trend: Mac bashers complain that Apple's offers less features for more money. But what matters is getting features that matter to the buyer. Design is one, and Dodge extols another:The first time I used the MacBook at night I was delighted to discover the backlit keyboard. I had no idea it was there. I guess it comes on when it detects low light conditions. The light shines through all the keys so you can type in the dark. OK, you can laugh at my backward ways, but I never had a PC with that feature. Working in low light or dark conditions is now simple. I love it.Dodge's conversion and anti-Microsoft evangelism hits where it hurts Microsoft the most. He also astutely observes the ongoing shift from the PC platform to cloud platform:Ten or 20 years ago users had to deal with the operating system to do anything on a PC. Today most people spend their time in the browser. From my perspective the underlying OS doesn't matter much. All my applications run in the browser. Web browsing, email, documents, spreadsheets, music, photos…everything is in the browser."The OS doesn't matter much?" This from someone who worked for Microsoft, which business was built on Windows -- a product still fiercely important to the company? Ouch, a statement like that has got to hurt. I've been saying that the operating system doesn't much matter for years. But I was never a high-profile Microsoft employee. Statement like this hurts Microsoft more because of who Dodge is -- emotionally for his former colleagues and logistically as anti-evangelism.Dodge concedes that human beings are creatures of habit, that he might not have gotten this new religion if not for the layoff. "Leaving Microsoft and joining Google gave me the perfect opportunity to change everything," he writes.In the Biblical account of early Christian evangelism, Paul was a true believer against the followers of Jesus Christ. They were enemies that should be killed. Later, after converting to Christianity, Paul turned out to be a more earnest evangelist than the men who lived with and followed Christ. A true believer can convert many, as Paul did throughout the Roman Empire. The so-called Mac Faithful are known for their passion and obsession with all things Apple. Will Don Dodge be a great crusader among them? Or among Googlers? Copyright Betanews, Inc. 2010
Continue reading...Wednesday, February 3, 2010
By Joe Wilcox, Betanews Microsoft shouldn't let Google set the Internet Explorer 6-ending agenda. Google services will stop supporting the browser, starting on March 1. It's Microsoft 's browser and responsibility for putting this antiquated technology -- and all Internet users subsequently affected by malicious and criminal activity -- out of misery. Save the Web! Stop Internet Explorer 6 now!If security really is Microsoft's top priority -- and I say that it's not -- IE6 shouldn't be used by anyone anywhere. Microsoft bears the blame for the IE6 scourge. High IE6 usage is more than a situation of users clinging to older technology. Microsoft created this problem by:1) Integrating Internet Explorer into Windows.2) Pushing a closed and arguably flawed plug-in architecture (e.g., ActiveX).3) After releasing IE6, essentially ending new browser development until Mozilla released Firefox in late 2004.4) Blocking so-called non-genuine copies of Windows from receiving new updates, including IE version upgrades.Microsoft should seek out and destroy IE6 wherever it's used. The browser is too much of a security risk. Since Microsoft isn't doing enough, I suggest five ways by which the company can decisively and quite aggressively take charge of this situation. A combination of the five, but necessarily all, would be necessary to eradicate IE6.1. Take the lead away from Google, by disabling IE6 across Microsoft Websites -- and encourage other Web properties to do the same. According to Net Applications, IE6 usage share was just over 20 percent in January, making this antiquated browser second-most used. It's not rocket science to identify a browser version, block site access and to provide notice that IE6 is no longer supported. The notice could provide links to download IE8, and, if Microsoft is PR savvy enough, links to competing browsers, too.Microsoft worries too much about breaking existing applications or Websites. The majority of safe sites should already support modern Web standards. Businesses that must have legacy support can run IE6 behind the firewall. Presumably, the majority of remaining IE6-supporting Websites would be the dangerous ones hosting malware. These are exactly the sites Microsoft should want to keep its customers away from.2. Use a bot to identify all Websites supporting IE6, then request that site operators simply stop support. Microsoft could even offer incentives, like free software or support services, to Websites that quickly respond. For years, IE6 peculiarities compelled Website designers to put in special tags supporting Microsoft's browser. Surely they can be easily enough removed and replaced with redirects to pages explaining IE6 isn't supported and offering links to download more modern browsers.3. For business that simply must have IE6, aggressively promote a virtualized alternative. The idea would be to quarantine IE6. If it must run -- say, to support legacy ActiveX controls -- do so in a sandbox separate from the operating system and other applications.4. Forcibly upgrade non-genuine Windows users to Internet Explorer 7 or 8. This one is politically and logistically difficult, which are problems of Microsoft's creation. Microsoft long ago prohibited pirated, or presumed pirated, Windows versions from receiving critical applications and operating systems updates, such as Service Packs. Years ago, when working as analyst, I strongly and repeatedly discouraged Microsoft product managers from withholding updates. I expressed mixed feelings about withholding IE upgrades.From a Microsoft political perspective, the withholding approach was about getting more people to pay for Windows. Product managers would never admit this, with the party line being something about rewarding so-called genuine users. Instead, Microsoft punished non-genuine users and tangentially genuine users assaulted by malware infesting non-genuine Windows copies. I argued that from a security perspective, it made more sense to update everyone with everything important. Anything bundled with Windows is important enough. By withholding critical system updates, including bundled IE, Microsoft puts every non-genuine Windows version at risk of being infected with malware.Logistically, the solution is difficult because: Non-genuine Windows copies wouldn't have the supporting system updates or Service Packs necessary to upgrade the browser to IE7 or IE8. Malware might be in place that has disabled Windows Update or otherwise would prevent downloading Service Packs or newer IE version. Even if possible, end users might not have the bandwidth or the patience to accept the updates necessary to replace IE6 with a newer browser version. An alternative option would be political suicide within Microsoft's corporate culture: Disable non-genuine Windows copies that can't be upgraded to IE6 or IE7 after three attempts. I contend that Microsoft should disable non-genuine Windows copies without warning. Why should it have to, if the software is pirated? Yes, a small number of legitimate customers will be affected. But the greater security good would be served, and Microsoft could individually resolve problems with customers whose legitimate Windows copy was disabled by the action.5. Immediately offer a mobile Internet Explorer alternative, even if it's a competing browser. IE6 isn't just a scourge of the past, it's ready to corrupt another platform's future. IE6 is the basis for Microsoft's mobile browser. That has got to stop now. Yes, some Betanews commenters will rightly argue that based on IE6 isn't the same as IE6. My retort: Why should the mobile browser be based on IE6, when newer, presumably safer versions are available? Microsoft owes it to mobile customers -- the majority of them business users -- to provide the safest browser possible. If IE8 is so much better, which Microsoft claims, shouldn't it be the foundation for mobile Internet Explorer?Do you have a better or different suggestion about how Microsoft can purge the IE6 plague? Please pipe up in comments. Copyright Betanews, Inc. 2010
Continue reading...Tuesday, February 2, 2010
By Joe Wilcox, Betanews Windows PC vendors can effectively raise selling prices -- not that it will be easy, particularly as long as they sell netbooks. One Windows PC OEM shows the way. Today, Sony announced new E-series laptops packing Intel i3 and i5 core processors and boasting, brashy colored exteriors. The $799.99 price is about $326 more than the average selling price of laptops sold at US retail in fourth quarter, according to NPD data.The $500-$1,000 price brand also is where Apple doubled its US retail unit share year over year in fourth quarter. Similarly, Apple unit share for retail PCs selling in the premium price brand -- more than $1,000 -- rose from 79 percent to 90 percent. Both segments are where the margins are.Like Apple, Sony computer prices are typically higher than most Windows PC manufacturers. Like Apple, Sony also runs its own chain of stores, where customers can get on-site technical service and support. For these reasons and others related to sales and branding, Sony has maintained a premium status around its brand, much like Apple.The new E-series notebooks play into a longstanding Sony trend of differentiating Windows PCs around features like style and portability, without aggressive discounting. The one exception is the W-series netbook, which starts at $449.99. Sony's next cheapest portable -- a thin-and-light netbook alternative from the Y-series, starts at $799.99.Sony E-series portables aren't by any means the first Windows notebooks shipping with i3 or i5 processors. Sony is differentiating on style, higher pricing and brand cachet. It's what other PC vendors need do to resist falling ASPs, which are bad for everyone, even customers (Say, buyers, don't you deserve something better?).Selling Prices in Free FallUS retail average selling prices fell for both Macs and Windows PCs during 2009, but for different reasons. For Windows PCs: Prices naturally declined due to commodity product maturation OEMs and retailers further slashed prices because of the weak economy Cheap netbooks pulled down ASPs, while also sucking away valuable margins By comparison, Apple tightly controls Mac pricing, which largely declined because of cuts at higher pricing segments. Late last year, Apple turned the 13-inch MacBook into a "Pro" and slashed prices on costlier MacBook Pros, reducing the entry level price from $1,999 to $1,199. Apple cut prices in relation to its own existing pricing rather than lowering them to compete with Windows PCs.In what can only be described as a shocking trend: In fourth quarter, US retail Windows notebook ASPs fell below that of desktops, according to NPD. I have repeatedly asserted that netbooks are a menace -- and for good reason. Microsoft estimates that netbooks accounted for 11 percent of PC shipments in fourth quarter. Their wicked toll: In fourth quarter, notebook ASPs (including netbooks) declined to $473 from $604 a year earlier. Desktop ASP: $488 down from $533 year over year. Thank you, netbooks. May you burn in hell.By comparison, also during fourth quarter, Mac notebook ASP was $1,359 down from 1,507 a year earlier. Interesting trend: Mac laptop ASPs also fell below desktops. The desktop ASP was $1,366 down from $1,471 a year earlier."Some of that [difference] is from falling notebooks prices -- aka netbooks -- and some is because Apple desktops and a smattering of others are all-in-ones, which add to the price of the desktop," said Stephen Baker, NPD's vice president of industry analysis.Cheap Prices equal Cheap BrandsThe ASP trend -- and where many Windows PC manufacturers or retailers are engaged in price wars -- is the below-$500 segment. For example, Dell portable prices start at $249 for the Mini Netbook or $399 for Inspiron notebook. Dell's mainstream portables sell for hundreds less than Sony, which I partly blame on over-agressive discounting and weak brand equity. Dell is not a premium brand like Apple or Sony.But it should be. Dell's Alienware brand has cachet. Alienware built up huge brand equity around powerful gaming systems that look cool and kick computing ass. Alienware should be the kind of brand where, with the right marketing and pricing, Dell could open up higher price brands in greater volume -- something the company has tried with the XPS series.How is the low-price strategy working for Dell? The US PC market grew by 24 percent year over year in fourth quarter, while Dell's growth was a slower 5.3 percent. HP grew by 45.1 percent and Toshiba by a whopping 71.5 percent. Not that HP or Toshiba is in the pricing leagues of Apple or Sony, but they should be. Toshiba netbooks start at $349 and laptops at $449. HP and Toshiba also lack the premium brand status associated with Apple or Sony.Companies don't just start new brands overnight, but they can subbrand. Dell bought its subbrand -- Alienware -- which, as previously asserted, could be a better volume performer if handled better. Through aggressive pricing, most Windows PC manufacturers have cheapened their brands. Do you buy a super deluxe Corolla or entry Camry for the same price? In other words, do you buy a Dell when you can have an Apple or Sony? Brand matters when people make pricing decisions, particularly when spending more for a product. Their purchasing criteria changes, too.Premium Really Is PremiumBased on comments, many Betanews readers would rather build than buy because they can get more value for less money spent. That's OK for desktops but not as easy for notebooks -- with bigger sales volume and increasing install base than desktops.Premium brand equity is valuable for offering less for more, while differentiating around non-performance features, such as size as color and style. E-series is good example. The entry-level models come with LCD -- rather than the typical Sony LED -- displays and integrated Intel graphics. But it's that $799.99 starting price that matters.Sony's E-series pricing and Windows PC differentiating features aren't lost on Microsoft -- nor their importance. Today, over at the Windows Blog, Brandon LeBlanc posted about the new Sony portables. He also blogged about the Alienware Mx11 thin-and-light notebook -- well, for a gaming laptop. Graphics memory of 1GB DDR3 is something unusual in a portable with 11-inch display, for the wicked price of $799. These are premium portables selling for $300 more than US retail laptop ASPs. Hell, waaaah! I want a Mx11. Don't you?It's long past time that Windows PC OEMs should seek to deliver more value rather than sell for less. In Europe and the United States, most consumers are buying a second or third PC. The criteria for a replacement PC typically is much different than a new one. Style matters -- as do personal features. Brand matters, too. To Acer, Dell, HP and other Windows OEMs pushing cheap PCs, I say this: If you don't offer a premium brand with premium features at a reasonable premium price, your customers' next computer purchase will be a Mac. Get it? Copyright Betanews, Inc. 2010
Continue reading...Tuesday, February 2, 2010
By Joe Wilcox, Betanews This evening, I received Google's official e-mail about ending support for Internet Explorer 6. Good riddance. Why isn't Microsoft doing something so ambitious as surgically removing the IE6 scourge from the Web? There are laws preventing rickety, unsafe vehicles from driving on the highways. Why is there no Microsoft prohibition against driving IE6 down the Information Superhighway? It's time Microsoft booted one of the vehicle's wheels so no one can drive it -- then haul the miserable wreck to the junk yard.But Microsoft will talk security but do nothing because so many people still use that buggy old buggy. According to Net Applications, IE6 usage share was 20.07 percent in January -- nearly 6 percent ahead of IE7. Surely some Microsoft managers are thinking like this: With overall IE usage share eroding (about 62 percent in January), forcibly locking out IE6 users from Microsoft sites could send them somewhere else. Google is going to lock out IE6 users anyway.What happens later in the year when Google search doesn't work right with IE6? Will Microsoft use that as a Bing marketing gimmick? We still support IE6 so you can Bing. Google's IE6 abandonment will drive people to other browsers. Microsoft should be very concerned about which new vehicle they drive down the Netways.Google is doing the right thing by partially pulling IE6 -- not that it's enough (Google Docs) or soon enough (March 1). By the way, Google has got it in for other browsers, even its own. Google will support Chrome 4 and above. You've Chrome three-oh? It's time to upgrade.Anyway, the purpose of this rant is to post the official memo, which I received because one of my domains is assigned to Google Docs. So here's the official Google announcement as seen by real, living customers:Dear Google Apps admin,In order to continue to improve our products and deliver more sophisticated features and performance, we are harnessing some of the latest improvements in Web browser technology. This includes faster JavaScript processing and new standards like HTML5. As a result, over the course of 2010, we will be phasing out support for Microsoft Internet Explorer 6.0 as well as other older browsers that are not supported by their own manufacturers.We plan to begin phasing out support of these older browsers on the Google Docs suite and the Google Sites editor on March 1, 2010. After that point, certain functionality within these applications may have higher latency and may not work correctly in these older browsers. Later in 2010, we will start to phase out support for these browsers for Google Mail and Google Calendar.Google Apps will continue to support Internet Explorer 7.0 and above, Firefox 3.0 and above, Google Chrome 4.0 and above, and Safari 3.0 and above.Starting this week, users on these older browsers will see a message in Google Docs and the Google Sites editor explaining this change and asking them to upgrade their browser. We will also alert you again closer to March 1 to remind you of this change.In 2009, the Google Apps team delivered more than 100 improvements to enhance your product experience. We are aiming to beat that in 2010 and continue to deliver the best and most innovative collaboration products for businesses.Thank you for your continued support!Sincerely,The Google Apps teamSo, if you use Google Docs and IE6, it's time to swap out one or the other. One more thing: Let's be real, Google. You got whacked by Chinese hackers because of an IE6 security hole. That's the real reason for dumping IE6, which is charitable action benefitting the whole Web. Why not say so? Copyright Betanews, Inc. 2010
Continue reading...Monday, February 1, 2010
By Joe Wilcox, Betanews Windows 7 did little to slow the Mac's sales trajectory during fourth quarter, according to NPD. Year over year, Apple doubled US retail unit share -- from 5 percent to 10 percent -- for PCs selling between $500 and $1,000. More startling, Apple increased its unit share from 79 percent to 90 percent in the market for "premium" PCs, meaning those selling for more than $1,000. In July, I reported that Apple's revenue share for PCs selling for more than $1,000 was 91 percent, because of higher average selling prices; nearly all Macs sold for more than $1,000. Now Apple benefits from 90-percent unit share, too.Stated differently: Nine out of 10 premium PCs purchased from US retail brick-and-mortar stores or online sites (including major chains and Apple Store) during fourth quarter was a Mac. The data isn't good for Microsoft's Windows PC partners. Microsoft and OEMs touted more feature-rich Windows 7 PCs for the holidays. Additionally, ahead of Windows 7's launch, Microsoft spent six months marketing premium Windows PCs during its "Laptop Hunters" campaign. These marketing efforts apparently failed. Apple doesn't just own the premium market, its sales are increasing there.Before any blogger or journalist links to this post, let me be clear: NPD did not issue a report, as some linkers are sure to write. I asked Stephen Baker, NPD's vice president of industry analysis, for the numbers. Please don't attribute them to a NPD report. I asked because of yesterday's Wall Street Journal story: "Windows 7 Fails to Boost Profits of PC Makers." I wanted a look at the numbers, so I asked Baker for Mac and Windows retail average selling prices and Mac retail market share.The data is startling confirmation -- at least for the United States -- about Apple's success establishing the Mac as a premium brand. More significantly, the data shows how discounting has lowered consumer expectations about Windows PCs and brand equity for companies like Dell or HP. Additionally, gains below $1,000 indicate there is demand for lower-priced Macs, which during 2009 Apple satisfied with the $999 white MacBook and $599 Mac mini.But there's also a warning for Apple, too. "They continue to gain share in those segments, but almost all the growth was in under $500 computers, where they don't play," Baker told me today. "So at some point they are clearly going to run out of headroom in $1,000-plus, and in the $500-$1,000 segment they are still pretty small. And, of course, if selling prices continue on this path, the 'premium' segment is going to be over $500 not over $1,000."Fourth-quarter ASPs tell the story. The average selling price for Windows PCs (desktops and notebooks combined) was $475, down from $589 a year earlier, according to NPD. Mac ASP: $1,361, down from $1,499. Windows PC prices fell organically, while Mac ASPs dropped mainly because during second half of 2009 Apple lowered prices at the high end of the pricing segment. Betanews founder Nate Mook and I discussed the data over IM. He made several astute observations about Apple's "premium" success: "You grow slowly until you hit the tipping point where you are big enough to lower prices. Suddenly being the 'premium' brand doesn't necessarily mean you're the most expensive. Yet you're still associated with being premium."For now, as I explained in Friday post, "'Apple iPad was my idea'," there are no price cuts but an opening of price bands. I wrote: "iPad fills a gaping hole in the Mac product line between the aforementioned $399 and $999. Suddenly, the cheapest, functional Mac portable is $499, or half what it was on Monday. Consumers who wanted a Mac but couldn't afford one can get one for under 500 bucks." The day after, I posted about Apple covering all mobile computing price points from $99 to $2,499, Boy Genius Report put together a visual representation (see chart above).Apple's iPad marketing emphasizes PC capabilities first, including Web browsing, e-mail and productivity functions using iWork. Then there are the seemingly bazillion third-party applications. With iPad, Apple has a sub-$500 PC for the mainstream market, lifted by the "premium" associated with wider-reaching brand.On January 27, Baker blogged about iPad:This should signal the death of the whole slate/pad/tablet concept, and now Apple has put a stake in the heart of that concept. However at $499, with its media directed functionality, it could make a play for the companion computing market the PC world discovered in 2009 with the netbook. And with unit volumes for notebooks and netbooks up 60 percent during the holiday season according to NPD's Retail Tracking Service, there is a huge unit opportunity for Apple that they have now chosen to attack.The one question remains: Can Apple really be effective taking its premium brand success to the market below five hundred bucks? That's for iPad to answer, starting in about 60 days.[Chart Credit: Boy Genius Report] Copyright Betanews, Inc. 2010
Continue reading...Saturday, January 30, 2010
By Joe Wilcox, Betanews My answer is $155. Yesterday, when checking my bank account, I found that Dow Jones had charged $155 for a year's Wall Street Journal online subscription. I had been expecting the same $119 charge as last year, which already was borderline too high but acceptable (I had a fulltime job 12 months ago). WSJ had gone too far with its pricing. I called customer service, cancelled the account and asked for a refund. The call wasn't easily made, because of the real and sentimental value received. I do regularly read the Journal online, and I have subscribed since 1996! No longer.With that introduction, and before continuing with the post, I must ask: What price is too much for you to pay for online content? How much would you pay -- haha, if anything? What about digitized content, such as ebooks? What do you consider to be a fair price for new ebook titles, or older ones? Please answer in comments.The issue of fair value for content isn't a new topic, but it's sure to grow as more content companies consider paywalls -- charging for some or all of their online content. Earlier this month, the New York Times announced plans to put up a paywall next year. Why the Times needs a year to warn everyone or to build the paywall infrastructure is truly baffling. The Times charged before with its now disbanded Select service.Actually, the Times already charges for online content. Earlier this month, after seeing five weeks of unopened Sunday Times bundles by the couch, I called to cancel yet again. Every time I call, a representative offers six more months of the Sunday Times for half price -- about 15 bucks a month. I've been a Times print subscriber -- with free online access -- since 2000. This last time, the customer service rep offered online access for the same $15 a month. Huh? Isn't it free? Well, yes, but the online service is for the Times Reader application, which otherwise would be free with a print subscription anyway. No thanks to either choice, I said.Circling back to the Journal, the pub is charging more and paying less to produce it. Dow Jones is in the process of outsourcing some of its customer service infrastructure (meaning more layoffs coming), and there were recent layoffs at WSJ, including editorial staff. Meanwhile, US salaries haven't kept pace with rate of inflation (e.g., editorial staff salaries haven't risen much), and many news organizations rely on freelancers or contractors, which cost less than fulltime employees. So why charge subscribers more -- loyalist like me -- if costs for producing the content isn't increasing? Fourteen years ago, I paid the Journal about $39 a year for online access through a downloadable application that took forever to update over a 9600 baud dial-up connection. WSJ later took the service to the Web browser, which is helluva lot more convenient.Something else: Given the amount of free content out there, shouldn't competition keep price for paywall content from going up? Additionally, the Journal's paywall is full of doors. For all News Corp. Chairman Rupert Murdoch's talk about charging for all Journal content, Google search still brings up most of it for free. No fee required. I've recently posted on this topic of free versus fee online content here at Betanews: Advertising is the wrong model for the open Web Can there be a free Web if no one makes money? Google's 'Open' definition: Simply brilliant business, but is it evil? But there are two topics not covered in previous posts: What is reasonable amount to pay for online content and what should people pay for ebooks? I would pay $155 a year for several online publications. Better: $120 a year for three or even four. It's something publishers should really consider, banding together to offer attractive and affordable online pay bundles. Let the subscriber choose the online publications. That $30 or $40 a year per publication might not immediately appeal to news publishers, but, frak, they're competing with free content -- all easily served up via Google News or search.The reality: Lots of people won't pay. You're reading this post for free. Betanews doesn't charge, but I wish that it did and you would pay. Betanews editors put a priority on the "news" part of the name and the traditional journalistic standards supporting it. But good content costs to produce, and there is too much content for the amount of advertising space. I'm not the least privy to Betanews business operations -- frak, I'm just a freelancer -- so the statement is meant to broadly apply to all news sites (and even blogs). It's supply-and-demand logistics. The more supply, the less the value. The large amount of online content now available -- much of it aggregated or pirated from sites that pay real reporters to produce it -- creates two advertising problems: There is too much content for the available advertising space The amount of available content reduces ad space's value (what advertisers are willing to pay) These two problems are perhaps the top reason more sites want to charge for content. Online advertising can't pay enough to produce quality content. Still, people won't pay for it. Why should anyone, when so much is available for free?So what about something that's not free today, but which future price is uncertain? I'm talking ebooks. On Wednesday, Apple unveiled the overrhyped iPad, with supporting iBookstore. Meanwhile, Amazon is in a frakus with what customers should pay for ebooks. According to the New York Times, Amazon has pulled Macmillan books over an ebook pricing dispute. Apparently, Macmillan wants to charge $15 for ebooks rather than $9.99. It's big business for Amazon, which this week claimed that when the same title is available as ebook and in print, digital versions account for six out of every 10 copies sold. Amazon and even Apple may drive down the cost of ebooks, much as they have for digital music downloads. For me, 10 bucks is about right for an ebook, but really too much when there is onerous DRM.Once again, I ask: What price are you willing to pay for online content (and by what criteria its value) or for ebooks? I expect that for online content many readers will say nothing. I hope others can explain what they would pay for, which could help news organizations looking to charge in the future. As for ebooks, I'm super curious what Betanews readers see is fair price. Comments are open, please have at it. Copyright Betanews, Inc. 2010
Continue reading...Friday, January 29, 2010
By Joe Wilcox, Betanews I've been awfully hard on Apple's iPad, criticalness that I really should consider, for a surprising reason. With iPad, Apple took the approach that I recommended nearly a year ago. Microsoft's current, catchy PC operating system marketing campaign ends with some consumer asserting: "Windows 7 was my idea." Perhaps I should claim that "Apple iPad was my idea." ;-)Some background: In early 2009, as the economy sucked growth from the PC market, netebook sales surged and Windows OEMs slashed prices, there were many calls by Wall Street analysts and pundits for Apple to release a netbook and to slash Mac prices. I opposed both ideas in several blog posts. I've called netbooks a menace, because they suck margins out of the PC market without offering much value to the computer manufacturer or netbook buyer. Meanwhile, Mac price cuts made no sense to me, even as more analysts called for them. Apple has established a premium brand that price cuts would jeopardize, all while reducing margins and offering little other business benefit. Apple had long priced against itself rather than against Windows PCs, which has been a successful strategy. Why change it?To me, the call for an Apple netbook and for lower prices made sense in a different way: Rather than move Macs and their prices down, Apple should move iPhone/iPod touch up in price and size -- that's what I recommended in several blog posts to be excerpted in a few paragraphs. The idea: For Apple to fill the middle pricing gap -- between $399 iPhone and $999 Macbook -- with an iPhone OS-based device that also provided access to App Store.That's what Apple is doing with iPad, which price ranges from $499 to $829. Apple now offers portable computers -- and that's how I classify iPhone, iPod touch and iPad along with Macs -- ranging from $99 to $2,499. From a pricing strategy perspective, iPad is a brilliant product, because it fills the gap between between iPhone/iPod touch and Macbook without price cuts or risk to the Mac's premium brand status. Microsoft and its Windows PC partners should be very concerned about this pricing development, but more on that topic after a few excerpts from past blog posts.iPhone/iPod touch as the Better NetbookIn March 2009, at Apple Watch, I posted: "Apple, Don't Buy into Netbook Hype." I wrote:From branding, logistics, pricing and market differentiating perspectives, a bulked-up iPhone or iPod touch makes more sense than a Mac netbook [e.g., mini-notebok, as analysts refer to it]. That's what Apple should do, and the existing netbook market shows the way. Mini-notebooks aren't just small and cheap, they're subsidized by carriers, just like smartphones. The carrier model, with 3G data plans, is already in place. Apple should push it upmarket from iPhone and even iPod touch rather than take MacBook down market...Suddenly, the differences between smartphones and multitouch mini-notebooks could blur really fast. Apple will have to work harder to differentiate iPhone and iPod from carrier-subsidized touchscreen mini-notebook/smartphone hybrids running Windows 7. Apple's biggest asset is the App Store, which would be helluva enticing if made available on a mini-notebook/smartphone hybrid...Apple is better positioned to extend the smartphone/portable media player market upwards, rather than pull the notebook market downwards. Marketing 101, guys: People will spend more for perceived value. If you offer them more for a lower price, they'll forever resist paying more. Upsell is almost always better than downsell. So, Apple shouldn't buy into netbook hype. Apple should redefine it.What I suggested is exactly what Apple is doing with iPad. Not that I can really lay claim to the idea. It's cheeky for me to take credit, but product development takes awhile. Surely someone at Apple was working on something like iPad long before I blogged the above paragraphs.A month later, in another Apple Watch post looking at Mac retail sales, I strongly recommended against Mac price cuts analysts had recommended to better compete with netbooks:If I were running Apple, I would resist the temptation to cut prices. As I explained a few paragraphs ago, Apple is performing pretty well compared with Apple a year ago. The company is better off losing market share to protect fundamentals. Market share declines will have people like me wagging accusing fingers that Apple will go down. So what? It's better for Apple to sell fewer Macs for much more than a few more Macs for much less.In December 2009 Betanews post, "10 things Apple did right in 2009," I praised Apple's strategy of cutting prices at the high-end, while resisting lower entry prices below $999:While Windows PC competitors slashed computer prices -- and so their margins and profits -- Apple held above-$1,000 pricing firm for iMac, Macbook Pro and Mac Pro. The higher pricing surely didn't seem to hurt Mac sales, which were strong all year. Meanwhile, low-cost netbooks sapped Windows PC margins and profits. Apple did right by lowering prices at the high end, which simply opened up more sales over $1,000, where Apple has more than 90-percent revenue share for computers sold at U.S. retail, according to NPD.The Brilliance that is iPadMy blog posts sometimes seem quite contradictory. For a month, I've been nothing less than brutally hard on Apple's tablet. Two reasons for seeming contradictions: 1) I sometimes purposely write provocative posts to incite debate. 2) I keep an open mind, looking at tech products and their supporting business strategies from different viewpoints -- meaning my opinion changes. Yesterday, I offered up "12 reasons why I won't buy an Apple iPad." On that my post, my position remains firm. But iPad means something else when examined from a different viewpoint, which is what today's post is about. I'm not the iPad's target market, and that's where lies the product's brilliance.During Wednesday's iPad launch keynote, Apple CEO Steve Jobs spoke about iPad fitting between smartphone and laptop. Geeks haven't reacted well to this; iPad is a compromise device, in terms of functionality overlap with the smartphone below and laptop above -- while replacing neither. But geeks aren't the target market, either (we share that in common). Jobs is first and foremost a marketer. From a marketing perspective -- looking at Apple computing products as a range of features and prices -- iPad fills a gaping hole in the Mac product line between the aforementioned $399 and $999.Suddenly, the cheapest, functional Mac portable is $499, or half what it was on Monday. Consumers who wanted a Mac but couldn't afford one can get one for under 500 bucks. The average consumer doesn't care about the operating system, whether iPhone OS 3.2 or Snow Leopard. Mac wannabes will care more about what the device can do for them. Apple has packed most of the basic, most appealing functions of the Mac portable -- including iWork -- into iPad. The pundits evaluating iPad as an ebook reader first should look at the device as ebook reader second or third -- or even last. The iPad is a portable Mac first, which is the real emphasis behind the device's Website (Give it a real look).On Wednesday, I blogged that "Apple's iPad does absolutely nothing to advance the tablet category." I was wrong. Apple instead did what I recommended about the netbook category: "Redefine it." The iPad is a netbook -- the cheapest Mac portable (discounting iPhone and iPod touch, of course) -- and it only costs $499. From that perspective, iPad is a brilliantly conceived device and one sure to eventually have mass-market appeal.My cranky, geek iPad sniping aside (in previous blog posts), Apple is rightly thinking about the mass market and how to offer a Mac across all price points and range of features. It's brilliant marketing that looks at the totality of what Apple should offer customers rather than to simply respond to competing products, strategies or pricing. Apple's marketing brilliance here is something I should praise, whether or not it was my idea. ;-) Copyright Betanews, Inc. 2010
Continue reading...Thursday, January 28, 2010
By Joe Wilcox, Betanews A year after global recession sapped Microsoft sales and the company announced its first-ever massive layoffs, some signs of recovery can be seen. The holiday quarter was as good to Microsoft as could be expected, given how much sales are dependent on large businesses -- the majority of which are still tightfisted with IT spending or are renewing licenses for fewer seats because of layoffs."We reported record revenue and record profits," Peter Klein, Microsoft's new CFO, asserted during a conference call this afternoon. He praised consumer sales, particularly for Windows 7 PCs. But Klein warned that "we have not seen a return of enterprise spending growth."The quarter's results are a bit complicated -- and to some people will appear higher than they really are. Because of technology discount upgrade guarantees for Windows 7, Microsoft carried $1.71 billion forward from previous quarters.For fiscal 2010 second quarter, Microsoft reported revenue of $19.02 billion, for a 14 percent year-over-year increase. Operating income: $8.51 billion, up 43 percent. Net income: $6.66 billion, or 74 cents a share. Net income rose by 60 percent and earnings per share by 57 percent year over year. However, Microsoft reported these results including the aforementioned carryover. Without it, Microsoft revenue would have been $17.31 billion or 60 cents a share.For about a year, Microsoft provided no guidance to Wall Street analysts, so there is none for fiscal Q2. Analysts average consensus was $17.9 billion and 59 cents earnings per share. Revenue estimates ranged from $15.91 billion to $19.18 billion. Q2 2010 Revenue by Division Windows & Windows Live: $6.9 billion, up 70 percent from $4.06 billion a year earlier. Server & Tools: $3.8 billion, up 2 percent from $3.76 billion a year earlier. Business: $4.75 billion, down 3 percent from $4.88 billion a year earlier. Online Services Business: $581 million, down 5 percent from $609 million a year earlier. Entertainment & Devices: $2.9 billion, down 11 percent from $3.26 billion a year earlier. Big question for this quarter: What about Windows 7? The answer is surprisingly complex. Fiscal first quarter was Microsoft's best sales period ever for Windows license sales -- the majority to OEMs stocking the channel for holiday 2009. Would Microsoft sustain the momentum in fiscal Q2? Apparently it did. In a statement, Microsoft CFO Kevin Turner called fiscal Q2 another "record quarter for Windows units." The company claims more than 60 million Windows license shipments through end of the quarter.The really good news came about two weeks ago from Gartner and IDC, which reported that PC sales were much stronger than expected during fourth calendar quarter (which corresponds to Microsoft's fiscal second). Better still: Mac market share dropped dramatically, as sales for several PC manufacturers surged.Worldwide PC shipments rose 15.2 percent year over year, according to IDC, and 22.1 percent, according to Gartner. IDC put US PC shipments up 24 percent year over year and Gartner 26.5 percent. After years of market share gains, Apple dramatically dropped, presumably with Windows 7 sapping Mac sales momentum. Gartner put Apple's US share at 7.5 percent, down from 8.8 percent in fiscal Q4 2009 and 7.7 percent in fiscal Q1 2009. Both analyst firms ranked Apple fifth in US market share, a one-rank decline below Toshiba. While Mac shipments grew a respectable 31 percent, according to IDC, HP shipments grew by 45.1 percent and Toshiba by a stunning 71.5 percent.Q2 2010 Income by Division Windows & Windows Live: $5.4 billion, up 99 percent from $2.7 billion a year earlier. Server & Tools: $1.5 billion, up 8 percent from $1.38 billion a year earlier. Business: $3.01 billion, flat with $3.02 billion a year earlier. Online Services Business: Loss of $466 million, down 46 percent from $320 million loss a year earlier. Entertainment & Devices: $375 million, up 188 percent from $130 million loss a year earlier.Segment by Segment ResultsMicrosoft reports revenue and earnings results for five divisons: Windows & Windows Live, Server & Tools, Business, Online Services and Entertainment & Devices.Windows & Windows Live. Revenue rose 70 percent year over year and income by 99 percent, bolster by $1.71 billion carried over from earlier quarters, as part of Microsoft's upgrade guarantee program. The division derives about 80 percent of its revenue from license sales to PC OEMs. OEM revenue increased by $2.3 billion or 72 percent when including recognized deferred revenue. Without it, OEM revenue grow by a more modest 21 percent, or by $664 million. Microsoft estimates worldwide PC shipments grew 15 percent to 17 percent during fiscal Q2.Server & Tools. The division is most insulated against economic maladies, because 50 percent of revenues comes from contractual volume-licensing agreements -- that's a decline of 5 percent from fiscal first quarter. Because of corporate layoffs, Microsoft is seeing customers renewing license contracts at lower levels. The division's revenue grew just 2 percent year over year, while operating income grew by 8 percent. Business. Next to Windows, Microsoft's other cash cow division reported revenue declines of 3 percent and flat income (really slightly down) year over year. Consumer revenue increased $95 million, or 12 percent, which Microsoft largely credited to increased PC sales. However, commercial Office 2007 sales declined, which isn't surprising. Microsoft is beta testing Office 2010, which launches within about six months.Online Services Business. The division's loss widened, with ad sales in decline -- starkly contrasting with results from Google, which reported solid earnings for the same quarter. The majority of the Online Services division's sales come from advertising, which fell 2 percent, or $11 million, year over year to $516 million.Entertainment & Devices. Xbox 360 and console game sales declined by $295 million, or 12 percent, year over year. Microsoft shipped 6.2 million consoles during the quarter. Copyright Betanews, Inc. 2010
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Saturday, February 6, 2010
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