microsoft | Paul Wallbank - Communications Professional

The mobile payments industry has a USB moment

Could the Apple Pay experience be similar to the development of the computer USB port?

Has Apple Pay legitimised mobile payments? It appears so, reports the New York Times. Since the launch of Apple’s payments service, Google and other mobile payment providers are claiming usage has doubled with customers exploring the systems.

If this is true, it’s similar to how Apple legitimised the USB port in 1998 with the release of the iMac.

Prior to the iMac the USB port was a bit of an oddity, on most PCs the sockets sat unused and the few devices available on Windows computers worked reliably, as Bill Gates himself found out during a live demonstration at the 1998 Comdex show.

Unlike Apple Pay, the move to USB on Macs wasn’t welcome and it was a high stakes decision by Steve Jobs given that Apple’s existence was still precarious and its user base was still made up of largely of true believers who had been through years in the wilderness with the company.

Those users also had many thousands of dollars invested in Apple Device Bus (ADB) devices, all of which became redundant with the move to USB. Many customers at the time swore this was the last straw and they would move to Windows PCs.

Apple’s users didn’t carry out their threats and stayed with the company whose move to USB turned out to be a winner for the entire computer industry.

For Apple USB’s success meant their customers were no longer locked into a proprietary technology, for manufacturers they were able to start moving off archaic serial and parallel ports while for Microsoft the shift meant a better range of more reliable devices — although their operating systems struggled with USB until the release of the far more stable Windows XP.

It appears in this respect Apple Pay is repeating history in giving a boost to a technology that has been struggling to find traction in the market place.

The difference this time is that the payments industry is a far bigger market with far more implications for the broader economy than the computer peripherals segment.

If Apple raise the boat on payment systems, there are some incumbent businesses who are going to find themselves in a very different marketplace in five years time.

Microsoft’s search for a strategy

Microsoft CEO Satya Nadella says the company’s future lies in the cloud and productivity. What’s new?

The decision of Microsoft to offer its Office tablet apps for free last week has had the desired effect with them rocketing to the top of the charts as people enthusiastically grab them.

Microsoft’s decision pretty well locks its resellers into the loss leading strategy the company flagged last week in China, with the tablet apps available for free its hard for retailers and integrators to be charging for the desktop version.

That loss leader strategy has been further laid out by CEO Satya Nadella at a function in London yesterday where he described their cloud and mobile first strategy, something he also discussed at a briefing to ‘a small gathering of journalists’ last week.

Nadella’s vision isn’t really anything new; it differs from Ballmer’s ‘devices and services’ strategy but the thrust of the business was always going to be on cloud services and the company’s Azure services regardless of any conceits around tablets or professional offerings.

Of the three key areas Nadella identifies — Windows, Office 365, and Azure — two of them are problematic; the Office 365 for reasons already mentioned and the Windows product line.

The ‘Windows everywhere’ strategy, which also happens one of Ballmer’s earlier initiatives, is doomed as the operating system is not suitable for smartphones or lightweight internet of things devices.

Even if Windows was successful on smartphones or could be successfully ported to low powered smart devices, the margins are tiny compared to the traditional desktop market that was so profitable for Microsoft in the past.

All of which brings Microsoft back to Azure; it’s clear the cloud service is the future of the company but the margins are dire except for some relatively niche areas like collaboration software.

Mantras about ‘productivity’ count for nothing as every software and cloud computing company cater for the B2B market is delivering a service that claims to improve customers’ productivity. That Office is declining as a profit centre only makes things harder for the company.

If anything, Nadella’s discussions illustrate the company is still casting around for the next big profit centre. As the Windows and Office franchises decline, time may start to run out for the current management just as it eventually did for Ballmer.

Giving away Office apps may lock some users into the 365 service and could prove moderately profitable, but last week’s moves indicates a much smaller future For Microsoft.

The fight for cloud computing’s sweet spot

An old PC industry was is being re-fought in the cloud. Will the result be different this time.

One of the great market battles of the PC era was the fight between the ‘best of breed’ software designed to do specific jobs well — Lotus 123, WordPerfect, and Harvard Graphics — versus the bundled ‘suites’ led by Microsoft Office.

Bundled suites of programs offered a common platform and cheaper price over buying products individually.

In the case of Microsoft Office, it also helped that the software giant was aggressive in undercutting the market and leveraging the deals it had made with hardware vendors and system integrators.

The winner of that battle was Microsoft as it turned out customers preferred the cheaper price points of the bundled packages and the common software platform made it easier to share data across the applications.

In the cloud computing field that fight is happening again as Zach Nelson, CEO of Netsuite, describes; “I think the next battle is going to be the same battle that happened in the client-server world. Is it the best of breed cloud apps or is it the suite?”

Nelson believes the suite vision will win out, “the suite is going to win again for exactly the same reasons why the suite won in the client-server world — it’s very hard to synchronise data between applications.”

Given Netsuite’s business, as its name suggests, is in providing a suite of software it’s no surprising that Nelson believes their way of doing business will prevail. Those providing ‘best of breed’ stand alone cloud applications naturally disagree.

Chris Ridd, Australian General Manager of accounting service Xero, disagrees with Nelson’s view. “With cloud and open APIs you have the holy grail of interoperability,” Ridd says. “In the 1990s the open systems were too early and didn’t work as well as they do today.”

Ridd also points out that Xero has over 350 add on services, ” I don’t think any suite can deliver that” he says.

History is on Nelson’s side but it may be that in this case history doesn’t repeat as the technology has moved along and now stand alone apps are what the market wants.

Time will tell although its unlikely whichever prevails will have anything like the success and market domination of Microsoft Office during the PC era.

ABC Nightlife with Tony Delroy October 2014

Connected cars, smart watches, Microsoft and social media will be the topics of the next Nightlife with Tony Delroy technology segment.

Paul Wallbank joins Tony Delroy on ABC Nightlife across Australia from 10pm Australian Eastern time on Thursday, October 2 to discuss how technology affects your business and life.

Update: If you missed the program you can listen to the podcast at the ABC site or stream it below.

For this month’s spot we’re looking at smartcars, smartwatches, the next version of Microsoft Windows and whether the new social media platform Ello can displace Facebook.

Some of the questions we’ll cover include;

What’s happening with connected car technologies?
Isn’t all this talk about smart cars another way ?
So how far are we off the driverless car?
Are our mobile phone choices going to dictate what brand car we buy?
How does the smart watch fit into how companies are trying to lock us into their software?
A new social media platform called Ello is taking off, what is it?
Do we really need another social media platform?
Microsoft have announced Windows 10, aren’t we only up to eight?
What’s different in Windows 10?
Has Windows 8 been a success?
When will Windows 10 be released on the market?

Join us

We’d love to hear your views so join the conversation with your on-air questions, ideas or comments; phone in on the night on 1300 800 222 within Australia or +61 2 8333 1000 from outside Australia.

Tune in on your local ABC radio station from 10pm Eastern Summer time or listen online at www.abc.net.au/nightlife.

You can SMS Nightlife’s talkback on 19922702, or through twitter to @paulwallbank using the #abcnightlife hashtag or visit the Nightlife Facebook page.

Could Windows 10 be Microsoft’s last desktop operating system?

Could Windows 9 be Microsoft’s last desktop operating system?

On Tuesday Microsoft are expected to announce their new Windows 10 operating system at a media event in San Francisco.

If the rumours are true, then the new system will be launched almost exactly two years after Windows 8 was released amid hopes that it would stem the PC industry’s decline.

Windows 8 didn’t deliver with most people being frustrated with the system’s inconsistent interface that tried to be unified desktop, laptop and tablet operating system which managed to be unsatisfactory on all of them.

As a consequence, users avoided Windows 8 like the plague with industry analysts Netmarketshare claiming most of Microsoft’s customers are buying systems kitted out with Windows 7 or just sticking with decade old Windows XP systems.

Courtesy of Netmarketshare http://www.netmarketshare.com

Making matters worse for Microsoft is the decline in personal computer sales in general with IDC estimating global shipments of both portable and desktop system will drop 3.8% in 2014.

These declines are already well established in the trends being seen in Microsoft’s business with the company’s Windows division showing an accelerating decline in profit margins.

Microsoft Windows division financial performance ($ million)

Should that decline continue with Windows 10, it may well be that Microsoft will have to consider the future of product.

As it is, the market may be deciding for them as users increasingly switch to tablets and smartphones. We may also see a wave of cheap Chinese made laptops running versions of Google Chrome or other Linux based systems also threatening the existing PC sales base.

Either way, a lot rides on what Microsoft announces in San Francisco this week. It could be the end of an era that defined the mass adoption of computers.

Lenovo Yoga

Lenovo’s Yoga 2 Pro is an attempt to combine a laptop and tablet computer into one device

Can a laptop be a tablet computer? The Lenovo Yoga Pro 2 tries to balance the needs of both in a package designed for home and small business users.

The laptop computer market is in a difficult place at the moment as both consumers and businesses move to tablets and smartphones so it’s interesting to get hold of the Lenovo Yoga Pro 2 to see how one of the leading portable manufacturers is responding to the changing industry.

One of the best ways of testing a portable device is to take it on a long trip, so a couple of 14 hour transpacific flights and trips around San Francisco, the Napa Valley and Silicon Valley proved a good workout for the Yoga Pro.

As a laptop

From a hardware perspective the Yoga is an impressive device with 8Gb of RAM, 256Gb solid state hard drive and a 1.8GHz i7 chip. The screen is a very nice 13.3″ 3200 x 1800 high-resolution display.

Rounding out the hardware specs are two USB ports — one 3.0 and the other 2.0 — along with a Micro HDMI output, webcam, inbuilt mic, headphone jack and an SD Card reader. All the basics expected in a mid range ultrabook that weighs in at a respectable 1.4kg.

In using the Yoga as a laptop, the device works well with the keys being crisp and responsive although the position of the glidepad and the backspace key being alongside the home key caused problems for this clumsy touch typist.

One of the problems with the larger form of ultrabooks is their usability when travelling economy on a plane; if the passenger in front of you reclines then it becomes difficult to use the device. This isn’t a problem specific to the Lenovo Yoga, but it is a drawback that the industry seems not to have considered in its move to the larger screens.

In the office

If you’re not travelling on planes, the weight and form factor works well and makes the Yoga 2 Pro a nice device to use while on the move. In an office environment it’s a standard mid to upper range laptop with good fast specifications.

For battery life, Lenovo claim “up to nine hours” for the Yoga Pro but in practice standard office use sees about five hours worth of juice with a full recharge taking under an hour. It’s lucky most transpacific flights now have power sockets.

Flipping to a tablet

While 1.4kg is good for a laptop it’s lousy for a tablet computer with the Yoga Pro 2 weighing in a kilo heavier than the iPad and 500g (one pound) heavier than the Microsoft Surface Pro. This makes it awkward to use over extended periods and the keyboard doesn’t feel right as the backing to a tablet.

The Yoga’s weight problem illustrates the core conflict for a device that wants to be a laptop and a tablet as the different demands for each type of device make if difficult for designers to meet both markets.

In the Yoga 2 Pro’s design, it’s clear the engineers had to make a choice between compromising either on the tablet or laptop functionality. As it turns out the designers decided to go with releasing a good Ultrabook laptop with compromised tablet functions — this was the correct choice for the Yoga.

Windows 8 limitations

Probably the greatest problem though for the Yoga Pro 2 in tablet mode lies in software with Windows 8 being far from adequate as a tablet operating system with a confused interface, an inconsistent user experience and unpredictable responses to touch screen commands.

For companies like Lenovo who are persisting with Windows as their operating system, it’s becoming critical that they start demanding better design from Microsoft before they find their market being overwhelmed by Android and iOS devices offering a superior user interface.

While the Windows 8 irritations aren’t a deal breaker for the Yoga, it does limit the device as a tablet computer and its something anyone considering it instead of an iPad or Android tablet should keep in mind.

A good general duty small business laptop

Overall, the Lenovo Yoga Pro 2 is good Windows Ultrabook for home and small business use offering the benefits of an ultrabook with the flexibility of being able to flip into a tablet for specific uses.

The device isn’t cheap, but the range of features and good hardware specs make it a decent purchase for small businesses, sole proprietors or workers operating from home who need a versatile Windows computer.

iPhone ME — Apple risks becoming the new Microsoft

Is Apple’s current inattention to detail a worrying trend?

It’s been a tough week for Apple, after the spectacular launch of the iPhone 6 the company has had two humiliating and worrying setbacks that indicate standards may be slipping at the once untouchable giant.

The iPhone 6 Plus should have been a triumph, and for a while it was, but the news the phones bend and distort has tarnished the product.

Compounding the bendable phone problem are the claims users are being charged to replace their damaged handsets.

On its own this problem might have been manageable like the iPhone4’s antenna problems in 2010, however today’s news that the latest iOS8 has had to be withdrawn after user complaints indicates a sloppiness has crept into the company.

Both problems, or all three problems if it turns out the stories of Genius Bars charging to replace damaged phones, show Apple isn’t paying attention to detail to the degree they’ve become known for.

The botched iOS8.0.1 rollout is sloppy work while the bendable phone is very much an uncharacteristic lapse in design.

For a premium brand with a large dose of arrogance, shipping defective products is both an embarrassment and damages the company’s name.

This inattention to detail is horribly reminiscent of Microsoft’s horror days at the turn of the Century where the company repeatedly rushed incomplete products to market — Windows ME being the most notorious example.

So maybe we are seeing Apple become the new Microsoft and the iPhone 6 Plus as the Windows ME of our time.

That doesn’t mean we’ll see the end of Apple, Microsoft is still a huge corporation, but it may be the tech industry’s most iconic business is beginning to lose its edge.

Image of Steve Jobs and Bill Gates via Wikipedia

Frenemies in the age of tectonic shifts

In an age where business is changing dramatically it’s worth keeping your rivals close.

“Apple lives in an ecosystem,” Steve Jobs told the 1997 MacWorld conference. “It helps other partners and it needs the help of other partners.”

A few minutes later Jobs unveiled Apple’s deal with Microsoft, much to the disgust of many of the company’s true believers in the audience – something not helped by Bill Gates appearing on video midway through the presentation.

“We have to let go of the idea that for Apple to win, Microsoft has to lose;” said Jobs after the booing died down.

I was reminded of Jobs’ and Gates’ deal when talking to Pat Gelsinger, the CEO of virtualisation software company VM Ware at their annual VM World conference in San Francisco this week.

Gelsinger was discussing the myriad deals VM Ware has made with companies that are their superficially their rivals as markets radically change. The company has even gone as far to embrace the open source Open Stack that was originally set up as competition to VM Ware’s proprietary technology.

“The idea of frenemies – or co-competition – isn’t new to the IT industry.” Said Gelsinger, “as we are in this period that we’ve called the tectonic shifts that are underway.”

“All of us need to be somewhat careful about who’s our friends and who’s our enemies as we go through that period and be as nice as we can to everybody because who’s our friends and who’s our enemies in six months or twelve months could change a whole lot.”

That lesson has been harsh in the IT industry as various unstoppable businesses have found the market has shifted rapidly against them. A process that’s accelerating as cloud computing changes the software industry.

“I always quip that ten years ago or fifteen years ago Sun would have been buying Oracle. Those shifts can occur quite rapidly,” Gelsinger says.

VM Ware itself is on the brunt of one of those shifts as its core business of creating virtual services in company’s data centres is being disrupted by cloud computing companies like Amazon, Google and – ironically – Microsoft.

Adapting to that changing market is the key task for Gelsinger and VM Ware’s management team, “our philosophy has been about doing the right thing that technology enables us to do.” Gesliner states, “do the right things for our customers and enable the ecosystem to join us on the journey.”

For companies like VM Ware and Microsoft no-one predicted that one of their biggest threats would come from an online book retailer, yet Amazon Web Services has upended the entire software industry.

The challenges for VM Ware today or Apple nearly two decades ago are being repeated in many other industries as competitors appear from unexpected directions, which is why it’s important not to ignore and sometimes co-operate with your competitors.

We shouldn’t also ignore the other main reason why companies like Apple, Microsoft and, possibly, VM Ware have survived massive market shifts over time – a deep and loyal customer base.

Understanding and responding to your customers’ needs is possibly the greatest management skill needed in every business today. Are you listening to what your market is telling you?

Paul travelled to VM World in San Francisco as a guest of VM Ware

Picture of Steve Jobs and Bill Gates via Joi Ito on Flickr

Driving the hybrids — VMWare and the case for hybrid cloud computing

VM Ware is pivoting its business to a mix of cloud and onsite technologies for its long term survival

A decade ago VM Ware disrupted the corporate IT world with its virtualisation software that changed the way big organisations used their servers. Today the company is facing up to the challenge of dealing with its own business being disrupted.

In the late 1990s when a big business wanted a new server it had to get someone to physically install one, VM Ware’s founders came up with the idea of ‘virtualisation’ with their software creating a virtual server that looked to the network like it was a discrete, real computer.

Naturally this was quicker and cheaper than buying and setting up a whole new server and VM Ware was an immediate success that upended the ‘big iron’ end of the computer industry.

Today VM Ware is valued at $42 billion on the stock market and is one of the IT industry’s giants.

However the virtualisation market itself is being disrupted by cloud computing. For many businesses, it’s even cheaper to pay Amazon, Microsoft or another cloud service to provide the servers for you.

So VM Ware is reinventing itself with a range of services to meet the challenge from the cloud providers. One of it’s key strategies is to provide a ‘hybrid’ cloud where customers run some IT services on their own servers and others on the cloud, the idea is this offers the best of both worlds.

This is almost the same challenge that Microsoft faces as both companies see their core business models being threatened by internet based technologies, something that VM Ware CEO Pat Gelsinger concedes.

“We think of Microsoft having a strategy much like ours, given they have on premise and in the cloud,” says Gelsinger. “We sort of agree on the shape of the market. We would say that Amazon and Google see a different shape in the market.”

Amazon and Google’s view is a ‘pure cloud’ model where companies and consumers run all their IT on web based services. In that world, purists like Xero’s Rod Drury are openly disdainful of the hybrid model believing it to be cumbersome and adding complexity to a simple business solution.

For companies like VM Ware and Microsoft their future lies upon the hybrid model being adopted by business. This is a high stakes industry battle which will define the careers of many IT workers and the shape of the businesses they work for.

Paul travelled to the VM World conference in San Francisco as a guest of VM Ware.

Blurring the boundaries between home and office

The workplace is changing as mobile internet becomes an expected part of society.

“My ambition is to only spend four or five hours in the office,” said Vodafone Australia CEO Iñaki Berroeta when asked at a lunch in Sydney today about how he would like to structure his working day.

For many Australians, this is becoming the reality of work as increasingly their job is following them home and into their social lives according to Microsoft’s Life On Demand white paper released this week.

The blurring of the lines between home and work is no surprise to small business owners, senior executives or those establishing a startup, however according to Microsoft this is becoming normal for the majority of workers.

In their paper, Microsoft found 30% of Australian workers are checking work emails on devices at home before they leave for work and 23% are doing work activities while they are socialising with their friends.

Overall, more than a quarter of Australians work from anywhere which has more than doubled in the last five years.

This is largely due to the rise of tablet computers and accessible wireless broadband. A direct consequence of this is nearly half of commuters work or study while on public transport.

Being able to work on the train, bus or tram is changing the usage of public transport with many commuters preferring to use the usually slower option (at least in Australia) over driving as it’s seen as more productive time. This is a cultural change that governments have been slow to understand.

Equally slow have been many businesses in understanding they have to deploy the tools that allow workers to be efficient while out of the office, this is the whole point of cloud services.

The workplace is changing as mobile internet becomes an expected part of society. How is your businesses catering to both your staff and customers’ needs in the age of the smartphone and tablet computer?