Microsoft News Tracker

Press release:

Microsoft Corp. CEO Steve Ballmer today outlined the company’s vision for how people, armed with the right software, are the key to driving business success. Called “People-Ready,” this vision for business is the backdrop for a series of innovative solutions in new and existing categories that Microsoft will bring to market over the next year. Addressing more than 500 business customers, Ballmer showcased new business solutions and explained how they are enabled by the integration across the company’s forthcoming versions of the Windows Vista™ operating system, the 2007 Microsoft® Office system, Windows Mobile® software and the next version of Microsoft Exchange Server, as well as infrastructure offerings such as Windows Server™ 2003 and SQL Server™ 2005.
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Ballmer also said the company would be aligning its global sales and marketing organization and its worldwide partner network to execute against the People-Ready vision. The company also announced a series of investments including a $500 million global marketing and sales campaign designed to broadly communicate the company’s software value proposition for business.

In a nutshell, Microsoft wants to sell more of their cash cows to businesses. There’s more by following the link and in the press Q&A, but it’s pretty turgid stuff. Mary Jo Foley has a nice round up at Microsoft Watch including an explanation of the “people-ready” part plus this gem:

In a question-and-answer session with press and analysts following his remarks, Ballmer singled out IBM as the primary target of the new people-ready campaign.

“We’re staking out a position quite different than our leading competitor. That’s IBM,” Ballmer said. “We are talking about making the people in the business making more productive. IBM is talking about a project. We’re talking about software….IBM increasingly is a services company. At the end of the day, we’re a software company.

True, but Microsoft is a software company with a number of strong services partners like Accenture. I don’t think they will be turning away folks who want more than to just buy software, but it is a talking point of sorts.

Update: IBM fires back via Reuters:

In a statement, IBM responded: “Microsoft’s marketing campaign — you can’t really call it a strategy — is Window dressing for a pitch to keep a one-size-fits-all, proprietary Windows world.

“This is a product-driven, instead of a customer-driven approach. It’s clear our survey of some 700 CEOs indicates that business process and business model innovation is what matters most to clients, and that can’t be achieved by another proprietary piece of software.”

IBM “thought leader” and Executive VP of Innovation and Technology, Nicholas Donofrio says so:

“The fact is that innovation was a little different in the 20th century. It’s not easy (now) to come up with greater and different things,” Donofrio said.

“If you’re looking for the next big thing, stop looking. There’s no such thing as the next big thing,” he added.

Hmm, that sounds like the old one about closing the patent office because there is nothing left to invent or the story told about famous physicist Max Planck:

“..The Munich physics professor Philipp von Jolly advised him against going into physics, saying, “in this field, almost everything is already discovered, and all that remains is to fill a few holes.”

There’s no need to worry though - the article relates that IBM has some alternatives to the “next big thing” which seem to be along the lines of doing the same old stuff, but describing it differently with larger words and in bigger meetings.

The Windows Vista hardware performance rating system (mention here in February) is back in the news since the latest Vista CTP is now prominently displaying the rating numbers. Ina Fried and Tom Krazit at CNET:

Microsoft is building into the new operating system a tool that will rate a PC based on how well it is running and on how much it can take advantage of Vista’s capabilities.

The “Windows Performance Rating,” which can be seen in the latest test version of the operating system, evaluates components such as the processor, the memory, the hard drive and graphics cards to come up with an overall score.

The rating appears in a large blue circle and can be seen in multiple places in the operating system, though Microsoft has said little about what exactly the rating signifies. The main rating is on a scale of 1 to 5, but individual components are also given a “sub rating” on some other, unspecified range.

“The idea behind the Windows Performance Rating is to help average consumers easily understand their Windows Vista PC’s overall performance, and to simplify the process of determining whether certain software applications will run smoothly based on their system components,” Microsoft said in a statement provided to CNET News.com.

There’s much more by following the link, but this is sure to be fun for all. The single number is sure to be featured prominently in PC advertising and there will certainly be much gnashing of teeth and complaining by vendors whose boxes don’t rate highly.

We now have an explanation of the mysterious Microsoft deal with 4Kids Entertainment that was announced in January. According to the press release - “Viva Piñata” Universe Revealed — Entertainment Property Brought to Life by Microsoft, Rare and 4Kids Entertainment:

Spontaneous and fun, piñata-filled world showcased via animated television series, immersive Xbox 360 video game and wide range of merchandise.

Microsoft Game Studios and 4Kids Entertainment, Inc. (NYSE: KDE) today celebrate the introduction of “Viva Piñata,” a high-energy, mass-appeal entertainment property created by Rare Ltd. that brings a vibrant world of living piñata animals to video games, television and beyond. The “Viva Piñata” universe showcases an engaging cast of colorful, wild-roaming piñata animals that entertain and challenge imaginations.

“Viva Piñata” will offer a number of entertainment elements enjoyable for everyone — from kids to adults. The “Viva Piñata” world will include a Saturday morning 3-D animated television series, slated to premiere this fall on 4Kids TV™ on FOX, that is produced and created by 4Kids Entertainment, known for such powerhouse properties as Yu-Gi-Oh!®, Pokémon®, Cabbage Patch Kids® and Teenage Mutant Ninja Turtles®. An immersive video game developed by Rare Ltd. exclusively for the Xbox 360™ video game and entertainment system is scheduled to debut this holiday worldwide, enabling gamers to create and customize piñata-filled adventures in their own evolving world. The 4Kids Entertainment licensing program will result in additional licensed products launching in 2007. Additional information can be found at http://www.vivapinata.com.
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Following the strategic alliance previously announced in January 2006 with Microsoft, 4Kids’ exclusive representation agreement includes all broadcast, home video, music and merchandise licensing rights on a worldwide basis for the “Viva Piñata” property.

I have to admit that I went to the promotional website to check out all the details because I couldn’t help wondering how they were going to handle the messy problem that pinatas exist to be bashed to bits by kids with bats. Let’s just say that the backstory is rather like Santa Claus if he got pummeled at every house he visited and then patched up before the next one. One of the main TV characters, the oddly deformed Fergy Fudgehog, “is nervous, high-strung and prone to panic attacks” because of “the thought of being bashed open for his candy.” Lots of crowd appeal so far.

However, I’m rather less interested in whether “Viva Piñata” will be a success than I am in why this is a reasonable investment for Microsoft. The kiddie fad merchandising business is big, but there are many players and many failed attempts for every one that is a success. Presumably the risk is decreased by hooking up with 4Kids although their current lineup (see also [1]) doesn’t show many recent winners other than snagging the Bratz doll cartoon franchise.

The story in the press is that this is an attempt to “expand the audience for its new Xbox 360 video game console beyond young, male ‘hard-core’ gamers” and I suppose claiming it as a marketing stunt is as good a rationale as any. However, the temptation is to mark it down as a typically weak attempt of a cash-rich company to expand beyond their core business. “Viva Piñata” may well be wildly successful, but it makes one wonder what’s next, Broadway shows or movies? Oh wait, Microsoft is already doing the latter.

Update: Things aren’t looking that good for 4Kids according to the AP:

Shares of 4Kids Entertainment Inc. tumbled in Thursday trading after an analyst cut his investment rating and gave a grim outlook for the company’s business.

A day earlier, 4Kids, which licenses popular characters for games and toys, posted a lower fourth-quarter profit as its revenue sank more than 21 percent. The company blamed the decline from a drop-off in sales of licensed merchandise.

The dismal report drew negative reactions from analysts. Robert Routh, a Jefferies & Co. analyst, said 4Kids’ quarterly results were “well below par,” adding that 4Kids doesn’t have any growth catalysts in sight.

As for the Microsoft deal:

… Routh cast doubt on the development. “Although sounding good,” he wrote, “predicting the success of the property at this point is very difficult.”