Microsoft News Tracker

Last week, I posted a reminder that Microsoft was changing their financial reporting structure and now the details have been revealed:

Microsoft Corporation today announced upcoming changes in its financial reporting structure reflecting completion of previously announced organizational changes. Beginning in fiscal year 2007, the company will report its financial performance based on five operating segments: Client, Server and Tools, Online Services Group, Microsoft Business Division, and Microsoft Entertainment and Devices Division.

Today’s news further aligns the company around three operating divisions – Microsoft Platforms and Services Division, Microsoft Business Division, and Microsoft Entertainment and Devices Division – previously created to achieve greater agility in managing future growth and execute on Microsoft’s software-based services strategy.

The Microsoft Platforms and Services Division includes the operating segments of Client, Server and Tools, and the Online Services Group. The Online Services Group includes MSN® as well as Windows Live™. The company will continue to report results for each of these three segments, which is consistent with the way they are managed and reported within Microsoft.

The Microsoft Business Division includes the Information Worker and Microsoft Business Solutions businesses. These businesses have been merged and the financial results for these two businesses will be presented as one operating segment.

The Microsoft Entertainment and Devices Division includes the Home and Entertainment and Mobile and Embedded Devices businesses. These businesses have been merged and the financial results for these two businesses will be presented as one operating segment.

The company also previously announced the formation of the Unified Communications Group within the Microsoft Business Division, which includes the Exchange Server business. Financial results in fiscal year 2007 for the Exchange Server business, as well as certain client access licenses related to products residing in the Microsoft Business Division, will be included as part of the results in the Microsoft Business Division segment. Previously, the financial results for these products and licenses had been included in the Server and Tools segment.

The company will announce financial results for its fiscal fourth quarter on July 20, 2006 for the seven business segments under which the company operated in fiscal year 2006, and will provide fiscal year 2007 guidance under the new operating segment structure.

The good news here is that Client, Servers and Tools, and Online Services weren’t all mashed together. The bad news is that Office (Information Worker) will cover up whatever is happening in Microsoft Business Solutions. In Entertainment and Devices, the action is mostly in the Xbox (and maybe the upcoming Zune) anyhow, so the obfuscation of Mobile and Embedded could charitably be called a neutral. As for Exchange Server getting counted with Office and MBS, that was odd from the start. Well, at least we get a parting glance of the old seven segment breakout to shoo us on our way.

Update: Microsoft filed a form 8-K with the SEC restating the last few years results with the new categories and you can find it here. Below is how last quarter’s results look restated:

If you compare with the previous 7 segment breakout, it is much as expected except that shifting Exchange server turned out to be a win-win: losing it lifted Servers and Tools and gaining it lifted the Microsoft Business Division (formerly Information Worker and MBS).

Engadget points to Digital Music News who has more details on Microsoft’s rumored portable media player, the Zune, from “presentation materials given to various partners and top-level executives.” Some of the choicer bits:

According to the sources, the device will offer 30GB of storage, though it will deliver the “same pricing, look and feel as the 60GB iPod”. That would suggest a retail price of $399, the price point for the high-end iPod. Immediately, the sticker is likely to draw comparisons to the comparable 30GB iPod, which is available for $299.
…
Wireless synchronization with the PC will not be available in the upcoming launch, scheduled for November in the United States. A global launch will begin next year, starting with Great Britain and Canada, according to the sources and materials.
…
Guiding the approach is a “closed ecosystem paired with a branded device,” which essentially describes iPod+iTunes. But that approach is fairly inconsistent with the PlaysForSure architecture, which attempts to offer flexibility between a wide range of WMA-compatible MP3 players and digital download stores.
…
According to the latest information and sources to Digital Music News, the newer ecosystem will be “incompatible with other Windows Media services,” placing the focus squarely on one device, and one jukebox and store.
…
The music store itself also offers several eye-openers. In the marketing materials, Microsoft mentions that it will deliver “bundling, variable pricing, and subscription” upon launch. The variable pricing aspect is a major win for major labels, especially following an unsuccessful bid to alter the uniform, 99-cent pricing approach found on the iTunes Music Store. Forced bundling is also decidedly non-iTunes, and will be used by labels to counter a cherry-picking revolution among digital consumers.
…
In terms of size, the marketing campaign will be “equivalent to the launch of the Xbox,” beginning with a fall splash.

More good buzz bait by following the link.

All of it is speculative, of course, but caving in to the record labels, stiffing one’s partners, and pricing high is sure to bring the knives out.

Brandon Hill at DailyTech points to a report at ZuneNation that the domain name zunelive.com was registered back in May by a private citizen who just so happens to have registered live.com in the past on behalf of Microsoft. That’s just as well since the pixels on the rumor that Microsoft’s product name for their upcoming iPod killer was “Zune” were barely cold before new sites like zunenation.com popped up.

Nate Mook at BetaNews:

Microsoft on Monday released Windows Vista Beta Build 5472 to technical beta testers, TAP customers and MSDN subscribers.
…
Quality and performance enhancements are the primary changes in 5472, along with further tweaks to User Account Control.

Per Paul’s Thurrott’s comment back in June, Microsoft appears to be on a monthly test release schedule for Vista with the next public beta being Release Candidate 1 (RC 1) which is due some time this quarter.

Microsoft’s previously announced acquisition of application virtualization software vendor Softricity is now complete:

Microsoft Corp. today announced it has completed the acquisition of Softricity Inc., a leading provider of application virtualization and dynamic streaming technologies. Virtualization is a key technology for reducing the cost and complexity of IT management, and the addition of Softricity is another step in Microsoft’s ongoing strategy to make virtualization more broadly accessible and affordable for customers. Financial terms of the deal were not disclosed.

Originally announced on May 22, the acquisition of Softricity helps Microsoft customers reduce costly application management processes, accelerate application and operating system deployments, and create a foundation for a software services infrastructure. Softricity’s application virtualization technology can help significantly reduce the amount of application compatibility testing typically needed when deploying new applications, upgrades and patches. Applications are served centrally and delivered directly to the user’s desktop in an isolated, virtualized image, minimizing application-related alterations to the operating system and compatibility challenges with other applications.

Combined with Softricity’s software streaming functionality, virtualized applications can be dynamically sent over the network, effectively whenever and wherever a user needs them. The approach creates the option of a centrally managed software service in which applications are available when and where needed and are easily updated.
…
Microsoft will soon make available the SoftGrid® application virtualization platform at a reduced price in the streamlined form of two core offerings: SoftGrid for Desktops and SoftGrid for Terminal Services. Both products will include the Softricity ZeroTouch™ Web-based access and self-service portal functionality. In addition, Microsoft’s Systems Management Server (SMS) 2003 customers will be able to acquire Softricity’s SMS connector as a free download. Support for existing Softricity customers will continue uninterrupted via existing sales and services teams and partners. Microsoft will provide additional details on the delivery of Softricity offerings that support Windows Vista and Windows Server “Longhorn” at a later date.