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May 22, 2006

Microsoft embraces “utility computing”

Posted by David Hunter at 11:12 PM ET.

Not that Software as a Service (SaaS) kind of utility computing that was all the rage during the dotcom boom, though. Instead, it’s a scheme where consumers “pay as you go” to use a personal computer and Microsoft’s OS:

Microsoft Corp. today announced the industry’s first pay-as-you-go personal computing offerings powered by Microsoft® FlexGo™ technology, enabling more-flexible Microsoft Windows®-based PC purchasing options for customers in emerging markets. Customers can get a full featured Windows-enabled PC with low entry costs that they can access using prepaid cards or through a monthly subscription.

The pay-as-you-go business model makes PCs more accessible by dramatically reducing the entry cost and enabling customers to pay for their computer as they use it, through the purchase of prepaid cards.

All of which brings to mind a different kind of utility:

Chip firms AMD and Intel obviously believe that Microsoft has the answer to markets so far they’ve failed to help because of the cost of materials. Flex Go lets people buy scratch cards for their cheap PCs which will let them use PCs for a certain period of time. A bit like the old electricity meters used in the UK. But it was incredibly frustrating when the lights went out and you couldn’t find a shilling to finish what you wanted to do.

Microsoft has lined up a number of partners for this play and while it gets points for innovation in the battle against software piracy in 3rd world countries, I tend to regard it like the Windows XP Starter Editions as mostly a political and public relations play with not much hope for widespread adoption. Like the Starter editions it presupposes a certain lack of sophistication in the targeted consumers which I doubt exists.

The announcement did clear up one question though:

Remember Transmeta Corp.’s secretive deal to develop a version of its Efficeon chip for Microsoft? The mystery of that project has now been solved — and it’s not a portable Xbox, or anything else along those lines. The specialized chip was designed for Microsoft’s new “FlexGo” pay-as-you-go initiative for PCs in developing nations.

We previously mentioned the Transmeta mystery project here.

Filed under Coopetition, General Business, Governmental Relations, Legal, Licensing, Marketing, Microsoft, OS - Client, Piracy, Public Relations, Transmeta, XP Starter Edition

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March 20, 2006

Microsoft’s other secret hardware project?

Posted by David Hunter at 7:40 AM ET.

Todd Bishop at the Seattle P-I has the scoop:

Microsoft appears to have another mysterious hardware project up its sleeve.

Transmeta Corp., which specializes in microprocessors for hand-held computers and other machines, disclosed in a regulatory filing last week that it had “substantially completed” the work required under a series of “development services agreements” that it signed with Microsoft last year.

This much is clear: Microsoft says it’s not related to the tiny “Ultra Mobile PCs” unveiled earlier this month as part of its previously secret Origami Project.

But beyond that, neither company will say what Transmeta has been doing for Microsoft.

More but still scanty details by following the link. Bishop speculates that Microsoft might raise the curtain at the Windows Hardware Engineering Conference which starts May 23 in Seattle.

Update: Bishop has more in his blog and points to a lengthy blog post by Dean Takahashi at The Mercury News. Excerpt:

In a bid to capture the huge audience for handheld entertainment gadgets, Microsoft is designing a product that combines video games, music and video in one handheld device, according to sources familiar with the project.

The Microsoft product would compete with Sony, Nintendo and Apple Computer’s products, including the iPod. And Microsoft has some of its most seasoned talent from the division that created its popular Xbox 360 working on it. Game executive J Allard leads the project, and its director is Greg Gibson, who was the system designer on the Xbox 360 video game console. Bryan Lee, the finance chief on the Xbox business, is leading the business side of the project.

The approval of the project spurred the reorganization of the leadership team in the Home and Entertainment Division in December. In September, Robbie Bach, formerly the chief Xbox officer, was promoted to lead the Entertainment and Devices Group, which combined the Xbox with other mobile and entertainment businesses in one of four major product groups.

Then in December, the jobs of the top Xbox executives were broadened so that they could manage all of the businesses related to the broader Entertainment and Devices Group, which included the Xbox business, mobile devices, MSN, music, and home productivity software. Allard, whose group designed the Xbox 360, was named to head “experience and design” for the entire group.

Sources say that the reason for the reorganization was to bring Allard, Lee, Gibson and all of the relevant businesses into a single group, which is supervised by Robbie Bach. The participation of these highly regarded Xbox veterans suggests that Microsoft is very serious about catching up with Sony’s PlayStation Portable handheld game player, Apple’s iPod music players, and Nintendo’s handheld GameBoy Advance and Nintendo DS game players.

Curiouser and curiouser! We mentioned the reorganization here and the idea of Microsoft doing its own hardware in this market (a la Xbox) has been around for a while including a prominent mention by Steve Jobs in January.

Update 2: Microsoft officially says “no comment”.

Filed under Apple, Conferences, Coopetition, Executives, Hardware, J Allard, Microsoft, New Form Factors, Nintendo, Robbie Bach, Sony, Transmeta, WinHEC06

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