Microsoft News Tracker

Just a little over a year ago Microsoft merged its Exchange server and Real-Time Collaboration (RTC) groups to form the Unified Communications Group (UCG) under corporate vice president Anoop Gupta and put it in the Business Division (mostly Office), led by division president Jeff Raikes. The UCG is responsible for Microsoft’s well hyped Unified Communications push announced last June. Today, however, Mary Jo Foley reports that Gupta is out and Raikes has personally taken over UCG leadership.

The ostensible reason for the change is that Gupta felt is was time to move on to a new role. His new job is corporate vice president of technology policy and strategy under Microsoft Chief Research and Strategy Officer Craig Mundie.

Today, Bill Gates and Craig Mundie keynoted the RSA Conference 2007 and announced a variety of security related Microsoft initiatives. Perhaps the biggest news was announced in detail on the blog of Microsoft’s Kim Cameron where Microsoft pledged interoperability between its CardSpace identity technolgy and the emerging open standard, OpenID:

JanRain, Microsoft, Sxip, and VeriSign will collaborate on interoperability between OpenID and Windows CardSpace™ to make the Internet safer and easier to use. Specifically (excerpted - ed.):

• Microsoft recognizes the growth of the OpenID community and believes OpenID plays a significant role in the Internet identity infrastructure.  Kim Cameron, Chief Architect of Identity at Microsoft, will work with the OpenID community on authentication and anti-phishing.
• JanRain, Sxip, and VeriSign recognize that Information Cards provide significant anti-phishing, privacy, and convenience benefits to users.  Information Cards, based on the open WS-Trust standard, are available though Windows CardSpace™.
• JanRain, Sxip and VeriSign plan to add Information Card support to future identity solutions.
• Microsoft plans to support OpenID in future Identity server products
• The four companies have agreed to work together on a “Using Information Cards with OpenID” profile that will make it possible for other developers and service providers to take advantage of these technology advancements.

The OpenID connection wasn’t surprising given Microsoft’s past failed attempt to go it alone in the identity business with Passport.

Other Microsoft announcements:

• Microsoft announced Identity Lifecycle Manager (ILM) 2007. Available to customers in May, ILM 2007 is a new solution that builds on Microsoft’s metadirectory and user provisioning capabilities by adding support for managing strong credentials such as certificates and smart cards. ILM provides an integrated and comprehensive solution for managing the entire life cycle of a user identity. Microsoft also unveiled a comprehensive strategy and road map for identity life-cycle management, including planned availability of ILM “2,” the next version of ILM, in late 2008.

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• Microsoft launched the public beta of the new Forefront Server Security Management Console, a centralized, Web-based management solution for onsite or remote administration of Microsoft messaging and collaboration security solutions.

• Microsoft announced that it has enabled support for Extended Validation (EV) SSL Certificates in Internet Explorer 7, which is the first browser to fully support EV SSL Certificates. When a user visits a site with a valid EV Certificate, Internet Explorer 7 will alert the user to the available identity information by turning the background of the address bar green and displaying identity information. Twelve certificate authorities, including VeriSign Inc., Cybertrust and Entrust, are already issuing EV SSL Certificates.

• Microsoft has added four new data providers to the Microsoft Phishing Filter service: the Australian Computer Emergency Response Team (AusCERT), BrandProtect, MySpace.com and Netcraft Ltd., whose own broad set of Internet Explorer and Firefox toolbar anti-phishing data sources will be included as data feeds into the service. These new providers join Microsoft’s current anti-phishing data providers, which include Cyveillance, Digital Resolve, Internet Identity, MarkMonitor Inc., and RSA Security, the security division of EMC Corp.

More details here and specifically on the IE7 phishing toolbar here.

(Via Slashdot) .NET Developer’s Journal reports Microsoft Snags Don Ferguson, Former IBM Chief Architect – “Father of WebSphere”:

Don Ferguson, who guided IBM’s strategy and architecture for SOA and Web services, and co-authored many of the initial Web service specifications, has been hired by Microsoft. He is now Microsoft Technical Fellow in Platforms and Strategy, in the Office of the CTO.

As AJAXWorld 2007 (East) speaker and fellow Microsoftie Alex Barnett points out, Ferguson’s old blog (and out-of-date bio) is currently still up at IBM.com, but his new bio is here at microsoft.com.

According to the Microsoft bio, Ferguson will be focusing “on both the evolutionary and revolutionary role of information technology in business.”

” Understanding the trends, architecting and piloting the implications for existing and new products and evangelizing Microsoft’s vision are the key aspects of Don’s job,” the bio gushes.

At IBM, he was an IBM Fellow and Chief Architect for IBM’s Software Group, providing overall technical leadership for WebSphere, Tivoli, DB2, Rational and Lotus products.

Ferguson also was chairman of IBM’s Software Group Architecture Board.

Barnett suggests that the “Office of the CTO” is Ray Ozzie’s team, but while Ozzie and Craig Mundie were co-CTOs at one point, they are currently Chief Software Architect and Chief Research and Strategy Officer respectively. The only Microsoft CTO that comes to mind is David Vaskevitch who is Senior Vice President, Chief Technical Officer, Business Platform. Undoubtedly elucidation will follow.

As promised back in September when Windows CE 6.0 was released to manufacturing (RTM), yesterday was the day for the formal launch event:

Craig Mundie, Microsoft Corp. chief research and strategy officer, announced the availability of Windows Embedded CE 6.0, the latest version of the company’s industry-leading software toolkit used to build real-time operating systems for devices such as Internet protocol (IP) set-top-boxes, Global Positioning Systems (GPS), wireless projectors, and a variety of industrial automation, consumer electronics and medical devices.

In conjunction with the 10-year anniversary of Windows Embedded, 100 percent of the Windows Embedded CE 6.0 kernel is now available through the Microsoft^® Shared Source program, an overall increase of 56 percent from previous versions of Windows Embedded CE. The Shared Source program provides full source-code access for modification and redistribution by device-makers (subject to the terms of a license agreement), who are under no obligation to share their final designs with Microsoft or others. Although the Windows operating system is a general-purpose computing platform designed for creating a consistent experience, Windows Embedded CE 6.0 is a tool kit device-makers use for building customized operating system images for a variety of non-desktop devices. By providing access to certain parts of the Windows Embedded CE source code, such as the file system, device drivers and other core components, embedded developers are able to choose the code they need, compile it, and build their own, unique operating systems, quickly bringing their devices to market.

Visual Studio 2005 Professional Edition is also shipping as part of Windows Embedded CE 6.0. This marks another first for Microsoft; Platform Builder, an embedded-specific integrated development environment, will now be included as a powerful plug-in for Visual Studio 2005 Professional. This brings the entire development chain together in one, easy-to-use tool, from device to applications, shrinking time to market for device development.

Hit the link for the enhancements in CE 6.0 and as implied above, the importance of Windows CE is less for itself than as a base for device specific customizations from 3rd parties and Microsoft itself like the upcoming Windows Mobile Crossbow.

As for the complete sharing of source code with 3rd parties, that seems to have been a surprise for everyone including parts of Microsoft:

The 100% sharing campaign may actually come as a surprise to Microsoft’s own support staff, which this morning released instructions regarding how to tell whether a portion of CE 6.0 is shared or not. With today’s news, which BetaNews confirmed, there is no “not.”

However, not all of Embedded CE’s source code will be licensed for free. A significant portion of it will be free to those who have already purchased and licensed Embedded CE “in the box.” The remainder of the code will be licensed under Microsoft’s existing “Premium Shared Source Program” terms, specifically to “qualified OEMs and partners.”

As the spokesperson told us today, although the fees have not yet been disclosed, Microsoft will consider this program a legitimate source of revenue.

The fact that at least those who can afford it can see everything that Microsoft put into Windows Embedded CE 6.0, will be of interest to those who responded to the news of its impending release last May with questions about its relative interoperability, especially in the face of rising competition from Linux and embedded UNIX. Operating systems based on industry standards, some have argued, are more prone to being shared under open-source licenses, which lends greatly to their inherent interoperability.

In this space (or more correctly, collection of spaces) Microsoft has to compete with other proprietary operating systems as well as open source and in the scramble for share, Microsoft has to do what it takes to attract device vendors:

However, Hardy Poppinga, product manager for Microsoft’s mobile and embedded division in Europe, the Middle East and Africa, told ZDNet UK that the new “shared source” initiative was in itself the division’s “most significant announcement for years”.

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According to Poppinga, Microsoft is opening up the code in response to the wishes of its partners, but he conceded that a “more competitive market” had also necessitated the move.

That’s certainly a refreshing difference from other markets.

Below are some selected highlights from yesterday’s Microsoft Financial Analyst Meeting 2006. As I mentioned previously, the list of speakers with copies of their presentations, and transcripts and/or Webcast replays are available here. (Bink.nu also has some candid snaps of the speakers.)

Steve Ballmer, Chief Executive Officer

Ballmer: Microsoft must be ‘multi-core’ :

Microsoft Chief Executive Officer Steve Ballmer said Thursday that his company must be able to operate successfully in multiple markets — a phenomenon he calls being “multi-core” — for the company to continue to grow well into the future.

Although Microsoft is best known for its desktop OS and software business, the company has managed also to carve out a successful business in server software, making it a two-core company, Ballmer said at Microsoft’s annual Financial Analyst Meeting in Redmond, Washington.
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But as Microsoft moves ahead, the company is fighting a war on several fronts, and Ballmer hopes it will develop more core businesses with its entertainment and online services strategies.

“There really is a Sony that lives inside of us,” he said. “There’s an aspiring Google or Yahoo that lives inside of us.”
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“You have to confront the question: Is it OK to get into some area of endeavor when you’re not first?” he said. “It’s always best in our business to be first. We want to be first. But are you prepared to get in and innovate and try to get growth in areas where you’re not first in the market. As investors, you have to understand that we think that’s important.”

And on a theme dear to the analysts’ hearts - Ballmer: Vista delays won’t be repeated.

Kevin Johnson, Co-President, Platforms & Services Division

Microsoft sees up to 10 percent sales growth from Vista:

Microsoft expects sales in its popular Windows division to grow 8 to 10 percent in the coming fiscal year, a senior executive said Thursday.

The No. 1 computer software maker expects sales of between $14.3 billion and $14.5 in its Windows operating system division in its current fiscal year, Kevin Johnson, co-president of Microsoft’s platforms and services division, said during the company’s annual financial analyst meeting being held at its headquarters in Redmond, Wash.

Since that’s the projected unit growth rate in PCs, Microsoft’s Windows client revenue is merely matching units. I guess that’s good news since it has lagged unit growth recently and presumably a match is the best they expect from the upselling and antipiracy initiatives:

Vista, with its multiple versions, has “something for everyone,” Johnson said, but Microsoft plans in particular to promote the purchase of its higher-end, or “premium” versions to consumers. Traditionally, higher-end versions do better among business customers than home users. “There is an opportunity for us to grow the premium mix,” he said.

Premium versions of Vista include Windows Vista Home Premium and Windows Vista Ultimate.

Microsoft also is investing in ways to encourage customers in emerging markets to purchase genuine copies of Windows Vista as part of an overall campaign to prevent people from using counterfeit or pirated versions of Windows, Johnson said.

To achieve this goal, Microsoft is “putting more feet on the street” and is providing more training for channel partners, especially in emerging markets such as China, to help sell genuine copies of Windows, he said.

Johnson also reiterated that Vista development continues on schedule although his caveat that it wouldn’t ship before it was ready inexplicably depressed investors since it’s clear that there’s no windfall there.

Bob Muglia, Senior Vice President, Server & Tools Business

Muglia went off on a Linux tangent for some reason, but I guess he’s entitled - his business is an earnings growth superstar even if it gets no buzz.

Jeff Raikes, President, Business Division

Most noteworthy:

Jeff had some interesting things to say about competitors. He referred to OpenOffice and IBM WorkSpace as efforts to “clone our old technological” capabilities. Whoa.

But it’s “good enough,” Jeff, as are old versions of Office and there’s the rub. Raikes also predicted a less than scintillating 7% CAGR for his business over the next few years.

Robbie Bach, President, Entertainment & Devices Division

No surprise that Microsoft game, device unit sees loss in ‘07, The big surprise is that they plan to make money in 2008.

Microsoft said investments for its new “Zune” media player and another year of losses at its Xbox game unit will continue to weigh on the entertainment and devices unit’s earnings this year. The division posted a loss last year.

The entertainment and devices division encompasses much of Microsoft’s consumer-oriented products, such as Windows-based smartphones, the Xbox 360 game console and its upcoming “Zune” media player, but it has not been a consistent earnings driver.

“Fiscal ‘07 will be a loss. We think that turns to profit in 08,” Robbie Bach, president of Microsoft’s entertainment and devices division, said at Microsoft’s annual analyst meeting.

As for Zune:

The software giant said it will invest “hundreds of millions” of dollars to develop and market Zune, due to hit the market later this year.
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Bach encouraged investors to be patient and not expect an immediate return on its outlay for the device.

“It is something that is going to take time,” said Bach. “This is not a six-month-investment time horizon,” he said, adding that it may take three, four or five years to succeed.

Zune’s differentiating feature from Apple’s iPod will be built-in Internet connections that allows users of the devices to connect with their friends and other music fans.

On the Xbox 360:

Though competitors Sony and Nintendo are slated to launch rival game consoles this fall, a Microsoft executive predicts his company’s next-generation game machine should have a 10 million unit lead by the end of this year.
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Microsoft’s next-generation Xbox 360, which launched last year, starts at $299, and Bach said he sees no price changes through the holiday season.

That presumably lays to rest the persistent rumors that there will be an Xbox 360 price cut when Sony ships the PS3. Microsoft also touted Windows Mobile based phones as gaining share from Research in Motions’ Blackberry. There’s more on Bach’s presentation here including:

When asked whether Microsoft was abandoning its PlaysforSure digital-media-connectivity initiative in favor of developing its own end-to-end Zune solution, Bach said Microsoft is planning to continue to back PlaysforSure.

“PlaysforSure continues as it is today,” he said. In fact, the Zune team “will work with the same (PlaysforSure) interfaces,” Bach said.

He likened the PlaysforSure/Zune paradigm to the PC/Xbox console one. The two teams will continue to work in parallel, with the hope that the two different environments ultimately will work together, Bach said.

What else could he say?

Ray Ozzie, Chief Software Architect

Ozzie’s presentation was described as “visionary” and “a high-level, theoretical look” which I take to mean that there were a lot of glazed eyes among the financial crowd. On a slightly more down-to-earth note - Web services to aid, not kill, software:

Web services, delivered alongside classic software, will complement rather than replace the existing software industry, Microsoft Corp.’s chief technologist said on Thursday.

Chief Software Architect Ray Ozzie told investors and reporters attending the annual financial analyst meeting at Microsoft’s headquarters that the company is looking to convert its existing software franchises into Web-delivered services.

“The overall services opportunity is largely additive, increasing revenue opportunities for both our existing software licensing model as well as our services business model,” Ozzie said.

Microsoft’s strategy is to connect a wide range of devices onto various networks to allow consumers to enjoy the same information and entertainment not only on their computers but also via mobile phones, televisions and gaming systems.
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In response to a question, Ozzie declined to say how much revenue per user could come from new Web services or how these might compare to license revenue streams from Windows and Office software that generate the bulk of Microsoft revenue.

Yusuf Mehdi, Microsoft’s Chief Advertising strategist

Microsoft Demos Next Version of adCenter

Kevin Turner, Chief Operating Officer

Turner delivered some bromides.

Craig Mundie, Chief Research & Strategy Officer

Microsoft shows off cell phone-PC prototype. It’s called FonePlus and is intended for emerging markets and rivals Nicholas Negroponte’s “$100 PC” as we have mentioned previously. It’s merely a research project but drew disproportionate press interest.

Chris Liddell, Senior Vice President & Chief Financial Officer

Microsoft acquires more, but R&D still the focus:

Chief Financial Officer Chris Liddell said Microsoft was in “high investment mode” and very acquisitive over the past year, spending $649 million to buy 23 companies. He said it acquired four companies in July.

But its acquisition spending is still dwarfed by the billions it plows into research and development every year and Liddell said it was unlikely that will change.

And Microsoft executives underscored that they are contemplating no change of strategy that would lead to a major acquisition anytime soon. It has spent less than $30 million per company, on average, on its buying streak over the past year.