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November 22, 2002—In this issue:
1. SHORT TAKES
- Xbox Live: The Sellout to Xbox's Washout
- Microsoft Bans Mod-Chip-Enabled Xboxes from Xbox Live
- Microsoft: Finding the Humor in Security
- Windows XP Saves Money, Says Microsoft
- Win.NET Server 2003: Delayed or a Measured Release?
- Gates: Unit Losses Are "Very Intentional"
- Oh, and About That 86 Percent Profit Margin ...
- Moderator Gets It All Wrong in COMDEX Digital-Hub Panel
- Report: Linux Poised for Desktop Failure
- Planning on Getting Certified? Make Sure to Pick Up Our New eBook!
- Sample Our Security Administrator Newsletter!
3. CONTACT US
- See this section for a list of ways to contact us.
1. SHORT TAKES
(An often-irreverent look at some of the week's other stories, contributed by Paul Thurrott, [email protected])
Xbox sales might be a total washout compared to sales of Sony's PlayStation 2, but the new Xbox Live online gaming service is apparently selling well, thank you very much. Microsoft announced late this week that Xbox Live is basically sold out; the company has shipped more than 150,000 Starter Kits. I spent a few hours last weekend playing with the service and, for the most part, I like the way it works. Xbox Live-enabled games are also benefiting from the service's success; Microsoft reports a 120 percent increase in sales for Xbox Live titles. Sales of the Xbox hardware, meanwhile, have jumped 18 percent.
And speaking of Xbox Live, Xbox users who install mod chips that let the system run pirated games are discovering that the new service doesn't work for them. That's because Microsoft has banned mod-chip-enabled Xboxes from Xbox Live. News of the ban has caused a furor in the mod community, and no doubt crackers are now working on ways around the ban. But in the push-and-shove match that's sure to follow, I find it difficult not to side with Microsoft. For the Xbox to be successful, the company has to make money on software, and letting people who copy rented games access the company's online service isn't going to help.
I spent an inordinate amount of time during COMDEX Fall 2002 coming up with humorous Microsoft headlines, the funniest of which, sadly, is unprintable. But finding humor in the recent security news about Microsoft's products is a challenge. A new Microsoft Internet Explorer (IE) vulnerability lets intruders format your hard disk remotely. The vulnerability is reportedly impossible to fix, according to various online security postings. The exploit affects IE 6.x and 5.0 and possibly Microsoft Outlook and Outlook Express. A security warning posted to the BugTraq mailing list includes code that exploits the vulnerability. This news would be funny if it weren't true.
Microsoft Senior Vice President Brian Valentine said this week that the move to Windows XP's unified code base will result in savings for the industry for years to come. "With Windows 98 and Windows 2000, equipment makers need to make two sets of device drivers and application vendors had to create two versions of their applications," he said. And the money software developers save by creating a single version "will be re-invested in innovation."
The press has been busy trashing Microsoft this week, thanks to the revelation that Microsoft has delayed the Windows .NET Server (Win.NET Server) 2003 release from the first three months of 2003 to April 2003. Likewise, the company has pushed the final release to manufacturing (RTM) Win.NET Server build from late 2002 to early 2003. These stories conveniently ignore the fact that no one cares. Win.NET Server isn't a desktop product that people will line up in retail stores to buy. It's a powerful server OS designed for businesses, which aren't concerned about the exact release date of Win.NET Server. And neither am I.
Wouldn't it be nice if all companies could afford to float hundreds of money-losing products, year after year, thanks to their state-sponsored dominance with a monopoly product? Well, that's exactly what Microsoft does, and this week Microsoft Chairman and Chief Software Architect Bill Gates seemed blissfully unaware that the vast majority of corporations can't float products the way Microsoft does. "Of the businesses that we are investing in, \[the losses are\] all very intentional," he said. "It's not like we thought we'd be making money on Xbox at this point, or on business solutions, or mobile, or MSN." You didn't think you'd be making money on MSN 7 years after you launched the service? Seriously? I find that hard to believe.
News that Windows and Microsoft Office are floating the rest of Microsoft isn't that big of a surprise, but what's up with Microsoft's 86 percent profit margin on Windows? Remember that Windows is an illegally maintained monopoly product that's the subject of the company's epic antitrust struggle. So the company illegally obtained most of its $40 billion cash hoard. Microsoft's current positive outlook, in the midst of the worst economic downturn in 25 years, is even more infuriating — or should be — to the company's competitors, none of which got a pass from federal courts. In other words, Microsoft might be somewhat constrained moving forward, but the ruling did nothing to separate the company from its ill-gotten windfall. So Microsoft can keep products like the Xbox, which virtually any other company on earth would have discontinued because of slow sales, on life support for years, thanks to the company's illegal monopoly. Remind me again why the antitrust ruling was fair.
People ask me why I dump on Apple Computer all the time, but that complaint isn't a fair characterization. For me, Apple is a double-edged sword — often relevant and innovative to the industry but duplicitous and dishonest at the same time. And much of the Apple news items in WinInfo Daily UPDATE involve discrediting the wildly biased Apple stories from analysts and the press, many of whom I believe have been compromised by their too-close relationships with the company. Here's a perfect example: This week at the COMDEX Fall 2002 trade show, Microsoft eHome Vice President Michael Toutonghi took part in a digital-hub session along with Apple Senior Vice President of Marketing Phil Schiller. After Schiller's presentation, session moderator Tim Bajarin introduced Toutonghi by saying (and I quote), "I'd like to point out that the digital hub was really started with Steve Jobs's keynote a few years ago, and companies really took that as a way to go." Ah yes, Jobs's keynote. In truth, Bill Gates publicly introduced the digital hub concept a few days before Jobs's keynote when Gates gave a Computer Electronics Show (CES) 2001 keynote address on January 6, 2001. Gates called his vision "the digital lifestyle." I find this type of history rewriting infuriating, and although Gates certainly got a lot of press at the time, Jobs is still remembered for launching this consumer-oriented push. If that's Apple bashing, so be it. Apple didn't invent the digital hub, and the company certainly isn't the only player that's innovating in that space.
And speaking of topics I'm often accused of maligning, a Gartner report this week says that Linux will fail on the desktop. Gartner Research Director Phil Sargeant says that during the next 2 to 3 years Linux will be deployed on less than 5 percent of desktops — a figure that still beats Mac OS X, by the way — because of Linux's lack of viable application software. Although OpenOffice.org and Sun Microsystems' StarOffice — two essentially identical office suites — are a good start, Sargeant says, they aren't enough. And he notes that the other OSs (Windows, primarily) aren't standing still, either. And lest you think I'm Linux-bashing, I've always said that Linux will deservedly see much success in the small and midsized server market. Don't those comments make me a Linux supporter?
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