An often irreverent look at this week's other news, including a massive aQuantive write-off that will sink Microsoft’s first quarter profits, Windows Home Server and Small Business Server Standard move to a farm in the country so they can chase rabbits, Microsoft snags some Xbox-related domain names, Nokia has a contingency plan in case Windows Phone tanks, Amazon’s rumored smart phone, and Samsung is kicking butt and taking names in the smart phone market.
Microsoft’s Fiscal Year Gets Off to a Really, Really Bad Start
So Windows 8 better sell a lot better than anyone expects, because it’s going to be a bloodbath otherwise. This week, Microsoft took the rare step of writing off $6.2 billion “in goodwill” chiefly related to its stupid, stupid, stupid purchase of online advertising firm aQuantive in 2007; that was a “rebound” purchase after Microsoft lost DoubleClick to Google. This massive write-off will wipe out most or all of the software giant’s quarterly profits and could lead to Microsoft’s first quarterly loss in its 26-year history as a public company. (Yes, yes, yes, Microsoft was founded in 1975, eleven years before it went public.) And while that’s interesting and everything, it’s just a paper loss. I’d be a lot more worried had Microsoft actually purchased Yahoo as it intended in 2008; that purchase would have cost the software giant $47.5 billion and it’s likely things would have gone a lot worse than they had in the interim.
Microsoft Kills Windows Home and Small Business Server … But Fans Only Care About the Former
In announcing its Windows Server 2012 product edition lineup this week, Microsoft also revealed that it was killing off two poorly-selling Server variants, Windows Home Server and Windows Small Business Server (SBS) Standard. Both are being mourned by their fans, but only one, Windows Home Server (WHS), had actual fans, and I noted the product’s passing in RIP, Windows Home Server. So where’s the love for SBS? I’d argue its non-existent. See, the people who love WHS are people, technology enthusiasts who understood the simplicity and power of this solution and evangelized it to others because it works. (You can count me in this group; WHS sits at the heart of my home network.) But SBS “fans” aren’t fans per se, they’re small Microsoft partners who sell and support SBS to small businesses. So for these people, SBS is work, and their income, and while they were pushing unnecessarily complex and convoluted on-premises server solutions on small businesses that would be generally better served by free or inexpensive, and much less complex, cloud computing solutions, the world was moving on around them. So while I do understand why some would be upset that Microsoft killed off SBS, that product was old-fashioned years ago, and its most recent version was only put in market so that existing customers had an upgrade they could purchase. It’s 2012, and Microsoft is embracing the cloud, as it should. And while I really liked WHS, I get why it had to go. As for SBS, it’s time to start embracing Windows Server Essentials. I hear it’s got some neat cloud integration.
Microsoft’s Xbox Name Grab Triggers a Few Minutes of Blogosphere Interest
Clearly, Microsoft intends to name its next-generation Xbox console—revealed in my Next Generation Xbox Preview, if you haven’t read it—as the Xbox 8, since, after all, it’s about to launch Windows 8 and Windows Phone 8 this year too. (This logic requires you to forget that it’s also releasing non-8 products like Office 2013, Windows Server 2012, and Visual Studio 2012 too, but stop overthinking things, please.) And the reason we know this is that Microsoft was just awarded the domain names Xbox8.org and Xbox8.us, which had been held by a Chinese cybersquatter. So that mystery is solved, and … oh, wait. It was also awarded XboxPhone.com, XboxTablet.com, XboxLiveTV.com, and XboxCompanion.com. My guess is that the Xbox 8 thing is just a reference to the Xbox services and apps—like Xbox Music and Video—that work with, and come with, Windows 8. Moving on.
Nokia Reportedly Has a “Contingency Plan”
If everything goes south for struggling smart phone maker Nokia and Windows Phone doesn’t pan out as hoped, the company reportedly has an unidentified contingency plan that it will pursue in a desperate, last ditch effort to save itself. That should calm the fears of the company’s critics—no, not really—who seemed shocked that Nokia was “all in” with Windows Phone as their sole strategy. Honestly, if things don’t work out for Nokia, no contingency plan is going to make a difference. I mean, what are they going to do, become yet another Android licensee? That would be the kiss of death, but at least it would happen quickly.
Amazon Rumored to be Making Its Own Smart Phone
And really, what the heck, since everyone else is making one too. But Bloomberg cites two people close to the company with the revelation that Amazon will soon challenge various Android handsets and Apple’s iPhone with a smart phone of its own design. And the smart phone market, which accounted for 400 million devices sold in the first quarter, and 50 million by market leader Samsung alone, is obviously a big one. What’s missing, however, are details about how Amazon will differentiate its handset. But if this thing is a phone version of the Kindle Fire, it will likely see great success: Amazon’s 7-inch tablet has been so successful that when Google decided to enter the tablet market, it didn’t copy Apple, it copied the Kindle Fire instead.
Samsung Continues Kicking @$$, Taking Names in Smart Phone Market
Speaking of smart phones, Samsung reported its second quarter financial results, and let’s just say it hasn’t slowed down a bit. The smart phone market leader sold 50 million devices in the quarter and racked up a profit of about $5.7 billion on revenues of about $40 billion. And this came despite slower than expected sales of its new flagship handset, the Galaxy S III, which has experienced a slow start because of parts constraints and temporary patent fight-related sales bans in certain markets. But the Galaxy S III is expected to surge in the current quarter, given the frothy demand, and even before counting sales of this handset, it’s pretty clear that Samsung has only extended its huge sales lead over Apple and the other handset makers. In the same way that one might rate smart phone platforms as Android and everyone else, one might rate handset makers as Samsung and everyone else. And its lead is only going to grow yet again in the current quarter, thanks to Apple’s once-a-year bump from a single new iPhone model each year: A new iPhone isn’t expected until the third quarter. But really, who cares?
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Andrew Zarian and I recorded the latest episode of the What The Tech podcast on Tuesday, and Leo Laporte, Mary Jo Foley, and I recorded the latest episode of the Windows Weekly podcast on Thursday. As always, these episodes should be available soon, generally in both audio in video formats, on the web, and via iTunes, the Zune Marketplace, and wherever else quality podcasts are found. You can also find all of my podcast activities on the SuperSite for Windows.
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