WinInfo Daily Update, July 28, 2006: Short Takes

WinInfo Short Takes

An often irreverent look at some of the week's other news, including numerous bits from the Microsoft Financial Analyst Meeting, my travel computing dilemma, the future of PlaysForSure, Office 2007 changes, Vista upgrades, Microsoft PCs, and much more...

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==== IN THE NEWS

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WinInfo Blog

Short Takes

- Financial Analyst Meeting: Ballmer Touts "MultiCore" Microsoft
- Financial Analyst Meeting: Road to Online Dominance Will Be Long
- Financial Analyst Meeting: This Year's Zune the First Wave Only
- Financial Analyst Meeting: Xbox Live Runs Wild
- Is PlaysForSure Not So Sure?
- Microsoft Bows, Somewhat, to Office 2007 UI Pressures
- Microsoft Designing Its Own Vista PCs
- Microsoft Talks Vista Upgrades
- 15 Million Xbox 360s by June 2007
- Windows Live Toolbar Goes Live
- Kazaa Settles
- Microsoft Denies Looming Xbox 360 Price Cut

==== WinInfo Blog ====

by Paul Thurrott, [email protected]

And just like that, it's August. I must say, I've spent most of the year looking forward to August and my extended vacation with the family. But now that it's suddenly looming on the horizon, I'm filled with dread and fear more than anything else. There's so much to do before I go: reviews and articles to finish, a book to complete, and a home to prepare for the French family that will be staying here while we're away. The list goes on and on.

In case it's not obvious, I can't take three weeks off from work. So, I'll be working from France, although I hope I won't have to work a full-time schedule most of the time. If I ever did separate myself from work for three weeks, I'd return a complete basket case and would lose another three weeks while I played video games and halfheartedly tried to get back up to speed. It just wouldn't work.

I've spent a lot of time wondering what kind of computing requirements I'll need while I'm away. I believe I'll be taking three notebooks with me: A Lenovo ThinkPad T60 running Windows Vista, which has been my main email machine for the past few months and will be my main computer while in France; a MacBook that my wife and I will share; and a Dell Latitude D810, a workhorse that's currently running Vista but will likely be partitioned into various OSs for testing purposes. At home, I've got two servers I'll leave up for remote access, and I'm bringing 500MB of external portable storage with me for backup purposes. This sort of thing is as complicated as getting "Yes" to go on tour. It's not the way I usually travel, but this is an unusual trip. Plus, I can use my family as Sherpas.

==== Short Takes ====

An often irreverent look at some of the week's other news

by Paul Thurrott, [email protected]

Financial Analyst Meeting: Ballmer Touts "MultiCore" Microsoft

At Microsoft's annual Financial Analyst Meeting yesterday in Redmond, CEO Steve Ballmer copied Intel's marketing for its new multicore microprocessors and claimed that his company is also multicore, just in a different way. Microsoft's approach to success moving forward, he said, was to attack multiple fronts at once, including Microsoft strongholds such as client and server computing, as well as video games, portable entertainment, Web services, and high-performance computing. Ballmer also pledged that Microsoft would never take five years to ship a major Windows upgrade again, referring to the long gap between Windows XP and Vista. But he stopped short of promising that Vista would ship in January 2007. Other executives noted only that Vista would ship "when it's ready." That will never happen, so my bet is still on January.

Financial Analyst Meeting: Road to Online Dominance Will Be Long

Noting that Microsoft products such as Windows, Office, and Excel often took as much as a decade to supplant the products they were designed to replace, Microsoft executives said yesterday that the company would need similar time and resource investments to become a dominant online player. But the company says it's on track with Windows Live, its ongoing push to connect Windows with the Internet, and similar services such as Office Live and Xbox Live. So although traditional products such as Windows and Office will continue to be important because of their installed base and huge revenue streams, Windows Live and the company's other online initiatives will increasingly be viewed as a way to jump-start new growth. This news makes sense until you realize that Microsoft's online services have never really generated a lot of money.

Financial Analyst Meeting: This Year's Zune the First Wave Only

Yesterday, Robbie Bach, the president of Microsoft's Entertainment and Devices Division, said that Microsoft would ship a Zune-branded portable media player, software, and service by the end of the year, integrated into a "great customer experience" just like the Xbox (by which he meant, just like Apple's iTunes and iPod, of course). However, Bach added that Microsoft wouldn't reap the benefits from the Zune project in six months. Instead, the company is looking at Zune as a long-term play, similar to the Xbox. "This is something that's going to be a three-, four-, five-year investment horizon," he said. "We will start with one product this fall in the United States. We will expand next calendar year into broadening the product line, as well as broadening the geographies we cover. So, it's something that we're going to invest in over time." He said that Microsoft wouldn't need to spend as much money developing Zune as it did with the Xbox and that Microsoft will differentiate from Apple by creating a community of interactive users, easily discoverable music and video content, and integration with Windows PCs, Xbox 360s, Windows Live Web services, and more. It's a combination, Bach said, that Apple just can't match.

Financial Analyst Meeting: Xbox Live Runs Wild

Speaking of Bach, he also provided some hugely positive statistics for Xbox Live, the online service that accompanies the Xbox 360. Since Microsoft launched the Xbox 360, Xbox Live has really taken off, he said. Before the Xbox 360, only about 10 percent of Xbox users accessed Xbox Live. Now, 60 percent of users access Xbox Live. And the service has pushed 34 million downloads, 3 million videos, and 5 million Xbox Live Arcade games to customers since late last year. But Bach said the most impressive statistic was that Xbox Live users have spent more than 2 billion hours competing against each other online. I'd like to think I've participated in at least one billion of those hours.

Is PlaysForSure Not So Sure?

One of the unanswered questions about Microsoft's Zune project is how it will affect the company's existing digital media ecosystem. Currently, Microsoft and its partners offer a variety of online music and movie services and portable media players. Microsoft created the PlaysForSure campaign to help people understand which devices, services, and other products are compatible with one another. There's just one problem: Zune will exist outside PlaysForSure and therefore won't be marketed as part of PlaysForSure. So where does that leave PlaysForSure? I'mNotSure. Microsoft says it won't abandon PlaysForSure. SureTheyWon't.

Microsoft Bows, Somewhat, to Office 2007 UI Pressures

In the coming weeks, Microsoft will ship an update to Office 2007 Beta 2--called a Technical Refresh (TR)--that will provide several enhancements to the prerelease Office productivity suite. The biggest visible change, however, will be to the Office 2007 ribbon, the new UI piece that replaces the toolbars and menus of previous Office versions. Responding to user worries that the ribbon was too big, Microsoft is reworking the ribbon slightly and will offer more obvious ways to hide it. No word yet on the exact timing of the Office 2007 Beta 2 TR.

Microsoft Designing Its Own Vista PCs

First, Microsoft turned its back on its digital media partners because they were unable to come up with designs cool enough to thwart Apple's iPod. Now, the company might be doing something similar in the PC market. After years of trying to convince PC makers that they need to ship better-looking PCs, Microsoft has given up and is now designing its own PCs in-house. However, these PCs won't be sold directly to the public. Instead, Microsoft will offer its designs to PC makers, along with instructions for making the PCs integrate better with Vista. The hope is that PC makers will see the light and become more bold and innovative. But because that will never happen, perhaps it's only a matter of time before Microsoft gets into the PC business.

Microsoft Talks Vista Upgrades

This week, Microsoft revealed how customers will be able to upgrade to Vista. First, only users running Windows 2000 and Vista will be able to purchase upgrade versions of Vista. Even then, only certain types of Windows versions will be upgradeable to Vista. For example, you can't upgrade from Win2K to Vista Home Basic. And although you can upgrade from Windows XP Media Center Edition 2005 to Vista Home Premium, you can't upgrade from that OS to Vista Business. My complete rundown of available upgrade options is available now on the SuperSite for Windows.

http://www.winsupersite.com

15 Million Xbox 360s by June 2007

Microsoft says it met its Xbox 360 sales target by selling 5 million consoles by June 30, the end of its fiscal year. The company now says it plans to sell 13 to 15 million units by the middle of 2007 and will be on track to having a 10-million-unit head start by the time Sony comes to market with the PlayStation 3 later this year. Analysts continue to point out that Microsoft loses money on each Xbox 360 it sells, but that's not exactly news, or even relevant, because Sony will lose even more on each PlayStation 3 it sells. The way I look at the situation, Microsoft is losing less per console on the Xbox 360 than it did with the original Xbox, and the company's attach rate--the number of games it ships per console--along with falling component prices will help the Xbox 360 turn into a money maker at some point. "Halo 3" will be a huge event, as well. In my opinion, the turnaround can't happen quickly enough.

Windows Live Toolbar Goes Live

This news happened rather quietly, but Microsoft delivered another Windows Live product this week, the new Windows Live Toolbar for Microsoft Internet Explorer (IE). Like previous MSN toolbars, the Windows Live Toolbar integrates nicely with Windows Live Search and offers various security features. The new toolbar also has some pretty exciting features, such as the ability to add custom buttons of any kind; Smart Menus that recognize and interact with phone numbers, addresses, and other information on Web pages; and free Onfolio data-collection features. Check it out! You might be pleasantly surprised.

http://toolbar.live.com/

Kazaa Settles

The music thieves responsible for the Kazaa peer-to-peer file-sharing service have reached financial settlements with various companies in the entertainment industry. Sharman Networks, which owns Kazaa, agreed to pay more than $115 million to end the suits against the company and will institute a filtering system to ensure that the system is no longer used to distribute copyrighted music and movie files. Let's see if I understand this correctly: The new Kazaa will plunder my system with spyware and multiple pop-up windows, but it won't provide music or movies? I guess I don't understand the point.

Microsoft Denies Looming Xbox 360 Price Cut

And finally, despite numerous rumors that it will cut the price of the Xbox 360 by $100 when Sony launches the PlayStation 3--or, perhaps, launch a new high-end Xbox 360 with a bigger hard disk and an integrated HD-DVD player--Microsoft said this week that no such price cut was in the making. "We have no plans to cut the price of Xbox 360 before the end of this year," a Microsoft spokesperson said. "There's no schedule \[for price cuts\] yet." In some ways, a price cut isn't really necessary: Sony's PlayStation 3 is already going to be more expensive than the Xbox 360.

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