WinInfo Short Takes: Week of October 29

An often irreverent look at some of the week's other news, including Soxtober, Microsoft earnings, measuring Xbox 360/Zune successes, Vista hits 85m sold, more WU reboots, OneCare culpability, Microsoft and the XO laptop, Linux market share, and much more...

WinInfo Blog

Three straight weeks of travel finally caught up with me this week, courtesy of a beautiful cold that I'm pretty sure I caught while sitting next to Mr. Hacksalot on the Amtrak between Washington D.C. and Boston the other day. Fortunately, I have a week off before my next trip (Seattle, again), so I'm sure I'll have time to get better so I can get sick again.

On a more positive note, how about them Red Sox? While we seem to be experiencing a golden sports age in Boston with the surreally dominant Patriots and the suddenly-contender Celtics, the Red Sox are, of course, the heartfelt favorites for a variety of reasons. They're up 2-0 in the World Series, and it's hard not to be impressed with what they've done this year, regardless of the eventual outcome of this series. The Sox seem to have that perfect mix of seasoned veterans and up-and-coming young players, and when they're firing on all cylinders, as they did in game one's 13-to-1 blowout, there's no better team on earth. It's just beautiful to watch.

Leo and I hooked up with Windows guru Ed Bott for this week's episode of the Windows Weekly podcast, which focuses on Ed's deconstruction of Peter Guttman's controversial and, as it turns out, completely incorrect assessment of the DRM features in Windows Vista. It's an interesting listen, I think, mostly because Ed really knows what he's talking about. The new episode should be up in the next day or so.

And while we're at it, let's not forget the SuperSite blog: It's still ugly and old-fashioned looking, but I'll get that updated as soon as possible. Regardless of the look, it's updated every day and should be of interest if you enjoy Short Takes.

Short Takes

Microsoft Earnings Soar on Vista, Halo 3 Sales
Here's the real "Halo effect": Microsoft on Thursday announced its quarterly results, easily surpassing estimates. The company earned $3.5 billion on revenues of $12.6 billion, up 27 percent when compared to the same quarter one year earlier. Microsoft credited the jump on stronger-than-expected sales of Windows Vista and Office 2007, Windows Server, and the Xbox 360, which posted a better-than-usual jump thanks to the release of Halo 3. Microsoft reports that the quarterly improvement was its best since 1999. Vista generated $4.1 billion in revenues during the quarter, while the group responsible for the Xbox 360 posted its second-ever profit, of $165 million. (I'm sure they'll reverse that trend in the coming quarter.) PC sales grew 15 percent in the quarter, much higher than the expected 11 percent, contributing to Microsoft's strong gains.

Just How Successful is Windows Vista, You Ask?
You've heard all the doom and gloom from the blogosphere, now it's time for some reality: In just 9 months on the market, Microsoft has sold 85 million copies of Windows Vista, most of which are the high-end editions such as Vista Home Premium and Ultimate. More interesting, perhaps, sales are actually increasing: Microsoft sold 25 million copies of Vista in the most recent quarter, so it's on track to have well over 100 million users by the end of the year.

A Note on Measuring Xbox 360/Zune Successes
So Microsoft's entertainment and devices group posted a profit of $165 million on revenues of $1.9 billion in the quarter, a huge gain over last year's $142 million loss in the same quarter. This got me wondering about how this group, which is responsible for the Xbox 360 and Zune, might actually measure success. It's not like they've ever made money: The entertainment and devices group at Microsoft has only had one other profitable quarter in its entire existence, and the Xbox has hemorrhaged billions of dollars since Microsoft first got into the video game business. Maybe we could compare this group to Apple, which earned $904 million on revenues of $6.22 billion in the same quarter overall. But that's Apple's entire business, which includes computers (Macs) as well as iPods and other entertainment-related devices. If you compare Microsoft's entertainment and devices group to just the part of Apple that makes iPods, the results are a bit closer: In this case, Apple's revenues were $2.3 billion, very close to the Microsoft entertainment and devices group's $1.9 billion. (Apple doesn't break out profits this way, but assuming it's roughly 50/50, they would have earned income of about $450 million in the quarter.) What skews this comparison, of course, is that Microsoft's entertainment and devices group revenues were up 90 percent year over year in the quarter because of the release of Halo 3, so the group is really running at about half of the iPod's revenue rate typically. And until that part of Microsoft can really compete with Apple's entertainment products, I can't imagine why anyone would call it successful.

Here We Go Again: New Reboots of WU Reboots, Auto-Updates
When is an opt-out really an opt-in? Apparently, when we're talking about Windows Update, which continues to supply its users with automatic updates even when they've specifically configured the service not to do that. This time around, small businesses that have configured Windows Server Update Services not to download and install updates automatically via Windows Update have discovered that certain undesired updates, like Windows Desktop Search 3.01, have been pushed automatically to users overnight. Microsoft explained this one away by noting that while WDS was an optional download, this update is required when the previous version is installed and... Geesh. Could this get any sillier?

OneCare Changes WU Settings, By the Way
Actually, yes, it can. It turns out that Microsoft's Windows Live OneCare security and PC health service might be responsible for some of the other auto-updating behavior that users have noted. Like other security products, OneCare enables the auto-install option in Windows Update to ensure that users always get the latest security updates. This change can bypass whatever choice the user made previously, and it's done without explicitly alerting the user. As Microsoft notes, however, that's by design: The people who would install such a product don't want to think about security and just want it to be updated in the background without any intervention. Honestly, in this case, I have to agree with Microsoft, and any attempt to sensationalize this event is, well, just an attempt to sensationalize this event and take advantage of the recent climate of distrust that has grown up around what is clearly just a huge misunderstanding. So should Microsoft "do the right thing" and make it more obvious what OneCare is doing? I'm not sure that's such a great idea. After all, the people this product targets would simply be confused by this discussion.

Microsoft Working to Get XP on XO Laptop
While Microsoft's earlier attempts at getting a low-cost version of Windows on The One Laptop per Child (OLPC) XO laptop were such a disaster that the organization went with a free version of Linux instead, the software giant this week said that was going to change. Microsoft is working on a low-end version of Windows XP that will run on the XO laptop and has invested "a nontrivial amount of money" on the project, according to the company. "We still have plenty of work to do in determining if the highly constrained performance, power, and memory in the first generation XO laptops will be compatible with Windows and popular Windows applications," said Microsoft corporate vice president Will Poole. "We remain hopeful with our progress to date, we still have significant work ahead to finalize our analysis and testing processes." Getting Windows on the XO would be a huge boon to both the OLPC organization and to Microsoft, since the laptops are targeted at emerging markets in the third world, which could one day become a thriving market for computers and electronics.

Linux Losing Market Share to Windows Server
And speaking of Linux, the open source darling is actually starting to lose market share at the hands of Windows Server. According to IDC, Linux market share in the server market began faltering about six quarters ago and now it's actually reversed course. Now, the market for Linux servers is shrinking at a rate of about 4 percent, while Windows Server has continued to grow, now at a rate of over 4 percent. IDC credits a number of factors for this change, including a slowing in the number of migrations from UNIX to Linux, which has always been Linux's big growth area, and the general strength of Microsoft's server products. In particular, Microsoft's IIS Web server and Exchange email servers have done particularly well, while Linux continues to do well in low-end Web serving and high performance computing.

Night of the Leopard
Well, it's that time again, when Apple wakes up, stretches, and strokes its 20 million OS X users for yet another $129 operating system upgrade. Tonight, the Cupertino company will launch Mac OS X 10.5 "Leopard," the fifth "major" update to OS X, a release that features such stunning innovations as workflow variables in Automator, a dictionary of Apple terms, a DVD player that can float above other applications, a printable font book, an updated version of Open GL, animated buddy icons in iChat, localization in Russian, Polish, and Portuguese (yes, those are three distinct and different features), new Mail stationary, three new screensavers (again, three separate and distinct features), and Ruby on Rails. Yep, those features and more like 'em qualify for Apple's list of "300+" new features in Leopard, so run out and stand in line tonight like a lemming. Or, do the right thing and read my Leopard review, which will be up later today on the SuperSite for Windows. Mac OS X users will probably want to upgrade because, heck, they enjoy throwing money at the wind. Windows users looking to switch? Not so much.

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