Android beat Windows mobile because of antitrust distraction – Bill Gates

Bill Gates has suggested if it wasn’t for the costly and prolonged antitrust lawsuit in 1998, Microsoft would be the dominant player in the mobile OS world not Google.

This lawsuit, which lasted roughly three years, proved to undermine the Microsoft dominance on the technology world. With the playing-field levelled for competition, Microsoft gradually fell back into the chasing peloton, though founder Bill Gates suggested there was a much bigger impact for the business.

“There’s no doubt that the antitrust lawsuit was bad for Microsoft, and we would have been more focused on creating the phone operating system,” said Gates at the DealBook Conference in New York. “Instead of using Android today, you would be using Windows Mobile.

“We were so close. I was just too distracted that I screwed that up because of the distraction. We were just three months too late with the release that Motorola would have used on a phone. It’s a winner take all matter for sure, now no-body here has ever heard of Windows Mobile, but oh well.”

Some might dismiss Gates’ proclamation, the OS did launch after all and was not in the same league as Android, though it is an interesting idea.

If Microsoft had not been spending so much time defending its PC software business, more attention and investment could have been directed to the mobile OS. The transition from home computer to the smartphone was after all one of the contributing factors to Microsoft’s decline from power.

Interestingly enough, Gates also claims that if he hadn’t had to defend the business in such an intense antitrust case, he wouldn’t have retired so early.

While Microsoft is now recapturing its dominant position, thanks to a focus on the cloud computing segment, it spent years lurking in the shadows as an also-ran in the technology segment. This was still a very profitable company, but it had fallen from the dizzy heights of the 80s and 90s. The world moved from the home computer to mobile, and Microsoft was slow to react.

On the other side of the equation, Google acquired Android and entered the mobile world. This is perhaps one of the smartest bits of business ever, as Google reportedly acquired Android for as little as $50 million. Without this OS, Google would not have dominated the mobile world and would not be anywhere near as profitable as it is today.

Gates might be exaggerating with his claims here, though the world certainly look a lot different if Microsoft had won the mobile OS race.

Nokia and Microsoft bundle their cloud offerings

A strategic collaboration between Nokia and Microsoft is banking on companies wanting to buy their cloud hardware and software together.

Here’s the official pitch: “By bringing together Microsoft cloud solutions and Nokia’s expertise in mission-critical networking, the companies are uniquely positioned to help enterprises and communications service providers transform their businesses.” This seems to be mainly about things like private networks, SD-WAN and private cloud, but specific commercial use-cases are thin on the ground at this stage.

“We are thrilled to unite Nokia’s mission-critical networks with Microsoft’s cloud solutions,” said Kathrin Buvac, President of Nokia Enterprise and Chief Strategy Officer. “Together, we will accelerate the digital transformation journey towards Industry 4.0, driving economic growth and productivity for both enterprises and service providers.”

“Bringing together Microsoft’s expertise in intelligent cloud solutions and Nokia’s strength in building business and mission-critical networks will unlock new connectivity and automation scenarios,” said Jason Zander, EVP of Microsoft Azure. “We’re excited about the opportunities this will create for our joint customers across industries.”

This initiative is more than just good PowerPoint and canned quote, however, with BT announced as its first paying punter. Apparently it’s already offering a managed service that integrates Microsoft Azure cloud and Nokia SD-WAN stuff. Specifically this means Azure vWAN and Nuage SD-WAN 2.0.

Apart from that the joint announcement mainly just bangs on about how great both companies are at this sort of thing – in other words a thinly-veiled sales pitch. The market will decide if it needs this kind of complete virtual WAN package and whether or not Nokia and Microsoft are the best companies to provide it. But there’s no denying BT is a strong first customer win.

Microsoft revenues surge once again thanks to the cloud

This will officially be the last time we talk about Microsoft’s recovery, as it is unfair to undermine the continued progress and domination of the firm on the digital economy.

Everyone in the TMT industry knows the trouble Microsoft faced in bygone years, and everyone understands why the firm found itself in that position. But there is no need to discuss this aspect of the business anymore. CEO Satya Nadella has redefined the organization, leaving the troubles in the past. This business is a new beast and the latest financials prove it is one of the dominant forces in the digital economy.

“We are off to a strong start in fiscal 2020, delivering $33 billion in revenue this quarter,” Nadella said. “Our Commercial Cloud business continues to grow at scale as we work alongside the world’s leading companies to help them build their own digital capability.”

Fundamentally, Microsoft is a different business. In the 90s and 00s, Microsoft was defined by its dominance of the PC operating software world. Although this presence still exists today, the focus is on enterprise customers, however, the prospects of the business are perhaps more acutely focused on Azure, the cloud computing unit. The Microsoft of today and the troubled Microsoft of yesteryear are chalk and cheese.

Looking at the financials for the first quarter which were announced following the close of the market yesterday [23 October], they are once again pretty impressive. Total revenues increased 14% year-on-year to $33 billion, while operating income stood at $12.7 billion, up 27% from the same three-month period in 2018.

Revenues at Microsoft Azure increased 59% year-on-year, while the team has stated there has been a ‘material increase’ in the number of $10 million + contracts. The cloud is driving Microsoft forward, while the excitement around edge computing opens-up new prospects for the business.

This quarter also saw the team open two new datacentre regions, in Germany and Switzerland, taking the total up to 54 worldwide. Microsoft Azure is now available in 140 countries around the world, with the geographical footprint focused in Europe and North America.

Asia is one market where the team could grow further, and this might be a development worth keeping an eye on as more countries travel through the digital transformation journey. Nadella paid homage to a partnership with Indian telco Reliance Jio as a green-shoot of growth in the market.

Alongside the progress which is being made to expand the datacentre footprint of the business, the team is also pointing towards strategic partnerships with the likes of VMWare, Oracle and SAP for the added momentum in the cloud business.

“You’d actually see it in a couple of places [impact of partnerships], not just in Azure, which may in fact be the most logical extension,” said CFO Amy Hood during the earnings call.

“But, at the heart of this is making it easier, faster and more reliable for us to help customers move their estate to the cloud and to migrate that with confidence.”

This is perhaps one of the most exciting aspect of the cloud segment and will not just be limited to the success at Microsoft. There is still a huge amount of growth left to realise.

Many companies around the world will claim to be cultivating a cloud-first mentality, and many of these companies are migrating workloads across to the cloud. However, what has been achieved to date is only a fraction of the total. The cloud has matured, availability is increasing, and prices are decreasing. The likes of Microsoft, Amazon and Google might be hoovering up the profits, but there is still huge potential for growth.

Value Growth
Total revenue $33.1 billion 14%
Operating income $12.7 billion 27%
Net income $10.7 billion 21%
Productivity and Business Processes unit $11.1 billion 13%
Intelligent Cloud unit $10.8 billion 27%
More Personal Computing unit $11.1 billion 4%

 

Microsoft might be toying with European data protection compliance

The European Data Protection Supervisor has raised ‘serious concerns’ over whether Microsoft is compliant with data protection regulations.

The contracts in question are between the software giant and various European Union institutions which are making use of said products. The central issue is whether contractual terms are compliant with data protection laws intended to protect individual rights across the region from foreign bodies which do not hold data protection to the same standards.

“Though the investigation is still ongoing, preliminary results reveal serious concerns over the compliance of the relevant contractual terms with data protection rules and the role of Microsoft as a processor for EU institutions using its products and services,” a statement reads.

“Similar risk assessments were carried out by the Dutch Ministry of Justice and Security confirmed that public authorities in the Member States face similar issues.”

The preliminary findings from the European Data Protection Supervisor follow on from investigations taking place in the Netherlands and also changes to the Microsoft privacy policies for its VoIP product Skype and AI assistant Cortana. The changes were seemingly a knee-jerk reaction to reports contractors were listening to audio clips to improve translations and the accuracy of inferences.

What is worth noting is that Microsoft is not the only company which has been bending the definition of privacy with regard to contractors and audio clips. Amazon and Google have also been dragged into the hazy definition of privacy and consent.

The issue which seems to be at the heart of this investigation is one of arm’s length. While government authorities and agencies might hand-over responsibility of data protection and privacy compliance to the cloud companies, the European Data Protection Supervisor is suggesting more scrutiny and oversight should be applied by said government parties.

Once again, the definition and extent of privacy principles are causing problems. Europe takes a much more stringent stance on the depth of privacy, as well as the rights which are affording to individuals, than other regions around the world. Ensuring the rights of European citizens are extended elsewhere was one of the primary objectives of the GDPR, though it seems there are still teething problems.

“When using the products and services of IT service providers, EU institutions outsource the processing of large amounts of personal data,” the statement continues.

“Nevertheless, they remain accountable for any processing activities carried out on their behalf. They must assess the risks and have appropriate contractual and technical safeguards in place to mitigate those risks. The same applies to all controllers operating within the EEA.”

One development which could result in additional scrutiny is The Hague Forum, an initiative to create standardised contracts for European member states which meet the baseline data protection and privacy conditions set forward. The European Data Protection Supervisor has encouraged all European institutions to join the Forum.

Although GDPR was seen as a headache for many companies around the world, such statements from the European Data Protection Supervisor proves this is not an area which can simply be addressed once and then forgotten. GDPR was supposed to set a baseline, and there will be more regulation to build further protections. Perhaps the fact that Microsoft is seemingly non-compliant with current regulations justifies the introduction of more rules and red-tape.

Microsoft gets into the Android smartphone game, or does it?

At an event devoted to its Surface device range Microsoft teased a new, dual-screen Android smartphone called the Surface Duo.

This is Microsoft’s first attempt at an Android phone and it gets its name from the fact that it has two screens, joined by a 360-degree hinge, i.e. not a foldy screen. Microsoft has yet to issue a formal press release on the launch, but there is a sparsely-populated product site and a video, which you can see below.

Panos Panay, Microsoft’s Chief Product Officer, did manage to have a chat with Wired, however, and he insisted it’s not a smartphone at all, despite it using the Android OS and enabling phone calls. Instead, Panos insists, it’s a ‘device’. The reason for this gadget semantics seems to be Microsoft’s hope that people will view the Duo as a completely new category.

There is some justification to this. In many respects the Duo is a miniature version of the Neo, which was also launched at the event. Microsoft is attempting to define and own the dual-screen device category, regardless of the size of those screens. As you can see from the second video below, the Neo does seem to introduce some novel features, but it runs on Windows with an Intel chip. Those options weren’t available for a smaller device, hence the ‘not quite a phone’ thing.

The reason we don’t know more is that neither the Duo nor the Neo are commercial devices yet, and won’t be for another year. As you would expect of Microsoft, they are positioned as mobile devices with an emphasis on productivity and the Neo certainly seems to offer some new ways of working on the road. Whether or not people will be willing to swap their existing smartphones for a smaller version of it is another matter entirely.

 

Microsoft unveils details for Project xCloud public trial

It’s been a year in the making, but Microsoft is going through the final preparations to launch its game-streaming service, Project xCloud.

The project itself will allow Xbox gamers to play their favourite games by streaming the content onto their mobile devices. Although the technology giant has had to fit out its data centres with specialist servers to run the games, the extensive geographical footprint of its data centre network could make Microsoft a force to be reckoned with in the emerging cloud gaming segment.

“Our vision for Project xCloud is to empower the gamers of the world to play the games they want, with the people they want, anywhere they want,” said Kareem Choudhry, Corporate VP for Project xCloud at Microsoft.

“We’re building this technology so gamers can decide when and how they play. Customers around the world love the immersive content from Xbox in their homes and we want to bring that experience to all of your mobile devices.”

Next month, the public trial will be launched. The US, UK and Korea have been selected as the initial testing grounds, with consumers able to sign-up here. All you’ll need is a wireless controller with Bluetooth and a stable mobile internet connection of 10 Mbps.

More to follow…

Security attitudes are improving but most don’t want to take responsibility

While there is growing momentum in the cybersecurity world this, ironically, might create a false sense of security and reality-check every now and then is always helpful.

A survey from Microsoft and insurance broker Marsh has highlighted some progress in the cybersecurity world, however there are still monumental risks which are worth highlighting. This is the encouraging, but humbling point which is being made by the duo here. Perhaps one of the most worrying is the attitude of security is someone else’s responsibility.

Only 19% of large enterprise organizations believe they pose a risk to the supply chain, which is certainly not the case. It does appear these companies believe the responsibility of securing the ecosystem should be dealt with by someone else.

“Despite the decline in organizational confidence in the ability to manage cyber risk, we’re optimistic that more organizations are now clearly recognizing the critical nature of the threat and beginning to seek out and embrace best practices,” Joram Borenstein, GM of the Cybersecurity Solutions group at Microsoft, wrote.

“Effective cyber risk management requires a comprehensive approach employing risk assessment, measurement, mitigation, transfer, and planning, and the optimal program will depend on each company’s unique risk profile and tolerance.”

Cybersecurity as a topic is now being considered the biggest risk to the organization and executives are playing a more prominent roles in developing and communicating these strategies. However, there are some elements to cybersecurity which is going to have a negative impact on the business, as you can see from the images below.

The extracts from the survey are quite varied, but they do illustrate a few interesting points which we would like to make in regard to cybersecurity.

Firstly, the attitude of the business. With 50% of respondents suggesting the business benefit of new technologies outweigh the risks, customers (either corporate or consumer) have to understand this. Suppliers or providers are commercial businesses which aim to make money for owners or shareholders. The risk of cybersecurity is tolerable as decreasing this risk might be unfeasible commercially.

This is not necessarily a bad thing, we live in a capitalist society after all and there is no such thing as 100% secure, though it is always worth remembering this nuance.

Another interesting element of the attitude towards cybersecurity risk is the evaluation of risk. Only 5% of companies are evaluation the cybersecurity threat at every possible element of the life-cycle, taking into account both the period prior and post purchase. Perhaps there is a belief that once a new technology or system has been installed it is safe, but this is of course not the case. It might also be down to the idea some are passing on the responsibility of security and resilience.

This is perhaps a problem which is a hangover from a bygone era. The responsibility of cybersecurity has to be shared throughout the ecosystem. If anyone shirks this responsibility, the supply chain is potentially corrupted and the threat passed onto other organizations. This is the new connected society, risk is shared amongst partners, customers and suppliers.

Of course, the introduction of new technologies will only heighten the threats which are present, this is always the case when companies and/or individuals venture into the unknown. However, it does lead us onto the final point; regulation.

Only 28% of the respondents believe current laws and regulations are fir for purpose in today’s society. The sheer velocity and variety of new technologies being implemented will not help sluggish bureaucrats catch-up either.

Although there are plenty of negative points to focus on here, the industry is heading in the right direction. Cybersecurity is heading in the right direction, there is more money being invested and attitudes are more focused, but the risks are becoming increasingly acute. Progress, but still persistent worries.

Microsoft President defends Huawei, calling Trump Un-American

Microsoft President Brad Smith has leapt to the defence of under-fire Chinese vendor Huawei, suggesting the US Government should table evidence if it wants to continue on this path.

In an interview with Bloomberg Businessweek, Smith has aired his views on the prolonged tensions between China and the US. In a similar position to some more considered regulators around the world, Smith has demanded the burden of proof to back-up serious accusation made by the White House.

“Oftentimes, what we get in response is, ‘Well, if you knew what we knew, you would agree with us.’ And our answer is, ‘great, show us what you know so we can decide for ourselves. That’s the way this country works,” Smith said.

Smith is of course 100% correct here. We completely understand some details will not be able to be released in their entirety to the general public, but certain individuals, organizations and agencies should be offered insight to evidence which the White House is hording. The burden of truth is not one which should be brushed aside, and President Trump has not earned the right to demand blind belief.

Fortunately, there are some across the world who elect to make responsible and considered decisions. We’re not talking about the Australians, the state which decided to blindly follow the orange light without asking any questions or demonstrating the ability of independent thought, but the Germans.

The fact that Huawei has not been banned from the German market tells us and the world that the White House has not deemed it pertinent to demonstrate proof of nefarious activities to one of its allies.

Last December, Germany’s Federal Office for Information Security (BSI) took a bold stance against the White House, demanded the US Government produce evidence to support the claims should it want the Germans to introduce its own ban. As there has been no action taken by the German Government or any of its agencies to date, it would be a fair assumption the US Government is yet to produce anything.

The Germans are not alone in ignoring the huffing and puffing from the Oval Office, though Smith joining the party is a notable development.

What is worth noting, is this is probably a commercially based decision, though that is not necessarily something Smith should be scalded for. Like most other US companies, Smith wants the opportunity for his firm to work with one of the technology industry’s fastest growing innovators.

Huawei is one of the world’s leading smartphone manufacturers, but it has also been making some promising moves in the PC and laptop segments also. With tetherless connectivity in laptops set to become a common trait over the next few years, this segment could witness a disruption. As Windows is installed on most PCs and laptops, Smith and Microsoft will win irrelevant as to which brand triumphs, but it will want to make sure it is working with every brand possible.

Microsoft will want to continue working with Huawei, as will many other companies. At least 130 applications have been submitted to the US Commerce Department seeking exemption from the ban to work with Huawei, though none have been approved thus far.

Soon enough, the US Government will have to present evidence to back up the claims. This administration seemingly believes it can bully its way through international relations, though if US companies start turning against US ‘foreign policy’ it creates a very uncomfortable situation.

Azure is on a spending spree

Cloud has led the Microsoft recovery in recent years, and the Azure team is doubling down on that momentum with a third acquisition in as many months.

The financial details of the deal have not been revealed, though Movere will join the Microsoft Azure family, adding migration smarts to an already comprehensive armoury.

“As cloud growth continues to unlock opportunities for our customers, cloud migration is increasingly important for business’s digital strategy,” said Jeremy Winter Partner Director for Microsoft Azure. “Today, I am pleased to announce that Microsoft has acquired Movere, an innovative technology provider in the cloud migration space.”

Founded in 2008 as Unified Logic, the focus of the business was altered in 2014 after the management team experienced difficulties in migrating their business onto the Azure platform. The start-up has been a partner of Microsoft for more than a decade, though in the last five years, it has been more acutely focusing on migration challenges for customers.

For Microsoft, this is just another tool it can talk to potential customers about, adding to two acquisitions over the last couple of weeks.

In July, the Azure team announced the acquisition of BlueTalon, a firm which aims to simplify data privacy and governance across modern data estates. Just after in August, jClarity was added to the mix. jClarity, a leading contributor to the AdoptOpenJDK project, will help teams at Microsoft to leverage advancements in the Java platform.

Alongside Amazon AWS, Microsoft Azure is leading the pack in the cloud world and it does not want to give any opportunity for the ‘also rans’ to close the gap. These acquisitions are simply increasing the breadth, depth and variety of the Azure proposition.

And the importance of the cloud to Microsoft should never be under-estimated.

After joining the Microsoft in 2014, CEO Satya Nadella shifted the focus of the business towards the cloud. Azure was the new poster boy of the firm, which was looking like a shadow of the dominant player which dominated the 90s and 00s.

Since that point, total revenues have grown to $110.36 billion in 2018, from $86.833 billion in 2014. Operating income increased to $35.058 billion in 2018, up from $27.759 billion in 2018. And looking at market capitalisation, Microsoft is now valued at $1.05 trillion, the largest in the technology world.

The cloud is driving Microsoft forward, and it is not afraid to spend some cash to capitalise on the momentum.

Nvidia brings its cloud gaming to Android

2019 was already looking like a promising year for cloud gaming and now Nvidia is bringing its own service, GeForce NOW, to Android, the streaming scrap is heating up.

Specifics on timing have not been released just yet, neither have pricing details, though Nvidia has said its streaming service will be available on Android devices over the coming months. With the service already available on PC and Mac devices, entering the Android world adds the potential of another two billion devices.

“Already in beta to the delight of 1 billion underpowered PCs that aren’t game ready, GeForce NOW will soon extend to one of the most popular screens in the world, Android phones – including flagship devices from LG and Samsung,” the team said on its blog.

“Just like on PC, Mac and Shield TV, when the Android mobile app releases it’ll be in beta. We’ll continue improving and optimizing the experience.”

The move into Android will take Nvidia into direct competition with both Google’s Stadia and Microsoft’s xCloud. There are of course pros and cons for all the available services, though a couple of bonus’ for Nvidia will gauge the interest of some gamers. Firstly, second purchases on titles will not be needed for the cloud gaming service, while the GeForce RTX graphics performance will be introduced soon enough.

Google was the first to plug the potential of cloud gaming back in March, promising users they will be able to access their games at all times, and on virtually any screen. The initial launch will be for £8.99 a month, though the team does plan on launching a ‘freemium’ alternative soon after. As you can imagine, Google is always looking for ways the complex data machine can offer content to users for profit.

It didn’t take long for Microsoft to launch its own alternative following the press Google collected. Hyped as the ‘Netflix of video games’, Microsoft will charge $9.99 to access a range of Xbox One and Xbox 360 titles on any screen. Like Stadia and GeForce NOW, a controller would have to plugged into Android devices.

There are some ridiculous figures which are being banded around concerning the percentage of traffic cloud gaming will account for during the 5G era, it is a segment worth keeping an eye on.