IT Spot

In looking at the reasons behind Thursday’s price cut for Windows Vista, it’s easy to blame the OS itself. After all, plenty of critics have panned it, users have grumbled and even Microsoft executives themselves were slinging arrows that the software wasn’t ready for prime time when it launched last year.

But, it’s important to note that this cut doesn’t affect the bulk of the PC market, where folks get Vista as part of a new PC. Rather, the cut is limited to the comparatively small number of folks who buy a boxed copy of Vista to upgrade their machine.

NPD analyst Chris Swenson notes that the prices for boxed copies of Windows have remained fairly high while the cost of getting a new PC has fallen drastically since Windows XP made its debut in 2001. Prior to the price cut an upgrade to Vista Ultimate cost $299. Now, I’ve seen some ads where you get a whole Vista PC for that price or not much more.

One other interesting note, it appears that the price cuts are also designed to spur Vista-to-Vista upgrades. Has anyone out there paid to move to a higher priced version of Vista? If so, I’d be interested to hear when and why you made the move. Drop me a note below or e-mail me at Ina DOT Fried AT CNET DOT Com.

Source: CNET News.com - Business Tech

A pivotal meeting of international delegates to decide the fate of Microsoft’s Open XML finished on Friday with advocates and foes of the standards bid predicting victory.

Brian Jones, a program manager at Microsoft involved in the process to standardize Open XML, posted a blog Friday saying that consensus among delegates at the meeting had been reached. Microsoft has been seeking standards approval for Open XML for two years at a joint committee of the ISO/IEC (International Organization for Standardization/International Electrotechnical Commission).

Meanwhile, advocates of rival document format ODF said that the weeklong meeting is unlikely to provide the impetus needed to make Microsoft’s Open XML an international standard.

The meeting in Geneva was held following a vote in September last year, when Open XML failed to get a sufficient number of votes to get the document format approved as an ISO-IEC standard.

During that vote, delegates from national standards bodies submitted comments about the 6,000-page specification, which were meant to be addressed during the Ballot Resolution Meeting (BRM) this week.

National standards bodies have until the end of March to change their votes based on the activity at the BRM. If enough votes are changed in favor of Open XML, it moves ahead in the standards process.

In his blog, Jones wrote:

“The objective of the BRM was to work with all of the National Body delegations in the room and improve the specification on a technical level–and that we did. There were many technical changes the delegates made to really get consensus on some of the more challenging issues, but all of these passed overwhelmingly once they were updated. The process really worked (it was very cool).”

But two people opposed to the standardization of Open XML said that technical issues were not sufficiently addressed during the BRM.

“I don’t think the BRM changed enough minds that Open XML is any more interoperable or more open than it was before,” said one advocate of rival document format ODF, who did not want to be quoted because no official results have been communicated. “Certainly this result should not change the minds of any delegates at the national bodies.”

No official word has come from the ISO, whose media representatives did not respond to requests for comment on Friday.

ODF advocate and standards expert Andrew Updegrove attended the meetings in Geneva this week and posted a blog with details of the proceedings based on his conversations with delegates.

He said that only a small fraction–about 20–of the 900 comments, or dispositions, were discussed. Updegrove concluded that issues concerning Open XML were not adequately hammered out.

However, during an expedited voting procedure in which dispositions were not actually discussed, many of those resolutions were approved, he said, which would lead people to conclude that the BRM was successful.

Updegrove drew the opposite conclusion and said that Microsoft is essentially trying to inappropriately push a complicated specification without sufficient consideration.

“Many, many, people around the world have tried very hard to make the OOXML adoption process work. It is very unfortunate that they were put to this predictably unsuccessful result through the self-interest of a single vendor taking advantage of a permissive process that was never intended to be abused in this fashion. It would be highly inappropriate to compound this error by approving a clearly unfinished specification in the voting period ahead,” Updgegrove said.

Delegates from national standards bodies have until the end of March to revise their postions. At that point, final results on whether Open XML will be approved as an ISO-IEC standard should be known.

Source: CNET News.com - Business Tech

In the next two weeks, observers in the Microsoft-Yahoo buyout courtship bid will get a telling signal whether it’s headed for a shot-gun marriage or a friendly embrace.

Yahoo has the option of either extending the March 14 deadline for shareholders to nominate an opposition slate of directors for its next annual shareholders meeting, or keeping the deadline hard.

“It’s not out of the realm of possibility to extend the date to nominate directors,” said one proxy solicitor. “I don’t see the motivation for Yahoo to do that. They could still negotiate after Microsoft files its slate. There’s no reason to extend the date, unless you want to negotiate a friendly deal.”

My bet is Yahoo will extend the deadline, giving it more time to contemplate its options, including Microsoft’s, without having to engage in the duel task of a love-hate relationship with Microsoft. Think if it this way, how easy is it to carry on a civil conversation and negotiate a deal, when the other party’s 10 thugs are beating up on you?

Microsoft has until March 14 to name its opposition slate of directors, and proxy solicitors say the Redmond giant should have no problem finding folks to fill out a 10-member slate. Yahoo’s entire 10-member board is up for re-election at the next shareholders meeting. The date of the meeting has yet to be selected.

Yahoo has plenty of reasons to enter a friendly deal and wrap up talks ASAP. It’s not only facing seven lawsuits from angry investors who argue Microsoft’s initial bid of $31 a share was fair, but also Yahoo noted its regulatory filings that its employees, management and executives are distracted by the Microsoft bid.

Add to that its other reported options like a News Corp. investment deal and AOL tie-up are considered long shots by industry observers and analysts.

Full coverage
Microsoft’s big bid for Yahoo

Click here for the latest on the software giant’s attempt to buy the Net pioneer.

And while the days are counting down for Microsoft to have its slate in place, odds makers say don’t be surprised to see corporate governance professor Duke Bristow show up on such a slate if it comes to that. Bristow has served on other proxy fights before, including Oracle’s slate in its drawn-out fight for PeopleSoft. Don’t know Bristow’s thoughts on this, since phone calls and emails have not been returned.

Representatives from Microsoft deferred deadline extension questions to Yahoo. And a Yahoo spokeswoman declined comment.

Yahoo, which is incorporated in Delaware, has a hard deadline for shareholders to name candidates, unless the Internet search pioneer changes its bylaws or delays the date of its shareholders meeting, said Stephen Jenkins, a director with Delaware law firm Ashby & Geddes, which has represented a number of clients in proxy fights.

In order for Yahoo to extend its March 14 deadline for shareholders to nominate an opposition slate, it would need to do one of two things. Yahoo could change its bylaws and extend the notification period to a time closer to when the annual shareholders meeting is held, which currently is expected to sometime between May 18 to July 7, or it can set its meeting sometime beyond July 7, thereby extending the notification period.

“The smart thing to do would be to extend the deadline if they don’t want to talk yet, but they don’t want to force Microsoft’s hand,” Jenkins said.

Source: CNET News.com - Business Tech

The launch of Google Sites has spurred closer examination of the Google Apps suite and of some of the claims or innuendo from Google executives regarding the enterprise fitness of its cloud-based applications.

Sarah Perez of ReadWriteWeb compiles a dossier from recent posts on ZDNet and other sites that strip bare the Google Sites bride. Google plays the backdoor game–IT isn’t giving you solutions you can use, so raise the software pirate flag, and use Google Sites for free to manage projects:

Google is actually going about marketing to the enterprise market in a pretty ingenious way–they’re not. Instead, they’re bypassing the IT department (who would, in all honesty, probably laugh at the thought) and marketing their suite on the sly directly to the employees themselves: “Are the tools provided by your IT department too unwieldy to use? Is IT too slow to respond to your needs? Then forget IT and use Google Apps instead!” This is definitely a good plan for Google in the short term, but it’s not one that is going to be good for them in the long run…especially when IT catches on to what their users are doing.

It’s not good in the long run because sooner or later, IT and centralized control rear their heads. It’s a cultural power struggle between IT and users that will go on forever.

Google is applying its guerrilla tactics, ingratiating itself with users and hoping that by the time it has more security, integration, service-level agreements, and less onerous terms of service, the battle to conquer the enterprise–and tweak Microsoft–will be won. It’s not a short-term campaign.

An example of a Google Sites project wiki.

(Credit: Google)

The marquee customer, among 500,000, touted by Google for Google Apps is Genentech. It so happens that Genentech Chairman and CEO Arthur Levinson is on Google’s board. But that is beside the point.

Google Sites is not enterprise-class. It doesn’t claim to be enterprise-class, unless wiki tools classified as such:

• are not deeply integrated into corporate infrastructure

• lack service-level agreements

• require that you give the host a “perpetual, irrevocable, worldwide, royalty-free, and nonexclusive license to reproduce, adapt, modify, translate, publish, publicly perform, publicly display, and distribute any content which you submit, post or display on or through, the services”

(That last part is lifted from the Google Terms of Service. See also the Google Apps Standard Edition Agreement.)

The fact is that wikis, ranging from free, such as Twiki, to more enterprise-scale solutions, such as Atlassian and Socialtext, are spreading like wildfire throughout corporations.

Google, the 800-pound search elephant, is just making its appearance in this space, with an easy-to-use beta product for individuals, smaller businesses, and rakish departments of larger companies.

Source: CNET News.com - Business Tech

In what may be an unprecedented decision, Microsoft said Thursday that it plans to lower the retail prices for several flavors of Windows Vista.

For those in the U.S., Microsoft is cutting prices only on the higher-end versions of Vista, and only for the upgrade version used to move from an earlier copy of Vista. The suggested price for Vista Ultimate drops to $219 from $299, while Home Premium falls to $129, from $159.

Other developed markets will also see price cuts, while in emerging markets, Microsoft is eliminating the distinction between full and upgrade versions of Home Basic and Home Premium as it attempts to convince more users there to use genuine software.

Analysts were surprised by Microsoft’s move.

“I can’t remember a big price cut like this,” said analyst Chris Swenson, who tracks retail software sales for NPD Group. “It’s very unheard of.”

Microsoft finalized Windows Vista in late 2006, but held back its retail launch of the product until January 2007. It has sold more than 100 million copies, largely on the back of a strong overall PC market, but retail sales have significantly trailed those of XP in its early days and Vista has received a number of critical reviews.

In an interview, newly minted Windows consumer marketing vice president Brad Brooks said that Microsoft had been testing lower prices over the past few months and was surprised to find that the amount of revenue lost was more than made up for by an increase in the number of PC buyers willing to shell out for an upgrade.

Brooks said that Microsoft had done a lot of research prior to Vista’s launch, but noted that both Home Premium and Ultimate were new products for the company. “We probably got the pricing mix wrong,” he said. “You don’t always get it right, but you make the adjustment.”

Gartner analyst Michael Silver said the move–which applies only to standalone versions sold at retail stores–is puzzling. “It’s sort of an odd move,” said Silver, who noted that the market for such upgrades is fairly limited. Those who bought XP in the fourth quarter of 2006 got a coupon for a free Vista upgrade, while most of those who have bought systems since then have gotten Vista. Machines purchased prior to 2006 probably aren’t all that attractive as candidates for a Vista upgrade.

“I guess at the end of the day anything that makes Vista a little bit more accessible is probably a good thing,” he said, but added that a cut in the price computer makers pay would have a far bigger impact, given new PC licenses account for 80 percent of Vista sales. “The whole notion of upgrading PCs has sort of fallen by the wayside.”

And, a retail price cut could actually hurt Microsoft when it comes to the market for new PCs and among businesses trying to decide when, or whether, to move to Vista.

“To the extent this ends up damaging Vista’s reputation instead of broadening its appeal, I think that’s a danger,” he said.

Brooks discounted that, saying that if that were the case, Microsoft would have seen sales drop rather than rise when it tested the lower price promotions in France and the United Kingdom in December and January. As for the limited market for upgraders, Brooks said the new pricing should also make it more attractive for existing Vista PC owners that want to move to a higher-end version.

Swenson noted that while a Windows retail price cut may be unprecedented, Microsoft has seen some gains by cutting the price of other products, most notably when it added the Student and Teacher version of Office. Not only did unit sales go up, he said, but total revenue increased as well as Microsoft was able to tap a new wave of demand.

“Even though they have this huge market share they still have to price their products to move,” Swenson said. Swenson had called for such a Vista price cut last year, with standalone Vista sales badly trailing those seen for XP in its first six months.

“While the main culprit behind the poor performance of the ’shrinkwrapped box’ Vista (sales) is most likely the more stringent hardware requirements of the new version of the operating system, the lower sales volumes could also be a signal that Microsoft is not pricing its product appropriately,” Swenson wrote in a report looking at Vista’s first six months on the market. “If PC prices have plummeted almost 25 percent since the launch of Windows XP, then it makes sense that Microsoft would take such price drops into consideration when pricing (boxed copies of Vista). Thus, Microsoft should strongly consider instituting an across the board price cut for all editions of the operating system, the low-end editions in particular.”

Brooks also pointed to the increase in sales Microsoft saw when it cut the price to computer makers for Windows XP Media Center Edition. Initially pitched as a high-end version above Windows XP Pro, Microsoft eventually lowered the price to not much higher than Windows XP Home and saw it become the dominant consumer version.

“It went from a run rate of about 1 million (copies) a year to a run rate of several tens of millions a year,” Brooks said. “So yeah, we got it right.”

Source: CNET News.com - Business Tech

Plus: Novell profit tops Street…Applied Materials tops forecasts…Alcatel outlook weak…Cisco profit climbs…Time Warner lowers earnings target.

As happens every year or so, some juicy Microsoft e-mails have surfaced as part of litigation that the software maker is party to.

In this case, Microsoft is being sued over a program in 2006 that labeled some PCs as Windows Vista Capable ahead of the products mainstream release in January 2007. As part of the discovery process, a number of e-mails have emerged with Microsoft executives discussing various problems with Vista as it came to market.

In one e-mail, Steven Sinofsky writes to Steve Ballmer that three factors were to blame for early Vista challenges.

First off, he said, “No one really believed we would ever ship so they didn’t start the work until very late in 2006.” He added that his Brother home printer didn’t have drivers until after Vista’s commercial launch.

Secondly, he said, major changes to the way Vista handles audio and video caused headaches, particularly for those upgrading from XP. Finally, he said, many Windows XP drivers didn’t really work under Vista. “This is across the board for printers, scanners, wan, accessories (fingerprint readers, smartcards, tv tuners), and so on,” Sinofsky wrote. “This category is due to the fact that many of the associated applets don’t run within the constraints of the security model or the new video/audio driver models.”

Sinofsky noted that Microsoft executive Orlando Ayala had stuck with XP because there was no Vista driver for his Verizon mobile wireless card. “The Vista Ready logo program required drivers available on (January 30). I think we had had reasonable coverage, but quality was uneven as I experienced,” he wrote.

News.com colleague Tom Krazit is looking into this issue in more detail, but the e-mail also notes pressure that Microsoft faced from Intel to list certain integrated chipsets as Vista capable even though their Vista readiness was limited.

“The ‘915′ chipset which is not Aero capable is in a huge number of laptops and was tagged as ‘Vista Capable’ but not Vista Premium (ready),” he wrote. “I don’t know if this was a good call.”

Sinofsky expressed surprise that Microsoft didn’t get more complaints to its support lines, but said that he did not take that as a sign of satisfaction.

“I think we have a lot of new PCs, which helps and the hobbyist people who bought (packaged copies of Windows) just know what to do and aren’t calling, but I know they are struggling,” he said.

I’ll be pouring through more of the documents and should have more details soon.

Source: CNET News.com - Business Tech

newsmaker For a man who just got fined more than a billion dollars for antitrust violations, Steve Ballmer is feeling plenty of competitive heat.

In an interview, the Microsoft CEO pointed to tough competitors in every part of the business. Longtime foes like Oracle and IBM remain, but Google, Apple, and Linux all loom large.

Against that backdrop, Microsoft is locked in a protracted battle to acquire Yahoo. Ballmer spoke to CNET News.com shortly after the launch of new server software in Los Angeles.

Q: Microsoft announced a broad set of interoperability moves last week. When you guys made the announcement, did you know that the EU was planning to levy further fines against Microsoft?

Ballmer: We knew it was pending, we didn’t know it was this week, but we knew it was coming at some point. This is not news today. We are in compliance, they agreed we are in compliance. This is a fine for activities that predate the compliance activities that Ms. Kroes talked about last fall. So this is not new news in terms of compliance. It says there was a past transgression and they assessed a fine for that past transgression.

So are you fairly confident that your EU regulatory hurdles are behind you?
Ballmer: I think as a company with a big market footprint, we will constantly be looked at by regulators in all parts of the world. That’s part of what we do, and that’s kind of our world.

Do you expect Europe to be the biggest regulatory hurdle if the proposed Yahoo acquisition happens?
Ballmer: Oh, I don’t know. I have nothing interesting to say about that. I think regulators will look at that in all appropriate jurisdictions and I’m sure they’ll give us a fair shake in all appropriate jurisdictions.

Bill Gates said about a week or so ago that Microsoft isn’t looking to unilaterally up its bid for Yahoo. What’s the next step? Is it nominating your own board of directors? Where do you go from here?
Ballmer: In this process, you’ve never been through one until you’ve been through one. Everybody prepares you and tells you about all the different stuff that goes on. If there’s news, I’m sure you guys will be the first to know.

Are you surprised that it’s taken this long?

Ballmer: No. Many acquisitions take this long.

Apple said today that they’re going to have some iPhone stuff, including some more enterprise connections. I’m curious, are they partnering with you guys at all to bring Exchange connectivity?

Ballmer: We continue to, under our new interoperability principles, license both the trade secret information and the patent information that anybody needs to interface with either Outlook or Exchange. So Apple–we don’t comment specifically about whether they’re a licensee, but certainly it would be consistent with our interoperability principles to enable Apple to do that work.

What’s the biggest benefit to Microsoft from Windows Server 2008? Is it improved competitive position versus Linux? Better virtualization software? Something else?

Ballmer: Yes (laughter). What is virtualization all about? It’s really about management, superior management. We get to bring what we’ve already done with System Center in high-quality management tools together with great underlying support for Windows Server, virtualization support, interoperable virtualization. So we can run Linux, we can run Windows.

I think in a virtualization-slash-management perspective, we take a little different perspective on that. We don’t think virtualization is an island–maybe VMware does, at least that’s their current strategy. We think it’s a big step forward.

In terms of the workloads, if you look and say where in the server market are we weaker, we’d be certainly weaker in Web applications than we are in most other (areas, like) Web and high-performance computing with IIS-7, with the improvements in Visual Studio, with the hardening we’ve done in server core that makes it easier to put up our rugged Windows Server. We think we’ve done a lot of work that’s going to help us drive share against Linux particularly in the Web work load (area).

A lot has been made about the consumer side of Web services, but Microsoft’s enterprise business is undergoing a pretty radical transformation as well with a move to support a mix of Web-based services and on-premise software. On the enterprise side of things, do you see the services world being as good a business, as profitable as the on-premise-only world was?

Ballmer: I think it’s better. I mean, if you do it right, it’s better. If we do it right, it should be better. My basic thesis, and what I tell our folks–and it’s got to be proven in the market–is if we add more value for our customers, it ought to allow us to make at least as much, if not more money, as we make today.

We can have service-based offerings that essentially line up with our information worker infrastructure products–Exchange and SharePoint, Office Communications Server–if we have instances that sort of line up to what people do, development and deployment applications, database applications, etc. That is more value. We can help people reduce management costs, deployment costs, operations costs, data center costs…Somehow if we can help our customers avoid cost and complexity that they have and give them all the value we give them today, there ought to be a trade in there where we get to make a little bit more money and our customers get a lot more value.

How quickly is that transition happening? Are there specific areas where people are really clamoring for a high-services component, and are there some you can point to where it’s going to remain on-premise as far as the eye can see?
Ballmer: Well, in the enterprise, I think the stuff that we might expect to see actually move most quickly is probably some aspects of the desktop infrastructure, for lack of a better term. We’ve announced some customers–I don’t know who’s public and who’s not public, though. But we’ve announced some customers for our Microsoft online offerings for Exchange, for Office Communications Server, for SharePoint, and I certainly show a
lot of demand there. That’s probably where the offer is clearest and the demand is highest.

Somebody might say, well, what about CRM? You see some (CRM), but you see it more in pockets. You see it more departmentally. It’s not quite the same, enterprise-driven demand that we’re seeing for some of the information worker productivity infrastructure.

Any that you see just pure on-premise as far as you can see?
Ballmer: No. No. (Though) some I think will take longer. You know, when will trading applications–proprietary trading applications on Wall Street–run on the Internet cloud? Probably not tomorrow. Might take a little bit longer than some of the other things we’re talking about.

Source: CNET News.com - Business Tech

Also: Jooce’d in developing nations. See what people are saying on News.com Extra.

When writing earlier this week about Adobe’s sponsoring of the SQLite project, I ran into a complicated issue: is software released into the public domain also open-source software?

I have an editor who hates headlines with question marks, but I’m afraid this time it’s appropriate, because even experts disagree.

For background, software or other material in the public domain simply means that it’s not copyrighted. Requirements to meet the official Open Source Definition are listed by the Open Source Initiative. Two programmers, Eric Raymond and Bruce Perens, founded the OSI about 10 years ago to formalize and codify the open-source idea as it branched off the free software movement Richard Stallman founded in the 1980s, and OSI lists 68 compliant licenses.

Richard Hipp, who founded the SQLite database project in 2000 as a public-domain project, believes it does qualify as open-source software.

“I’ve had a number of conversations on this topic with corporate lawyers for companies that are actively using SQLite. The consensus there seems to be that ‘public domain’ is valid and is a proper subset of ‘open source’–except in France and Germany where the concept of ‘public domain’ is not recognized,” he told me in an e-mail discussion prompted by the Adobe story.

But not so fast. Take the view of Mark Radcliffe, the intellectual property attorney who’s general counsel to the Open Source Initiative.

When I asked Radcliffe if public domain software was open-source, he was clear: “No. Truly public domain software is no longer protected by copyright, thus it cannot have a license which would impose the terms necessary to comply with any of the open source licenses,” he said.

Agreeing with him is Louis Rosen, an attorney with Rosenlaw and Einschlag who previously led OSI’s legal work and who still is involved. He directed me to an older but still relevant piece he wrote about why the public domain isn’t a license

“‘Public domain’ will never be a license. It actually means ‘No license required,’” Rosen said. “Software that is ‘dedicated to the public’ or ‘to the public domain’ is pretty safe. I just worry a bit when people or companies give software away in such an amateurish way, without understanding that licenses or covenants are far more efficient and effective.”

While “public domain” isn’t a license on OSI’s official list of open-source licenses, Perens said it’s not far off: “Software that has been formally dedicated to the public domain through some sort of written statement meets the requirements of the Open Source definition only if the source code is available. Surprisingly, ‘public-domain’ binary-only software exists in some odd corners of the Net.”

And Raymond added, “Public-domain software qualifies…The users are guaranteed all the redistribution and reuse rights that the Open Source Definition seeks to secure by the fact that there is no owner to enforce restrictions.”

Moving from the theoretical realm into the practical, though, the SQLite project appears more open-source than not. The project’s source code is available without restriction, and programmers who contribute code it to it must explicitly declare their contribution is given to the public domain for perpetuity, which appears to satisfy Perens’ opinions.

Source: CNET News.com - Business Tech