IT Spot

I’m clicking reload, so you don’t have to.

After spending the better part of the afternoon trolling every known tech and business Web site, I can tell you that Microsoft is really, certainly, without a doubt going to do something at some point, unless it decides not to.

The Microsoft board is reportedly meeting Wednesday to come up with its next move in its now three-month-old effort to buy Yahoo. The company is said to be considering upping its bid to $32 or $33 a share, unless of course it just pulls the offer. Then again, it may just nominate a slate of directors without putting forth a new offer.

Essentially, it still has the same options it had last week.

But it sure is taking its sweet time.

That said, feel free to do other things. Just check back here every so often. I’ll be hitting reload until quitting time (and annoying my sources every half hour or so).

“Hey! Ho! Time for Ballmer to go,” a Wired.com headline proclaimed on April 29.

My rejoinder: “Hell, no. There are no Softies ready for a promo.”

Wired’s story attempts to make a case for CEO Steve Ballmer taking the hits for Vista’s less-than-stellar market reception, as well as the so-far-unconsummated . “Other CEOs have gotten canned for lesser crimes,” Wired concludes.

There’s just one problem, as Wired notes in an aside. No one’s ready to step up within the company and fill Ballmer’s big shoes.

In my new book on Microsoft’s future, entitled Microsoft 2.0: How Microsoft Plans to Stay Relevant in the Post-Gates Era, I make a similar argument.

When Chairman Bill Gates hangs up his day-to-day hat on June 30, it will be an all-Ballmer, all-the-time show. And there’s no heir apparent inside the company to SteveB. Given this void, Microsoft needs Ballmer to stay at the top, at least for the foreseeable future, for continuity and leadership reasons, if nothing else.

Up until now, Microsoft has been a company where science mattered more
than sales. Specifically, Gates valued technology more than marketing and built Microsoft to reflect his priorities. Gates’ tech vision was evident through the people Microsoft hired and promoted, the projects that got funding, and the amount of commitment the company put behind various initiatives.

The balance of power is set to change drastically, come this summer. And while Ballmer is no technical slouch, he admits that “one of the biggest mistakes I’ve made over time is not wanting to nurture innovations where I either didn’t get the business model or we didn’t have it.”

In the brave, new post-Gatesian world, who’s poised to lead the company? Who is on the fast track at Microsoft these days? Who are the up-and-coming superstars likely to take charge during Microsoft’s next 10-plus years? I’ve asked various Microsoft watchers, partners, customers, and employees these questions, and the fact that few could come up with any immediate suggestions says volumes.

Five years ago, back in 2003, Business 2.0 magazine compiled a list of the 10 most promising rising stars at Microsoft, a group the publication dubbed “The Baby Bills.”

Indicative of how quickly things change, that list looks
obsolete today. Some of Gates’ potential heirs-apparent have left (or been
forced out of) the company; several others have been pushed into less visible
jobs at Microsoft. The Softie who many thought would be a shoe-in successor to Gates–Eric Rudder–has retreated from a visible position running Microsoft’s Server and Tools business, to working in a research incubator while plotting his next move.

Here’s a snapshot of the Business 2.0 Baby Bill Class of 2003 and what each of these execs is doing today:

Eric Rudder–Then: senior vice president, Servers and Tools. Now:
Allegedly working on a secret distributed operating-system project
under Chief Research Officer Craig Mundie.

Chris Jones–Then: corporate vice president, Windows Client Group. Now: corporate vice president of Windows Live Experience Program Management.

J Allard–Then: corporate vice president, Xbox Platform. Now:
corporate vice president, Design and Development, Entertainment
and Devices Division.

Yusuf Mehdi–Then: corporate vice president, MSN Personal
Services and Business Division; and later, chief advertising strategist. Edged out of advertising management as a result of the aQuantive purchase and subsequent Microsoft realignment. Now: senior vice president of Strategic Partnerships.

Steven Sinofsky–Then: senior vice president, Office. Now: senior vice president of Windows and Windows Live Engineering.

Martin Taylor–Then: platform strategist (and Ballmer’s chief of staff). Fired by Microsoft allegedly for a company policy violation. Now: operating principal, Vista Equity Partners.

Tami Reller–Then: corporate vice president, marketing and strategy,
Business Solutions. Passed over for job running Microsoft Business Solutions unit. Now: chief financial officer, Platforms & Services Division.

From the original “Baby Bills” short list, Allard, Jones, and Sinofsky remain
among the core group of influencers at Microsoft (and of these, Allard’s current role is rather sketchy, as Rick Thompson, not Allard, is the Zune king at the company).

Along with the three Microsoft presidents–Kevin Johnson, head of Platforms & Services; Jeff Raikes (who will be replaced this fall by Stephen Elop–the head of Business Systems); and Robbie Bach, head of Entertainment & Devices–along with Chief Software Architect Ray Ozzie, there are a handful of Microsoft managers whose strategies and thinking will help Microsoft make–or miss– a transition into its next phase as more of a software and service provider.

Are any of these individuals next in line to succeed Ballmer? Many Microsoft watchers are doubtful that Ballmer and the board will go inside to find the next Microsoft leader. I tend to agree. Next time Microsoft needs a CEO–which could be at any time the 52-year-old Ballmer decides he’s finally had enough–the company might look outside, rather than inside, for fresh top management blood. (For the record, Ballmer has said he plans to stick around at Microsoft for close to a decade or longer–at least until his youngest son is in college.)

What about Ozzie? My gut is Ozzie wants to retreat even further behind the scenes than he is already. The last thing he wants is an OzzieSoft with him anointed as the “next Bill Gates.”

Not everyone at Microsoft is quite as shy and retiring, however. Here are some of the young (and not so young) Turks bucking to influence Microsoft’s near-term, post-Gates directions:

J Allard

(Credit: Microsoft)

J Allard: The closest thing that Microsoft has at the executive level to a hip exec able to appeal to the all-important 16-to-34-year-old mountain-bikeriding, gaming-savvy geek demographic. Allard is a 15-year Microsoft veteran. But what’s Allard’s job these days? In spite of his lofty-sounding title of corporate vice president, Design and Development, Entertainment and Devices Division, no one really seems to know what Allard is up to these days. Plus, Allard is much more of a “Bill guy” than a “Steve guy.”

Craig Mundie

(Credit: Microsoft)

Craig Mundie: Chief Research and Strategy Officer Mundie is seen as the No. 2 technology guy at Microsoft. But according to recent rumors, Mundie is none too happy about living in Chief Software Architect Ozzie’s shadow and is looking for a way to climb his way up the corporate ladder. Mundie’s been way more visible than Ozzie lately on the speaking circuit and is championing Microsoft’s move to multicore, among other strategic hot spots.

Satya Nadella

(Credit: Microsoft)

Satya Nadella: Sixteen-year Microsoft veteran Nadella has trod a long and winding road inside Microsoft. Nadella currently is corporate vice president in charge of Microsoft’s engineering team for Web search, advertising, and commerce–aka, the Windows Live Search, Microsoft adCenter, and subscriptions/points/billing platforms. What will Nadella’s role be if MicroHoo comes to pass? Unclear.

Steven Sinofsky

(Credit: Microsoft)

Steven Sinofsky: Steven Sinofsky runs engineering for two key teams at Microsoft: Windows Client and Windows Live. He was moved into this role in 2006 for a reason–Microsoft’s top brass were tired of being hurt and embarrassed by Microsoft’s ongoing failure to release products on a timely basis. So far, Sinofsky’s been able to maintain radio silence on most of the projects (Windows 7, IE 8, etc.) he’s spearheading.

Kevin Turner

(Credit: Microsoft)

Kevin Turner: The former Walmart CIO currently runs field sales and marketing, product support, customer support, branding, advertising, public relations, marketing research, corporate operations, and internal IT at Microsoft. In short, he’s one of Microsoft’s chief ambassadors to the outside customer world, as well as the uber-boss of nearly 40,000 of Microsoft’s 80,000 or so employees.

Even though some shareholders (including some of Microsoft’s own employees) believe a change in leadership is what’s needed to keep the company relevant in the next five-plus years, it doesn’t seem as though Ballmer or the bulk of his inner circle”–aka the “Senior Leadership Team”–is going anywhere. Sometimes, no move just might be the best move.

Microsoft’s board of directors met Wednesday to evaluate options in its attempt to acquire Yahoo, The Wall Street Journal reported.

An announcement of the board’s conclusions could come after the meeting, the newspaper said, citing people familiar with the situation.

Microsoft is evaluating an offer of as much as $32 to $33 per share, well over the present $29.12 value of Microsoft’s offer, but “major Yahoo shareholders” are angling for $35 to $37 per share, the paper reported.

It looks like Mark Hamburg, a Adobe Photoshop and Lightroom programming guru, will be leading work to give Microsoft Windows a better user interface.

And given the dramatic user interface differences between earlier and later Adobe projects that Hamburg worked on, that raises some very intriguing possibilities.

Adobe Photoshop Lightroom is used to edit and catalog photos, chiefly the raw images that come from higher-end digital cameras. Compare its design, deliberately imbued with ‘personality’ and ‘elegance,’ to that of Photoshop below.

(Credit: Adobe Systems)

Microsoft and Adobe Systems had confirmed Hamburg’s move on Monday, but Microsoft wouldn’t share details beyond saying Hamburg would work on “user experience” for the company. However, Chicago photographer and Photoshop consultant Jeff Schewe, who caught a plane to California to attend Hamburg’s going-away party, shared a lot more on his blog

“He was heavily recruited by Microsoft and given an unbeatable opportunity to work outside his normal digital imaging field,” Schewe said. “Mark was invited by (Microsoft Chief Technology Officer) David Vaskevitch to come lead a team working on the future of operating system user experience at Microsoft.”

Adobe Photoshop’s interface has well over a decade’s worth accumulated menus, panels, and dialog boxes.

(Credit: James Martin/CNET Networks)

Schewe also quoted Hamburg about the change: “Given that I find the current Windows experience really annoying and yet I keep having to deal with it, this opportunity was a little too interesting to turn down. I can’t imagine doing serious imaging anywhere other than Adobe, but, I needed to do something other than imaging for a while.”

Hamburg’s baby: Adobe Photoshop Lightroom
So what does Hamburg’s move portend? It’s way to soon to say Microsoft will be better able to counter the widespread opinion that Apple’s Mac OS X is superior, but Hamburg’s Adobe work sheds some light on the new possibilities.

Hamburg joined Adobe to work on version 2.0 of Photoshop in 1990, after Photoshop 7 was released, he turned his attention to lead Shadowland, the project that became Photoshop Lightroom. That software, which is used to edit and catalog photos, is a major break from Photoshop when it comes to user interface.

Where Photoshop has a seemingly endless list of menus, submenus, dialog boxes, and configurable panels, Lightroom adapts to the task at hand.

Central is the photo in the middle, as large as possible. Adjustment panes can be pulled out from all four sides based on various tasks. The software shifts appearance according to modes for managing catalogs, developing an individual photo, showing slideshows, printing, and creating photo galleries for the Web.

Overhauling user interfaces can be tough, though. Short-term pain caused by unfamiliarity can challenge the long-term benefits of a clean-slate design.

Adobe is proceeding cautiously with Photoshop interface overhaul. And Microsoft has had trouble with its “ribbon,” which presents a task-based interface across the top of Microsoft Office 2007 programs. It’s been tough for many users to adjust to the ribbon, and Microsoft is trying ways to make it easier to find the commands they want to perform.

Hamburg’s goals: ‘elegance,’ ‘personality’
Some possibilities can be gleaned from Hamburg himself. He discussed some of his Lightroom design goals in a 2007 blog posting.

“We wanted Lightroom to seem elegant. To exhibit grace. To show an attention to style beyond the utilitarian aspect that dominated Adobe’s products up to that time. We wanted a richer UI experience,” Hamburg said.

And Adobe wanted to give Lightroom a deliberate personality–even if that means some feathers are ruffled.

“One of the goals in Lightroom was to consciously think about the product personality we were trying to create with the expectation that a less accidental personality would induce a stronger emotional reaction in users. That stronger reaction can be both positive and negative,” he said. “The second part of this goal was to have enough passionate users to outweigh the detractors.”

Finally, he said Adobe wanted to balance power and complexity, adding the latter only when it significantly increased the former.

Designing a user interface for a product with as limited a range of abilities as Lightroom is a very different task than a user interface for an entire operating system, though. But even if Windows doesn’t directly copy Lightroom, for example, by changing its look to suit the task at hand, I for one would welcome a version of Windows with elegance, personality, and power.

Schmidt is concerned about a possible Microhoo combination.

(Credit: CNBC)

In a broad interview scheduled to run on CNBC at 4 pm EST Wednesday, Google CEO Eric Schmidt made it clear he’s not pleased with the prospect of a Microsoft-Yahoo combination.

In the interview with CNBC’s Maria Bartiromo, Schmidt said that given Microsoft’s history of antitrust issues, an acquistion is cause for concern, according to a transcript of the interview. He also said a two-week partnership trial with Yahoo went well, and said he expects it to be one of several options Yahoo’s executives are considering for their future.

“Well, the long and short of it is that we did a test for about two weeks, which has since ended, where Yahoo took a small percentage of their ads and replaced them by ours,” Schmidt said. “We did this as part of a commercial conversation, which I obviously cannot go into, but it’s one of the strategic options that we believe Yahoo! is considering at this time.

Schmidt, who was a senior executive at Sun Microsystems and CEO of software-maker Novell before taking the helm at Google, has competed with Microsoft for years, and it was very clear in his conversation with Bartiromo that he is not keen on the Redmond, Wash. company landing Yahoo. Schmidt said:

We actually enjoyed working with Yahoo. We also compete with them. They’re a well run and, I think, impressive company. We’ve primarily been concerned about the possibility of a Microsoft acquisition of Yahoo! because of Microsoft’s history and because of the assets that Yahoo has are quite valuable. And we actually think that in the wrong hands, they could be used in the wrong way.

Nonetheless, beyond saying the Yahoo effort went well, Schmidt did not tip his hand about Google’s response if it should face a Microhoo combination.

“There’s a big debate within the company…people are concerned about the history, as I mentioned, and the possibility of merger. So I don’t think we really know yet. We debate it all the time,” Schmidt said.

Some on Wall Street expect Microsoft to announce a hostile takeover bid of Yahoo as soon as Wednesday afternoon after the close of trading.

As Microsoft prepares to kick the ball further in its Yahoo buyout play, possibly announcing a proxy fight as early as this afternoon, shares of both companies are up in late morning trading.

Microsoft investors apparently seem heartened by the prospect, with stock in the software giant rising 1.06 percent to $28.96 a share, over Tuesday’s close.

That bodes well for Microsoft, which has suffered three straight days of declines after posting quarterly results after the markets close on Thursday that showed revenues that were weaker than some analysts expectations.

Yahoo, the object of Microsoft’s buyout attention, opened lower in early morning trading but was up slightly over Tuesday’s close by the time the late morning rolled around. Shares of Yahoo were trading up a slight 0.44 percent to $27.48 per share.

Yahoo and Microsoft may have also gotten a bit of a lift from the broader markets, which were also up in late morning trading. As they say, all boats rise with the tide…(but, as we know, some more than others, depending on their baggage…)

Google, a Microsoft arch-rival and a quasi-white knight for Yahoo, was having a better run for the money in the morning - rising nearly 4 percent to $580.57 per share.

Part of that lift may have come from Google’s CEO Eric Schmidt, who was interviewed on CNBC this morning, during an investor conference in Los Angeles.

CNBC anchor Maria Bartiromo, in her interview with Schmidt, questioned him about the Microsoft-Yahoo bid and Google’s advertising test with Yahoo, which recently concluded .

Says Bartiromo: “What kind of combination would you like to see with Yahoo? What kind of a partnership would you like to see?”

Schmidt responds: “Oh, well, we actually enjoyed working with Yahoo. We also compete with them. They’re a well run and, I think, impressive company. We’ve primarily been concerned about the possibility of a Microsoft acquisition of Yahoo because of Microsoft’s history and because of the assets that Yahoo has are quite valuable. And we actually think that in the wrong hands, they could be used in the wrong way.”

He then goes on to cite the U.S. Department of Justice and its anti-trust efforts against Microsoft more than 10 years ago, in which the agency and Microsoft entered into a “consent decree.”

Schmidt also elaborates on the challenge a Microhoo merger would have on Google by noting:

“We read in the press that there’s discussions and we’ll see what they decide to do. If they go ahead and the merger’s ultimately successful, it would be possible for Microsoft to integrate some of the properties and essentially eliminate consumer choice, particularly in electronic mail, instant messaging, the things were they have 80 or 90 percent market share, and that’s a sweet spot for Microsoft in its ability to eliminate choice.”

Do you think Schmidt was trying to send a not so subtle message to the DOJ? Hmmm….

A compatibility glitch with the latest versions of Windows has thrust the spotlight onto a little known product from Microsoft’s Dynamics line for mid-size businesses.

Microsoft said Tuesday that it was delaying the availability of Windows XP Service Pack 3 and halting automatic updates to Vista Service Pack 1 because of problems with Microsoft Dynamics Retail Management System.

But, just what is Dynamics RMS?

It’s software that allows specialty retailers to handle cash register functions, process payments as well as automate purchasing, inventory and other back-end processes, said Michael Griffiths, the group product manager for the retail part of the Dynamics business.

Dynamics RMS is used to manage about 38,000 different store locations, he said.

Perhaps its most notable customer is the NFL’s Dallas Cowboys, who use it to handle all of their merchandising activities, in conjunction with Microsoft’s Dynamics AX product.

Microsoft acquired Dynamics RMS as part of its 2002 acquisition of Southern California-based Sales Management Systems and last updated the product in January 2007.

Griffiths said that the Dynamics team discovered the issue as part of its testing and realized that the problem could lead to data loss.

“The key issue is there is a potential for data loss within the RMS solution itself, which is obviously something we wanted to make sure we address immediately,” Griffiths said.

He didn’t offer a specific reason why the company didn’t catch the issue sooner. “It just happened this was the time and place when we did find the issue,” he said.

The iPod survey is back up and running, please take a minute or two to share your thoughts on the iPod if you haven’t already.

News.com survey

Click here to take CNET News.com’s iPod survey

Due to an overwhelming response yesterday in just a few hours, we had to close our iPod survey before we could upgrade to a larger account that permits more responses. We got nearly 1,000 responses in 3 hours, which was far more than I anticipated when I signed up for the basic account. Thanks to PollDaddy.com for helping us get back up and running this morning.

The idea is to gather some information on how News.com readers are currently using their iPods, or any MP3 players, in preparation for a story next week about the future of the iPod. We’ve spent a lot of time over the past six months talking about the iPhone and the Mac, so it’s high time we take a look at the device that is perhaps most responsible for Apple’s success this decade.

Attendance is down at this year’s Interop. I’ve heard about companies issuing travel bans on employees and vendors pulling out at the last minute due to budget constraints. Nevertheless, the networking industry is making the best out of it. Some of the early highlights for me include:

1. Switching, switching, and more switching
Extreme kicked off the proceedings on Monday with a new 10-Gigabit stackable data center switch built to scale to 40/100 Gig in the future. Nice device that set the tone for Interop 2008. On the show floor, start-up Arastra received its fair share of Vegas buzz. The company was founded by former Sun Microsystems bigwig Andy Bechtolsheim, but the real story here is that Arastra is pushing the 10-Gigabit Ethernet performance limit with prices at around $500 per port. It will be tough for old Andy to crack this market with the big boys, but this is pretty impressive.

2. Don’t forget Cisco
Is Cisco Systems vulnerable in the data center switching or other networking spaces? Probably not. Jayshree Ulall’s team won the “best of Interop” award for Cisco’s new Nexus data center switches and picked up another award for application acceleration.

3. Virtualization
I am intrigued by Citrix’s strategy that blends server/desktop virtualization with its leading XenApp (formerly Presentation Server) and NetScaler application acceleration portfolios. Citrix is thinking about virtualization, asset optimization, and traffic management from end-to-end. This is where the industry is headed; Citrix has a pretty good idea of how to get there.

4. Nortel gets the Interop Chutzpah award
Nortel is on the offensive and its target is–obviously–Cisco. Nortel announced 60 companies that chose Nortel over Cisco, a pretty bold gesture. Nortel is also featuring an “energy calculator” at its booth where users can enter a Cisco and Nortel configuration and get data on power consumption comparisons. No gimmicky booth babes or give-aways, just “go for the throat” guerilla marketing.

Also on tap Wednesday: more virtualization and wireless networking–should be fun.

Seagate has come a long way in the data storage business, from its 5MB ST506 hard drive in 1979 to its latest 1TB Barracuda introduced last year. And today the company announced that it is the first manufacturer to ship 1 billion hard drives.

If you can’t visualize that many storage devices, picture this: You can circle the globe 13.7 times with the 1 billion hard drives placed end-to-end, according to Seagate.

(Credit: Seagate)

Not all of them bear the Seagate brand. The number also includes the ones manufactured by Conner, which merged with Seagate in 1996, as well as those from Maxtor, which was acquired in December 2005.

More noteworthy, however, are some of the other statistics behind the accomplishment. For example, the first 5MB drive–the Seagate ST506–weighs a hefty 5 pounds and cost $1,500 when it debuted in 1980. A 3.5-inch 1TB drive today, which has 200,000 times more capacity, retails at only a fraction of that cost.

Another interesting fact: It took Seagate 17 years to ship the first 100 million drives, but only 12 years to make the next 900 million.

What’s scary is that Seagate expects to hit the 2 billion milestone within the next 5 years, based on current increases in production capacity and demand. That looks like a very possible scenario, considering the amount of data we guzzle daily with no signs of slowing down.

At its press event, Seagate also did a little crystal-ball gazing, predicting that higher broadband penetration and rapid growth in digital content will increase market demand for hard drive storage by almost 80 percent by 2012. But the company has played down the impact of solid state drives (SSDs) on traditional disk-based devices, believing instead that hybrid drives will be more affordable for most consumers. The company will still be involved in the SSD business though, with its first product expected later this year.

(Source: Crave Asia)