Is Microsoft doomed in its Current Form?

It seems Microsoft has had a dose of reality in the last week. At the Consumer Electronics Show in Las Vegas, Tami Reller, the CFO of the Windows division, has warned that PC shipments will be lower than an already gloomy forecast in this quarter. In her case, she put this down to supply problems in the Thai flood regions where the high waters are still causing havoc to component makers, particularly on hard disks. Some UK distributors have plenty of servers but no disks which will impact their sales in the next few months.

Finally, it seems that the penny is dropping at Microsoft. Their figures are actually dependent on the shipment of PCs to a very high degree. I have illustrated before that Windows itself and Office Productivity products constitute the majority of the revenues and profits generated at Microsoft and these numbers are directly dependent on the number of client devices sold into homes and corporates. As PC sales alarmingly decline, so will Microsoft revenues and profits - in their very heartland.

Microsoft is a well spread company, for sure. But with servers taking a decline lately, Windows Server, already under severe attack by Linux, is also suffering. All this is occurring as Apple see sharp increases in the sales of its PC-like devices while tablets and smartphones continue to boom - all these devices coming with largely Apple and Google operating systems.

The threat also is that corporations are wising up. They have paid through the nose for arguably second rate products in their companies for too long. PCs which seem to fail conspicuously in less than 3 years, an operating so clunky it takes 5 minutes to load up each morning, office productivity tools which seem to suspend and crash for no perceivable reason, occupying ever expanding disk space.

Apple may charge top dollar for their hardware but you get a robust operating system, rich in features and free utilities of high quality which takes seconds to load up or resume, no matter what state you left it in. And office suite software is far cheaper with a breadth of products available at below £20 a pop - except Microsoft Office for Mac which is £189 but at least half the price of the PC version and many times better.

The fact is that tablets and smartphones are changing not just the array of client devices and how we use them for home and work but they are changing the way we buy software. Suddenly, we have a plethora, a vast hypermarket of innovative, low cost and clever software available to us that costs just a few pounds to buy. And we buy tons of the stuff. Finally, we are finding there are alternatives to the status quo that has frankly held us back for years in terms of real productivity.

Steve Jobs called it the post-PC era. I would liken it to the IT version of a 'renaissance' as people dream up all sorts of clever software and just punt it out in volume.

But there is a new trend. Bring Your Own Device (BYOD) is the consumerisation of IT. This is the concept that we buy our smartphones and tablets, even PCs ourselves and bring them to work as devices of choice to work with and demand access to the corporate networks and all its facilities and data. In the old days, at job offer time, we were told you would get a salary package and then a PC and phone would be provided. Already in the US, job offers go out with no PC or phone provided but the recruits are invited to bring their own.

This is one reason why Apple as a PC, tablet and smartphone provider and its counterparts in the tablet and smartphone arena are doing so well in the corporate world as users rebel against the constraints of the old PC world and flourish in the new post-PC era.

These are worrying trends for Microsoft. I heard of story of a Microsoft executive going into an Apple store to bait the salespeople with a new Nokia Lumia with its noddy-like tiling on the front having already arrived late and behind the market. It must have been a pathetic sight as an army of Apple customers looked up from their iPhone 4S devices and thought, 'whatever'.

This is part of the problem with Microsoft. This ingrained belief of impregnability and that users really have no place to go, so they swallow whatever Microsoft do and say. It's a Windows world, it's an Office world. The Spanish bank BBVA has proved that this is not necessarily the case in choosing to migrate its entire 110,000 staff to Google Apps for Business after a successful trial - encouraging all their employees to ditch the past. They have embraced the advantage of the Cloud to run their company by allowing the web to be the platform, not the PC which unshackles users from being given sub-standard machines and to choose a device of their own.

15 months ago, I bought the top of the range Lenovo Thinkpad - a great machine in terms of weight, PC sexiness and performance. Its battery life was always rubbish even though it was advertised as 10 hours and even though it runs Windows 7 its performance has degraded over time as I have found with every PC I have ever owned - it's as if they get fatigued from running rubbish software. Yesterday, as I walked into the atrium of a Microsoft building, it literally died. One minute I was looking at the presentation I was about to give, the next it was blank and dead. It still is dead.

In supreme irony, I had my Macbook Pro tucked in my bag (having not wanted to antagonise by using it) and latched onto the guest wifi and loaded up the same presentation from Dropbox. In seconds, without skipping a beat, I hooked up to the projector using my convertor cable and without pressing any button the projector and resolution was detected and my presentation was given. Jaws hit the table when they saw the Mac and I expected to get escorted out by security but when they saw how their own software behaved on a Mac with so many more options on how to run a slideshow from a PC and time your delivery, they were impressed.

But they still don't get it. Even when the graphs point out the clarity of the numbers and trends, they don't seem to get the fact that their very heartland, the core product set of the company is under persistent threat not by their customers but by users. No amount of canoodling with the CIO will make a difference. Users are rewriting corporate policy and deciding the future IT strategy.

I predicted that Microsoft will make a profits warning in 2012 and Keller's announcement prior to Q2 results was seeding some bad news. At some point, a hole will appear in that lucrative area that Microsoft has depended upon for years. If nothing else, the price of MS Office has to collapse in the future - nobody is going to pay the kinds of prices of the past for that product for the future. 

I predict that Microsoft will survive but not in the same form. It will have to radically change and find new ways to make money. Right now, it's not at all clear how they will do that. Is it time for management change? Maybe that's the starting point. 

But what do I know?

Small Business? Think Big

If you are a small business, the last thing you need to worry about is how much reserves and capital you need to keep on hand to expand. If the opportunity presents itself, you just want to take advantage of it.

I have bleated on about The Cloud and so it is best to illustrate how to organise your IT so that you don't have to worry about it as you grow. You just add users as and when you need to rather than having to worry about whether you have enough storage and dedicated servers to run your business. It also practical advice on how to secure your data from the most common threat - forget hacking, it's good old theft.

So here's a heads up on a few recommendations. I started my small business using TASBooks software. It's a great, easy to use package and even a non-skilled finance person like me can easily keep my books up to date. I farm out my payroll to a professional who for £150 per quarter does the payroll calculation, sends the necessary filing to HMRC, calculates my VAT and does the same and my P60 once a year. It's a good service. Because I have some international customers, I now use TASBooks 2 which has multi-currency. I have needed some support so I now pay £372 a year for support which I use infrequently, but when I do I need it badly! So it's a no brainer, I have to have it and it at least gives me the odd upgrade too.

Then I pay an accountant once a year to do my return plus produce my accounts. That's around £1,800. In total then, I spend around £372 plus £600 plus £1,800 just for accounting which for the financially minded is £2,772. I could shave a bit here and there if I tried but that's the sum of it to date and it make me feel reasonably secure.

What are the limitations? Well the TASBooks requires a PC to run the software and I need to back up all the files which are not big. So I have Acronis software and 500Gb pocket drive. This means I have to be attached to the unit to do the nightly back ups but they get done. Goodness knows how I would restore but let's just assume I can. The backups often fail - I don't know why but I get error messages which I don't understand and I don't have time to check. I just hope the next night it works.

My laptop is my work machine and so it runs the TASBooks and the back up manager - and if I want to do any accounting stuff on the fly in some down time, then that's the machine I have to use. If I am on the road, I can't back up - pure and simple.

I used to run ACT from Sage as well and keep a support contract which last time I paid was £180 per year. I found I didn't need much support but I could never get functions like group mailings working. Also, it requires back ups and it runs on my laptop.

I actually have a hosted Exchange Server at Fasthosts for around £90 a year and I host my domain there too for another fee and I get around 2Gb of mail storage space there in the deal. My website is controlled by en external contractor and consequently it hasn't been updated for at least 3 years.

I am a small businessman on the road. The issue for me is if I am on business and either my laptop breaks down or I get robbed, my entire business fails. It's that weak a set up.
Only my email is half resilient as I could start up again with a new machine quickly and Fasthosts have all my mail data safely on their data centre site in Gloucester and their tech support is pretty good. People try to sell me PC maintenance but you cannot replace data and applications too. If they are lost it is a nightmare trying to piece it all back together. And as a small businessman, I haven't the time or money to think about building in resilience. There is the nightmare of reloading all those little programs I use too like PDF complete. My business is billing clients.

So here's an alternative. Either host your Exchange server as I do or go with a Cloud based solution. Microsoft 365 at £15.75 on their absurd charging levels is the starting point of choice and grin and bear the lunacy of running it locally, having a SharePoint back end that you will have to work around but at least you are resilient. Google Apps is another alternative at $50 per user per year but for those working in Government areas the servers are unlikely to hold your data in this country while if you work a lot with MS Office people you may find annoyances around compatibility of files. But the advantage is that you can access your mail and files from any device including a smartphone.

Then your accounts. I am now looking at going with www.inniaccounts.co.uk. It has a starting price of £69 per month and this not just gives you online accounting software backed up in The Cloud and accessed anywhere via the web but it also gives you, in the cost, all the bits that I have detailed I outsource as above. An accountant at hand to do your filing, VAT returns, and your end of year accounts plus payroll. That's just £828 per year all in. That's a saving of £1,944 for me.

I have also gone Salesforce.com for my CRM and that was on a deal at £120 for the year. Now I can group email to my heart's content but all my data is backed up online and I can access the program from my iPad and laptop or any machine anywhere, any time. That's a saving on annual costs of ACT of around £60 but with the data automatically cared for.

Then there is Evernote of which I am a huge fan. At base level this is free. It allows you to keep multiple note books on things like projects into which you can pile web pages of research, files, emails - anything. It's all online so it's automatically backed up each time you add something and it is synchronised over Android and iPad if you want so these notepads are available to all, automatically as well as working offline. The premium version which gives more space is £26 a year. Microsoft OneNote, it's big competitor which I bought and never used, is a few hundred pounds.

It's my end of year this month, so I am thinking about these things as I am faced with an upgrade dilemma on my excellent Lenovo X200 laptop. I am on Windows XP and Office 2007 although the Exchange Server is actually Office 2003. I now do around 80% of my work on my iPad and love it as it is convenient for emails and note taking plus working in Salesforce.com. I have to go back to the PC for things like accounts and presentations as everyone works in PowerPoint and I need to project things which the iPad is weak on and printing is not a good solution yet.

But to upgrade it will cost me £134 for Windows 7 and £350 for Office 2010 and I am not sure it will work with my hosted Exchange. I have trialled MS Office 365 and Google Apps and on cost and usability Google wins but it's a Microsoft world and I cannot be an island of incompatibility with my clients - or just risk it. But MS 365 is so annoyingly clunky and not simple - it just peeves me that this is the best that the largest software company can produce with all those vast resources of brilliant people at their fingertips. Think customer, for goodness sake!

Rant over, I have to work out which way to go and it's likely to be MS 365 at £15.75 per month. While I just have to sort out the main back up and retrieval software as Acronis is ok but I want something more flexible. Of course, my data is sensitive and I don't want Americans snooping at it, as one comment was made to my blog yesterday, but our mails and data can be monitored any time if so desired so get real. Phones can be hacked too easily and banking details can be blagged simply as we have all just learned. I argue strongly that for the small businessperson it is far too hard to be as secure as the major vendors in terms of data control and security. We don't have the money, the scale and the time to do it as good as Microsoft or Google. So a solution outsourced to either, in my terms, is far more secure than what I have today.
If someone steals my laptop, they have everything. If someone hacks a server in an office or gets a back up tape or a stray USB or someone leaves a laptop on a train with the customer database on it, then they have the crown jewels. When it's all on the web, the laptop is a useless to them on that front.

So in my above examples, I would save a considerable amount of money if I go to online accounts. I have already saved going with Salesforce.com and Evernote. And it's likely I will succumb to Office 365 which also gives me a new website although I am toying restarting using WordPress as it is so simple, associated with blogs which I do all the time, and it's darn cheap (plus there is a free app on the iPad so I can update it on the fly).

Just with some simple thoughts, I can off load all my IT worries to The Cloud, save money, get security and resilience, avoid expensive one off upgrades and scale up if I need to at a smooth monthly cost. I even replace my very nice accountant which is the only downside.

But business is business.

Comparisons in The Cloud

Hot foot from The Cloud Computing Forum with my free trial of Microsoft Dynamics, I thought I would give the whole thing a go.

So I got my MS Dynamics trial going with a little bit of sweat and some clunky processes of verifications. Finally the beast arrived. Neatly, you can sign in with your MS Live ID.
From there I went about importing my contacts from ACT, my old and tired CRM package. There is a process to follow and I adhered to it religiously. When I viewed my contacts I got loads of blank entries that corresponded to null contacts found in companies. Then you notice that it has picked up first names only for the Full Name. I follow the procedure to wipe out the data and start again. The same thing happened although this time I had carefully followed the mapping of the data columns as per the instructions. I did it again. Same thing.

Annoyed, I turned to Salesforce.com. I signed up for the trial of the Group version although it is arguable that as a small, small company I only needed the entry level Contact Manager. The sign up took seconds and I was provisioned immediately. I pressed the button for Outlook synchronisation and a small program was downloaded and then I followed the steps. Outlook was synchronised with some errors which I manually checked and corrected - that took about 30 minutes in total.

Then I uploaded my ACT from the same file I used on MS Dynamics. It worked. Nothing more to say than this. All my contacts were there as required. I had a little tweaking to do on some accounts where contacts were not assigned but that took about 10 minutes in total which for 9,500 contacts in total isn't bad.

Salesforce allows you to send emails and it records them. But if I am honest that functionality is better in ACT where you use native Outlook and a copy is recorded in ACT. For Salesforce, you have to use its editor and it's not as nice. Plus it makes nothing ad hoc. Even scheduling meetings seems to not affect the Outlook calendar. What this forces you to do is to work entirely in Salesforce and I am a little uncomfortable with this and can see why salespeople rebel against the time taken to do things in Salesforce.

By this time MS Dynamics has been ditched. I can't see where it links with Outlook and although the tabs on the left are good, it is not as intuitive as Salesforce which has everything you need to work a contact or opportunity in front of you.

Then came the price. I could have started on a special offer on Salesforce Contact Manager at £1.20/user/month but I splashed out and did the next offer for Group at £10.20/user/month. The comparable offer on MS Dynamics is one flavour at £22.75/user/month for this month, £29.50 after the end of June.

No brainer - Salesforce wins it.

And here is the issue for Microsoft in The Cloud. Everything is about getting the same product down into The Cloud and amortised on price. There is no understanding of the different needs of an Enterprise of one man or 10,000. The price and product is the same. But the businesses are radically different.

One size does not fit all, sadly. Whereas Salesforce does escalate to a high price, that depends on the user status in a very hierarchical fashion and you go into the realms of unlimited customisation. But for me, Salesforce Group is perfect and I am working happily in it as we speak.

This is where Microsoft's strategy is critically flawed. Businesses of my size do not compare with the likes of BP International. My requirements are simple and limited. Salesforce Group gives me a raft of features perfect for my business. MS Dynamics is clunky and overloaded while making it difficult for a user to get started. I don't want to have to be trained to do something as simple as inputing data, thanks, or importing a .csv blinking file. If that isn't easy, then you are onto a losing battle with SMEs.

Salesforce has cracked it. It worked perfectly on my iPad and I don't have to worry about file management. It also has a custom app for iPhone which works on iPad. Then it has something called Chatter which is free and is an imbedded Twitter type application which allows you to create working teams on accounts or groups of accounts from people within your company or even outside. People then see updates and you can 'chatter' any news or success or share ideas as well. It's a neat function and this works on iPad and my Android too.

The Cloud isn't just about sticking an application in a hosted environment. It's about solutions. Microsoft is using old mentality to try to get into The Cloud. Microsoft should take a leaf out of the books of the likes of Salesforce. To make matters worse, salesforce seemless links into Google Apps which are free.

They are already there and doing it brilliantly. They are the benchmark.

Caught with their pants down

Another day and another mobility giant disappoints.

This time around its RIM, makers of the Blackberry. The once darling of the markets and the must-have device of any workaholic executive, the Blackberry led the way for corporations to serve their emails on mobile technology. It had so many things that were wrong to start with - the clunky wheel mouse, inability to read attachments, constant scrolling up and down to find messages, that blinking deductive text that made so many messages just total rubbish. It didn't matter, the Blackberry was simply a cutting edge device, we put up with it all.

Suddenly the world is different. Profits dropped in the quarter to May to $695m down from $769m on the same period last year - missing even their revised forecast. Talk of challenges and cost cutting is rife - shares are down 12%. Oh and any company that has joint CEOs is asking for trouble.

The same could be said for Nokia who, having absorbed Symbian, had got so locked into their own world of mobile phones they simply failed to see the Smartphone revolution as a threat. HTC, Apple, Samsung have all battered them repeatedly and now they have turned to Microsoft as a last ditch effort to be saved.

For Blackberry, their woes have gotten worse as there have been delays in delivering their new tablet product which would be just another catch up device in a rapidly filling market. Google Android came from left field with Apple to invade the mobility market and their power and brilliance has simply left the traditionalists behind. Innovation at RIM and Nokia seems to be a thing of the past.

In both cases, RIM and Nokia have been caught with the pants down. RIM has at least got a decent share of the corporate market to defend but when it took me precisely two minutes to configure my email client on my Android with ZERO new software on any server, you know that Blackberry are struggling for the future.

Analysts are saying that users are not waiting for Blackberry - they are moving to other platforms. The same can be said of Nokia. Too little, too late.

iCloud, You Cloud

On a day when IDC revised their PC sales figures in Europe down, on the US West Coast, Steve Jobs came off sick leave to unveil Apple's iCloud strategy. It's a sunny day for the industry.

As a dedicated iPad user the one fatal flaw I have been aware of is that the device is entirely dependent on contact with a PC or Mac running iTunes. From a static device, the iPad gets its OS updates, it gets backed up and can be restored (twice in my case after crashes when updating the OS - rule 1: never interrupt a Sync) only when in contact with a host PC or Mac running iTunes.

So will transferring that dependence into The Cloud, the iCloud no less, make the iPad any the better? Yes.

It means that I no longer have to be situated close to a PC or Mac to back up and interact with iTunes, the mother program. I will now be able to do this anywhere thanks to iCloud. And that goes for the iPod and iPhone too. In fact, Apple will automatically update all devices via synchronising from the iCloud. This means that if you add an event in your calendar, all devices will be updated to reflect it. Immediately, if you like. The same will go for documents, contacts and emails.

This is ace. I am a user of the excellent Evernote application, a far better version of MS's OneNote product. Automatically, via The Cloud, it updates my iPad 2, PC and Android phone with changes to every Note I write - immediately, automatically and wherever I am. It is, at last, one of the few programs to really make this possible. Apple now proposes this with all products.

Well you have to remember there is a Mac and a PC world so I would suggest we will not see ALL products reflecting this. But the proliferation of new devices has brought many new developers into play and we are at last getting the kind of innovation we last saw when the PC went open architecture for the first time. It does mean that the rich software companies will gobble up small players as we have seen in the past but there is a hope that we no longer all have to adhere solely to Microsoft's agenda.

And that's good news for us all as they have stifled the stuffing out of the application market on PCs. The world of Mac and Android is where the innovation has been.

The iCloud is a great step forward and what it illustrates is the massive benefit that The Cloud can bring. All devices synchronised, everywhere.

Now isn't that a reason to get excited?

Nokia Knocked Again

Nokia has once again downgraded its revenue and profit forecast. This has caused an 18% slide in the value of its shares.

Not a good time for the new UK General Manager, Conor Pierce, to take the helm and some important decisions will have to be made for the future. Nokia is still the highest shipper of handsets even if its market share is dwindling. The problem is that it still ships the vast majority of its handsets in the very low margin 'dumb mobile' sector. The high margin smartphone sector has largely passed them by and this is now being dominated by the rapid growth shown by companies like Apple and HTC.

Did Nokia's management underestimate the threat posed by companies like Apple who came from left field? Did Nokia cling to the hope that Symbian would be the de facto standard in mobile operating systems, again underestimating the threat that companies like Google posed - again coming from left field?

They have pinned all their hopes of a revival on their much publicised partnership with Microsoft. The first of the new handsets sporting Windows 7, as there is no real mobile operating system form Microsoft, will not be seen in UK markets until Q1 2012. It already sounds late.

Having already made announcements about 7,000 job cuts, the once mighty Nokia is a little punch drunk. But is it on the ropes?

Xooming Marvellous

Up front, I will admit I am an Apple iPad man. I bought my iPad 2 about a month ago, upgrading from the iPad in the process. And I love it.

Now here's a curious thing. Chatting to a high-up-in-Microsoft mate of mine recently, he basically said that the iPad would get swamped by the Microsoft combatants. I poo-pooed his argument as usual as just MS bluster version 3.5.

BUT, whilst my MS friend version 2.0 maybe wrong on one count he may be right on another. You see, I also recently received an upgrade on my mobile phone and went from a steam-driven pseudo Nokia smartphone to the HTC Desire Z. Oh my, what a spanking phone - if you will forgive the battery from not lasting anything like it says on the tin, that is.

OK, battery aside, the phone is superb. And that's because of its Android operating system from Google. There are tons of brilliant Apps, the Wifi linkage is brilliant and even the retractable keyboard for idiots like me is actually fairly redundant as the touchscreen works really well.

What is more, the operating system seems stable and quick. The graphics are dazzling and it's a dream to Twitter, email, text and all else from. In short, it's the cat's whiskers in smartphones, in my humble opinion.

So enter the Motorola Xoom, the Android 3.0 (honeycomb) driven tablet. Even the marketing blurb is wonderful simply saying 'It supports Abobe Flash Player 10'. If only Apple could say that for the iPad - it continues to be a rusting nail in a festering wound for them.

There's more. The Xoom has a 10.1" display at 1280x800 WGA screen. What does that mean? It's bigger and better definition than the iPad 2. The onboard cameras are better than the iPad's too. Better still, you can buy nice accessories like a portfolio case rather than useless and expensive Smart cases that the iPad 2 has. Mine went straight into a cupboard and I stuck with my nice, leather and expensive yet not dimensionally correct 'Snugg' case bought by my family on my birthday.

If there is going to be a serious threat to Apple, I think it will be Android that will bring it on. If nothing else, we are all a bit jaundiced by the Microsoft 'catch up and botch it' syndrome. In this case they cannot simply buy the company to compete as Apple and Google are just a little beyond reach on that front.

There are a few drawbacks at this stage. Models available are Wifi only so far, with external 3G Mobile broadband extra which is a shame and it looks slightly pricey at the moment although you do get bigger memory for your bucks.

I would like to see one in action to validate my argument but on 'paper' the Motorola Xoom with Android looks pretty darn hot.


- Posted using BlogPress from my iPad

Google Android & Your Data

Eric Schmidt (Chairman of Google) has recently tried to allay fears that Google Android devices are accumulating our location data and backing it up to storage devices. He says that, 'Google is on the side of the consumer'.

Of course, Google would claim that we opt into such features. Note that whenever an Android App asks you to switch on your location indicator, such information is being relayed back to Google's servers and is stored - allegedly.

Microsoft have made great play on this - almost to the point of slander. But the reality is that they are not far wrong. Google claims that by storing and using such location data that it can produce 'Better targeted search'.

That phrase is in fact a euphemism for 'Making more money' - that is selling highly specific target information such as user location to advertisers so that they can more accurately tailor an advert to us and therefore increase their chances of a hit and possible sale.

As an example, just this morning I received adverts from Zoopla for postcodes near where I was sitting, not my home address. That's highly specific and very much dependent on my current location.

It is noticeable that Google tries to hide the fact that it will 'sell' the location information to advertisers and not a penny of that increase in revenue comes back to us as individuals. Perhaps, if Google wants to use this data in the future, we should charge them for every time they sell it or get a cut in the advertising revenue. After all, we are becoming the moving billboards upon which they can mount their adverts to woo us.

Google, as we are becoming aware, are not the nerdy, friendly cool guys we once thought they were. Their revenue figures and profitability are simply astounding. They are a fantastic money machine and we are the ones who make it happen.

We are all stakeholders in the Google phenomenon. Perhaps we should rise up and ask for our share of the money they are making out of us?


- Posted using BlogPress from my iPad