Microsoft topples Apple, returns to the top of the world

WASHINGTON -- Microsoft is back at the top of the technology world following an extraordinary comeback to close the gap with Apple, some 3 years into a transformation of the onetime leader by chief executive Satya Nadella.

Microsoft regained its title as the world's most valuable company when it closed Friday at a higher market value than Apple for the first time since 2010, after a brief move ahead of the iPhone maker earlier in the week.

At Friday's close, Microsoft's market capitalization was $851.2 billion, having tripled in value since Nadella took over in early 2014.

Apple's valuation stood at $847.4 billion, having dropped some 20 percent in the past 8 weeks. Not far behind were Amazon ($826 billion) and Google parent Alphabet ($763 billion).

In the 1990s, Microsoft held the crown as the top tech firm and most valuable company as it powered the revolution in personal computers with its Windows operating system.

But in recent years, it appeared headed to obscurity after spectacular failures in mobile computing, while Apple, Google and Amazon saw their fortunes rise.

Analysts say patience, diversification and the willingness to jettison failing ventures helped fuel Microsoft's surge.

"Microsoft is firing on all cylinders right now," said Jack Gold, technology analyst with J. Gold Associates.

"Satya Nadella has been doing a fantastic job in leading them away from dead-end areas and being more innovative."

THRIVING IN THE CLOUD

Microsoft still draws considerable revenue from Windows, the software that powers the vast majority of PCs.

But it has leveraged its position to bring business customers to its cloud computing platform known as Azure, and has developed a steadier revenue stream from its Office software suite for both consumers and enterprises.

"Azure has been really big for Microsoft," Gold said.

For companies already using Microsoft systems for PCs and servers, "it's easy for them to stick with Microsoft, and that's the advantage for Microsoft."

Microsoft has become far less dependent on a single product than in the past, with strong growth from its cloud services and revenues from its Xbox gaming business, Bing search, Surface tablets and PCs, as well as the professional social network LinkedIn acquired in 2016.

It won a $480 million contract with the US Army last month to supply HoloLens devices that will help troops train using augmented and virtual reality.

It is also competing with Amazon and others for a multibillion-dollar contract for Pentagon cloud services.

The diversified revenue stream is in contrast with Apple, which still relies on iPhone sales for the vast majority of revenue and profit.

"Microsoft is pretty well-balanced across a number of different categories," said Bob O'Donnell of TECHnalysis Research.

"For Apple, we've reached peak smartphone and it's a very challenging market. Longtime observers of Apple knew this would happen at some point, and the question is how quickly they can transition to services."

Microsoft's emphasis on business services makes the company less visible to consumers, but "it means they are not subject to the whims of tech fashion, and their revenue base is more solid and more stable," O'Donnell said.

LEARNING FROM FAILURE

A big part of Microsoft's transformation came when it decided to throw in the towel on its Windows mobile phone business after acquiring the device business of Nokia but failing to get a foothold in the sector dominated by Apple and Google-powered Android smartphones.

"I think Satya Nadella exercised extraordinarily good judgment," said Roger Kay, a consultant and analyst at Endpoint Technologies Associates.

"He ceded the consumer business to Apple and focused on the corporate sector and the cloud."

Microsoft's failures in mobile may have actually helped it by forcing the company to work with rival operating systems, analysts say.

Apple, meanwhile, has largely required its own devices for its services, a strategy which Gold called "troubling."

"That's the same path Microsoft went down a decade ago," he said. "Apple is going to have to change that."

The company appeared to move a step toward opening its services in the past week, agreeing to offer its streaming music on Amazon's Alexa-powered devices.

"Apple has a great track record when it comes to reinvention," said a research note from Gene Munster and Will Thompson of the investment firm Loup Ventures.

It anticipated that the company's "next reinvention does not involve product replacement; rather, it will require a shift in mindset to consuming Apple products as a service."

source: news.abs-cbn.com

Microsoft to buy LinkedIn for $26.2-B in its largest deal

Microsoft Corp. will buy LinkedIn Corp. for $26.2 billion in its biggest-ever deal, marking CEO Satya Nadella's first big effort to breathe new life into the software giant's business-productivity tools.

By connecting core software like Microsoft Word and PowerPoint with LinkedIn's network of 433 million professionals, the deal marks a turn for Microsoft, which stumbled in a mobile phone venture launched under Nadella's predecessor. It also aims to take on challengers in several areas.

The deal could help keep services like Outlook email relevant enough that customers won't want to leave it for rivals such as Google's Gmail, analysts said. And because the acquisition brings a network heavy in marketing and sales professionals, it delivers a shot across the bow to competitors in those areas, such as Salesforce (CRM.N) and Marketo (MKTO.O).

For LinkedIn, the opportunity to tap Microsoft's customers, including the 1.2 billion users of its Office suite of business software, could help it jumpstart growth, which has slowed in recent quarters.

"LinkedIn and Microsoft really share a mission" of helping people work more efficiently, said Microsoft CEO Nadella in a conference call with analysts. "There is no better way to realize that mission than to connect the world's professionals."

Nadella has been trying to reinvigorate the once-lumbering company since taking over two years ago, and has helped build more credibility around Microsoft's efforts in areas such as cloud-based services. When he took the top job in February 2014, the company's share price was $34.20; early Monday afternoon, it was trading around $50.

"The Venn diagram is pretty big," Nadella said in a separate call with Reuters, meaning the overlap of customers of both companies, although he didn't give a precise number.

In a presentation to analysts, Microsoft said after adding in LinkedIn, the total potential market size of Microsoft's productivity and business-process segment was $315 billion, up from $200 billion without LinkedIn.

Nadella gave an example of a customer walking into a meeting scheduled on a Microsoft Outlook calendar integrated with LinkedIn, receiving notification that one of the people in the meeting went to college with a colleague.

"The future of productivity is around people, identity and data and the relationships between the them," said Matt McIlwain, a portfolio manager at Madrona Ventures. "Microsoft is buying LinkedIn for the opportunity to leverage these capabilities and combine them with Microsoft's strong but complementary assets in those three areas."

The offer of $196 per share represents a premium of 49.5 percent to LinkedIn's Friday closing price.

MIXED TRACK RECORD

LinkedIn's shares soared 47 percent to $192.42 and Microsoft's shares were down 2.7 percent to $50.06.

Microsoft has a mixed track record when it comes to acquisitions, with past targets such as business network Yammer, internet video conferencing service Skype and particularly phone company Nokia failing to deliver hoped-for benefits.

Monday's deal raised investors' hopes that another social media company, Twitter (TWTR.N), could be the next acquisition target, sending shares up more than 5 percent.

Reid Hoffman, chairman of LinkedIn's board and the company's controlling shareholder, said the deal has his full support.

Jeff Weiner will remain chief executive of LinkedIn, reporting to Nadella. In a phone call with Reuters, Weiner said LinkedIn would remain its own entity in the way that YouTube is relatively independent from parent Alphabet (GOOGL.O), or Instagram from parent Facebook (FB.O).

Microsoft plans to speed-up monetization of LinkedIn by boosting individual and organization subscriptions as well as targeted advertising, it said.

Despite the rich premium paid by Microsoft, LinkedIn is selling for well below its peak of more than $270 per share in 2015. A weak forecast earlier this year sent its shares tumbling amid slowing online ad revenue.

LinkedIn went public in 2011 at $45.

The deal, which won the unanimous support of both boards, is expected to close this year, the companies said.

Microsoft, which has $105.55 billion in cash, said it would issue new debt to fund its acquisition. Moody's said it was reviewing Microsoft AAA rating for a possible downgrade.

After the deal, which will require approval from regulators in the United States, the EU, Canada and Brazil, LinkedIn will become part of Microsoft's productivity and business processes unit, the companies said.

Microsoft's financial adviser was Morgan Stanley and LinkedIn's financial adviser was Allen & Company LLC and Qatalyst Partners, founded by Silicon Valley dealmaker Frank Quattrone.

Microsoft's legal adviser was Thacher & Bartlett LLP and Wilson Sonsini Goodrich & Rosati and Professional Corp advised LinkedIn.

source: www.abs-cbnnews.com

Here come the robots: Davos bosses brace for big tech shocks

DAVOS, SWITZERLAND - Implantable mobile phones. 3D-printed organs for transplant. Clothes and reading-glasses connected to the Internet.

Such things may be science fiction today but they will be scientific fact by 2025 as the world enters an era of advanced robotics, artificial intelligence and gene editing, according to executives surveyed by the World Economic Forum (WEF).

Nearly half of those questioned also expect an artificial intelligence machine to be sitting on a corporate board of directors within the next decade.

Welcome to the next industrial revolution.

After steam, mass production and information technology, the so-called "fourth industrial revolution" will bring ever faster cycles of innovation, posing huge challenges to companies, workers, governments and societies alike.

The promise is cheaper goods and services, driving a new wave of economic growth. The threat is mass unemployment and a further breakdown of already strained trust between corporations and populations.

"There is an economic surplus that is going to be created as a result of this fourth industrial revolution," Satya Nadella, chief executive of Microsoft, told the WEF's annual meeting in Davos on Wednesday.

"The question is how evenly will it be spread between countries, between people in different economic strata and also different parts of the economy."

Robots are already on the march, moving from factories into homes, hospitals, shops, restaurants and even war zones, while advances in areas like artificial neural networks are starting to blur the barriers between man and machine.

One of the most in-demand participants in Davos this year is not a central banker, CEO or politician but a prize-winning South Korean robot called HUBO, which is strutting its stuff amid a crowd of smartphone-clicking delegates.

But there are deep worries, as well as awe, at what technology can do.

A new report from UBS released in Davos predicts that extreme levels of automation and connectivity will worsen already deepening inequalities by widening the wealth gap between developed and developing economies.

“The fourth industrial revolution has potentially inverted the competitive advantage that emerging markets have had in the form of low-cost labor,” said Lutfey Siddiqi, global head of emerging markets for FX, rates and credit at UBS.

“It is likely, I would think, that it will exacerbate inequality if policy measures are not taken.”

An analysis of major economies by the Swiss bank concludes that Switzerland is the country best-placed to adapt to the new robot world, while Argentina ranks bottom.

WINNERS AND LOSERS

There will be winners and losers among companies, too, as new players move into established industries with disruptive new technologies.

That is something uppermost in the minds of Davos attendees such as General Motors CEO Mary Barra, who is confronting the threat of driverless cars - another science fiction that has become science fact - or bank boss Jamie Dimon at JPMorgan Chase, facing competition from digital "fintech" start-ups.

Such innovations, coupled with the rise of robots in both the manufacturing and service sectors, could automate vast numbers of jobs. Oxford University researchers predicted in 2013, for example, that 47 percent of U.S. jobs were at risk.

Such fears about technology destroying jobs are not new. The economist John Maynard Keynes famously cried wolf in 1931, by issuing a warning of widespread "technological unemployment".

The question is whether this time will be different, given the speed to change and the fact that machines now offer brain as well as brawn, threatening professions previously seen as immune, such as entry-level journalism or routine financial analysis.

Pessimists fear this will hollow out middle-income, middle-class jobs on an unprecedented scale, with the WEF itself predicting that more than 5 million jobs could be lost in 15 major economies by 2020.

But ManpowerGroup CEO Jonas Prising is more upbeat for the long term. "If history is any indicator, we'll have more jobs being created in the end than are going to be destroyed," he said.

However, beyond the Davos talking-shop there are doubts about how well business leaders will actually plan for the future.

"When you have these very big levels of disruptive change you need some pretty serious thinking and action," said Ian Goldin, professor of globalization and development at Oxford University.

"But the CEO who really looks years ahead and looks at broader social issues is rare, even in Davos."

source: www.abs-cbnnews.com

Windows 10 aims to be core of connected devices

REDMOND -- Microsoft pulled back the curtain Wednesday on the upcoming Windows 10 operating system focused on bringing harmony to the diverse array of Internet gadgets in people's lives.

As it previewed the new operating system, Microsoft also unexpectedly added to the roster of modern gadgets with the unveiling of headgear that overlays holograms on the real world and lets wearers use their hands to interact with virtual objects.

By allowing users to work seamlessly over devices such as computers, tablets and smartphones, Microsoft hopes Windows 10 will renew its relevance in an age of mobile computing dominated by Apple and Google-backed Android software.

And in order to boost its takeup by the approximately 1.5 billion people around the world who use Windows-powered computers, in a change of policy Microsoft will allow free upgrades.

Microsoft also hopes to lure users with stunning new technology.

Chief executive Satya Nadella touted HoloLens capabilities that will debut with Windows 10 later this year as the next generation of computing.

The US technology titan is also trying to make it more natural to interact with devices, such as conversational-style speaking with the company's virtual assistant Cortana.

"The number of devices is just exploding around us," Microsoft's Terry Myerson said during a presentation to press and analysts at the company's headquarters in Redmond, Washington.

"It should be easy to put one device down and pick up another where you left off; technology needs to get out of the way."

HoloLens was touted as an entry to "the world's first holographic computing platform" which enables users to place three-dimensional holograms in the physical world.

"Until now, we've immersed ourselves in the world of technology," Microsoft's Alex Kipman said while introducing HoloLens. "But, what if we could take technology and immerse it in our world?"

Walking on Mars

Windows Holographic creates three-dimensional images in the real world, then lets people wearing the headgear reach out and manipulate virtual objects.

Examples shown during the event ranged from someone getting visual prompts during a routine home plumbing repair to being able to virtually walk on Mars and control a rover lander actually on that planet's surface.

Kipman said he invited virtual reality innovators, including Facebook-owned Oculus VR, to explore adapting different applications for the goggles.

"Holograms can become part of our everyday life," he said.

Nadella called HoloLens and Windows 10 a "mind-blowing" experience that will open a new type of computing.

"Today is a big day for Windows," Nadella said as Microsoft provided a look at its latest operating system at its headquarters in Redmond, Washington. "We want to move from people needing Windows, to choosing Windows, to loving Windows; that is our bold goal for Windows."

Windows 10 is being designed with feedback from millions of "insiders" testing early versions of the operating system, Myerson said.

IE cedes to Spartan
Microsoft is so intent on distancing Windows 10 from its predecessors that it skipped directly from Windows 8, which failed to deliver on its promise as a platform for a variety of devices.

The Windows 10 design creates a foundation on which developers can build applications for smartphones, tablets, laptops, desktop computers, and Xbox One video game consoles, he said.

During the first year after the release of Windows 10, the operating system will be available as a free upgrade for computers running prior generation Windows 8.1 or Windows 7 software.

Microsoft said it will also keep Windows 10 upgraded during the lifetime of devices.

Personalized virtual assistant Cortana, and its touted ability to answer questions conversationally, will be now available on personal computers. Cortana made her debut on Windows-powered mobile devices.

Microsoft also unveiled a new Web browser code-named Spartan, which will have Cortana built in and ready to chime in at presumably helpful moments.

Spartan is poised to be the successor to Internet Explorer.

"Project Spartan is a new browsing experience tuned for being mobile and working across this family of devices," said Microsoft's Joe Belfiore.

Windows 10 is also designed to hook gamers, according to Xbox team leader Phil Spencer.

Along with modifications that allow for more sophisticated play on smartphones, an application for Xbox will let people use Windows 10-powered computers or tablets at home to play games with or against friends using one of the Microsoft consoles, Spencer demonstrated.

"I think there are lots of developers who want to bring their experiences to the Xbox," Spencer said.

source: www.abs-cbnnews.com

Why Google boss says Internet will 'disappear'

DAVOS - Google boss Eric Schmidt predicted on Thursday that the Internet will soon be so pervasive in every facet of our lives that it will effectively "disappear" into the background.

Speaking to the business and political elite at the World Economic Forum at Davos, Schmidt said: "There will be so many sensors, so many devices, that you won't even sense it, it will be all around you."

"It will be part of your presence all the time. Imagine you walk into a room and ... you are interacting with all the things going on in that room."

"A highly personalised, highly interactive and very interesting world emerges."

On the sort of high-level panel only found among the ski slopes of Davos, the heads of Google, Facebook and Microsoft and Vodafone sought to allay fears that the rapid pace of technological advance was killing jobs.

"Everyone's worried about jobs," admitted Sheryl Sandberg, chief operating officer of Facebook.

With so many changes in the technology world, "the transformation is happening faster than ever before," she acknowledged.

"But tech creates jobs not only in the tech space but outside," she insisted.

Schmidt quoted statistics he said showed that every tech job created between five and seven jobs in a different area of the economy.

"If there were a single digital market in Europe, 400 million new and important new jobs would be created in Europe," which is suffering from stubbornly high levels of unemployment, he said.

The debate about whether technology is destroying jobs "has been around for hundreds of years", said the Google boss. What is different is the speed of change.

"It's the same that happened to the people who lost their farming jobs when the tractor came ... but ultimately a globalised solution means more equality for everyone."

Everyone has a voice

With one of the main topics at this year's World Economic Forum being how to share out the fruits of global growth, the tech barons stressed that the greater connectivity offered by their companies ultimately helps reduce inequalities.

"Are the spoils of tech being evenly spread? That is an issue that we have to tackle head on," said Satya Nadella, chief executive of Microsoft.

"I'm optimistic, there's no question. If you are in the tech business, you have to be optimistic. Ultimately to me, it's about human capital. Tech empowers humans to do great things."

Facebook boss Sandberg said the Internet in its early forms was "all about anonymity", but now everyone was sharing everything and everyone was visible.

"Now everyone has a voice ... now everyone can post, everyone can share and that gives a voice to people who have historically not had it," she said.

Schmidt, who said he had recently come back from the reclusive state of North Korea, added he believed that technology forced potentially despotic and hermetic governments to open up as their citizens acquired more knowledge about the outside world.

"It is no longer possible for a country to step out of basic assumptions in banking, communications, morals and the way people communicate," the Google boss said.

"You cannot isolate yourself any more. It simply doesn't work."

Nevertheless, Sandberg told the assembled elites that even the current pace of change was only the tip of the iceberg.

"Today, only 40 percent of people have Internet access," she said, adding: "If we can do all this with 40 percent, imagine what we can do with 50, 60, 70 percent."

Even two decades into the global spread of the Internet, the potential for opening up and growth was tremendous, she stressed.

"Sixty percent of the Internet is in English. If that doesn't tell you how uninclusive the Internet is, then nothing will," said the tycoon.

The World Economic Forum brings together some 2,500 of the top movers and shakers in the worlds of politics, business and finance for a four-day meeting that ends on Saturday.

source: www.abs-cbnnews.com

Microsoft debuts hologram goggles

REDMOND -- Microsoft unveiled headgear on Wednesday that overlays holograms on the real world, in what it touted as the next generation of computing.

The US technology titan debuted its HoloLens capabilities built into its coming Windows 10 operating system and showed off goggles that let wearers use their hands to interact with virtual objects.

"Until now, we've immersed ourselves in the world of technology," Microsoft's Alex Kipman said introducing HoloLens at a press event at the firm's Washington state headquarters.

"But, what if we could take technology and immerse it in our world?"

Windows Holographic creates three-dimensional images in the real world, then lets people wearing the headgear reach out and manipulate virtual objects.

Kipman said he invited virtual reality innovators, including Facebook-owned Oculus VR, to explore adapting different applications for the goggles.

"Holograms can become part of our everyday life," he said.

Microsoft chief executive Satya Nadella touted HoloLens and Windows 10 as a "mind-blowing" experience that will open a new type of computing.

"Today is a big day for Windows," Nadella said as Microsoft provided a look at its latest operating system at its headquarters in Redmond, Washington.

"We want to move from people needing Windows, to choosing Windows, to loving Windows; that is our bold goal for Windows."

Industry tracker Forrester predicts that what it refers to as mixed-reality computing will catch on by the year 2020, and include Internet giants Apple and Google weighing in with holographic offerings.

Millions of people will likely buy HoloLens by the end of next year, especially if Microsoft targets entertainment and particularly games who are proven early-adapters of technology, according to Forrester.

"If successful, HoloLens will ultimately expand the way people interact with machines just as the mouse-based interface did in the 1990s, and touch interfaces did after the introduction of the iPhone in 2007," said Forrester analyst James McQuivey.

HoloLens also has the potential to radically improve how firm's operate when it comes to collaborating from afar, training employees, and tending to work outside offices, according to Forrester analyst J.P. Gownder.

source: www.abs-cbnnews.com

'Cloud' lifts Microsoft earnings above expectations

SAN FRANCISCO - Microsoft on Thursday reported quarterly profits ahead of most expectations, as revenues got a boost from its Xbox consoles and Internet "cloud" services for enterprises.

Net profit in the quarter dipped to $4.5 billion from $5.2 billion in the same period a year ago, but topped most analyst forecasts.

Revenue rose above $23 billion, its best ever for the fiscal first quarter.

The better-than-expected results pushed shares of the US technology titan up 2.75 percent to $46.30 in after-hours trade.

"We are innovating faster, engaging more deeply across the industry, and putting our customers at the center of everything we do, all of which positions Microsoft for future growth," Microsoft chief executive Satya Nadella said in a release.

Microsoft said revenue hit a record high for its first fiscal quarter, aided by the popularity of its Xbox video game consoles and Surface tablet computers, along with businesses turning to software offered as services in the Internet "cloud."

"Customers are embracing our latest technologies from Surface Pro 3 and Office 365 to ("cloud"-based) Azure and SQL Server" for corporate customers, Microsoft chief operating officer Kevin Turner said.

Revenue in Microsoft's Devices and Consumer unit grew 47 percent to $10.96 billion, with the company bringing in nearly $1 billion from sales of its Surface Pro 3 tablet computer.

Xbox sales more than doubled to 2.4 million in the quarter, which saw the newest version of the console release in 28 new markets.

Revenue was up 10 percent when it came to commercial offerings, with "cloud" services such as Office 365 and Azure growing 128 percent, according to Microsoft.

- Pumping up the 'cloud' -

At a press briefing in San Francisco this week, Nadella detailed the latest moves in Microsoft's strategy to entice businesses with the ability to tap into the power of colossal online data centers as needed.

Microsoft's event spotlighted how the company is playing on its strengths with software used by businesses to capitalize on a trend toward renting computing power, storage or software as services hosted at data-centers in the Internet "cloud."

"The Microsoft cloud is the most complete cloud offering that empowers every business across every industry in every geography," Nadella boasted.

Microsoft in on track to bring in $4.4 billion this year from "cloud" services, but is spending about $4.5 billion annually on major investments such as huge data centers packed with computing equipment, executives said at the briefing.

Microsoft's main rivals in the "cloud" computing space are Google and Amazon Web Services.

But the US software giant is seen as having the advantage of experience, relationships and established products when it comes to working with business computer network needs.

It has "cloud" data centers in 19 regions around the world, and some of the facilities are large enough to hold a pair of jumbo jets.

Microsoft's "cloud" will handle demanding computing loads for businesses and let them better extract valuable insights from their data, along with public "cloud" power to augment private in-house systems.

The earnings results include the newly acquired handset division of Finland's Nokia, whose Windows-based smartphones are struggling in a market dominated by Google Android devices and Apple's iPhones.

Revenue from phone hardware was more than $2.6 billion in the quarter, according to Microsoft.

"You have to look at the whole story as quite positive here," Gartner vice president of research Merv Adrian said.

He applauded Microsoft for playing on its strengths to adapt to customers increasingly shifting to smartphones, tablets and services hosted at data centers online.

"Everywhere you look, Microsoft seems to be executing quite nicely."

source: www.abs-cbnnews.com

Now the hard part: Microsoft CEO touts new Surface tablets

NEW YORK - Satya Nadella has enjoyed a fairly smooth ride in his first 100 days as Microsoft Corp chief executive, but he risks hitting a rough patch next week when he unveils the latest models of the tepidly received Surface tablet.

Investors have lapped up Nadella's "mobile first, cloud first" strategy to recast the venerable software maker as a "devices and services" company, sending its shares up 9 percent since he took the helm.

So far he has stressed the services side of the business, making the momentous move to put Microsoft's Office suite on Apple Inc's iPad. This was popular with Wall Street and more importantly with consumers, who performed 27 million downloads in a matter of weeks.

But Microsoft is expected to unveil the third generation of its Surface devices at an event on Tuesday, laying hints that it will also introduce a smaller tablet, to address the fast-selling lower end of the market dominated by Apple's iPad mini, Amazon.com Inc's Kindle Fire, Google Inc's Nexus and Samsung's Galaxy range.

The devices side of the strategy has been a challenge. Microsoft's Surface, launched in October 2012, has about 2 percent of the market and has not made a dent on Apple's iPad. That fits with Microsoft's 3 percent global share in smartphones.

Given that tiny market, some investors believe Microsoft should not waste time and money on the low-margin hardware business. ValueAct Capital, which led the shareholder revolt last year which culminated in previous CEO Steve Ballmer's retirement, has lobbied against Microsoft's hardware effort, including its costly acquisition of Nokia's handset business.

"Nadella is off to a golden start as CEO, although turning around the tablet and mobile business over the next 12 to 18 months remain his two key Herculean tasks," said Daniel Ives, an analyst at FBR Capital Markets. "If the turbulence gets too rough on the tablet and/or mobile segment, we can potentially see some strategic changes on the horizon around the hardware business."

Despite unspectacular sales, there are signs that Microsoft's Surface Pro 2, which runs the full Windows operating system, is starting to attract Microsoft's core business customers.

"There's certainly tons of interest in the Surface Pro as an Ultrabook (lightweight laptop) replacement that has tablet capabilities," said J.P. Gownder, an analyst at tech research firm Forrester. "It is the No. 1 model I get asked about, it's going to have a lot of eyes on it."

Even if the Surface never dominates the market, Gownder thinks Nadella and Microsoft are right to persevere with hardware, if only as a way of showing other device makers how best to make use of Windows.

"Microsoft would be nuts not to have devices in the mix. The danger is in not exploring," said Gownder. The Surface "is an important product to basically show what their overall vision is for Windows, and also to offer businesses and consumers another choice." (Reporting by Bill Rigby; Editing by David Gregorio)

source: www.abs-cbnnews.com

Microsoft makes big bet on Apple's iPad

Microsoft is placing its bets on the iPad.

In his first press appearance, Microsoft's newly-minted CEO Satya Nadella shared the news that the company was bringing its popular "Office" suite to Apple's tablet.

"Our commitment going forward is to drive Office 365 everywhere -- that means across the web. Across all phones, across all tablets, across PCs," Nadella said.

A Microsoft employee demo-ed how Office for iPad works. Users can download it as a free app.

But to create or edit in applications like Word, Excel and Powerpoint, users will need to purchase a subscription from Microsoft.

Analyst Patrick Moorhead says the company's strategy is spot on.

"The interesting thing here is that you can't actually buy Office 365 off of the iPad. What you can do is you can engage and sign up if you have an Office 365 application. So it's not actually transacting business inside of the iTunes store which is a pretty smart move for Microsoft," Moorhead, the president of Moor Insights & Strategy, said.

Among analysts, expected revenues range from between just less than a billion dollars a year to as much as nearly seven billion dollas.

Sources tell Reuters this "touch-first" version had been ready for years -- but that Microsoft didn't want to hurt its legacy Windows operating system.

Professor J.P. Eggers of New York University's Stern School of Business said Thursday's announcement could be its death knell:

"In some ways it's actually getting rid of the old. The piece that was the legacy business - the biggest legacy for the company - and going and saying look, it's back to what the firm has done well for a long time, which is the Office suite. But it's kind of saying we're going to favor one of the children of the company as opposed to the other, as opposed to trying to keep them together as they've been doing for the last 20-something years," Eggers said.

He also expects the deal will deal a big blow to Microsoft's tablet: the Surface, which has suffered poor sales.

This, even as Microsoft's purchase of Nokia's devices and services business has yet to close.

"Based on what we saw today and what we've been seeing, you have to think that Nadella would want to undo the deal with Nokia if they could - that there's just no good reason to go down that path - because that really was a strong push to try and have a real space in the actual physical operating system for the mobile platform," Eggers said.

Eggers said he'll likely have to accept that transaction -- headed up by Nadella's predecessor Steve Ballmer -- as a sunk cost.

But his willingness to refine the company's strategy could mean large dividends ahead.

source: www.abs-cbnnews.com

Windows designer moves to new Microsoft job

SEATTLE - Julie Larson-Green, one of Microsoft Corp's most senior women executives and a leading force behind the latest design of Windows, is moving to a new job in charge of harmonizing the look and usability of Microsoft's wide range of software.

Larson-Green, who oversaw the design of Windows 7 and its less popular successor Windows 8, was promoted to run Microsoft's Devices and Studios group as part of former chief executive Steve Ballmer's sweeping reorganization of the company last July.

However, when Microsoft agreed to buy Nokia's handset unit only a few months later, Microsoft planned to put former Nokia boss Stephen Elop in charge of that group, with Larson-Green reporting to him.

Elop is still set to take over that group when the Nokia deal is completed, expected in the next few weeks, but with the move Larson-Green is no longer set to report to him.

"I'll remain in (the) role leading the DnS (Devices and Studios) organization in the interim until the Nokia deal closes and Stephen Elop makes his transition to Microsoft," said Larson-Green in an email to colleagues which was obtained by Reuters. The memo and job change were earlier reported by Seattle-area tech news site GeekWire.

The new job means Larson-Green, known for introducing the 'ribbon' bar to the Office suite of applications, returns to software-focused design after leading the Devices and Studios group which is centered on hardware such as the Xbox game console and Surface tablet.

Her official title will be Chief Experience Officer of the My Life & Work Team, which is part of Microsoft's Applications and Services Group, led by Qi Lu.

Larson-Green will lead efforts to ensure Microsoft's varied software has a harmonized interface across a range of devices, which has become a key function in the era of mobile computing, where a growing number of people use a wide variety of smartphones and tablets to work and play rather than a PC.

The move is the first significant executive change at Microsoft under new CEO Satya Nadella, who took over from Ballmer earlier this month.

source: www.abs-cbnnews.com