All posts by onlyconnect

google

Blocked from Google search: agree our terms or else go away

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Late last week I encountered behaviour from Google that I had not seen before. It was related to my habit of not signing into Google automatically; I only sign in when I want to use Google+ (I know; but I have quite a few followers there and use it from time to time). Nor do I always use Google for search; I have Bing set as default, but Google is better for some kinds of searches – such as the kinds of searches admins and developers make when trying to fix a problem – so I use whichever one I think will get me the best results.

I therefore hit Google, only to find that I could not proceed. The only thing on the page was a notice stating that I could only continue using Google services if I “review key points” of Google’s Privacy Policy.

google-privacy

The word “review” turns out to be misleading. The next banner you see asks you not only to review but also to click “I agree” to a range of statements including delivering “ads based on your interests”.

google-privacy2

If you click “Other options” you find that there are none, other than a list of minor tweaks you can make to your settings on a per-browser basis.

In my experience these do not work well anyway. I have opted out of every interest-based ad that I can, but I still see many ads that are obviously “interest based”, such as ads that mysteriously match recent searches on ecommerce sites.

Once you have reviewed these options, you have to go back and click “I agree”, or give up using Google search.

Most web sites in the EU now have at least some form of cookie consent banner, but in my experience it is rare that a site blocks you completely. Some simply state that by continuing you implicitly agree to their terms. Some let you dismiss the banner with an x, leaving ambiguity about whether or not you agree. Google has gone for the nuclear option: unless you specifically agree, no search for you. I found the same banner both on Google.co.uk and Google.com.

My immediate question was in what circumstances Google chooses to block search (and other services) until you agree its policies. I asked Google, but have yet to receive a reply; if and when I do, I will update this post.

It seems that some others also noticed this change of behaviour. Privacy advocate Aral Balkan tweeted about it.

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Google is doing the right thing here, if it is not willing to let you use search or YouTube, for example, unless you agree its policies. No doubt it is trying to stay the right side of the law, especially in the EU.

At the same time, I do for some reason find this disturbing. Agreements like this are one-sided; there is no use in my trying to get Google to change some clause or other because I do not agree. Further, the extent to which I have choice in the matter is limited. Perhaps I can do my job without Google search, but without *any* Google services? What if I want to report on a conference where the sessions are on YouTube? Google has not created this content, but does deliver it. Is it reasonable for me to tell people, sorry, I cannot report on that, because it is on Google and I do not agree with its privacy policy, that feeds me pestilential interest-based ads and records my data in ways I cannot control?

You have choice but not that much choice; and the same applies to Facebook, where you may information that requires log-in and cannot easily be obtained elsewhere. I am sure that to most people putting something on Facebook is exactly equivalent to putting it on the Internet, but it is private property and there is a distinction.

cloud computing, microsoft

Microsoft financials July-Sept 2015: decline of Windows hits home, cloud rises

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Microsoft has reported its financials for its first quarter. Making sense of these is harder than usual because the company has changed its segment breakdown (and the names are misleading). The new segments are as follows:

Productivity and Business Processes: Office, both commercial and consumer, including retail sales, volume licenses, Office 365, Exchange, SharePoint, Skype for Business, Skype consumer, OneDrive, Outlook.com. Microsoft Dynamics including Dynamics CRM, Dynamics ERP, both online and on-premises sales.

Intelligent Cloud: Server products not mentioned above, including Windows server, SQL Server, Visual Studio, System Center, as well as Microsoft Azure.

More Personal Computing: What a daft name, more than what? Still, this includes Windows in all its non-server forms, Windows Phone both hardware and licenses, Surface hardware, gaming including Xbox, Xbox Live, and search advertising.

Here are the latest figures:

Quarter ending  Sept 30th 2015 vs quarter ending Sept 30th 2014, $millions

Segment Revenue Change Operating income Change
Productivity and Business Processes 6306 -184 3105 -233
Intelligent Cloud 5892 +417 2400 +294
More Personal Computing 9381 -1855 1562 -57
Corporate and Other -1200 -1200 -1274 -55

A few points to note.

Death of Windows Phone: Microsoft acquired Nokia’s Devices and Services business in April 2014. In fiscal year 2015, according to Microsoft’s 10-Q report, the company “eliminated approximately 19,000 positions in fiscal year 2015, including approximately 13,000 professional and factory positions related to the Nokia Devices and Services business.” This was rationalisation following the acquisition; the real blow came a year later. “In June 2015, management approved a plan to restructure our phone business to better focus and align resources (the “Phone Hardware Restructuring Plan”), under which we will eliminate up to 7,800 positions in fiscal year 2016.”

Windows Phone is not quite dead, but Microsoft seems to have given up on the idea of competing with Android and iOS in the mainstream. Year on year, phone revenue is down 58%, Lumia units down from 9.3 million to 5.8 million, non-Lumia phones down from 42.9 million to 25.5 million. This is what happens when you tell the world you are giving up.

Windows: Revenue down 7% “driven by declines in the business and consumer PC markets”.

Surface: Revenue down by 26% because Surface Pro 3 launched in June 2014; this should pick up following the launch of new Surface hardware recently.

Cloud: Microsoft’s “Commercial cloud” comprises Office 365 Commercial, Azure and Dynamics CRM online. All are booming. Azure revenue and usage more than doubled year on year, with 121% revenue growth. In addition, Office 365 consumer subscribers increased by 3 million in the quarter, to 18.2 million, an increase of nearly 20%.

Server products: Revenue is up 6% thanks to “higher revenue from premium versions of Microsoft SQL Server, Windows Server, and System Center”

Xbox: Steady, with Live revenue up 17%, Minecraft adding 17% to game revenue, and hardware revenue down 17% because of Xbox 360 declining (and by implication, not being replaced by Xbox One, a worrying trend).

Further observations

Is Microsoft now facing permanent long (but slow) decline in Windows as a client or standalone operating system? It certainly looks that way. The last hope is that Windows 10 in laptop, tablet and hybrid forms wins some users over from Mac computers and iPad/Android tablets. Despite some progress, Microsoft still has work to do before Windows delivers the smooth appliance-like experience of competing tablets, so I do not regard this as likely. The app ecosystem is also a problem. Tablets need Universal Windows Platform (UWP) apps but developers can still target more Windows users with desktop apps, discouraging UWP development.

Microsoft is also busy removing the advantage of Windows by stepping up its first-party Mac, iOS and Android application development, though this makes sense as a way of promoting Office 365.

That leads on to the next question. If Windows continues to decline, can Microsoft still grow with Office 365 and Azure? Of course it is possible, and on these figures that strategy looks to be going reasonably well. That said, you can expect both Google to continue integrating Android and of course Chromebook with its rival cloud services. Apple today does not compete so much in the cloud, but may do in future. If the future Microsoft has to relying on third-party operating systems for user interaction it will be a long-term weakness.

Elvis Costello, music, reviews

Unfaithful music & Disappearing ink by Elvis Costello

unfaithful music

I still remember my first encounter with Elvis Costello’s music. It was the John Peel show on the radio of course, the song was Less than Zero, and I found it captivating: distinctive voice, catchy melody, and above all words that were evocative, mysterious and vaguely menacing even though I didn’t fully understand them. I snapped up the album My Aim is True when it was released a few months later and have been a fan ever since, following the twists and turns of his career from punk rock to R&B to country to collaborations with jazz, classical and hip-hop musicians.

Costello is an amazing wordsmith and songs pour out of him, such that many of his B sides and outtakes are more than equal to the best work of many others, a characteristic he shares only I think with Bob Dylan – who makes a regular appearance here as they encounter each other and end up performing together on a number of occasions.

Now this is his book, 36 chapters (plus postscript) and approaching 700 pages. It is an excellent read, presuming you have some time for the man or an interest in the music scene of the last forty or so years. Writing in short pithy paragraphs (just as you would expect) Costello tells the story of his life, his bands, his writing, his father Ross MacManus who was also a singer, girls girls girls, and along the way recounts many entertaining and often alcoholic incidents of life on the road.

The rhythm of the book is somewhat staccato and the sequence of events is only loosely chronological – that is, there is more about his earlier years in the first half of the book, and more about his later years in the second, but he constantly jumps back in forth in time making literary counterpoints. His habit of ending an anecdote just when you thought it was getting going can be annoying; but he is never dull.

It would be an interesting exercise to rearrange, or attempt to rearrange, the book into chronological order, but I don’t fancy doing it with my printed copy.

There are black and white photos interspersed throughout the book; they don’t look great partly because they are printed on paper designed for text. In addition they have no captions. A shame.

Costello writes a lot about his father, and in some ways the book is a tribute to him. He writes of his statement a couple of years ago that he would give up making records, which at the time he said was about spending more time with his children. “The real reason was that I needed time to imagine how I could bear to write songs and not be able to play them for my father. Watching him listen to music was irreplaceable to me,” he says. Such passages are where Costello shows most emotion.

One good reason to read the book is for insight into Costello’s songwriting. Some songs are described in detail, often including how they were influenced by or borrow from existing music, and how the words came together. One of my favourite passages (since I am a fan of both) is a conversation with Dylan:

“One night Bob Dylan said to me: ‘U2! How could they do that to you? How could they take your song like that!

“It took me a moment to know what he was talking about, and a moment more to realize that he was putting me on. But then, U2’s ‘Get on your boots’ was probably to ‘Pump it up’ what ‘Subterranean Homesick Blues’ is to Chuck Berry’s ‘Too much monkey business’.”

Costello is a performer and the book is in a way a performance; I wish it were less so, but perhaps if so it would be less entertaining.

There is a sharp side to Costello which occasionally goes too far. He writes of early days with Stiff (the independent record label responsible for his first releases) and the threat of being paired with another singer, “a horrible little git called Eric, who’d stumbled into the office with a single decent song.” Did he have to say that?

One thing which comes over powerfully though is his love of music and absolute belief in its importance. Of music he says, “There is no superior. There is no high and low. The beautiful thing is, you don’t have to choose, you can love it all. Those songs are there to help you when you need them most.”

That in the end is the great thing about Unfaithful Music and disappearing Ink; it will inspire you to go back to the music, both from Costello and from others, and perhaps even to go beyond your comfort zone and explore some artists you may have missed or dismissed. He did.

This is among the most enjoyable music books I have read; recommended.

dylan, music, reviews

Shadows in the night by Bob dylan

shadows in the night

Dylan is a man of many moods. If you are looking for Dylan the folk singer, Dylan the prophet, Dylan the protestor, or the electric Dylan of Highway 61 revisited, you may not find this album to your taste. Instead, we are transported to the fifties, Frank Sinatra and the pensive small hours of the morning. Dylan is soulful and languid, singing standards from another era, songs of autumn, songs of night. The music is melodic, slow and recessed; the mood is reflective, the voice is tour-weary but tuneful (for Dylan) and articulate; Dylan has taken a lot of care with this album, nothing is thrown away, nothing breaks the mood, and the lyrics are full of meaning; even though others wrote them down, he makes them his own.

These are the songs of a man who has been everywhere, done everything, and has nothing left to prove. It feels like he is singing for himself and allowing us the privilege of listening in. Sometimes he is confessional; “I know I have sinned, I go seeking shelter and I cry in the wind,” he sings in Stay with Me; and “Show me that river, take me across and wash all my troubles away” in a magnificent performance of Lucky old Sun at the close. These are songs of yearning; “if my one wish comes true, my empty arms will be filled with you” he croons in Full Moon and Empty Arms.

As a Dylan fan of many years, and one lucky enough to have seen him perform on many occasions, I love the album. It is different but not different; as ever, he follows his artistic instinct, never mind what others think. “Let people wonder, let ‘em laugh, let ‘em frown …. don’t you remember I was always your clown, why try to change me now?” he sings.

Thank you Bob for giving us an enchanted evening.

microsoft, windows

Is Windows 10 stable? Mostly it is, but there are some concerns

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“Windows 10’s lack of stability is really starting to be an issue for me” says Mary Jo Foley over on zdnet.

The problems she experienced include the Store not working, the Mail app not syncing and then wiping her accounts after an update, and the PC randomly shutting down. She has now done a clean install and so far all is good.

I am using Windows 10 now for most of my work, having in-place upgraded from Windows 8.1. My experience has been better, with no random shutdowns, and the desktop environment has been perfectly stable. There are some bugs and annoyances though. Here are the ones that come to mind:

The Start menu bug is the biggest annoyance. This one deserves some reflection. If you have a lot (possibly more than 512, possibly some other factors) of Start menu entries, Windows 10 does not show them all. Even Cortana/Search does not find them. The entries exist though, and I use my Explorer workaround to find them.

I find this bug astonishing. It looks like poor coding in a hugely sensitive part of Windows, the first thing people mention when they explain why they dislike Windows 8. There is still no fix from Microsoft, though some users report improvement after various updates.

Another annoyance is that on my HP laptop I cannot disable tap-to-click. I can disable it temporarily but it reverts, certainly on the next start-up.

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While some users like tap-to-click, I loathe it and do not think it should ever be on by default. In many Windows laptops the setting is hard to find and some users have ditched Windows because of it, and switched to Macs. The reason is that it is easy to tap the trackpad by mistake; and an accidental click can have dire consequences, such as sending an email by mistake, or clicking Yes in a dialog when you meant No. If you suffer from any sort of tremble it is a disaster.

I am not sure who is responsible for this bug; it could be the Synaptics driver, but it was fine in Windows 8.1.

Another annoyance relates to the new Windows calculator. On my desktop PC I am in the habit of pressing the Calculator key to open it (I have a Microsoft keyboard). In earlier versions of Windows the calculator appears instantly. In Windows 10 it may take several minutes or not appear at all. Of course what you tend to do is to assume that you did not press the key hard enough and press it again. Eventually lots of instances appear. I’ve looked into this a little; the Calculator does appear in the Task Manager process list, but with a status of Suspended. I’ve also had a scenario where the calculator appears but does not accept input until you click on it with the mouse, defeating the value of the key.

I am using the Edge browser but in practice it is not that good. I like the direction Edge is taking, but some sites do not work properly, and there are bugs. Favourites do not work when you have a long list; you click a sub-folder but the wrong entries appear, until it settles down and starts functioning correctly. You can pin the task pane (with Favourites, History etc) but the setting does not persist when you next start the browser. I also sometimes get long delays opening a web page; it is always hard to say what causes these and sometimes it will be a server issue, but Edge is worse than other browsers so I think it is partly to blame.

Some of the new apps show promise but are not 100% stable. Photos is good but I have had it exit silently when scrolling through a long list (perhaps related to OneDrive issues). I still prefer Paint for quick cropping and simple editing. The Music app has its attractions, but Foobar2000 is much faster, and Spotify is better if you want all the cloud streaming and social aspects.

Talking of OneDrive, the lack of placeholders in Explorer, where a file is listed but only downloaded on request, is an issue though I do not find it too difficult to work around. I have a OneDrive folder called synced which I sync on every PC I use. Photos of course does have a kind of OneDrive placeholder system.

So there are annoyances, and others will have different ones, but nothing I would describe as instability. Most applications run fine, and I have found application compatibility with Windows 7 and 8 very good. I like the faster boot and resume. I like the new Task View button and the multiple desktops. Overall it is working OK for me.

My general advice when consulted about whether to upgrade is to wait until next year, unless there are pressing reasons to go more quickly. I am also aware of numerous issues related to the in-place upgrade. One user for example upgraded from Windows 7 because of the annoying nags from Windows Update. The upgrade worked, but for some reason resulted in tablet mode being enabled (I cannot be sure whether this was a mis-click or an upgrade issue). This is on a desktop PC. Unfortunately, tablet mode is almost as confusing as Windows 8 was for a less technical user. The taskbar is hidden and it is not easy to find your applications.

I am sure Windows 10 will be the best version yet. It is taking time though and from a user perspective there is no rush (yes, it was released before it was ready). From Microsoft’s point of view it is important that the worst bugs get fixed soon (Start menu, please); and the generally poor performance of the Universal apps is a concern, considering the strategic significance of the platform.

Update: a newer Synaptics driver on the HP site has improved the trackpad problem; at least, the setting has survived a reboot so I hope it is fixed.

.net, microsoft

Notes from the field: unexpected villain breaks Dynamics CRM and IIS on Windows Server 2012

Yesterday I was asked to convert a Dynamics CRM 2013 installation from an internal to an Internet Facing Deployment (IFD). It is a bit fiddly, but I have done this before so I was confident.

The installation in question is only for test; the company has its production CRM 2011 on another server. Because it is for test though, it is a small deployment on a single server.

I got to work running the Claims Based Authentication wizard in the CRM Deployment Manager but also noticed something odd about the server. WSUS (Windows Server Update Services) was installed though it was not in use. This seems a bad idea so I asked if I could remove it. Sure, it was just a quick experiment. I removed WSUS and got on with the next steps of configuring IFD.

Unfortunately ADFS 2.0 (in this case) would not play ball. It could not communicate with CRM. I quickly saw why: attempting to browse to the special FederationMetadata.xml URL raised a 500 error.

I tried a few things. There are plenty of odd things that can go wrong: permissions on the private keys of the certificate used for the CRM web site, Service Principal Names, incorrect DNS entries and so on. All seemed fine. Still the error.

I decided to backtrack and temporarily disable Claims Based Authentication. Unfortunately it appeared that I had broken CRM completely. All access to the site raised the same 500.19 IIS error.

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The web page IIS delivers says that the most likely causes are that the worker process is unable to read the ApplicationHost.config or web.config file, or malformed XML in the applicationhost.config or web.config file, or incorrect NTFS permissions.

I did a repair install on CRM. I reapplied the rollups. No difference.

I ran Process Monitor to try to figure out what configuration file was causing the problem. It was not a great help, but did point me in the right direction to the extent that it seemed that ASP.NET was not working properly at all. I now focused on this rather than CRM itself, observing also that there were not many CRM-related errors in the event log and I would expect more if it was really broken.

I created a hello world ASP.NET application and installed it in a separate site on a different port. Same error.

Searching for help on this particular error was not particularly helpful. In the context of CRM, the few users that encountered something similar had reinstalled everything from scratch. However, now at least I knew that IIS rather than CRM was broken. This helpful MSDN article actually includes a hint to the solution:

For above specific error (mentioned in this example), DynamicCompressionModule module is causing the trouble. This is because of the XPress compression scheme module (suscomp.dll) which gets installed with WSUS. Since Compression schemes are defined globally and try to load in every application Pool, it will result in this error when 64bit version of suscomp.dll attempts to load in an application pool which is running in 32bit mode.

which is also referenced here. These refer to WSUS breaking 32-bit applications, but in my case after removing WSUS neither 64-bit nor 32-bit apps were running.

Let me put it more clearly. If you remove WSUS using the role wizard in Server Manager, a number of bits get left behind, including a setting in ApplicationHost.config (in /System32/Inetsrv) that breaks IIS.

So it was my attempt to clean up the server that had made it worse.

That said, this is also a Windows Server failure. Adding and removing a role should result as far as possible in no change.

Once identified, the problem is easy to fix (this is often true). Still, several hours wasted and more evidence for Martin Fowler’s assertion that you should automate server configuration and spin up a new one from scratch when you want to make a change, to avoid configuration drift. There is a more detailed post on the same theme – Phoenix servers that rise from the ashes, not snowflake servers that are unique and ugly – here.

In a small business context this perhaps is harder to achieve – though the cost of entry gets lower all the time, through either cloud computing or internal virtualization platforms.

microsoft, windows

Windows 10: My Surface Pro is mocking me

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I have a Surface Pro, first version, still a reasonable spec with Core i5 and 4GB RAM, though the 128GB SSD is too small and a frustration.

Still, Microsoft hardware, Windows 8.1 installed and in good shape, Windows 10 upgrade will be a breeze?

Now, I know there is an ISO route that would probably work but I decided to wait for the upgrade to arrive via Windows Update since I have yet to see this run successfully. In due course the GWX (Get Windows 10) update sprang to life and said my upgrade was ready.

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Note that in anticipation of the big day I had freed over 10GB of disk space which should be enough, right?

The upgrade failed though.

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Well, I understand that things go wrong sometimes; but note that Microsoft has not seen fit to give us any log entries to give a clue about what might be going wrong, just an error code and a useless link that leads to generic Windows Update troubleshooting tips.

I did try a few things. Freeing more disk space. Resetting Windows Update. The famous sfc /scannow beloved of generic forum respondents. I was rewarded for my efforts with a variety of different error codes but the same outcome.

Now my Surface is mocking me. Every time I boot up, I get the little pop up assuring me that my upgrade is ready. Every time I shutdown I am am invited to “update and restart”, the machine attempts to install Windows 10, and then again it fails.

I guess I should get the message: this is not going to work.

image

Again, I know there is an ISO route and I guess I will have to use it; but while I am not really surprised, it is disappointing that even on first-party hardware the automatic upgrade is so problematic.

Postscript

I am not sure what changed, but I tried the update again a couple of days ago and it worked. This is the first time I have successfully upgraded a PC to Windows 10 via Windows Update.

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microsoft, windows

Using Explorer as an alternate Start menu for Windows 10 to work around missing entries

There are a couple of issues with the Start menu in Microsoft’s just-released Windows 10. One is that some sort of bug means there may be missing entries. Second, the All Apps list is not great for navigation even when it is working. There are two many clicks: click Start, click All Apps, click a letter or start scrolling, maybe expand the folder you want, and you eventually get there.

I have upgraded my own desktop PC to Windows 10, which was running Windows 8.1 Enterprise. The good news is that the upgrade went smoothly, but unfortunately I have run into this bug and some applications are missing from the All Apps list.

I am reluctant to install a third-party Start menu like Start 10, though this is a good solution for many users, since I like to keep Windows as plain as possible as well as tracking changes Microsoft makes to the user interface. How than can I retain easy access to all my applications until this bug is fixed?

My first thought was to use the Windows libraries feature. Using this, you can combine the two main locations for Start menu entries into a single list in Explorer. These are the locations:

C:\ProgramData\Microsoft\Windows\Start Menu\Programs

C:\Users\[Username]\AppData\Roaming\Microsoft\Windows\Start Menu\Programs

The first location is for applications available to all users of your PC, while the second is per-user. I combined these in a new library which I called Store Complete and was initially pleased; all the shortcuts were there. Except they were not: I realised that my new Start folder did not include any Store apps, since the shortcuts for these are handled differently.

This led me to investigate Store app shortcuts, and I came across another approach. Make a new shortcut (no need for a library), and in the Target field type:

c:\windows\explorer.exe shell:AppsFolder

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I called the Shortcut Apps but you can call it what you like. This creates a folder with shortcuts to all your applications, both Store and desktop apps. The snag: they are all in a single list, whereas the Library approach preserves the hierarchy if an application has several subfolders of shortcuts (like some developer tools).

The Apps list on my PC has 836 items and it is complete. For example, I have the application Password Safe, which is not listed in All Apps, nor is Futuremark’s PC Mark which I have just installed:

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Actually PC Mark should be under F for Futuremark, but it is not there either:

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Nor are they found if I type Password Safe or PC Mark into Cortana/Search in the taskbar. But they are there in my Apps folder:

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Scrolling through this list is a little tedious, but it also has a search box which works. Not ideal, but a workable alternative.

Note: I tried pinning this folder to the Start panel but that does not work. However you can pin it to the taskbar for quick access.

microsoft, windows

Windows 10

2 Comments

The launch of Windows 10 today is a key moment for Microsoft and users of its platform. A few observations.

I like new Windows more than I had expected. I get on fine with Windows 8, though mostly on the desktop since that is where the applications are. Being able to run Store apps in a window makes a big difference though, and there is a real chance that this will kick-start Microsoft’s app platform at last. See my overview on The Register here.

Is Windows 10 ready, or rushed out too soon? The latter I fear. The desktop side is solid as far as I can tell, with the exception of the new Start menu – actually a Universal Windows Platform (UWP) app – which is a bit broken. Since this is how users launch applications that is a serious problem. Still, it might work OK for you if you have fewer than 512 application shortcuts. I have also seen issues with search within the Start menu, either not finding apps, or in one case just hanging (reboot sorted it).

It really should not be difficult to have reliable search across a tiny database.

The Windows Store is another source of problems. I tried to install the latest Twitter app, and ended up with a “Restoring user data” message that would not go away. It is frustrating because you cannot simply cancel the process and try again. At this time my event viewer filled with DCOM activation errors, which may or may not be related, but did remind me how much intricate and ancient technology remains in Windows.

Microsoft also has this mad idea that all eligible users should be upgraded automatically using a Get Windows 10 (GWX) application installed via Windows Update. From what I have heard so far, failures are common. Users who suffer a long update process that ends with an error message and return to the previous version of Windows may never try again, or next time buy a Mac.

This is exactly what you would expect from an in-place upgrade. There are simply too many variations of hardware and software, too many things to go wrong, for this to work reliably across millions of users.

These things will distract attention from what matters more, which is Microsoft steering Windows towards becoming a modern, mobile-friendly operating system. There is also a lot of good work on the business side, in security and manageability. In six months time Windows 10 will be a delight.

The coverage of Windows 10 in the general media also interests me. Never mind Microsoft’s generally strong financials, the common view is that the company is failing because of its lack of success in mobile. That may prove true, but it is not true yet.

In this light, I am still puzzled by CEO Satya Nadella’s decision to dismantle the Nokia acquisition, at huge cost. At the Build conference in April, Microsoft seemed determined to make Windows Phone work, with the universal app platform, Android runtime layer, and Objective C compiler support. The Nokia team had the skills to design and build phones. Disposing of it seems short-sighted.

If the app platform in Windows 10 does succeed, users will want to run those apps on their smartphones too.

microsoft, mobile, windows

Microsoft financials April-June 2015: loss from Nokia write-down, comments on future direction

Microsoft has reported its financials for its fourth quarter. The company made a loss of over three billion dollars ($bn 3.195) but this was because of an eight billion dollar write-down mostly on the phone business – in effect, writing off the value of its Nokia acquisition. It still has plenty of cash in the bank – over $96 bn according to its balance sheet. Perhaps it is too easy for companies of this size to make bad business decisions (I leave open whether it was the acquisition or the way it was handled that was the bad decision, but one of them was).

Here are the latest figures:

Quarter ending  June 30th 2015 vs quarter ending June 30th 2014, $millions

Segment Revenue Change Gross margin Change
Devices and Consumer Licensing 3233 -1670 2966 -1555
Computing and Gaming Hardware 1933 +591 435 +417
Phone Hardware 1234 -748 -104 -158
Devices and Consumer Other 2300 +538 594 +303
Commercial Licensing 10451 -782 9529 -769
Commercial Other 3076 +814 1350 +659

A few points to note. The confusing segment names are summarised at the end of this post. Revenue was slightly down quarter on quarter, from $bn 23.4 to 22.2, largely because of a decline in consumer Windows (weak PC sales). Commercial licensing was also down, which Microsoft attributes to the end of the XP migration boom.

Phone aside, Microsoft’s hardware is performing well, thanks to Surface Pro 3 and Xbox One. Although Xbox One has been outsold by Sony’s PlayStation 4, it is holding its own and Microsoft says that Xbox Live usage has grown by over 30% over the year. The company says this is “deeper user engagement”; another way of looking at this is that playing games without an Xbox Live subscription is often disappointing.

Microsoft’s cloud and server projects are both growing. Business cloud revenue (Office 365, Azure and Dynamics CRM) is up 106% over the year and server products up 12%.

A bright spot is that search advertising revenue grew by 21% and Bing is expected to be profitable in the next financial year. The search wars are last year’s thing but Microsoft’s determination has won it a small but viable slice of the market. It is important because the data from search is essential for high quality predictive analysis and personalisation services, which is still a coming thing (Cortana, Siri, Google Now).

In the earnings call, CEO Satya Nadella revealed some data:

  • 15 million consumer Office 365 subscribers growing by 1 million per month
  • 50,000 new SMB customers for Office 365 per month
  • Paid seats for Dynamics CRM up 140% year on year
  • 17,000 customers for Enterprise Mobility Services (Mobile Device Management)
  • Over 100% growth in Azure both in revenue and compute usage

Of Windows 10, Nadella says:

While the PC ecosystem has been under pressure recently, I do believe that Windows 10 will broaden our economic opportunity and return Windows to growth.

A short-term boost from Windows 10 would not be surprising, but does he think that Microsoft can reverse the trend from PC to mobile, or that Windows can be successful enough in the mobile category (tablets and phones) to benefit from that trend? If the latter, perhaps destroying the Nokia acquisition was not the best move (but I must not harp on about this).

On Windows 10, Nadella described three phases:

Upgrade phase: From July 29th when free Windows 10 upgrades begin.

OEM device phase: From “the fall” when Windows 10 PCs and devices go on sale.

Enterprise upgrade phase: Piloting and deployments from January 2016

Note from the last that Windows 10 is not fully business-ready yet. Enterprise Store, OneDrive for Business client, “Project Centennial” which lets you wrap Win32 apps for Store deployment, none of these are done.

How is Microsoft hoping to grow its business? CFO Amy Hood identified three areas, in response to a question on operational expenditure:

The first one is Windows 10. The second is the first party hardware where we just had such terrific performance again this Q4. And then, finally, the third bucket was about accelerating our commercial cloud leads.

Of these, the third looks a sure bet, the other two are more speculative. Microsoft will continue to be a fascinating business to watch.

Microsoft’s segments summarised

Devices and Consumer Licensing: non-volume and non-subscription licensing of Windows, Office, Windows Phone, and “ related patent licensing; and certain other patent licensing revenue” – all those Android royalties?

Computing and Gaming Hardware: the Xbox One and 360, Xbox Live subscriptions, Surface, and Microsoft PC accessories.

Devices and Consumer Other: Resale, including Windows Store, Xbox Live transactions (other than subscriptions), Windows Phone Marketplace; search advertising; display advertising; Office 365 Home Premium subscriptions; Microsoft Studios (games), retail stores.

Commercial Licensing: server products, including Windows Server, Microsoft SQL Server, Visual Studio, System Center, and Windows Embedded; volume licensing of Windows, Office, Exchange, SharePoint, and Lync; Microsoft Dynamics business solutions, excluding Dynamics CRM Online; Skype.

Commercial Other: Enterprise Services, including support and consulting; Office 365 (excluding Office 365 Home Premium), other Microsoft Office online offerings, and Dynamics CRM Online; Windows Azure.