Tag Archives: microsoft

cloud computing, microsoft, professional

Microsoft at Ignite: Building on Office 365, getting more like Google, Adobe mysteries and FPGA magic

September 28, 2016 onlyconnect

I’m just back from Microsoft’s Ignite event in Atlanta, Georgia, where around 23,000 attendees mostly in IT admin roles assembled to learn about the company’s platform.

There are always many different aspects to this type of event. The keynotes (there were two) are for news and marketing hype, while there is lots of solid technical content in the sessions, of which of course you can only attend a small fraction. There was also an impressive Expo at Ignite, well supported both by third parties and by Microsoft, though getting to it was a long walk and I fear some will never find it. If you go to one of these events, I recommend the Microsoft stands because there are normally some core team members hanging around each one and you can get excellent answers to questions as well as a chance to give them some feedback.

The high level story from Ignite is that the company is doing OK. The event was sold out and Corporate VP Brad Anderson assured me that many more tickets could have been sold, had the venue been bigger. The vibe was positive and it looks like Microsoft’s cloud transition is working, despite having to compete with Amazon on IaaS (Infrastructure as a service) and with Google on productivity and collaboration.

My theory here is that Microsoft’s cloud advantage is based on Office 365, of which the core product is hosted Exchange and the Office suite of applications licensed by subscription. The dominance of Exchange in business made the switch to Office 365 the obvious solution for many companies; as I noted in 2011, the reality is that many organisations are not ready to give up Word and Excel, Outlook and Active Directory. The move away from on-premises Exchange is also compelling, since running your own mail server is no fun, and at the small business end Microsoft has made it an expensive option following the demise of Small Business Server. Microsoft has also made Office 365 the best value option for businesses licensing desktop Office; in fact, I spoke to one attendee who is purchasing a large volume of Office 365 licenses purely for this reason, while still running Exchange on-premises. Office 365 lets users install Office on up to 5 PCs, Macs and mobile devices.

Office 365 is only the starting point of course. Once users are on Office 365 they are also on Azure Active Directory, which becomes a hugely useful single sign-on for cloud applications. Microsoft is now building a sophisticated security story around Azure AD. The company can also take advantage of the Office 365 customer base to sell related cloud services such as Dynamics CRM online. Integrating with Office 365 and/or Azure AD has also become a great opportunity for developers. If I had any kind of cloud-delivered business application, I would be working hard to get it into the Office Store and try to win a place on the newly refreshed Office App Launcher.

Office 365 users have had to put up with a certain amount of pain, mainly around the interaction between SharePoint online/OneDrive for Business and their local PC. There are signs that this is improving, and a key announcement made at Ignite by Jeff Teper is that SharePoint (which includes Team Sites) will be supported by the new generation sync client, which I hope means goodbye to the ever-problematic Groove client and a bit less confusion over competing OneDrive icons in the notification area.

A quick shout-out too for SharePoint Groups, despite its confusing name (how many different kinds of groups are there in Office 365?). Groups are ad-hoc collections of users which you set up for a project, department or role. Groups then have an automatic email distribution list, shared inbox, calendar, file library, OneNote notebook (a kind of Wiki) and a planning tool. Nothing you could not set up before, but packaged in a way that is easy to grasp. I was told that usage is soaring which does not surprise me.

I do not mean to diminish the importance of Azure, the cloud platform. Despite a few embarrassing outages, Microsoft has evolved the features of the service rapidly as well as building the necessary global infrastructure to support it. At Ignite, there were several announcements including new, more powerful virtual machines, IPv6 support, general availability of Azure DNS, faster networking up to an amazing 25 Gbps powered by FPGAs, and the public preview of a Web Application Firewall; the details are here:

My overall take on Azure? Microsoft has the physical infrastructure to compete with AWS though Amazon’s service is amazing, reliable and I suspect can be cheaper bearing in mind Amazon’s clever pricing options and lower price for application services like database management, message queuing, and so on. If you want to run Windows server and SQL server in the cloud Azure will likely be better value. Value is not everything though, and Microsoft has done a great job on making Azure accessible; with a developer hat on I love how easy it is to fire up VMs or deploy web applications via Visual Studio. Microsoft of course is busy building hooks to Azure into its products so that if you have System Center on-premises, for example, you will be constantly pushed towards Azure services (though note that the company has also added support for other public clouds in places).

There are some distinctive features in Microsoft’s cloud platform, not least the forthcoming Azure Stack, private cloud as an appliance.

I put “getting more like Google” in my headline, why is that? A couple of reasons. One is that CEO Satya Nadella focused his keynote on artificial intelligence (AI), which he described as “the ability to reason over large amounts of data and convert that into intelligence,” and then, “How we infuse every application, Cortana, Office 365, Dynamics 365 with intelligence.” He went on to describe Cortana (that personal agent that gets a bit in the way in Windows 10) as “the third run time … it’s what helps mediate the human computer interaction.” Cortana, he added, “knows you deeply. It knows your context, your family, your work. It knows the world. It is unbounded. In other words, it’s about you, it’s not about any one device. It goes wherever you go.”

I have heard this kind of speech before, but from Google’s Eric Schmidt rather than from Microsoft. While on the consumer side Google is better at making this work, there is an opportunity in a business context for Microsoft based on Office 365 and perhaps the forthcoming LinkedIn acquisition; but clearly both companies are going down the track of mining data in order to deliver more helpful and customized experiences.

It is also noticeable that Office 365 is now delivering increasing numbers of features that cannot be replicated on-premises, or that may come to on-premises one day but Office 365 users get them first. Further, Microsoft is putting significant effort into improving the in-browser experience, rather than pushing users towards Windows applications as you might have expected a few years back. It is cloud customers who are now getting the best from Microsoft.

While Microsoft is getting more like Google, I do not mean to say that it is like Google. The business model is different, with Microsoft’s based on paid licenses versus Google’s primarily advertising model. Microsoft straddles cloud and on-premises whereas Google has something close to a pure cloud play – there is Android, but that drives advertising and cloud services rather than being a profit centre in itself. And so on.

There were a couple more notable events during Nadella’s keynote.

Distinguished Engineer Doug Burger and one of Microsoft’s custom FPGA boards.

One was Distinguished Engineer Doug Burger’s demonstration of the power of FPGA boards which have been added to Azure servers, sitting between the servers and the network so they can operate in part independently from their hosts (see my short interview with Burger here).

During the keynote, he gave what he called a “visual demo” of the impact of these FPGA accelerators on Azure’s processing power. First we saw accelerated image recognition. Then a translation example, using Tolstoy’s War and Peace as a demo:

The FPGA-enabled server consumed less power but performed the translation 8 times faster. The best was to come though. What about translating the whole of English Wikipedia? “I’ll show you what would happen if we were to throw most of our existing global deployment at it,” said Burger.

“Less than a tenth of a second” was the answer. Looking at that screen showing 1 Exa-op felt like being present at the beginning of a computing revolution. As the Top500 supercomputing site observes, “the fact the Microsoft has essentially built the world’s first exascale computer is quite an achievement.” Exascale is a billion billion operations per second.

However, did we see Wikipedia translated, or just an animation? Bearing in mind first, that Burger spoke of “what would happen”, and second, that the screen says “Estimated time”, and third, that the design of Azure’s FPGA network (as I understand it) means that utilising it could impact other users of the service (since all network traffic to the hosts goes through these boards), it seems that we saw a projected result and not an actual result – which means we should be sceptical about whether this would actually work as advertised, though it remains amazing.

One more puzzle before I wrap up. Adobe CEO Shantanu Narayen appeared on stage with Nadella, in the morning keynote, to announce that Adobe will make Azure its “preferred cloud.” This appears to include moving Adobe’s core cloud services from Amazon Web Services, where they currently run, to Azure. Narayen:

“we’re thrilled and excited to be announcing that we are going to be delivering all of our clouds, the Adobe Document Cloud, the Marketing Cloud and the Creative Cloud, on Azure, and it’s going to be our preferred way of bringing all of this innovation to market.”

Narayen said that Adobe’s decision was based on Microsoft’s work in machine learning and intelligence. He also looked forward to integrating with Dynamics CRM for “one unified and integrated sales and marketing service.”

This seems to me interesting in all sorts of ways, not only as a coup for Microsoft’s cloud platform versus AWS, but also as a case study in migrating cloud services from one public cloud to another. But what exactly is Adobe doing? I received the following statement from an AWS spokesperson:

“We have a significant, long-term relationship and agreement with Adobe that hasn’t changed. Their customers will want to use AWS, and they’re committed to continuing to make that easy.”

It does seem strange to me that Adobe would want to move such a significant cloud deployment, that as far as I know works well. I am trying to find out more.

microsoft, professional

Azure Stack on show at Microsoft Ignite

September 27, 2016 onlyconnect

At the Expo here at Microsoft’s Ignite you can see Azure Stack – though behind glass.

Azure Stack is Microsoft’s on-premises edition of Azure, a private cloud in a box. Technical Preview 2 has just been released, with two new services: Azure Queue Storage and Azure Key Vault. You can try it out on a single server just to get a feel for it; the company calls this a “one node proof of concept”.

Azure Stack will be delivered as an appliance, hence the exhibition here. There are boxes from Dell, HP Enterprise and Lenovo on display. General availability is planned for mid-2017 according to the folk on the stand.

There is plenty of power in one of these small racks, but what if there is a fire or some other disaster? Microsoft recommends purchasing at least two, and locating them some miles from one another, so you can set up resilience just as you can between Azure regions.

Incidentally, the Expo at Ignite seems rather quiet; it is not on the way to anything other than itself, and I have to allow 10-15 minutes to walk there from the press room. I imagine the third party exhibitors may be disappointed by the attendance, though I may just have picked a quiet time. There is a huge section with Microsoft stands and this is a great way to meet some of the people on the various teams and get answers to your questions.

cloud computing, microsoft

Microsoft pivot: Ignite is now its key conference

September 24, 2016 onlyconnect

I have been covering Microsoft for quite a few years and it was always clear to me that the must-attend event, if you want to keep up with the company, was the Professional Developer Conference (PDC), and after that was scrapped, its successor developer event Build.

The reason for this is that at PDC or Build the company gives in-depth presentations on the latest features of its developer platform. Pivotal events that I recall include PDC 2003 where we learned about the “Three pillars of Longhorn”, PDC 2008 where Windows 7 was previewed, and Build 2011 where Windows 8 was unveiled.

Two of these three worked out badly for the company, and one fantastically well. The three pillars of Longhorn became the two pillars of Vista after a notorious “reset” of Windows development, while Windows 8 was so hated in the PC community that Microsoft retreated to the more familiar and desktop-oriented Windows 10 a few years later.

Windows 7 on the other hand was such a success that even today, more than a year after the release of Windows 10, many PCs ship with Windows 7 pre-loaded and 10 as an upgrade option. Well, maybe that is a sign of failure (of the later versions) rather than success; but however you choose to spin it, it has been hugely popular.

Perhaps I should also mention PDC 2000 where the .NET Framework was announced (strictly, it was announced at TechEd Europe the previous week, but I digress). That one worked out pretty well I guess, though not without internal conflict between the C++ folk and the .NET Folk – played out in both the Longhorn story and the Windows 8 story.

The reason though why these events were so strategically revealing was that nothing at Microsoft mattered more than the direction of Windows. These events were about informing and attracting developers to the Windows platform.

Alongside its developer events, Microsoft has always held others aimed more at system administrators, events like TechEd (especially the USA variant), MEC (Microsoft Exchange Conference) and Microsoft Management Summit (last held in 2013). While always interesting, it seemed to me that these IT Admin events were less strategic than the developer events, because the Windows platform was the foundation of the company’s business and it was at the developer events that you saw this platform evolve.

In August 2013 Microsoft co-founder Steve Ballmer stepped down as CEO, to be replaced by server guy Satya Nadella, accelerating the company’s pivot away from Windows and towards Office 365 and Azure as its key platform. Microsoft’s cloud runs on Windows of course, even if many of the VMs on Azure end up running Linux, but the company is now keen to emphasize its support for any operating system – or to be more precise, Windows, Mac, iOS, Android, and that vague thing IoT – presumably on the basis that broad endpoint support makes its cloud offering more compelling.

I could write screeds about Windows 10 and its evolution, about which I have mixed feelings. Windows for sure remains critically important to Microsoft, and indeed to all of us who feel that it meets needs that its competition does not address. (The answer is not always “just use a Mac”, if only because of Apple’s addiction to premium pricing and high profit margins).

Nevertheless, it is the cloud and hybrid cloud offerings that come first in today’s Microsoft, and Windows server rather than Windows 10 that is more strategically important.

That is why Microsoft Ignite, which starts on Monday 26th September 2016 and is aimed primarily at IT administrators, that is now the key event. Here we will see the formal launch of Server 2016 as well as Azure and Office 365 news; and I plan to pay close attention.

development, microsoft

Time for another look at “pure .NET”

August 24, 2016 onlyconnect 3 Comments

Back in the Nineties there was a lot of fuss about “pure Java”. This meant Java code without any native code invocations that tie the application to a specific operating system.

It is possible to write cross-platform Java code that invokes native code, but it adds to the complexity. If it is an operating system API you need conditional code so that the write API is called on each platform. If it is a custom library it will have to be compiled separately for each platform.

Over on the Microsoft .NET site, developers have tended to have a more casual approach. After all, in the great majority of cases the code would only ever run on Windows. Further, Microsoft tended to steer developers towards Windows-only dependencies like SQL Server. After all, that is the value of owning a developer platform.

Times change. Microsoft has got the cross-platform bug, with its business strategy based on attracting businesses to its cloud properties (Office 365 and Azure) rather than Windows. The .NET Framework has been forked to create .NET Core, which runs on Mac and Linux as well as Windows. SQL Server is coming to Linux.

Another issue is porting applications from 32-bit to 64-bit, as I was reminded recently when migrating some ASP.NET applications to a new site. If your .NET code avoids P/Invoke (Platform Invoke) then you can compile for “Any CPU” and 64-bit will just work. If you used P-invoke and want to support both 32-bit and 64-bit it requires more care. IntPtr, used frequently in P/Invoke calls, is a different size. If you have custom native libraries, you need to compile them separately for each platform. The lazy solution is always to run as 32-bit but that is a shame.

What this means is that P/Invoke should only be used as a last resort. Arguably this has always been true, but the reasons are stronger today.

This is also an issue for libraries and components intended for general use, whether open source or commercial. It is early days for .NET Core support, but any native code dependencies will be a problem.

Breaking the P/Invoke habit will not be easy but “Pure .NET” is the way to go whenever possible.

microsoft, windows

The battle to own Windows Explorer shell overlay icons, or why your OneDrive green ticks have stopped working

August 9, 2016 onlyconnect 4 Comments

There are a number of dark areas in Windows that do not work quite right. MAXPATH anyone? But here is another one that I have only recently become aware of.

If you use applications such as Mozy, OneDrive (Business or Personal), Adobe Creative Cloud, Tortoise (a developer utility) or Dropbox, you will be familiar with the idea of files in Explorer showing little icons to indicate their state: synced, not synced, in conflict, excluded and so on.

A common complaint is that while everything still works, the little green ticks (or whatever) no longer appear.

The reason for this is simple, if depressing. Well, there are two reasons. One is that Windows has a limit of 15 overlay icons. If more than that are specified (by multiple applications) then anything over the limit does not work.

The second is that multiple applications cannot apply overlays to the same file. So if you tried to set up your Tortoise repository in a OneDrive folder (do not do this), one or other would win the overlay battle but not both.

The overlay configuration is stored in the registry, at HKLM\Software\Microsoft\Windows\CurrentVersion\Explorer\ShelliconOverlayIdentifiers\

If you visit this location in RegEdit, you will notice something interesting:

Some of these entries, including AccExtIco (Adobe Creative Cloud), OneDrive (personal OneDrive) and SkyDrivePro (OneDrive for Business), have a leading space in their name. Why? That is because the authors of these applications want THEIR stuff to work right, so by including the leading space they get to the top of the queue.

(I also have entries for SkyDrive as well as OneDrive, registry bloat caused by the name change no doubt).

Microsoft’s support article on the subject therefore suggests renaming these entries to have TWO leading spaces:

Rename the following registry keys. To do this, right-click the folder, select Rename, and then rename the folder. When you rename the folder, add two spaces at the beginning of the name.

You can see where this is going to end … Adobe will install its entries with three spaces, Microsoft will come back with four, and so on. Possibly.

It is also an imperfect solution. On a machine suffering from this issue I performed an Office repair, which restored the old entries with a single leading space while not removing those with two leading spaces. More bloat.

If you get this problem, the best solution is to remove applications so that there is no conflict. If you want to use Mozy for backup, Dropbox because it works, and two OneDrives because they are nearly free, well, you are not going to have all your icon overlays working and that is that.

Notes from the field

What to do when Outlook is stuck on “processing”

July 10, 2016 onlyconnect

I have seen this a couple of times recently, both cases where Outlook 2016 is installed. You start Outlook, it loads plug-ins, then presents a dialog that says “Processing”.

It does this for a long time. What is is processing? Who knows. Will it complete in its own good time? Not sure, but for sure it takes longer than you want to wait in order to get your email.

Here is the fix that worked for me. Close Outlook by clicking the X at top right. If that doesn’t work, you can use Task Manager to end the Outlook process.

Now hold down Ctrl and click the Outlook shortcut on the taskbar, presuming it is pinned. This dialog appears:

Click Yes. If you get further dialogs such as First things First, click Accept:

In both cases I have seen, Outlook now opens immediately, though in safe mode which means no plug-ins are loaded.

Close Outlook and restart it. Again it opens quickly, this time complete with plug-ins.

What is going on here? Not sure, but it may be related to automatic updates for those of us with the Pro Plus version of Office installed via Office 365 or other entitlement.

Observation: this is poor from Microsoft. One of the issues is that showing a generic busy dialog with no indication of what the software is actually doing makes poor UI. Users are more accepting of a long process if they can see evidence of it, even if the technical details of what is displayed make no sense. Maybe something like “Verifying nodes nnn of nnn” with the number incrementing.

This would also help if in fact the software is stuck in a loop, since the user can see that nothing is really happening.

Another issue of course is that this looks like a bug. Most users will end up calling support, despite the trivial fix above.

There may be other reasons for this problem which require different fixes. If that is the case with you, apologies!

azure, cloud computing, Notes from the field

The case of the disappearing Azure AD application registration

July 5, 2016 onlyconnect

Some time ago I wrote a simple web application which runs on Microsoft Azure and uses Azure Active Directory for authentication. The application is used constantly and has proved reliable; however yesterday it stopped working. A quick debug session showed that the problem was an Azure AD permissions error.

In order to use Azure AD, applications have to be registered in the Azure management portal. I use the old portal for this; I am not sure that the functionality exists in the new portal yet. There is a nice how-to here.

One of the elements in the registration is a key which has a maximum lifetime of 2 years:

My application was deployed about two years ago so I went to the portal to see if it had expired.

What I found surprised me. The application was not listed at all. It had disappeared.

Instead of simply obtaining a new key and updating my application config, I had to create a new application registration and update several keys in the config, which was an annoyance.

There is a wider point here, in the whole category of dealing with “things that expire”. Some time ago, Microsoft suffered an extended Azure outage because of an expired certificate. It is a shame that Microsoft insists on a maximum 2 year lifetime for this key but does not provide a check box for “alert me when this key is about to expire”, how difficult would that be?

Problems like this also mean that things which “just work” may not continue to do so. Of course a well organised enterprise setup can deal with this type of problem, but imagine, for example, the case of a small business with an application running on Azure where the developers have gone out of business, perhaps, or are no longer available. In fact the only code I needed to change was in web.config, but I can imagine it could take some time to figure out what to do and what to change.

Uncategorized

Last thoughts on Windows Phone

May 31, 2016 onlyconnect 1 Comment

Microsoft’s Windows Phone disaster lurched further towards oblivion last week, when Windows boss Terry Myerson emailed employees with the news that “Today I want to share that we are taking the additional step of streamlining our smartphone hardware business, and we anticipate this will impact up to 1,850 jobs worldwide, up to 1,350 of which are in Finland.”

“Streamlining” is exec-speak for further withdrawal from the mobile phone business.

Microsoft is at times a dysfunctional company and nowhere is this better illustrated than in its mobile devices adventures. The failure of Windows Phone is a self-inflicted wound. Mis-steps include:

Aiming the first release of Windows Phone 7, in 2010, at the consumer market despite Windows core strength being in business computers
Launching Windows Phone while failing to do the spadework with operators and retailers to ensure that it was actually widely available
Using Silverlight as the development platform for Windows Phone and then abandoning Silverlight on Windows and releasing Windows 8 with a different and incompatible development platform
Promising that Windows Phone would be updated by Microsoft so users could stay up to date, while in fact leaving this to operators who did not care – this applied until April 2014 when the Developer Preview program kicked off, allowing users to update by signing up as developers, subject to hardware constraints
Long dormant periods while Microsoft went through one of its, “let’s pause while we make huge changes that will be great eventually” phases, such as before Windows Phone 8.0 which introduced the NT kernel and before Windows Mobile 10 which introduced the Universal Windows Platform

Despite all the above, the arrival of a former Microsoft executive at Nokia meant that Windows Phone was adopted by a company that actually understood how to develop and market smartphones. Visibility of Windows Phone at retail greatly improved and technology such as Nokia’s PureView photography gave it an edge in some areas. Windows Phone was also strong for turn by turn driving directions with Here maps.

It was an uphill battle against iPhone and Android, and with Microsoft’s too-slow platform development, but Nokia made some impact and built significant market share in certain territories, though in Europe rather than the USA.

Microsoft acquired Nokia’s devices business in 2014, along with CEO Stephen Elop, and it was here that everything went wrong. Specifically:

The transition period along with the coming Windows 10 resulted in not much happening in terms of new phones or announcements

Steve Ballmer was replaced as Microsoft CEO by Satya Nadella, before the acquisition completed. Ballmer had a strong belief in “Windows everywhere” and the importance of Microsoft not conceding the mobile space to competitors. Nadella came from a server background and believes everything will be fine as long as Microsoft’s server and cloud products are strong.

There was no consensus at Microsoft about whether Windows Phone was a key strategic asset or a waste of time and after running around in circles for a bit the inevitable happened: in June 2015 Nadella cut back the Windows Phone staff, cancelled some forthcoming devices, and parted company with Elop, who presumably had no appetite for presiding over the death of the business he had nurtured.

Myerson’s memo still presents the illusion that Windows Phone has some kind of future. “We’re scaling back, but we’re not out!” he writes. However you cannot be a little bit in the mobile phone business any more than you can be a little bit pregnant. The reason, as Elop announced when Nokia chose Windows Phone, is that you need an ecosystem. No, Continuum (the ability to use a phone like a desktop with an external display) is not an ecosystem. Maybe there will be some specialist business cases where a mobile device running Windows meets the need, but it will be a tiny niche.

This is also the reason why June 2015 was really the date that Windows Phone died, at least in public. Once it became obvious that Microsoft no longer believed in its own mobile platform, there was no hope, and sales suffered accordingly.

Could it have been different? Of course. The Nokia acquisition was not necessarily a bad idea: in theory it gave the hardware the backing of Microsoft’s deep pockets and brought to the company the skills that it lacked in how to make and market phones.

The saga has not been pretty to watch. In particular, the destruction of value in acquiring and then disposing of Nokia is distressing, as is the destruction of value in the Windows Phone operating system itself.

I have used a Windows Phone as my main mobile device for several years, and yes, it has a lot going for it. Navigation is easier than on Android or iOS, performance is good, and the integration with social media was for a while excellent. The camera on a Lumia 1020 remains superb. The development platform is strong, with Visual Studio and C#.

The subject of operating system design is another story; but there is another take on this narrative which looks like this:

Old world: Windows 7, Windows Mobile 6

Lurch towards mobile: Windows 8, Windows Phone 7

Lurch back towards desktop: Windows 10, Windows Mobile 10 with Continuum

Windows 10 is not as good as Windows 8.x on tablets, and Windows Mobile 10 is perhaps not as good as Windows Phone 8.x on mobile. I say perhaps because I don’t hate it; but there is a trade-off with performance and touch-friendliness worse while the capability of the operating system and its apps has improved.

In this way of reading Microsoft’s strategy, the death of Windows Phone is a consequence of the unravelling of former Windows boss Steven Sinofsky’s strategy to make Windows a secure and mobile-friendly platform.

The new Microsoft

That is it then; Microsoft is exiting mobile and trusting in server and cloud, plus a large but declining desktop Windows business, plus applications for other people’s mobile platforms. It is a software company after all.

It is too early though to say whether or not Ballmer was wrong and Nadella right in steering away from Windows everywhere. For sure Google will continue to do all it can to push Android users towards its own cloud services. Apple’s is a more open platform in this sense, because the company has no real equivalent to Office 365 or Azure, but Microsoft is vulnerable here as well. There is also Amazon Web Services to think about, the dominant cloud player, with its own offerings for email, cloud database and so on.

Still, this is the new Microsoft; and from a customer perspective there is good news in that both iOS and Android should be well supported for Microsoft’s services, and that Office 365 and Azure have to compete on technical merit, not just on the basis of integrating nicely with Windows.

Uncategorized

Microsoft Financials: steady, but a turning point as on-premises server business declines

April 22, 2016 onlyconnect

Microsoft has announced its latest financials, and I have made a quick table summarising the year-on-year comparison for the quarter. See the end of this post for what the confusing segment categories represent.

Quarter ending March 31st 2016 vs quarter ending March 31st 2015, $millions

Segment	Revenue	Change	Operating income	Change
Productivity and Business Processes	6522	+65	2994	-210
Intelligent Cloud	6096	+193	2188	-345
More Personal Computing	9458	+89	1645	+596
Corporate and Other	-1545	-1545	-1544	-1352

A few observations.

Overall the figures are flat. That is not a bad result if you think of Microsoft as a PC company, considering that the PC is in decline; disappointing if you think of Microsoft as a cloud company. The answer is that one is offsetting the other, which is not too bad.

Microsoft says that revenue and income would be up, were it not for currency fluctuations. Of course there is that big hit in “Corporate and other” which is “net revenue deferral related to Windows 10 of $1.6 billion,” according to the earnings statement.

On-premises server business is in retreat. It is not possible to migrate customers to the cloud while at the same time growing on-premises business. That truth finally showed up in Microsoft’s figures. CFO Amy Hood referred to a “larger than expected decline in our transactional on premise server business” in the earnings call.

Margins are not so good in cloud. Selling software license is almost all profit, once you have developed it. Not so with cloud, which requires data centres, networking, and ongoing maintenance. “Our company gross margin percentage declined this quarter driven by our accelerating mix of cloud services in our Intelligent Cloud and Productivity and Business Processes segment offset by higher gross margin percentage performance from products within More Personal Computing,” said Hood.

Office 365 continues to grow. CEO Satya Nadella said that “Commercial Office 365 customers surpassed 70 million monthly active users and we grew seats by 57 percent” year on year. This is key to the company’s health. Customers in Office 365 are hooked to the platform and more likely to buy other services such as Dynamics CRM, Enterprise Mobility Services MDM (Mobile Device Management), or applications hosted on Azure. “Dynamics CRM Online seats more than doubled this quarter with over 80 percent of our new CRM customers deploying in the cloud,” said Nadella.

Windows 10 is being taken up. The nagware is working according to Nadella, who said that “The number of Windows 10 devices is twice that of Windows 7 over the same time period since launch.” Nevertheless I still hear a lot of caution out there, with people advising one another to stick with Windows 7. Windows 10 pushes users more strongly to Microsoft services than 7, with Cortana driven by Bing. “Over 35 percent of our search revenue last month came from Windows 10 devices,” said Nadella.

Windows Phone is dying fast. “For phone we expect year over year revenue declines to deepen in Q4 as we work through our Lumia channel position,” said Hood.

Linux is growing. Nadella made a few comments about SQL Server on Linux and Linux on Azure. Why SQL Server on Linux? “We look at that as an expansion opportunity,” he said. Over 20% of VMs on Azure are Linux, he added. Microsoft made Linux “first class” on Azure in order to be able to host an enterprise’s “entire data estate across Windows and Linux.” People don’t move between operating systems, he said, but “now they have a choice around database.”

I’d add that we are now seeing scenarios where Linux is ahead of Windows on Azure. The new Azure Container service is currently Linux only, for example, though a Windows option is planned.

What Microsoft does with Linux in the coming years will be interesting to see. Office on Linux? Microsoft Android?

A reminder of Microsoft’s segments:

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.

Tim Anderson's IT Writing