Hungarian ceremony for Steve Ballmer

Microsoft chief executive Steve Ballmer had to scramble for cover after a Hungarian student hurled eggs at him during a lecture in Budapest earlier this week.
The young man then launched into a rant, during which he accused Microsoft of stealing "from the Hungarian people".
Amid nervous laughs from the audience, the heckler concluded his short outburst with the words "Give the money back, right now!" before throwing three eggs at Mr Ballmer in quick succession.
The protester then left the auditorium to the jeers of his fellow students. Scrawled across the back of his shirt in black marker pen were the words "Microsoft = Corruption".
Mr Ballmer appeared from behind the desk and laughed off the attack, telling his audience: "It was a friendly disruption … now that broke my train of thought."

Nortel and Microsoft Innovative Communications Alliance

Nortel and Microsoft have announced four new joint unified communications products, as a result of their partnership in the UC space.

Nortel Converged Office will combine Nortel's Communication Server 1000 IP-PBX with Microsoft Office Communications Server 2007.

The Nortel UC Integrated Branch will also be integrated with Office Communications Server 2007 in order to deploy WAN routing, ethernet switching, security, and VoIP into remote sites.

The cross-platform capabilities will also be apparent in the Nortel and Microsoft Carrier Hosted UC Solution for hosting unified communications - giving small and medium-sized businesses instant messaging, VoIP, click-to-call, and video conferencing through the Microsoft Office Communicator 2007.

Nortel's Multimedia Conferencing, version 5.0 is now available for the Microsoft Communications Server 2007.

Nortel sees the partnership as providing a trusted, well-understood front-end from which to offer large and small companies their UC infrastructure products.

Innovative Communications Alliance website

Cisco becomes a Windows Server reseller

Six months ago, Microsoft CEO Steve Ballmer and Cisco CEO John Chambers held a joint press conference to showcase their growing relationship with a few demos of Cisco-Microsoft interoperability. Now, they've taken that relationship to the next level with a joint branch office product.

Later this year, Cisco will begin including a bare-bones installation of Windows Server 2008 in its Wide Area Application Services appliances, which do WAN optimization and application acceleration. The initial appliances will add local print, directory, and domain services to Cisco's own capabilities via Server Core, a new trimmed down command-line Windows Server installation option.

Though Cisco includes elements of embedded versions of Windows in other products, this represents the first time companies will get explicit Windows services as a feature of a Cisco appliance. Potentially, this is an indication that Server Core represents an opportunity for Windows Server to show up in other places where it wouldn't have before.

European Union fined Microsoft

BRUSSELS, Belgium (AP) -- The European Union fined Microsoft Corp. a record $1.3 billion on Wednesday for charging rivals too much for software information.
EU regulators said the company charged "unreasonable prices" until last October to software developers who wanted to make products compatible with the Windows desktop operating system.
The fine is the largest ever for a single company and the first time the EU has penalized a business for failing to obey an antitrust order.

Reed more here

Gartner: 10 trends of IT industry

Gartner 's predictions for IT Organisations 2008:

1. Mac will double its market share

By 2011, Apple will double its U.S. and Western Europe unit market share in computers. Apple's gains in computer market share reflect as much on the failures of the rest of the industry as on Apple's success. Apple is challenging its competitors with software integration that provides ease of use and flexibility; continuous and more frequent innovation in hardware and software; and an ecosystem that focuses on interoperability across multiple devices (such as iPod and iMac cross-selling).

2. Half of business travelers won't take their laptops

By 2012, 50 per cent of traveling workers will leave their notebooks at home in favour of other devices. Even though notebooks continue to shrink in size and weight, traveling workers lament the weight and inconvenience of carrying them on their trips. Vendors are developing solutions to address these concerns: new classes of Internet-centric pocketable devices at the sub-$400 level; and server and Web-based applications that can be accessed from anywhere. There is also a new class of applications: portable personality that encapsulates a user's preferred work environment, enabling the user to recreate that environment across multiple locations or systems.

3. Open source will penetrate 80% of enterprise software

By 2012, 80 per cent of all commercial software will include elements of open source technology. Many open source technologies are mature, stable, and well supported. They provide significant opportunities for vendors and users to lower their total cost of ownership and increase returns on investment. Ignoring this will put companies at a serious competitive disadvantage. Embedded open-source strategies will become the minimal level of investment that most large software vendors will find necessary to maintain competitive advantages during the next five years.

4. A third of all software purchased will be by subscription

By 2012, at least one-third of business application software spending will be as service subscription instead of as product license. With software as service (SaaS), the user organization pays for software services in proportion to use. This is fundamentally different from the fixed-price perpetual license of the traditional on-premises technology. Endorsed and promoted by all leading business applications vendors (Oracle, SAP, Microsoft) and many Web technology leaders (Google, Amazon), the SaaS model of deployment and distribution of software services will enjoy steady growth in mainstream use during the next five years.

5. Many new businesses will buy IT infrastructure as a service

By 2011, early technology adopters will forgo capital expenditures and instead purchase 40 per cent of their IT infrastructure as a service. Increased high-speed bandwidth makes it practical to locate infrastructure at other sites and still receive the same response times. Enterprises believe that as service oriented architecture (SOA) becomes common, cloud computing will take off, thus untying applications from specific infrastructure. This trend to accepting commodity infrastructure could end the traditional lock-in with a single supplier and lower the costs of switching suppliers. It means that IT buyers should strengthen their purchasing and sourcing departments to evaluate offerings. They will have to develop and use new criteria for evaluation and selection and phase out traditional criteria.

6. Power efficiency will become a key criteria in IT purchases

By 2009, more than one third of IT organizations will have one or more environmental criteria in their top six buying criteria for IT-related goods. Initially, the motivation will come from the wish to contain costs. Enterprise data centers are struggling to keep pace with the increasing power requirements of their infrastructures. And there is substantial potential to improve the environmental footprint, throughout the life cycle, of all IT products and services without any significant trade-offs in price or performance. In future, IT organizations will shift their focus from the power efficiency of products to asking service providers about their measures to improve energy efficiency.

7. CO2 footprint will become part of PC purchasing criteria

By 2010, 75 per cent of organizations will use full life cycle energy and CO2 footprint as mandatory PC hardware buying criteria. Most technology providers have little or no knowledge of the full life cycle energy and CO2 footprint of their products. Some technology providers have started the process of life cycle assessments, or at least were asking key suppliers about carbon and energy use in 2007 and will continue in 2008. Most others using such information to differentiate their products will start in 2009 and by 2010 enterprises will be able to start using the information as a basis for purchasing decisions. Most others will stat some level of more detailed life cycle assessment in 2008.

8. Green sourcing will drive vendors to provide green

By 2011, suppliers to large global enterprises will need to prove their green credentials via an audited process to retain preferred supplier status. Those organizations with strong brands are helping to forge the first wave of green sourcing policies and initiatives. These policies go well beyond minimizing direct carbon emissions or requiring suppliers to comply with local environmental regulations. For example, Timberland has launched a Green Index environmental rating for its shoes and boots. Home Depot is working on evaluation and audit criteria for assessing supplier submissions for its new EcoOptions product line.

9. End user preferences will drive half of all IT purchases

By 2010, end-user preferences will decide as much as half of all software, hardware, and services acquisitions made by IT. The rise of the Internet and the ubiquity of the browser interface have made computing approachable, and individuals are now making decisions about technology for personal and business use. Because of this, IT organizations are addressing user concerns through planning for a global class of computing that incorporates user decisions in risk analysis and innovation of business strategy.

10. 3D printers will grow 100-fold

Through 2011, the number of 3D printers in homes and businesses will grow 100-fold over 2006 levels. The technology lets users send a file of a 3D design to a printer-like device that will carve the design out of a block of resin. A manufacturer can make scale models of new product designs without the expense of model makers. Or consumers can have models of the avatars they use online. Ultimately, manufacturers can consider making some components on demand without having an inventory of replacement parts. Printers priced less than $10,000 have been announced for 2008, opening up the personal and hobbyist markets.

Source: Gartner

Kevin Johnson says that Yahoo will accept Microsoft's offer

Kevin Johnson, president of Microsoft Platforms & Services Division, issued an email to Microsoft employees. The letter has a tone of confidence that assumes a deal with Yahoo will ultimately take place. See the text here:

I want to provide all employees in the Platforms & Services Division with an update on our February 1 proposal to combine with Yahoo!, and answer a few common questions that have been asked.

As we’ve discussed, the online advertising industry is growing rapidly and is expected to be an $80B industry by 2010. We believe our proposal is a compelling one and that the combination of Yahoo! and Microsoft creates a more credible alternative to an increasingly dominant player in the advertising industry. We are committed to building great services for consumers while delivering great value to advertisers and publishers. We have been very thoughtful about this combination, and are excited about what our two companies can do together to collectively target growth opportunities in online services, search, and advertising.

It is important to remember that, while we have made what we believe to be a very compelling proposal for Yahoo! shareholders and employees, we do not have an agreement in place with Yahoo! at this time. While Yahoo!’s Board and management consider our proposal, let me share a perspective on the process going forward:

While Yahoo! has issued a press release rejecting our proposal, we continue to believe we have a full and fair proposal on the table. We look forward to a constructive dialogue with Yahoo!’s Board, management, shareholders, and employees on the value of this combination and its strategic and financial merits.

If and when Yahoo! agrees to proceed with the proposed transaction, we will go through the process to receive regulatory approval, and expect that this transaction will close in the 2nd half of calendar year 2008. Until this proposal is accepted and receives regulatory approval, we must continue to operate our business as we do today and compete in this rapidly changing online services and advertising marketplace.

It is important to note that once Yahoo! and Microsoft agree on a transaction, we can begin the integration planning process in parallel with the regulatory review. We can create the integration plan but we cannot begin to implement it until we have formal regulatory approval and have closed the transaction. Because the integration process will be critical to our success as a combined company, we are taking this very seriously. We have recent – and successful - experience in this arena, including our integration planning with aQuantive and Tellme, both of which led to successful combinations of talent, assets, and infrastructure.

Our proposal includes a thoughtful integration planning process for a Microsoft-Yahoo! combination. It is important to me that this process includes leaders from Yahoo! and Microsoft and is done in a way that enables us, together, to make decisions in a collaborative way. Importantly, this will be an inclusive process with Yahoo! employees as they are a key part of our success as a combined company.

With the above process and timeline in mind, I want our teams to stay focused on existing commitments and goals. We should continue to make progress against our plans for online services.

There has been a lot written about various aspects of our proposal. And there are compelling opportunities and tough challenges ahead. While it’s hard to predict the future, I want to convey my sense of where things are by responding to a set of common questions that have come up from employees.

Q: What are the benefits of a Microsoft-Yahoo! combination?

A: First, the industry needs a more compelling alternative in search and online advertising. I have personally met with top executives of the major media companies, and I know there is a desire for more competition in search and online advertising. Without this, there’s less innovation, less competition, and less value being generated for consumers, advertisers, and publishers. Together, Microsoft and Yahoo! would have an opportunity to change and evolve the experiences and value we deliver to all of these groups.

For consumers and developers, our expanded R&D capacity would allow us to drive innovation in emerging user experiences in areas such as search, video, mobile, commerce, and social media. Already, our collaborative work with Yahoo! on interoperability between our instant messaging services has benefited consumers and made it easier for them to stay connected with friends and family.

For advertisers and publishers, scale economics would allow us to deliver more value to this customer base. By combining search and non-search advertising inventory on a single ad platform, yield is also improved. The other benefits and opportunities may include improving return on investment and decreasing the cost and complexity of running multiple campaigns. We also believe in an extensible ad platform. From my discussions with top advertising agency executives, they share this belief and want to play a key role in extending this ad platform for incremental value to advertisers.

For shareholders, a successful combination would provide superior value and an opportunity to participate in the upside of the combined company. There are expected operating efficiencies driven by synergies from eliminating redundant operating expenses, redundant capital expenses, and ensuring appropriate headcount allocation by function.

The focus of our combined company will be to build great experiences and platforms for our joint consumers, advertisers, and publishers. I am confident in the collective engineering & business talent we have at Microsoft and Yahoo! to drive towards this vision.

Q: What impact would this combination have on staffing? Would there be any reductions?

A: People are the single most important asset in this combination. We want the very best talent at the combined company, and we will demonstrate this to Yahoo! and Microsoft employees at each step of the deal. There’s no question we will dedicate significant rewards and compensation to Yahoo! and Microsoft employees.

While some overlap is expected in any combination of this size, we should remember that Microsoft is a growth company that has hired over 20,000 people since 2005, and we would look to place talented employees throughout the company as a whole. We have no shortage of business and technical opportunities, and we need great people to focus on them.

Q: How should we view the two cultures at Microsoft and Yahoo!? How would we bring the two cultures together?

A:Both companies share a passion for great engineering, creativity, and development of services and technologies that truly can change the world. Respect for both the creative and analytical aspects of advertising is core to both companies, along with recognition that advertising is an industry that represents opportunity and growth. We would have an opportunity to bring together the best of both companies – Microsoft’s culture of innovation, and long-term commitment to tough R&D problems, with Yahoo!’s blend of Web-centric DNA and innovative engineering, 21st century media expertise, and advertising talent. Some aspects of the two cultures will naturally merge quickly and some will remain unique in the near-term and merge more slowly over time. At Microsoft today, we have a corporate culture, but individual teams develop, nurture, and retain a culture of their own as well. The culture of the combined entity will be shaped by individuals and teams from both Yahoo! and Microsoft.

Q: How would we address the multiple brands and technologies within Live, MSN, and Yahoo!? Which brand would we keep?

A: Both Microsoft and Yahoo! have great brands and technologies. Yahoo! has a very strong consumer brand and we are committed to build on the Yahoo! brand as a major part of the combined products and services we deliver to customers. The Yahoo! brand is one of the reasons the combination of the two companies would create so much value. It is premature to say which aspects of the brands and technologies we would use in our combined offerings. As part of the integration planning effort, it is important that we enable a joint team of leaders from Microsoft and Yahoo! to make thoughtful decisions about brands and technologies. How we integrate Microsoft and Yahoo!’s brands, products, and services are the types of decisions that would be made during this integration planning process—by leaders from both companies—and implemented over time after the transaction closes.

Q: If we move forward with a combination, what’s our plan for addressing Yahoo!’s technology infrastructure, since it’s non-Windows based?

A: Services we’ve acquired over the years have been based on both Windows and open source technologies. Although Windows is our strategic platform and in some cases the teams ultimately migrated their products to Windows for a variety of reasons, in other cases we have prioritized continuity and have used open interoperability mechanisms to achieve effective systems integration. Yahoo! has made significant investments in both its skills and technologies, so we would work closely with Yahoo! engineers to make pragmatic platform and integration methodology decisions as appropriate, prioritizing above all how those decisions would impact customers.

Q: Would we maintain locations in both Silicon Valley and Redmond?

A: Absolutely. Silicon Valley is one of Microsoft’s largest presences outside our Redmond headquarters, with nearly 1,800 employees in a variety of key engineering and business roles. Yahoo!’s campus houses over 10,000 employees and plays a key part in their innovative culture. In bringing the companies together, we would be committed to maintaining Yahoo!’s significant presence in Silicon Valley, and we anticipate that there would be exciting opportunities for a combined Microsoft and Yahoo! talent base in Silicon Valley, Redmond, and many other cities worldwide.

Q: How should we interact with Yahoo! employees?

A: It’s important that Microsoft employees not speculate with Yahoo! employees about the proposal or about what a deal would mean for the combined company. Prior to close of the transaction, no Microsoft employee should reach out to Yahoo! employees for the purpose of integration planning unless specifically instructed to do so by the integration team and its LCA advisors.

Prior to the close, we must continue to compete with Yahoo! as before. At the same time, there are areas where we partner with Yahoo!. If you have questions about what is permissible, please contact your team’s LCA leader.

Q: How does this impact our relationship with customers and partners?

A: Our commitment to customers and partners remains paramount. While this proposed combination is exciting, Microsoft and Yahoo! remain separate companies and will continue to compete in the marketplace.

Q: What can I expect going forward?

A: It’s business as usual and, as such, your commitments remain unchanged. Please stay focused on your key priorities, whether it’s a technical product roadmap, serving our advertiser or publisher customers, or connecting with users of our services. It’s important that we stay focused on our business commitments and let the process for the transaction take its course.

At the appropriate times, we will update you further on progress and news regarding this proposed transaction.

Thanks again for your continued focus on our business and customers during this period.
Regards,
Kevin Johnson
President Microsoft Platforms & Services Division

Sony Ericsson will make Windows Mobile phones

Sony Ericsson and Microsoft will cooperate in making smartphones, with the first Sony Ericsson handset based on the Windows Mobile operating system on sale by the end of the year.

The world's fourth-biggest cell-phone maker also unveiled six other new models on Sunday, including two additional touch-screen phones, a Walkman music phone with 8 gigabytes of memory and a dust-resistant camera phone.

The Microsoft deal means all the world's top handset makers apart from Nokia will now have Windows Mobile versions. The Sony Ericsson model, named the "X1," will be a slider phone with a typewriter-style qwerty keyboard and touch screen.

The marketing manager of Microsoft's mobile business, Scott Horn, told Reuters he was confident of reaching the company's goal of selling at least 20 million smartphones with partners by the end of Microsoft's fiscal year at the end of June.

Read the article here: Reuters

Mobile Fair-Wireless fair set to stage mobile Web battle

FRANKFURT (Reuters) - Cell phone makers, telecoms carriers and Internet groups are squaring up for a fight for dominance of the mobile Internet, finally ready for market after years of promises and hundreds of billions in investments.

Wireless broadband is coming of age, making rivals of companies such as Nokia Oyj, Google Inc, Microsoft Corp and Apple Inc, who previously could afford to coexist relatively peacefully.

Mobile networks are now capable of delivering the Internet as smoothly to a mobile phone as to a PC, with the clunky handsets, stuttering downloads and network jams of the recent past almost forgotten in many developed markets.

And the scramble to capitalize on that opportunity will loom over all other business at next week's Mobile World Congress.

"Web, Web, Web -- if you ain't walking onto the stand hand in hand with a Web guy you ain't no one," said Ben Wood, chief analyst at UK-based telecoms and IT research firm CCS Insight.

The outcome of the struggle to win the mobile Web will not only be crucial for the combatants but will decide how the mobile Web is experienced by billions of people.

At the fair, visitors will be on alert for sightings of prototypes of the Gphone -- phones built on a Google open software platform that will help it loosen up the market and extend its online advertising power into mobile search ads.

Chip designer ARM Holdings Plc, for one, will show Google's so-called Android platform in action at the four-day fair that starts in Barcelona on Monday, a source close to the company has told Reuters.

Read more here: Reuters

Microsoft-Yahoo fussion may let Google grab mobile ads

Among the benefits Microsoft could get from acquiring Yahoo for $44.6 billion is a chance to compete in the emerging mobile advertising market. But while Microsoft struggles to take over Yahoo, both Microsoft and Yahoo could be distracted while Google becomes dominant in still another market.
While Microsoft Relevant Products/Services's $44.6 billion bid for Yahoo appears to be aimed at capturing a share of the rapidly growing online advertising market dominated by Google, some observers think the move would also position Microsoft in the emerging market for mobile advertising.
Robert Scoble, vice president of media development for PodTech.net and a former Microsoft blogger, wrote on his Scobelizer blog that the leveraged buyout will actually benefit Google by distracting both Microsoft and Yahoo from the mobile front.
"The real race today" Scoble wrote, "is for ownership of your mobile phone." He noted that six million cell-phone users are added every month in China. "So every month that Microsoft and Yahoo will be stuck in some courtroom arguing out why this is a good deal means money in the bank for Google as they close mobile-phone deal after mobile-phone deal," he said.

Huge Emerging Market

While mobile advertising was an emerging $106 million business in the U.S. and Europe in 2007, researchers such as Local Mobile Search predict it will balloon to $5 billion by 2012.
Even so, it's probably unlikely that mobile advertising was the driving force in Microsoft's interest in Yahoo, said Charles King, principal analyst with Pund-IT, in a telphone interview. "There's opportunity there, certainly, but the fly in the ointment is that mobile services are very much an emerging market," he said.
Yahoo is a strong player in the emerging market, though. In addition to making its many services such as e-mail and IM available on mobile devices, Yahoo owns a 40 percent stake in Chinese search company Alibaba and operates a strong division in Japan. "Those two markets are among the fastest-growing and most sophisticated in the world," King noted.

Time on Google's Side

While the mobile advertising market is still too young for any one company to be considered dominant, it will advance very quickly. "Anyone who wants to compete in that market needs to get to the front of the line," King said. "Time is a critical factor because of the speed at which the market is growing."
To some degree, Google's dominance in searches may spill over into the mobile space. "Google's mindshare in search is pretty remarkable. Once they tend to engage users in their service, it's really tough for competitors to dislodge them," King said. "If they can do with mobile advertising what they've done with search," Google may be quickly able to achieve dominance in mobile.
With European and U.S. regulators certain to give the deal intense scrutiny, whatever advantanges Microsoft and Yahoo gain from combining won't happen for several years. That gives Google a huge head start, King said. "Time is definitely on Google's side; they've proven they can move very quickly when they want to."

Cultural Conflict

Microsoft, on the other hand, "plays a good long game," King said. "The company is so successful commercially they can devote the time and effort and resources to enter a market -- even if it takes years to do so." While buying Yahoo would give Microsoft a "definite leg up," King said, it may not happen soon enough to block Google.
Besides the time for the acquisition to clear regulators, Microsoft faces large integration issues in swallowing the Silicon Valley icon. This deal, for example, is twice as large as HP's acquisition of Compaq in 2000. That acquisition, like the infamous merger of AOL and Time Warner, faltered mostly "on cultural issues," King said.
"Often you'll hear about immense technical benefits of an acquisition, but unless the cultural components are dealt with successfully, the acquiring company can wind up with a handful of ashes," King added.

Will Microsoft buy Yahoo?

Microsoft is looking to buy Yahoo as a way of staving off Google, according to sources speaking with the New York Post. The newspaper claims that the Redmond software company is considering a deal that could be worth $50 billion to buy Yahoo to improve its distant third-place standing in search advertising, which is dominated by Google. The frustration is said to have reached a boil in recent months as Google has bought many of the companies Microsoft had been interested in, especially web advertiser DoubleClick. This in particular may have been the tipping point, as shown when Microsoft argued that Google was creating a monopoly.
Google considers the possibility of a Microsoft acquisition of Yahoo anti-competitive and possibly threatening to the Internet as a whole, says company Chief Legal Officer David Drummond in an official blog. The official argues that Microsoft's historic approach of establishing and extending proprietary standards is opposite to the very notion of the Internet; a Yahoo deal could potentially recreate Microsoft's leverage with Office and Windows on a much wider level, Drummond says.
"Between them, the two companies operate the two most heavily trafficked portals on the Internet," he explains. "Could a combination of the two take advantage of a PC software monopoly to unfairly limit the ability of consumers to freely access competitors' email, IM, and web-based services?"
Microsoft has issued a formal rebuttal to the argument, dismissing notions that an acquisition of Yahoo is an attempt to create a monopoly and contends instead that Google's 75 percent control of search revenue means that an acquisition of Yahoo would create more competition rather than less. "The alternative scenarios only lead to less competition on the Internet," Microsoft General Counsel Brad Smith claims, also arguing that Microsoft supports openness.
Regardless, sources within Yahoo are allegedly reporting that the search engine firm is investigating the possibility of allying with Google as an attempt to stave off a hostile Microsoft takeover. The plan would revive earlier talks between the two companies and may have been spurred along by a call by Google chief Eric Schmidt to Yahoo's own chief Jerry Yang, according to a Wall Street Journal report.
Other large financial, media, and technology firms have also expressed interest, though no bids have been made apparent, the insiders say. Yahoo is believed by some to be aggressively seeking alternative offers after considering the Microsoft offer as a threat rather than the invitation suggested by the latter's official reasons behind the proposal.
Microsoft may need to abandon its longstanding financial independence to complete a takeover of Yahoo, the company said late yesterday. Despite its large cash reserves, the company's Chief Finance Officer Chris Liddell acknowledged that the $44.6 billion proposed deal might require that the firm borrow money and accumulate debt. While the $21 billion in reserves owned by the Windows developer would cover nearly all the cash portion of the proposed deal, a loan would help Microsoft avoid wiping out these reserves and leaving itself without options if it needs more cash in the near future, according to the executive.
The willingness to rely on loans indicates Microsoft's commitment to its proposed bid, which is widely understood to be an attempt to thwart Google's control of search and web advertising. The company has officially claimed to be creating a viable alternative in the market.
However, reports have surfaced that Yahoo considers Microsoft a threat and that the company is considering an alliance with Google or other alternative firms as an attempt to make a Microsoft deal impractical or impossible. Google has commented on the deal and warned that Microsoft might translate its monopolies with Office and Windows to the Internet by creating proprietary web standards.