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A year of healthy progress along Microsoft strategic ambitions

Microsoft Stock Price for the last 5 years — July 22, 2016:Microsoft Stock Price for the last 5 years -- 22 July, 2016 My earlier posts related specifically to this 3 years overall transition history:
– Microsoft partners empowered with ‘cloud first’, high-value and next-gen experiences for big data, enterprise social, and mobility on wide variety of Windows devices and Windows Server + Windows Azure + Visual Studio as the platform as of July 10, 2013
– Microsoft reorg for delivering/supporting high-value experiences/activities as of July 11, 2013
– An ARM-focussed Microsoft spin-off could be the only solution to save Microsoft in the crucial next 3-years period as of August 24, 2013
– Opinion Leaders and Lead Opinions: Reflections on Steven Sinofsky’s “Era of Continuous Productivity” vision as of September 1, 2013
– The question mark over Wintel’s future will hang in the air for two more years as of September 15, 2013
– Microsoft could be acquired in years to come by Amazon? The joke of the day, or a certain possibility (among other ones)? as of September 16, 2013
– Sinofsky’s ‘continuous productivity’ idea to be realised first in Box Notes as of September 21, 2013
MS FY15 NEW STRATEGIC SETUPMicrosoft is transitioning to a world with more usage and more software driven value add (rather than the old device driven world) in mobility and the cloud, the latter also helping to grow the server business well above its peers as of April 25, 2014
– Satya Nadella on “Digital Work and Life Experiences” supported by “Cloud OS” and “Device OS and Hardware” platforms–all from Microsoft as of July 23, 2014
– Steve Ballmer on leaving Microsoft, relationship with Bill Gates: “We’ve dusted-up many times”, on His Biggest Regret: “doing hardware earlier [for being] more effective in phone business” AND on Amazon: “They Make No Money.” as October 25, 2014
– The Empire Reboots — Can C.E.O. Satya Nadella Save Microsoft? | Vanity Fair, Oct 27, 2014

WPC Day 1: The Digital Transformation Opportunity from Microsoft Partner Network UK Blog as of July 11, 2016:

“Empower every person and every
organisation on the planet to achieve more”
The Microsoft Mission

At the core of today’s opening Worldwide Partner Conference keynote was ‘Digital Transformation’ aka the desire of CEO’s to use technology to change business outcomes – whether it be how they:

  • Engage their customers,
  • Empower employees to make better decisions,
  • Optimise their operations,
  • Build up the predictive power within their organisations so that every operation is intelligent,
  • Transform their products and services.

Digital Transformation = An Unprecedented Partner Opportunity

Every customer of every size business (startup to Enterprise) is not only looking to use digital technology, but to build digital technology for their own.

Digital-transformatoin-all-partner-types1-1024x530[1]

Businesses are looking to drive greater efficiency – automating processes and enhancing productivity, particularly in those areas where there are operating expenses. This poses an unprecedented opportunity for you no matter what partner type you are.

Digital Transformation Opportunity by Microsoft and Partners -- July 11, 2016Microsoft Ambitions to Drive Digital Transformation

Microsoft has three core ambitions which play a fundamental part in digitally transforming businesses:

  • Re-inventing Productivity and Business process
  • Building the Intelligent Cloud
  • Create more Personal Computing

These will be covered in more detail over the next two days keynotes, however, Satya provided some great examples of what these 3 ambitions entail.

1) Re-inventing Productivity and Business Process

This is all about removing the barriers between productivity tools and business applications. Satya focused on two key areas:

  • ‘Conversations as a Platform’: Using human language understanding personal assistants and Bots (conversational interfaces) which augment our connection with technologies. (Watch the demo 48 minutes into Day 1 Keynote)

2) Building out the intelligent Cloud

To showcase how intelligent cloud is helping transformation, Satya invited General Electric CEO, Jeff Immelt, on stage to discuss how he has digitally transformed the GE business.

Considering GE is over 140 years old, it’s a company that has embraced transformation and digital transformation. You can read more about their story and find out about Microsoft’s new partnership with GE to bring Predix to Azure, accelerating digital transformation for industrial customers.

Satya then went on to talk about ‘The next phase of building the Intelligent cloud’ with ‘Cognitive services’.  We’re seeing the beginnings of a new platform for cognitive services. Microsoft has taken decades of research from Microsoft Research encapsulating speech, computer vision, natural language text understanding, and made these available as API’s. These API’s are being used to infuse perception into apps – the ability for Apps/Bots to understand speech and see i.e. computer vision. These cognitive capabilities are capable of transforming business by bringing productivity gains. A great example of this is how Macdonalds are creating efficiency in their Drive Thru’s with speech/order recognition (Watch the demo 1 hour 10 minutes into the Day 1 keynote).

3) Create More Personal Computing

Create more personal computing was the third and final ambition covered. Satya discussed Windows 10 – an OS system spanning multiple devices from Raspberry PI to Hololens and bringing centralised infrastructure benefits and cost savings to business.

It was on the topic of Hololens, he discussed how personal computing is shaped by category creation moments. Moments where input and output change. ‘Mixed Reality’ is that moment. With Hololens its created an interface changing moment – Mixing real with virtual, enabling us to be anywhere and everywhere – fully untethered and mobile.

What followed was a great demo showcasing how Japan Airlines are using Microsoft HoloLens to change how they train flight crews and mechanics (Watch the demo 1 hour 17 minutes into the Day 1 keynote)

Mixed reality offers huge opportunities for partners with so many applications across so many sectors.

Expect more details on Digital Transformation and Microsoft’s three ambitions in WPC Day 2 and 3 keynotes.

News From WPC2016 Day 1

The three ambitions announced a year ago and the proof-points of healthy progress along them in FY16:

  1. Office 365, Dynamics 365, AppSource, and LinkedIn as all being part of one overarching strategy in Productivity and Business Process:
    – core part of an overarching strategy
    – digital transformation both for us and our partnerships with customers
  2. Significant differentiation vs. Amazon AWS in Intelligent Cloud:
    – enterprise cloud leadership
    – every customer is also an ISV
    – hyperscale-plus-hybrid approach with annuity focus enabling cloud lead conversation with customers
    – meeting cloud needs of customers where they are
  3. Windows strategy to achieve progress in More Personal Computing:
    – deliver more value and innovation, particularly for enterprise customers
    – grow new monetization through services across our unified Windows platform
    – innovate in new device categories in partnership with our OEMs

The Q1FY16 progress was presented in my Microsoft is ready to become a dominant force in cloud computing with superior cloud offerings, a Windows ecosystem under complete renewal, first signs of Surface-Lumia-Xbox successes on the market, and strong interest in technology partnerships by other industry leaders as of October 24, 2015.

Reinvent Productivity and Business Processes“, “Build the Intelligent Cloud” and “Create More Personal Computing” were the original 3 “interlocking ambitions” the Microsoft CEO talked about at Microsoft Iginite held on May 4-8, 2015 in Chicago. The proof-points of FY16 progress are shown along that list, and explained in detail by remarks from Microsoft (MSFT) Satya Nadella on Q4 2016 Results – Earnings Call Transcript as of July 18, 2016.

For more information see also:  Q4 2015 Earning Call Transcript, the 2015 Annual Report or—even better—my earlier posts indicated here under each ambition. For a deeper strategic intent underlying these ambilitions see my earlier post Julia Liuson: “Microsoft must transform from a company that throws a box with software into the market … into a company that offers pure services” published on These ambitions also became reporting segments in FY16. See Earnings Release FY16 Q1 as of October 22, 2015. The major corporate groups were also organised along these line: ASG = Application & Services Group for “Reinvent productivity and business processes” ambition, C&E = Cloud & Enterprise for “Build the intelligent cloud platform” ambition, and OSG= Operating Systems Group for “Create more personal computing” ambition.

Note that the overall strategic approach was developed 2 years ago and it was described in my post Satya Nadella on “Digital Work and Life Experiences” supported by “Cloud OS” and “Device OS and Hardware” platforms–all from Microsoft of July 23, 2014:

image.png

Here are the remarks from Microsoft (MSFT) Satya Nadella on Q4 2016 Results – Earnings Call Transcript as of July 18, 2016. for details

1. Office 365, Dynamics 365, AppSource, and LinkedIn as all being part of one overarching strategy in Productivity and Business Process:

For initial and additional details available earlier see my earlier posts:
– The first “post-Ballmer” offering launched: with Power BI for Office 365 everyone can analyze, visualize and share data in the cloud as of February 10, 2014
– OneNote is available now on every platform (+free!!) and supported by cloud services API for application and device builders as of March 18, 2014
– An upcoming new era: personalised, pro-active search and discovery experiences for Office 365 (Oslo) as of April 2, 2014
– Microsoft Azure: Marketable machine learning components capability for “a new data science economy”, and real-time analytics for Azure HDInsight service as of October 22, 2014

In fact, this last quarter, some of the most strategic announcements were all around our application platform. At our partner conference, there was a significant amount of excitement with the tools that we announced like PowerApps and Power BI, Azure functions and Flow. These are tools that our developers and system integrators and solution partners will use in order to be able to customize applications around Azure. And so to me that’s another huge advantage and a competitive differentiation for us.

1.1 Core part of an overarching strategy

The move to the cloud for our customers and for us is not just about a new way of delivering the same value just as a SaaS service. It’s really the transformation from having applications that are silos to becoming more services in the cloud where you can reason about the activity and the data underneath these services to benefit the customers who are using these services. So that’s what this notion of a graph [by Microsoft Graph] represents.

So when somebody moves to Office 365, their graph [by Microsoft Graph], their people, their relationships with other people inside the organization, their work artifacts all move to the cloud. You can connect them with all the business process data that’s in Dynamics 365, but not just in Dynamics 365 but all the applications in AppSource because business process will always be a much more fragmented market as opposed to just one market share leader by industry, by vertical, by country. And so that’s our strategy there.

And now the professional cloud or the professional network helps usage across all of that professional usage. Whether it’s in Office 365 or whether you’re a salesperson using any application related to sales, you want your professional network there. Of course, it’s relevant in recruiting, it’s relevant in training, it’s relevant in marketing. So that’s really our strategy with LinkedIn as the professional network meeting the professional cloud. And these are all part of one overarching strategy, and ultimately it’s about adding value to customers.

1.2 Digital transformation both for us and our partnerships with customers

This past year was a pivotal one in both our transformation and in our partnerships with customers who are also driving their own digital transformation. Our progress is best captured in the results of our three ambitions, starting with Productivity and Business Process. In a world of infinite information but finite attention and time, we aim to change the nature of work with digital technology. In pursuit of this ambition, we continue to add value to our products, grow usage, and increase our addressable market. Along these lines, let me start with Office 365 and then move to Dynamics 365.

In the last quarter, we advanced our collaboration tools. We launched Microsoft Planner, which helps teams manage operations, as well as Skype Meetings, which is aimed at helping small businesses collaborate. In June, we further strengthened our security value proposition with the release of Advanced Security Management.

Lastly, we continue to add intelligence in machine learning to Office to help people automate their tasks and glean insights from data. These advancements helped to drive increased usage across enterprises, small and medium businesses, and consumers. In the enterprise, Office 365 Commercial seats grew 45% year over year, and revenue grew 59% in constant currency. Also 70% of our Office Enterprise agreement renewals are in the cloud. Innovative companies like Facebook, Hershey’s, Discovery Communications, Cushman Wakefield all adopted Office 365 and now see how transformative this service can be for their own business.

We are enthusiastic about the early feedback and growth opportunity from companies using our newly released Office 365 E5, which includes powerful security controls, advanced analytics, and cloud voice. These customers tell us that they love the simplification that comes with standardizing across all of our productivity workloads.

We will continue to grow our install base and drive premium mix through offers like Office 365 E5, but they’re very, very early days of E5. And E5 value proposition across all three of the areas, whether it’s cloud voice or analytics or security are all three massive areas for us. And I would say if anything, the initial data from our customers around security is gaining a lot of traction. But at the same time, one of the things that customers are looking for is making an enterprise-wide architectural decision across all of the workloads.

We see momentum in small and medium businesses, with a growing number of partners selling Office 365, now up to nearly 90,000, a 25% increase year over year. We continue to grab share and adding over 50,000 customers each month for 28 consecutive months.

We also see momentum amongst consumers, with now more than 23 million Office 365 subscribers. Across segments, customers increasingly experience the power of Office on their iOS and Android mobile devices. In fact, we now have more than 50 million iOS and Android monthly active devices, up more than four times over last year.

Now let’s talk about progress with the other pillar of this ambition, Dynamics 365. We are removing any impedance that exists between productivity, collaboration, and business process. This month we took a major step forward with the introduction of Microsoft Dynamics 365 and Microsoft AppSource. Dynamics 365 provides business users with purpose-built SaaS applications. These applications have intelligence built in. They integrate deeply with communications and collaboration capabilities of Office 365.

Dynamics 365 along with AppSource and our rich application platform introduces a disruptive and customer-centric business model so customers can build what they want and use just the capabilities they need. The launch of Dynamics 365 builds on the momentum we’re already seeing in this business. Customers around the globe are harnessing the power of Dynamics in their own transformation, including 24 Hour Fitness and AccuWeather. Overall, Dynamics now has nearly 10 million monthly paid seats, up more than 20% year over year, and Q4 billings grew more than 20% year over year.

Overall, Business Processes represent an enormous addressable market, projected to be more than $100 billion by 2020. It’s a market we are increasingly focused on, and I believe we are poised with both Dynamics 365 and Microsoft AppSource to grow and drive opportunity for our partners.

Across Office 365 and Dynamics 365, developers increasingly see the opportunity to build innovative apps and experiences with the Microsoft Graph, and we now have over 27,000 apps connected to it. Microsoft AppSource will be a new way for developers to offer their services and reach customers worldwide.

Lastly, with Office 365 and Dynamics 365, we have the opportunity to connect the world’s professional cloud and the world’s professional network with our pending LinkedIn deal. Overall, the Microsoft Cloud is winning significant customer support. With more than $12 billion in Commercial Cloud annualized revenue run rate, we are on track to achieve our goal of $20 billion in fiscal year 2018. Also, nearly 60% of the Fortune 500 companies have at least three of our cloud offerings. And we continue to grow our annuity mix of our business. In fact, commercial annuity mix increased year over year to 83%.

2. Significant differentiation vs. Amazon AWS in Intelligent Cloud 

For initial and additional details available earlier see my earlier posts:
– Windows Azure becoming an unbeatable offering on the cloud computing market as of June 28, 2013
Microsoft partners empowered with ‘cloud first’, high-value and next-gen experiences for big data, enterprise social, and mobility on wide variety of Windows devices and Windows Server + Windows Azure + Visual Studio as the platform as of July 10, 2013

– 4. Microsoft products for the Cloud OS [‘Experiencing the Cloud’, as of Dec 18, 2013, but published only on Feb 14, 2014] (was separated from the next “half bakedness” post because of its length)
– 4.5. Microsoft talking about Cloud OS and private clouds: starting with Ray Ozzie in November, 2009[‘Experiencing the Cloud’, as of Dec 18, 2013, but published only on Feb 14, 2014] (was separated from the next “half bakedness” post because of its length)
Microsoft’s half-baked cloud computing strategy (H1’FY14) as of February 17, 2014 Note that this “half bakedness” ended by the facts published in Microsoft is ready to become a dominant force in cloud computing with superior cloud offerings, a Windows ecosystem under complete renewal, first signs of Surface-Lumia-Xbox successes on the market, and strong interest in technology partnerships by other industry leaders as of October 24, 2014
– Microsoft is transitioning to a world with more usage and more software driven value add (rather than the old device driven world) in mobility and the cloud, the latter also helping to grow the server business well above its peers as of April 25, 2014
– Microsoft BUILD 2014 Day 2: “rebranding” to Microsoft Azure and moving toward a comprehensive set of fully-integrated backend services as of April 27, 2014
– Scott Guthrie about changes under Nadella, the competition with Amazon, and what differentiates Microsoft’s cloud products as of October 2, 2014
– Sam Guckenheimer on Microsoft Developer Division’s Journey to Cloud Cadence as of October 19, 2014
– Microsoft Azure: Marketable machine learning components capability for “a new data science economy”, and real-time analytics for Azure HDInsight service as of October 22, 2014
Microsoft Cloud state-of-the-art: Hyper-scale Azure with host SDN — IaaS 2.0 — Hybrid flexibility and freedom as of July 11, 2015
– Microsoft’s first quarter proving its ability to become a dominant force in cloud computing with superior cloud offerings as of Januar 27, 2015
– DataStax: a fully distributed and highly secure transactional database platform that is “always on” as of February 3, 2016
– Microsoft chairman: The transition to a subscription-based cloud business isn’t fast enough. Revamp the sales force for cloud-based selling as of June 6, 2016

Cloud Growth Helps Microsoft Beat Street in Q4 from TheStreet as of July 19, 2016 

… [0:34] and Microsoft’s Enterprise Mobility [Suite]
customers nearly doubled YoY to 33,000. [0:40] …

Note that the Q1FY16 report was that “Enterprise Mobility [Suite] customers more than doubled year-over-year to over 20,000, and the installed base grew nearly 6x year-over-year“. Enterprise Mobility Suite (EMS) is a service available in the CSP (Cloud Solution Partner program) along with Windows Intune, Office 365, Azure and CRM Online. The reason for that very impressive growth was given by Satya Nadella in the much earlier Q2FY15 report as:

Microsoft Enterprise Mobility Suite is one key of product innovation that I would like to highlight given the growth and uniqueness of our offering. Microsoft offers a comprehensive solution that brings together mobile device management, mobile application management, hybrid identity management and data protection into a unified offering via EMS.

Office 365 now includes new app experiences on all phones and tablets for mobile productivity.  Further, we have released completely new scenarios. This includes Office Sway for visualizing and sharing ideas; Delve, to help search and discover content; Office 365 Groups to make it easier to collaborate; andOffice 365 Video for secure media streaming for businesses.

Finally, we continue to invest in enterprise value by integrating MDM and the Enterprise Mobility Suite into Office 365; new encryption technologies and compliance certifications; and new eDiscovery capabilities in Exchange.

Overall at the highest level, our strategy here is to make sure that the Microsoft Services i.e. cloud services be it Azure, Office 365, CRM Online or Enterprise Mobility Suite are covering all the devices out there in the marketplace. So that, that way we maximize the opportunity we have for each of these subscription and capacity based services.

2.1 Enterprise cloud leadership

Now let’s get into the specifics of the Intelligent Cloud, an area of massive opportunity, as we are clearly one of the two enterprise cloud leaders. Companies looking to digitally transform need a trusted cloud partner and turn to Microsoft. As a result, Azure revenue and usage again grew by more than 100% this quarter. We see customers choose Microsoft for three reasons. They want a cloud provider that offers solutions that reflect the realities of today’s world and their enterprise-grade needs. They want higher level services to drive digital transformation, and they want a cloud open to developers of all types. Let me expand on each.

To start, a wide variety of customers turn to Azure because of their specific real-world needs. Multinationals choose us because we are the only hybrid and hyperscale cloud spanning multiple jurisdictions. We cover more countries and regions than any other cloud provider, from North America to Asia to Europe to Latin America. Our cloud respects data sovereignty and makes it possible for an enterprise application to work across these regions and jurisdictions. More than 80% of the world’s largest banks are Azure customers because of our leadership support for regulatory requirements, advanced security, and commitment to privacy. Large ISVs like SAP and Citrix as well as startups like Sprinklr also choose Azure because of our global reach and a broad set of platform services. Last week GE announced it will adopt our cloud for its IoT approach.

Next, Azure customers also value our unique higher-level services. Now at 33,000, we nearly doubled in one year the number of companies worldwide that have selected our Enterprise Mobility Solutions. The Dow Chemical Company leverages EMS along with Azure, Office 365, and Dynamics to give its thousands of employees secure real-time access to data and apps from anywhere.

Just yesterday, we announced Boeing will use Azure, our IoT suite, and Cortana Intelligence to drive digital transformation in commercial aviation, with connected airline systems optimization, predictive maintenance, and much more. This builds on great momentum in IoT, including our work with Rolls-Royce, Schneider Electric, and others.

This is great progress, but our ambitions are set even higher. Our Intelligent Cloud also enables cognitive services. Cortana Intelligence Suite offers machine learning capabilities and advanced predictive analytics. Customers like Jabil Circuit, Fruit of the Loom, Land O’Lakes, LIBER already realize the benefits of these new capabilities.

Lastly, central to our Intelligent Cloud ambition is providing developers with the tools and capabilities they need to build apps and services for the platforms and devices of their choice. We have the best support for what I would say is the most open platform for all developers. Not only is .NET first class but Linux is first class, Java is first class. The new Azure Container service cuts across both containers running on Windows, running across Linux. So again, it speaks to the enterprise reality. .NET Core 1.0 for open source and our ongoing work with companies such as Red Hat, Docker, and Mesosphere also reflects significant progress on this front. We continue to see traction from open source, with nearly a third of customer virtual machines on Azure running Linux.

So those would be the places where we are fairly differentiated, and that’s what you see us gaining both for enterprise customers and ISVs.

On the server side, premium server revenue grew double digits in constant currency year over year. New SQL Server 2016 helps us expand into new markets with built-in advanced analytics and unparalleled performance. More than 15,000 customers, including over 50% of the Fortune 500, have registered for the private preview of SQL Server for Linux. And we’re not slowing down. We will launch Windows Server 2016 and System Server 2016 later this year.

2.2 Every customer is also an ISV

One of the phenomena now is that pretty much anyone who is a customer of Azure is also in some form an ISV, and that’s no longer just limited to people who are “in the classic tech industry” or the software business. So every customer who starts off consuming Azure is also turning what is their IP in most cases into an ISV solution, which ultimately will even participate in AppSource. So at least the vision that we have is that every customer is a digital company that will have a digital IP component to it, and that we want to be able to partner with them in pretty unique ways.

That’s the same case with GE. It’s the same case with Boeing. It’s the same case with Schneider Electric or ABB or any one of the customers we are working with because they all are taking some of their assets and converting them into SaaS applications on Azure. And that’s something that we will in fact have distribution agreements with.

And AppSource is a pretty major announcement for us because we essentially created for SaaS applications and infrastructure applications a way to distribute their applications through us and our channel. And I think it makes in fact our cloud more attractive to many of them because of that. So we look – I think going forward, you’ll look to see – or you’ll see us do much more of this with many other customers of ours.

2.3 Hyperscale-plus-hybrid approach with annuity focus enabling cloud lead conversation with customers

The focus for us is in what I describe as this hyperscale-plus-hybrid approach when you think about the current approach, which is pretty unique to us. Overall, I believe this hyperscale plus hybrid architecturally helps us a lot with enterprise customers because we meet them where their realities are today and also the digital transformation needs going forward, so that’s one massive advantage we have.

And the way we track progress is to see how is our annuity growth of our server business, and how is our cloud growth. And if you look at this last quarter, our annuity grew double digits and our cloud grew triple digits. And that’s a pretty healthy growth rate, and that’s something that by design both in terms of the technical architecture as well as the traction we have in the marketplace and our sales efforts and so on are playing out well, and we are very bullish about that going forward.

The Transactional business is much more volatile because of the macro environment, IT budgets, and also the secular shift to the cloud. The question again that gets asked is about the cannibalization. But if you look at Boeing or you look at any of the other examples that I talk about when it comes to the cloud, our servers never did what these customers are now doing in our cloud. So at a fundamental long-term secular basis, we have new growth, new workloads, and that’s what we are focused on, and that’s a much bigger addressable market than anything our Transactional Server business had in the past.

[Amy E. Hood – Chief Financial Officer & Executive Vice President:]
The first thing really that I think Satya and I both focus on every quarter, every month, is how much of our business are we continuing to shift to annuity and specifically to the cloud. We structure all of our motions at this company, from how we engineer to how we do our go-to-markets to how we think about sales engagement to how we do our investments, fundamentally toward that long-term structural transition in the market.

In terms of server products and services, I tend to think of it as the all-up growth. It’s really about growing the cloud, growing the hybrid, and then whatever happens in the Transactional business happens.

And so to your question on Transactional performance, there were some deals that didn’t get done in Q3 that got done in Q4, and there were some deals done in Q4 on the Office side with large companies that I’m thrilled by. But at the same time, we still will focus on those deals moving to the cloud over time. And so this volatility that we are going to see because of macro and because of budget constraints, especially on Transactional, we will focus on because we expect excellent execution and have accountability to do that in the field. But our first priority, every time, is to make sure we are focused on annuity growth and digital transformation at our company, which is best done through that motion.

In terms of the sales motion they are absolutely incented more towards cloud versus Transactional going into this year.

I do believe that every conversation that we’re having with customers is cloud-led. That cloud-led conversation and making a plan for customers to best change and transform their own business certainly is a far more in-depth one than on occasion is required by long-time Transactional purchasers, especially in Office, as an example, because what we’re talking about now is really pivoting your business for the long term.

And so I’m sure there are examples where that has elongated the sales cycle, for good reason. But I would generally point back and say most of these are driven at the structural level, which is – structurally over time, on-premises Transactional business will move to the cloud or to a hybrid structure through an annuity revenue stream.
[END BY Amy E. Hood]

2.4 Meeting cloud needs of customers where they are

The position that we have taken is that we want to serve customers where they are and not assume very simplistically that the digital sovereignty needs of customers can be met out of a fewer data center approach. Because right now, given the secular trend to move to the cloud across all of the regulated industries across the globe, we think it’s wiser for us and our investors long term to be able to meet them where they are. And that’s what you see us. We are the only cloud that operates in China under Chinese law, the only cloud that operates in Germany under German law. And these are very critical competitive advantages to us.

And so we will track that, and we will be very demand driven. So in this case we’re not taking these positions of which regions to open and where to open them well in advance of our demand. If anything, I think our cycle times have significantly come down. So it will be demand-driven, but I don’t want to essentially put a cap because if the opportunity arises, and for us it’s a high ROI decision to open a new region, we will do so.

3. Windows strategy to achieve progress in More Personal Computing

For initial and additional details available earlier see my earlier posts:
– Windows Embedded is an enterprise business now, like the whole Windows business, with Handheld and Compact versions to lead in the overall Internet of Things market as well as of June 8, 2013
– How the device play will unfold in the new Microsoft organization? as of July 14, 2013
– With Android and forked Android smartphones as the industry standard Nokia relegated to a niche market status while Apple should radically alter its previous premium strategy for long term as of August 17, 2013
– Windows [inc. Phone] 8.x chances of becoming the alternative platform to iOS and Android: VERY SLIM as it is even more difficult for Microsoft now than any time before as of August 20, 2013
– Leading PC vendors of the past: Go enterprise or die! as of November 7, 2013
– Xamarin: C# developers of native “business” and “mobile workforce” applications now can easily work cross-platform, for Android and iOS clients as well as of November 15, 2013
Microsoft is transitioning to a world with more usage and more software driven value add (rather than the old device driven world) in mobility and the cloud, the latter also helping to grow the server business well above its peers as of April 25, 2014
Microsoft Surface Pro 3 is the ultimate tablet product from Microsoft. What the market response will be? as of May 21, 2014
Windows 10 Technical Preview: Terry Myerson and Joe Belfiore on the future of Windows as of October 1, 2014
– The Era Of Sub-$90 Windows 8.1 Phones in U.S. as of October 3, 2014
– Windows 10 is here to help regain Microsoft’s leading position in ICT as of July 31, 2015
– Microsoft and partners to capitalize on Continuum for Phones instead of the exited Microsoft phone business as of June 5, 2016

We have increased Windows 10 monthly active devices and are now at more than 350 million. This is the fastest adoption rate of any prior Windows release. While we are proud of these results, given changes to our phone plan, we changed how we will assess progress. Going forward, we will track progress by regularly reporting the growth of Windows 10 monthly active devices in addition to progress on three aspects of our Windows strategy:

3.1 Deliver more value and innovation, particularly for enterprise customers

We continue to pursue our goal of moving people from needing Windows to choosing Windows to loving Windows. In two weeks, we will launch Windows 10 Anniversary Update, which takes a significant step forward in security. We are also extending Windows Hello to support apps and websites and delivering a range of new features like Windows Ink and updates to Microsoft Edge. We expect these advances will drive increased adoption of Windows 10, particularly in the enterprise, in the coming year. We already have strong traction, with over 96% of our enterprise customers piloting Windows 10.

3.2 Grow new monetization through services across our unified Windows platform

As we grow our install base and engagement, we generate more opportunity for Microsoft and our ecosystem. Bing profitability continues to grow, with greater than 40% of the search revenue in June from Windows 10 devices. Bing PC query share in the United States approached 22% this quarter, not including volume from AOL and Yahoo!. The Cortana search box has over 100 million monthly active users, with 8 billion questions asked to date.

We continue to drive growth in gaming by connecting fans on Xbox Live across Windows 10, iOS, and Android. Just this quarter we launched our Minecraft Realm subscription on Android and iOS. Overall engagement on Xbox Live is at record levels, with more than 49 million monthly active users, up 33% year over year. At E3 we announced our biggest lineup of exclusive games ever for Xbox One and Windows 10 PCs. And we announced Xbox Play Anywhere titles, where gamers can buy a game once and play it on both their Windows 10 PC and Xbox One. We also announced two new members of the Xbox One console family, the Xbox One S and Project Scorpio.

The Windows Store continues to grow, with new universal Windows apps like Bank of America, Roku, SiriusXM, Instagram, Facebook, Wine, Hulu, and popular PC games like Quantum Break.

3.3 Innovate in new device categories in partnership with our OEMs

Our hardware partners are embracing the new personal computing vision, with over 1,500 new devices designed to take advantage of Windows 10 innovations like Touch, Pen, Hello, and better performance and power efficiency.

Microsoft’s family of Surface devices continues to drive category growth, and we are reaching more commercial customers of all sizes with the support of our channel partners. We recently announced new Surface enterprise initiatives with IBM and Booz Allen Hamilton to enable more customer segments. Also in the past year, we grew our commercial Surface partner channel from over 150 to over 10,000.

Lastly this quarter, more and more developers and enterprise customers got to experience two entirely new device categories from Microsoft Surface Hub and Microsoft HoloLens. While we are still in the early days of both of these devices, we are seeing great traction with both enterprise customers and developers, making us optimistic about future growth.

Julia Liuson: “Microsoft must transform from a company that throws a box with software into the market … into a company that offers pure services”

April 9, 2015Microsoft Changes Course by Hsiao-wen Wang
from CommonWealth Magazine, Taiwan

On Oct 21, 2015 she expanded her role as the head of the Visual Studio and .NET engineering with all the rest of the once existing DevDiv, except Brian Harry's Visual Studio Online Team (responsible for both the 3rd party developer services from Microsoft, as well as for new One Microsoft Engineering System–1ES). So product management and cross-platform developer tools belong to her as well. See the announcement below.

On Oct 21, 2015 Julia Liuson, corporate vice president of Microsoft, expanded her role as the head of the Visual Studio and .NET engineering with all the rest of the once existing DevDiv, except Brian Harry’s Visual Studio Online Team (responsible for both the 3rd party developer services from Microsoft, as well as for new One Microsoft Engineering System). So now product management and cross-platform developer tools belong to her as well. See the announcement below. Note that in August 2013 she was the manager of Brian Harry’s TFS (Team Foundation Server) DevTeam. In her …get more girls in STEM disciplines (STEM=science, technology, engineering and mathematics) article of Sept 10, 2012 she is already a corporate vice president in Microsoft’s Developer Tools business. In June 2010 she was Visual Studio Business Applications and Server & Tools Business (STB) China co-General Manager.

Microsoft remains a technology giant that is able to post net earnings of more than NT$100 billion [$3B USD] per quarter. The giant is currently transforming itself and redefining its battlefield. Industry insiders wonder how Microsoft will make money if it can no longer rely on software licensing.

It seems that commercial cloud services are Microsoft’s answer. One of the crucial parties in overcoming in-house resistance to turning Windows into open source software is Julia Liuson. Born in Shanghai, Liuson grew up in Beijing. Upon obtaining a bachelor of science in electrical engineering from the University of Washington, she joined Microsoft in 1992, holding various technical and managerial positions when the company was still in its heyday. Liuson [as a corporate vice president] works closely with Microsoft’s new CEO Satya Nadella and oversees software development for Visual Studio and the .Net framework.

Q: When taking the helm of Microsoft, Nadella said, “Our industry does not respect tradition — it only respects innovation.” How has Microsoft changed since Nadella called for the company’s transformation when taking office more than a year ago?

A: There has been a very big change in terms of acceptance for going open-source. In terms of operating procedures, we have also seen massive changes. In the past we used to release major software updates every three years, as if we were selling a precious encyclopedia set. But in a speed-hungry Internet business environment, someone needs to run and maintain [software], racing against time 24 hours a day. It is like having to update one encyclopedia page per day, updating a chapter every week.

We have also changed our organization’s operating model. In the past, the ratio of software developers to software testing personnel was one to one. When the developers had developed new software, they would throw it over the wall to the testing staff, where it was no longer the developers’ business. Now, the real work begins when the developers have written the software and release it into the market, because we need to pay attention to customer feedback before we go back to make modifications.

In order to tear down the fences between developers and other departments, we reorganized our staff in work teams of eight to twelve members so that planning, development, testing, marketing and sales as well as customer support can communicate closely with each other and shorten the time needed for product updates and new releases.

INSERT from Oct 1, 2015: Our DevOps Journey – Microsoft Engineering Stories

… In the past, we had three distinct roles on what we call “feature teams”: program managers, developers, and testers. We wanted to reduce delays in handoffs between developers and testers and focus on quality for all software created, so we combined the traditional developer and tester roles into one discipline: software engineers. Software engineers are now responsible for every aspect of making their features come to life and performing well in production. … One of our first steps was to bring the operations teams into the same organization. Before, our ops teams were organizationally distant from the engineering team. … [Now] we call our operations team “Service Engineers.” Service Engineers have to know the application architecture to be more efficient troubleshooters, suggest architectural changes to the infrastructure, be able to develop and test things like infrastructure as code and automation scripts, and make high-value contributions that impact the service design or management. …

In addition to the Our DevOps Journey – Microsoft Engineering Stories briefing from Microsoft see also the background information in the end of this post under the “DevOps Journey” title.
END OF THE INSERT


Q: As Microsoft transforms, what attitudes and skills are needed most?

A: Microsoft must learn to listen more closely to its customers; that’s a huge change.

Just the Beginning

Corresponding to these attitudinal changes, everything was different from before, like the requirements of the products, analysis of customer behavior, and the collection of big data.

Previously, we only needed to sell our products and everything was fine; we didn’t need to look at what the user wanted. However, now that I need to collect [data] on the behavior of these users, how am I going to go about my product support? How do I analyze the data I’ve gathered? These have all been huge transformations at Microsoft.

We cannot dig moats like before to protect the high market share of our products Windows and Office. Now we are a challenger, a new service that starts with a zero market share with zero users. We need to win over every single customer.

We need to adjust our own mindset: If I were a small startup, what would I do? This is completely different from our mindset in the past, when Microsoft was the industry leader with a market share above 90 percent.

Q: What keeps you awake at night?

A: Everything (laughs)! Just kidding. Come to think of it, I am in charge of Microsoft software, which has millions of users around the globe. But I don’t know who they are and how they use our software. If you told this to the people at Amazon, they would laugh at you.

Microsoft must transform from a company that throws a box with software into the market, a company that does not know who its customers are into a company that offers pure services, that knows who every single customer is and how they use its services. This is what keeps me awake at night.

There are still many things that need to be done. How much I wish it was still yesterday. Then I would have another 24 hours to get things done (laughs).

Dec 22, 2011: cached by Zoominfo page of Microsoft Chinese Employee – 微软华人协会 > Julia Liuson

Julia[1]Julia Liuson (潘正磊) is the General Manager for Visual Studio Business Applications. Her teams are responsible for enabling developers to easily build business applications on Microsoft platforms by reinvigorating development paradigms for build LOB application, deliver first class tooling for Office server and client, and bring .Net programmability to all ISV applications.

Julia joined Microsoft in 1992 as a software developer on Access 1.0. After the successful launch of Access 1.0, 1.1, and 2.0 she became development lead for the database and web project tools in Visual InterDev 1.0 and 2.0. In 1998, she assumed the role of development manager for Visual Basic.Net, and led the development effort for Visual Basic.Net 2002 and 2003. Julia served as Director of Development for all Visual Studio product line, and tackled division wide process and engineering excellence issues.

As the Partner Product Unit Manager of Visual Studio Team Architect, she was a core member of the leadership team that led the successful development and launch of Visual Studio Team System in 2005.

In 2006, she became the Partner Product Unit Manager for Visual Basic, and was responsible for delivering the most productive development tool on .Net for professional developers, and for moving millions of VB6 users forward to the .Net platform.

Oct 21, 2015: Microsoft Executive VP of the Cloud and Enterprise Group [C+E] Scott Guthrie:

Today we are announcing some organizational changes within C+E that will enable us to further accelerate our customer momentum and move even faster as an organization.  Our new C+E structure will be aligned around our key strategic businesses (Cloud Infrastructure, Data and Analytics, Business Applications and App Platform, Enterprise Mobility, Developer).  As part of today’s changes we are also bringing several teams even closer together to enable us to make deeper shared technology bets.

Each team in C+E will have a clear, focused charter.  Our culture will continue to be grounded in a Growth Mindset.  We’ll exercise this by being Customer-Obsessed, Diverse and Inclusive, and by working as One Microsoft to Make a Difference for our customers and partners. We’ll embrace data driven decision making and optimize for continuous learning and improvement.

Developer Tools and Services

Our Visual Studio Family of developer tools and services provides a complete solution for building modern cloud and mobile applications.

The Visual Studio Tools and .NET Team will be led by Julia Liuson.  John Montgomery who leads the Visual Studio and .NET PM team will report to Julia going forward.  The VS Code Team, led by Shanku Niyogi, which is responsible for our cross-platform developer tools, will also today join the Visual Studio Tools and .NET Team with Shanku also reporting to Julia.

The Visual Studio Online Team will continue to be led by Brian Harry.  The VSO team is responsible for both our 3rd party developer services, as well as for new One Microsoft Engineering System.

4336.image_5F00_thumb_5F00_768E6E83[1]

“… TFS on-prem[ises] is growing slowly because it’s already huge. VS Online usage is growing more rapidly but is still far smaller than TFS on-prem[ises]. … Here’s a month by month trend of VS Online adoption by major organization. The numbers look a little larger than they really are because adoption is still early and people are using only subsets of the functionality or using VS Online as a supplement to on-prem TFS.” ASG = Application & Services Group for “Reinvent productivity and business processes” ambition, C&E = Cloud & Enterprise for “Build the intelligent cloud platform” ambition, OSG = Operating Systems Group for “Create more personal computing” ambition. Forrás: Team Foundation Server and VS Online adoption at Microsoft by Brian Harry, June 3, 2015

Oct 24, 2014 excerpt from the web according to “Visual Studio Online” “One Microsoft Engineering System” search:

… Visual Studio Online’s goal is to become the single place for all developer targeted services – for both the internal One Microsoft Engineering System and for customers. It provides software development teams with capabilities of project planning, work item management, version control, build automation, test lab management, elastic load test, Application Insights and more. We ship new features every 3 weeks at http://www.visualstudio.com>   and our adoption is growing at a very rapid clip. Ultimately, our audience is Engineers like YOU! Come onboard to build one of the most mission-critical services that will set the tone for all future engineering practices – inside Microsoft and outside in the developer community!

VS Online makes use of a wide range of technologies on premise and in the cloud, so you’ll have the opportunity to learn new stuff and go deep in many domains. Our key technologies are Azure, SQL Azure, AAD, and ASP.NET MVC on the backend. On the front end we use Knockout to build out an awesome user experience on the web, WPF for VS, and SWT for Eclipse. …

Sept 1, 2015: Cached Software Engineer II career

As Microsoft transforms to a devices + services company, Visual Studio continues to evolve and adapt in significant ways to support this transformation; requiring a strong team to deliver great engineering tools and systems. The Visual Studio Engineering Tools and Systems team is driving big, bold improvements for current and future releases in the ability to operate at a faster cadence by improving daily engineer productivity, speeding up builds and other advancements in how the software is built and delivered. This team is tasked with creating the next generation engineering system that aligns with the One Microsoft Engineering System vision (1ES). An engineering system that allows hundreds of people to work together efficiently and be very productive on one of the most important products at Microsoft, Visual Studio. This team is responsible for designing, creating, implementing, and managing the tools, services, and processes to arm the Developer Division engineers to do their best work.

As of 24 Oct, 2015Principal Software Engineer Manager – C+E career

… The Tools for Software Engineers team (TSE) is set out to maximize the productivity of all Microsoft engineers and reduce the time from idea to production.

In Satya’s memo to the company he states “In order to deliver the experiences our customers need for the mobile-first and cloud-first world, we will modernize our engineering processes to be customer-obsessed, data-driven, speed-oriented and quality-focused.” Come join us to be a part of this change!

TSE develops and operates a set of engineering tools and services including build tools, build languages (MSBuild), CloudBuild service, drop and artifact services, verification services including unit test execution and code review tools, engineering reporting and analysis services; all working towards a unified, world-class engineering system offering for internal Microsoft needs and third parties.

CloudBuild is at the center of Microsoft 1ES and is helping major groups within the company build faster, more reliable and at scale. CloudBuild serves thousands of developers and builds millions of targets daily in a highly scalable and distributed service running at scale in multiple Data Centers across the world. …

July 31, 215: 2015 Annual Report>The ambitions that drive us

To carry out our strategy, our research and development efforts focus on three interconnected ambitions:

  • Reinvent productivity and business processes.

  • Build the intelligent cloud platform.

  • Create more personal computing.

Reinvent productivity and business processes

We believe we can significantly enhance the lives of our customers using our broad portfolio of communication, productivity, and information services that spans devices and platforms. Productivity will be the first and foremost objective, to enable people to meet and collaborate more easily, and to effectively express ideas in new ways. We will design applications as dual-use with the intelligence to partition data between work and life while respecting each person’s privacy choices. The foundation for these efforts will rest on advancing our leading productivity, collaboration, and business process tools including Skype, OneDrive, OneNote, Outlook, Word, Excel, PowerPoint, Bing, and Dynamics. With Office 365, we provide these familiar industry-leading productivity and business process tools as cloud services, enabling access from anywhere and any device. This creates an opportunity to reach new customers, and expand the usage of our services by our existing customers.

We see opportunity in combining our offerings in new ways that are more contextual and personal, while ensuring people, rather than their devices, remain at the center of the digital experience. We will offer our services across ecosystems and devices outside our own. As people move from device to device, so will their content and the richness of their services. We are engineering our applications so users can find, try, and buy them in friction-free ways.

Build the intelligent cloud platform

In deploying technology that advances business strategy, enterprises decide what solutions will make employees more productive, collaborative, and satisfied, and connect with customers in new and compelling ways. They work to unlock business insights from a world of data. To achieve these objectives, increasingly businesses look to leverage the benefits of the cloud. Helping businesses move to the cloud is one of our largest opportunities, and we believe we work from a position of strength.

The shift to the cloud is driven by three important economies of scale: larger datacenters can deploy computational resources at significantly lower cost per unit than smaller ones; larger datacenters can coordinate and aggregate diverse customer, geographic, and application demand patterns, improving the utilization of computing, storage, and network resources; and multi-tenancy lowers application maintenance labor costs for large public clouds. As one of the largest providers of cloud computing at scale, we are well-positioned to help businesses move to the cloud so that businesses can focus on innovation while leaving non-differentiating activities to reliable and cost-effective providers like Microsoft.

With Azure, we are one of very few cloud vendors that run at a scale that meets the needs of businesses of all sizes and complexities. We believe the combination of Azure and Windows Server makes us the only company with a public, private, and hybrid cloud platform that can power modern business. We are working to enhance the return on information technology (“IT”) investment by enabling enterprises to combine their existing datacenters and our public cloud into a single cohesive infrastructure. Businesses can deploy applications in their own datacenter, a partner’s datacenter, or in our datacenters with common security, management, and administration across all environments, with the flexibility and scale they want.

We enable organizations to securely adopt software-as-a-service applications (both our own and third-party) and integrate them with their existing security and management infrastructure. We will continue to innovate with higher-level services including identity and directory services that manage employee corporate identity and manage and secure corporate information accessed and stored across a growing number of devices, rich data storage and analytics services, machine learning services, media services, web and mobile backend services, and developer productivity services. To foster a rich developer ecosystem, our digital work and life experiences will also be extensible, enabling customers and partners to further customize and enhance our solutions, achieving even more value. This strategy requires continuing investment in datacenters and other infrastructure to support our devices and services.

Create more personal computing

Windows 10 is the cornerstone of our ambition to usher in an era of more personal computing. We see the launch of Windows 10 in July 2015 as a critical, transformative moment for the Company because we will move from an operating system that runs on a PC to a service that can power the full spectrum of devices in our customers’ lives. We developed Windows 10 not only to be familiar to our users, but more safe and secure, and always up-to-date. We believe Windows 10 is more personal and productive, working seamlessly with functionality such as Cortana, Office, Continuum, and universal applications. We designed Windows 10 to foster innovation – from us, our partners and developers – through experiences such as our new browser Microsoft Edge, across the range of existing devices, and into entirely new device categories.

Our ambition for Windows 10 is to broaden our economic opportunity through three key levers: an original equipment manufacturer (“OEM”) ecosystem that creates exciting new hardware designs for Windows 10; our own commitment to the health and profitability of our first-party premium device portfolio; and monetization opportunities such as services, subscriptions, gaming, and search. Our OEM partners are investing in an extensive portfolio of hardware designs and configurations as they ready for Windows 10. By December 2015, we anticipate the widest range of Windows hardware ever to be available.

With the launch of Windows 10, we are realizing our vision of a single, unified Windows operating system on which developers and OEMs can contribute to a thriving Windows ecosystem. We invest heavily to make Windows the most secure, manageable, and capable operating system for the needs of a modern workforce. We are working to create a broad developer opportunity by unifying the installed base to Windows 10 through upgrades and ongoing updates, and by enabling universal Windows applications to run across all device targets. As part of our strategic objectives, we are committed to designing and marketing first-party devices to help drive innovation, create new categories, and stimulate demand in the Windows ecosystem, including across PCs, phones, tablets, consoles, wearables, large multi-touch displays, and new categories such as the HoloLens holographic computing platform. We are developing new input/output methods like speech, pen, gesture, and augmented reality holograms to power more personal computing experiences with Windows 10.

Our future opportunity

There are several distinct areas of technology that we aim to drive forward. Our goal is to lead the industry in these areas over the long-term, which we expect will translate to sustained growth. We are investing significant resources in:

  • Delivering new productivity, entertainment, and business processes to improve how people communicate, collaborate, learn, work, play, and interact with one another.
  • Establishing the Windows platform across the PC, tablet, phone, server, other devices, and the cloud to drive a thriving ecosystem of developers, unify the cross-device user experience, and increase agility when bringing new advances to market.
  • Building and running cloud-based services in ways that unleash new experiences and opportunities for businesses and individuals.
  • Developing new devices that have increasingly natural ways to interact with them, including speech, pen, gesture, and augmented reality holograms.
  • Applying machine learning to make technology more intuitive and able to act on our behalf, instead of at our command.

We believe the breadth of our products and services portfolio, our large global partner and customer base, our growing ecosystem, and our ongoing investment in innovation position us to be a leader in these areas and differentiate ourselves from competitors.

Regarding the digital work and life experiences see my earlier Satya Nadella on “Digital Work and Life Experiences” supported by “Cloud OS” and “Device OS and Hardware” platforms–all from Microsoft post of July 23, 2014:

Those ambitions are also reporting segments now
Oct 22, 2015Earnings Release FY16 Q1

Revenue in Productivity and Business Processes declined 3% (up 4% in constant currency) to $6.3 billion, with the following business highlights:

  • Office commercial products and cloud services revenue grew 5% in constant currency with Office 365 revenue growth of nearly 70% in constant currency and continued user growth across our productivity offerings
  • Office 365 consumer subscribers increased to 18.2 million, with approximately 3 million subscribers added in the quarter
  • Dynamics revenue grew 12% in constant currency, with the Dynamics CRM Online enterprise installed base growing more than 3x year-over-year

Revenue in Intelligent Cloud grew 8% (up 14% in constant currency) to $5.9 billion, with the following business highlights:

  • Server products and cloud services revenue grew 13% in constant currency, with revenue from premium products and services growing double-digits
  • Azure revenue and compute usage more than doubled year-over-year
  • Enterprise Mobility customers more than doubled year-over-year to over 20,000, and the installed base grew nearly 6x year-over-year

Revenue in More Personal Computing declined 17% (down 13% in constant currency) to $9.4 billion, with the following business highlights:

  • Windows OEM revenue declined 6%, performing better than the overall PC market, as the Windows 10 launch spurred PC ecosystem innovation and helped drive hardware mix toward premium devices
  • Phone revenue declined 54% in constant currency reflecting our updated strategy
  • Search advertising revenue excluding traffic acquisition costs grew 29% in constant currency with Bing US market share benefiting from Windows 10 usage
  • Xbox Live monthly active users grew 28% to 39 million

July 9, 2014Upcoming VS Online Licensing Changes by Brian Harry

Through the fall and spring, we transitioned VS Online from Preview to General Availability.  That process included changes to branding, the SLA, the announcement of pricing, the end of the early adopter program and more.  We’ve been working closely with customers to understand where the friction is and what we can do to make adopting VS Online as easy as possible.  This is a continuing process and includes discussions about product functionality, compliance and privacy, pricing and licensing, etc.  This is a journey and we’ll keep taking feedback and adjusting.

Today I want to talk about one set of adjustments that we want to make to licensing.

As we ended the early adopter period, we got a lot of questions from customers about how to apply the licensing to their situation.  We also watched as people assigned licenses to their users: What kind of licenses did they choose?  How many people did they choose to remove from their account?  Etc.

From all of this learning, we’ve decided to roll out 2 licensing changes in the next couple of months:

Stakeholders

A common question we saw was “What do I do with all of the stakeholders in my organization?”  While the early adopter program was in effect and all users were free, customers were liberal with adding people to their account.  People who just wanted to track progress or file a bug or a suggestion occasionally, were included.  As the early adopter period ended, customers had to decide – Is this really worth $20/user/month (minus appropriate Azure discounts)?  The result was that many of these “stakeholders” were removed from the VS Online accounts in the transition, just adding more friction for the development teams.

As a result of all this feedback we proposed a new “Stakeholder” license for VS Online.  Based on the scenarios we wanted to address, we designed a set of features that matched the needs most customers have.  These include:

    • Full read/write/create on all work items
    • Create, run and save (to “My Queries”) work item queries
    • View project and team home pages
    • Access to the backlog, including add and update (but no ability to reprioritize the work)
    • Ability to receive work item alerts

Some of the explicitly excluded items are:

    • No access to Code, Build or Test hubs.
    • No access to Team Rooms
    • No access to any administrative functionality (Team membership, license administration, permissions, area/iterations configuration, sprint configuration, home page configuration, creation of shared queries, etc.)

We then surveyed our “Top Customers” and tuned the list of features (to arrive at what I listed above).  One of the conversations we had with them was about the price/value of this feature set.  We tested 3 different price points – $5/user/month, $2/user/month and free.  Many thought it was worth $5.  Every single one thought it was worth $2.  However, one of the questions we asked was “How many stakeholders would you add to your account at each of these price points?”  The result was 3X more stakeholders if it’s free than if it’s $2.  That told us that any amount of money, even if it is perceived as “worth it”, is too much friction.  Our goal is to enable everyone who has a stake to participate in the development process (and, of course, to run a business in the process).  Ultimately, in balancing the goals of enabling everyone to participate and running a business, we concluded that “free” is the right answer.

As a result, any VS Online  account will be able to have an unlimited number of “Stakeholder” users with access to the functionality listed above, at no charge.

Access to the Test Hub

Another point of friction that emerged in the transition was access to the Test hub.  During the Preview, all users had access to the Test hub but, at the end of the early adopter program, the only way to get access to the Test hub was by purchasing Visual Studio Test Professional with MSDN (or one of the other products that include it, like VS Premium or VS Ultimate).

We got ample feedback that there were a class of users who really only need access to the web based Test functionality and don’t need all that’s in VS Test Professional.

Because of this, we’ve decided to include access to all of the Test hub functionality in the Visual Studio Online Advanced plan.

Timing

I’m letting you know now so that, if you are currently planning your future, you know what is coming.  I’m always loathe to get too specific about dates in the future because, as we all know, stuff happens.  However, we are working hard to implement these licensing changes now and my expectation is that we’ve got about 2 sprints of work to do to get it all finished.  That would put the effective date somewhere in the neighborhood of mid-August.  I’ll update you with more certainty as the date gets a little closer.

What about Team Foundation Server?

In general, our goal is to keep the licensing for VS Online and Team Foundation Server as “parallel” as we can – to limit how confusing it could be.  As a result, we will be evolving the current “Work Item Web Access” TFS CAL exemption (currently known as “Limited” users in TFS) to match the “Stakeholder” capabilities.  That will result in significantly more functionality available to TFS users without CALs.  My hope is to get that change made for Team Foundation Server 2013 Update 4.  It’s too early yet to be sure that’s going to be possible but I’m hopeful.  We do not, currently, plan to provide an alternate license for the Test Hub functionality in TFS, though it’s certainly something we’re looking at and may have a solution in a future TFS version.

Conclusion

As I said, it’s a journey and we’ll keep listening.  It was interesting to me to watch the phenomenon of the transition from Preview to GA.  Despite announcing the planned pricing many months in advance, the feedback didn’t get really intense until, literally, the week before the end of the early adopter period when everyone had to finish choosing licenses.

One of the things that I’m proud of is that we were able to absorb that feedback, create a plan, review it with enough people, create an engineering plan and (assuming our timelines hold), deliver it in about 3 monthsIn years past that kind of change would take a year or two.

Hopefully you’ll find this change valuable.  We’ll keep listening to feedback and tuning our offering to create the best, most friction-free solution that we can.

Thanks,

Brian

July 7, 2014: TFS Adoption at Microsoft – July 2014 by Brian Harry

Years ago, I used to do monthly updates on TFS adoption at Microsoft.  Eventually, the numbers got so astronomical that it just seemed silly so I stopped doing them.  It’s been long enough and there’s some changes happening that I figured it was worth updating you all on where we are.

First of all, adoption has continued to grow steadily year over year.  We’ve continued to onboard more teams and to deepen the feature set teams are using.  Any major change in the ALM solution of an organization of our size and complexity is journey.

Let’s start with some stats:

As of today, we have 68 TFS “instances”.  Instance sizes vary from modest hardware up to very large scaled out hardware for the larger teams.  We have over 60K monthly active users and that number is still growing rapidly.  Growth varies month to month and the growth below seems unusually high (over 10%).  I grabbed the latest data I could get my hands on – and that happened to be from April.  The numbers are really staggeringly large.

Current 30 day growth
Unique users 62,553 7,256
TPCs 788 46
Projects 15,581 187
Work items 42,088,748 5,572,355
Source files 320,224,466 11,959,935
Builds/month 568,190 109,764
Test cases 9,483,760 1,172,495

In addition we’ve started to make progress recently with Windows and Office – two of the Microsoft teams with the oldest and most entrenched engineering systems.  They’ve both used TFS in the past for work planning but recently Windows has also adopted TFS for all work management (including bugs) and Office is planning a move.  We’re also working with them on plans to move their source code over.

In the first couple of years of adoption of TFS at Microsoft, I remember a lot of fire drills.  Bringing on so many people and so much data with such mission critical needs really pushed the system and we spent a lot of time chasing down performance (and occasionally availability) problems.  These days things run pretty smoothly.  The system is scaled out enough and the code, and our dev processes have been tuned enough, that for the most part, the system just works.  We upgrade it pretty regularly (a couple of times a year for the breadth of the service, as often as every 3 weeks for our own instances).

As we close in on completing the first leg of our journeygetting all teams at Microsoft onto TFS, we are now beginning the second.  A few months ago, The TFS team and a few engineering systems teams working closely with them moved all of their assets into VS Online – code, work items, builds, etc.  This is a big step and, I think, foreshadows the future for the entire company.  At this point it’s only a few hundred people accessing it but it’s already the largest and most active account on VS Online and it will continue to grow.

It was a big decision for us – and we went through a lot of the same anxieties I hear from anyone wanting to adopt a cloud solution for a mission critical need.  Will be intellectual property be safe?  What happens when the service goes down?  Will I lose any data?  Will performance be good?  Etc.  Etc.  At the same time, it was important to us to live the life that we are suggesting our customers live – taking the same risks and working to ensure that all of those risks are mitigated.

The benefits of moving are already visible.  I’ve had countless people remark to me how much they’ve enjoyed having access to their work – work items, build status, code reviews, etc from any device, anywhere.  No messing with remote desktop or any other connectivity technology.  As part of this, we also bound the account to the Microsoft Active Directory tenant so we can log in using the same corporate credentials as we do for everything else.  Combining this with a move to Office 365/SharePoint Online for our other collaboration workflows has created for us a fantastic mobile, cloud experience.

I’ll see about starting to post some statistics on our move to the cloud.  As, I say, at this point, it’s a few hundred people and mostly just the TFS codebase – which is pretty large at this point.  Over time that will grow but I expect it will be slow – getting larger year over year into a distant future when all of Microsoft has moved to the cloud for our engineering system tools.

I know I have to say this because people will ask.  No, we are not abandoning on-prem TFS.  The vast majority of our customers still use it, the overwhelming majority of our internal teams still use it (the few hundred people using VS Online is still rounding error on the more than 60K people using TFS on premises).  We continue to share a codebase between VS Online and TFS and the vast majority of the work we do accrues to both scenarios – and that will continue to be the case.  TFS is here to stay and we’ll keep using it ourselves for a very long time.  At the same time VS Online is here to stay too and our use of it will grow rapidly in the coming years.  It will be a big milestone when the first big product engineering team not associated with building VS Online/TFS moves over to VSO for all of their core engineering system needs – I’ll be sure to let you know when that happens.

Brian

DevOps Journey

Sept 2, 2015DevOps – Enabling DevOps on the Microsoft Stack by Michael Learned a Visual Studio ALM Ranger currently focused on DevOps and Microsoft Azure

There’s a lot of buzz around DevOps right now. An organization’s custom software is critical to providing rich experiences and useful data to its business users. Rapidly delivering quality software is no longer an option, it’s a requirement. Gone are the days of lengthy planning sessions and development iterations.  Cloud platforms such as Microsoft Azure have removed traditional bottlenecks and helped commoditize infrastructure. Software reigns in every business as the key differentiator and factor in business outcomes. No organization, developer or IT worker can or should avoid the DevOps movement.

DevOps is defined from numerous points of view, but most often refers to removing both cultural and technology barriers between development and operations teams so software can move into production as efficiently as possible. Once software is running in production you need to ensure you can capture rich usage data and feed that data back into development teams and decision makers.

There are many technologies and tools that can help with DevOps. These tools and processes support rapid release cycles and data collection on production applications. On the Microsoft stack, tools such as Release Management to drive rapid, predictable releases and Application Insights help capture rich app usage data. This article will explore and shed some light on critical tools and techniques used in DevOps, as well as the various aspects of DevOps (as shown in Figure 1).

IC826498[1]
Figure 1 The Various Aspects of DevOps

The Role of DevOps

Most organizations want to improve their DevOps story in the following areas:

  • Automated release pipelines in which you can reliably test and release on much shorter cycles.
  • Once the application is running in production, you need the ability to respond quickly to change requests and defects.
  • You must capture telemetry and usage data from running production applications and leverage that for data-driven decision making versus “crystal ball” decision making.

Are there silos in your organization blocking those aspects of DevOps? These silos exist in many forms, such as differing tools, scripting languages, politics and departmental boundaries. They intend to provide separation of duties and to keep security controls and stability in production.

Despite their intentions, these silos can sometimes impede an organization from achieving many DevOps goals, such as speedy, reliable releases and handling and responding to production defects. In many cases, this silo structure generates an alarming amount of waste. Developers and operations workers have traditionally worked on different teams with different goals. Those teams spend cycles fixing issues caused by these barriers and less time focused on driving the business.

Corporate decision makers need to take a fresh look at the various boundaries to evaluate the true ROI or benefits these silos intend to provide. It’s becoming clear the more you can remove those barriers, the easier it will be to implement DevOps solutions and reduce waste.

It’s a challenge to maintain proper security, controls, compliance and so on while balancing agility needs. Enterprise security teams must ensure data is kept secure and private. Security is arguably as important as anything else an organization does.

However, there’s an associated cost for every security boundary you build. If security boundaries are causing your teams waste and friction, those boundaries deserve a fresh look to ensure they generate ROI. You can be the most secure organization in the world, but if you can’t release software on time you’ll have a competitive disadvantage.

Balancing these priorities isn’t a new challenge, but it’s time for a fresh and honest look at the various processes and silos your organization has built. Teams should all be focused on business value over individual goals.

The Release Pipeline

The release pipeline is where your code is born with version control, then travels through various environments and is eventually released to production. Along the way, you perform automated build and testing. The pipeline should be in a state where moving changes to production is transparent, repeatable, reliable and fast. This will no doubt involve automation. The release pipeline might also include provisioning the application host environment.

Your release pipeline might not be optimized if these factors are present:

  • Tool and process mismatches, whereby you have different tools and processes in place per environment. (For example, the dev teams deploy with one tool and ops deploy with another.)
  • Manual steps can introduce error, so avoid them.
  • Re-building just to deploy to the next environment.
  • You lack traceability and have issues understanding which versions have been released.
  • Release cycles are lengthy, even for hotfixes.

Provisioning

Provisioning containers is sometimes considered an optional part of a release pipeline. A classic on-premises scenario often exists in which an environment is already running to host a Web application. The IIS Web server or other host and back-end SQL Server have been running through numerous iterations. Rapid releases into these environments deploy only the application code and subsequent SQL schema and data changes needed to move the appropriate update levels. In this case, you’re not provisioning fresh infrastructure (both IIS and SQL) to host the application. You’re using a release pipeline that disregards provisioning and focuses only on the application code itself.

There are other scenarios in which you might want to change various container configuration settings. You might need to tweak some app pool settings in IIS. You could implement that as part of the release pipeline or handle it manually. Then you may opt to track those changes in some type of versioning system with an Infrastructure-as-Code (IaC) strategy.

There are several other scenarios in which you would want to provision as part of an automated release pipeline. For example, early in development cycles, you might wish to tear down and rebuild new SQL databases for each release to fully and automatically test the environment.

Cloud computing platforms such as Azure let you pay only for what you need. Using automated setup and tear down can be cost-effective. By automating provisioning and environmental changes, you can avoid error and control the entire application environment. Scenarios like these make it compelling to include provisioning as part of a holistic release management system.

There are many options and techniques for including provisioning as part of your release pipeline. These will differ based on the types of applications you’re hosting and where you host them. One example is hosting a classic ASP.NET Web application versus an Azure Web app or some other Platform-as-a-Service (PaaS) application such as Azure Cloud Services. The containers for those applications are different and require different tooling techniques to support the provisioning steps.

Infrastructure as Code

One popular provisioning technique is IaC. An application is an executable that can be compiled code, scripts and so on combined with an operational environment. You’ll find this environment yields many benefits.

Microsoft recently had Forrester Research Inc. conduct a research study on the impact of IaC (see bit.ly/1IiGRk1). The research showed IaC is a critical DevOp component. It also showed provisioning and configuration is a major point of friction for teams delivering software. You’ll need to leverage automation and IaC techniques if you intend to completely fulfill your DevOps goals.

One of the traditional operational challenges is automating the ability to provide appropriate environments in which to execute applications and services, and keeping those environments in known good states. Virtualization and other automation techniques are beneficial, but still have problems keeping nodes in sync and managing configuration drift. Operations and development teams continue to struggle with different toolsets, expertise and processes.

IaC is based on the premise that we should be able to describe, version, execute and test our infrastructure code via an automated release pipeline. For example, you can easily create a Windows virtual machine (VM) configured with IIS using a simple Windows PowerShell script. Operations should be able to use the same ALM tools to script, version and test the infrastructure.

Other benefits include being able to spin up and tear down known versions of your environments. You can avoid troublesome issues because of environmental differences between development and production. You can express the application environment-specific dependencies in code and carry them along in version control. In short, you can eliminate manual processes and ensure you’ve tested reliable automated environment containers for your applications. Development and operations can use common scripting languages and tools and achieve those efficiencies.

The application type and intended host location will dictate the tooling involved for executing your infrastructure code. There are several tools gaining popularity to support these techniques, including Desired State Configuration (DSC), Puppet, Chef and more. Each helps you achieve similar goals based on the scenario at hand.

The code piece of IaC could be one of several things. It could simply be Windows PowerShell scripts that provision resources. Again, the application types and hosting environment will dictate your choices here.

For Azure, you can use Cloud Deployment Projects that leverage Azure Resource Management APIs to create and manage Azure Resource Groups. This lets you describe your environments with JSON. Azure Resource Goups also let you manage group-related resources together, such as Web sites and SQL databases. With cloud deployment projects, you can store your provisioning requirements in version control and perform Azure provisioning as part of an automated release pipeline. Here are the sections that make up the basic structure of a provisioning template:

Figure 3 Separate Configuration Data Within a DCS Script
Configuration InstallWebSite
{
  Node $AllNodes.NodeName
  {
    WindowsFeature InstallIIS
    {
      Ensure = "Present"
      Name = "Web-Server"
    }
  }
}
InstallWebSite –ConfigurationData .\config.ps1
Where config.ps1 contains
$ConfigData = @{
  AllNodes = @(
  @{
    NodeName = “localhost”
  })
}

For more information on templates, go to bit.ly/1RQ3gvg, and for more on cloud deployment projects, check out bit.ly/1flDH3m.

The scripting languages and tooling are only part of the changes needed to successfully adopt an IaC strategy. Development and operations teams must work together to integrate their work streams toward a common set of goals. This can be challenging because historically operations teams have focused on keeping environments stable and development teams are more focused on introducing new features into those environments. Sophisticated technologies are emerging, but the foundation of a successful IaC implementation will depend on the ability of the operations and development teams to effectively collaborate.

Release Orchestration

Release Management is a technology in the Visual Studio ALM stack. It’s really more of a concept whereby you can orchestrate the various objects and tasks that encompass a software release.  A few of these artifacts include the payload or package produced by a build system, the automated testing that happens as part of a release pipeline, approval workflows, notifications and security governance to control environments closer to production.

You can use technologies such as DSC, Windows PowerShell scripts, Azure Resource Manager, Chef, and so on to manage environment state and install software and dependencies into running environments. In terms of tooling provided by Visual Studio ALM, think of Release Management as the service that wraps around whatever technologies and tools you need to execute the deployments. Release Management might leverage simple command-line or Windows PowerShell scripts, use DSC, or even execute your own custom tools. You should aim to use the simplest solution possible to execute your releases.

It’s also a good practice to rely on Windows PowerShell because it’s ubiquitous. For example, you can use Windows PowerShell scripts as part of a release pipeline to deploy Azure Cloud Services. There are a lot of out-of-the-box tools with Release Management (see Figure 2), but you also have the flexibility to create your own.

IC826496[1]
Figure 2 Tools and Options Available for Release Management

Release Management can help you elegantly create an automated release pipeline and produce reliable automated application releases. You can also opt to include provisioning.  The Release Management tooling with Visual Studio and Team Foundation Server can help you orchestrate these artifacts into the overall release transaction. It also provides rich dashboard-style views into your current and historical states. There’s also rich integration with Team Foundation Server and Visual Studio Online.

Where Does DSC Fit In?

There has been a lot of press about DSC lately. DSC is not, however, some all-encompassing tool that can handle everything. You’ll use DSC as one of the tools in your DevOps structure, not the only tool.

You can use DSC in pull or push modes. Then you can use the “make it so” phase to control the server state. Controlling that state can be as simple as ensuring a file or directory exists, or something more complex such as modifying the registry, stopping or starting services, or running scripts to deploy an application. You can do this repeatedly without error. You can also define your own DSC resources or leverage a large number of built-in resources.

DSC is implemented as a Local Configuration Manager (LCM), running on a target node, accepting a Management Object File (MOF) configuration file and using it to apply configuration to the node itself.  So there’s no hard-coupled tool. You don’t even have to use Windows PowerShell to produce the MOF.

To start using DSC, simply produce the MOF file. That will eventually describe the various resources to execute, which end up written mostly in Windows PowerShell. One of the big advantages of DSC on Windows Server-based systems is the LCM is native to the OS, giving you the concept of a built-in agent. There are also scenarios for leveraging DSC with Linux. See Figure 3 for an example of separating the configuration data for the DSC script.

Figure 3 Separate Configuration Data Within a DCS Script
Configuration InstallWebSite
{
  Node $AllNodes.NodeName
  {
    WindowsFeature InstallIIS
    {
      Ensure = "Present"
      Name = "Web-Server"
    }
  }
}
InstallWebSite –ConfigurationData .\config.ps1
Where config.ps1 contains
$ConfigData = @{
  AllNodes = @(
  @{
    NodeName = “localhost”
  })
}

DSC can be an important piece of a release pipeline if it has the resources available to help support your deployment. With on-premises or IaaS applications, DSC is an excellent choice to help control the environment configuration and support your deployment scenarios.

Still DSC isn’t meant to be used for every scenario. To put this in context, if you’re deploying Azure PaaS resources, it’s recommended you use Azure Resource Manager to get the VMs started and the networking configured. This isn’t something DSC is designed for. Once the VMs are running, you can use DSC to get the local configuration the way you want it and ensure the configuration elements you care about don’t change.

 Monitor with Application Insights

Once an application and environment is in production, it’s critical to collect data and monitor the operational health. You also need to understand usage patterns. This data is critical to managing a healthy service. Collecting and monitoring this data is an important piece of DevOps. For example, Microsoft has used production data to improve the Visual Studio Online teams. This rich data helps the Visual Studio Online teams ensure service availability, demonstrates to them how developers are using the service and informs decisions on feature prioritization. You can read more about the Microsoft DevOps journey at bit.ly/1AzDL9V.

Visual Studio Application Insights adds an SDK to your appli­cation and sends telemetry to the Azure Portal. It supports many different platforms and languages, including iOS, Android, ASP.NET and Java. You can capture performance data, application uptime and various usage analytics. You can show this rich data to decision makers and stakeholders to help make better decisions, detect issues and continuously improve your applications. You can read more about Application Insights at bit.ly/1IbRnrF.

Figure 4 and Figure 5 show examples of the types of data collected by Application Insights.

IC826495[1]Figure 4 Application Insights Can Provide Data on Users and Page Views

IC826494[1]Figure 5 Application Insights Also Monitors Web Tests

Wrapping Up

DevOps helps teams drive toward continuous delivery and leverage data from running applications to help make better-informed decisions. This article has examined various prominent Microsoft technologies you can use to achieve these goals:

  • Release Management lets you use any technology to drive deployments. These technologies include simple Windows PowerShell scripts, DSC configurations or even third-party tools such as Puppet.
  • Infrastructure-as-Code strategies help development and operations teams efficiently work together.
  • Visual Studio Application Insights gives you a mechanism to capture rich data from running applications, to help stakeholders understand application health and examine usage patterns to drive informed decision making.

These technologies can help you greatly improve your DevOps maturity. You’ll also need to blend an appropriate set of technologies while working to overcome cultural barriers.

Additional Resources

  • To learn more about Infrastructure as Code, listen to Brian Keller’s discussion on Channel 9 at bit.ly/1IiNqmr.
  • To learn more about Azure Resource Group Deployment Projects, check out bit.ly/1flDH3m.
  • To learn more about TFS Planning, Disaster Avoidance and Recovery, and TFS on Azure IaaS, check out the guide at vsarplanningguide.codeplex.com.
  • To learn more about Config as Code for DevOps and ALM practitioners, check out vsardevops.codeplex.com.

Micheal Learned is a Visual Studio ALM Ranger currently focused on DevOps and Microsoft Azure. He has worked on numerous software projects inside and outside of Microsoft for more than 15 years. He lives in central Illinois and devotes his free time to helping the community, as well as relaxing with his daughter, two sons and wife. Reach him on Twitter at twitter.com/mlhoop.

Thanks to the following technical experts for reviewing this article: Donovan Brown (Microsoft), Wouter de Kort (Independent Developer), Marcus Fernandez (Microsoft), Richard Hundhausen (Accentient), Willy-Peter Schaub (Microsoft) and Giulio Vian (Independent Developer)

PC Market Trends

A comment from IDC brought ahead: “Competition from 2-in-1 devices and phones remains an issue“. In the notes to the IDC press release it is mentioned as well that “tablets with detachable keyboards [i.e. 2-in-1 devices] running either Windows or Android are not included in the PC category” by IDC. This approach to the PC category is one of the reasons why the decline of the PC market in Q2 2015 is 11.8% according to IDC, while it is 9.5% according to Gartner.

But most importantly: the PC market has continuously been shrinking for the last 3 years as is shown by the chart below:
Infographic: PC Market Plunge Is Picking Up Pace | Statista

You will find more statistics at Statista
July 14, 2015: After a brief respite throughout last year, the global PC market returned to its pre-2014 slump in the first half of 2015. According to Gartner’s latest estimates, worldwide PC shipments amounted to 68.4 million in the past three months – down 9.5 percent from last year’s June quarter.

The struggling PC industry had received a boost when Microsoft ended official Windows XP support in April 2014, prompting a replacement cycle that has now apparently faded. Despite the sobering results, analysts remain cautiously optimistic about the industry’s mid-term outlook. They argue that the recent decline is no sign of structural weakness but partly a consequence of last year’s unusually positive results and partly an effect of inventory control ahead of the Windows 10 launch scheduled for later this year.

[Gartner’s latest estimates:]
July 9, 2015: Gartner Says Worldwide PC Shipments Declined 9.5 Percent in Second Quarter of 2015

PC Industry Faces Slowdown as Industry Anticipates the Launch of Windows 10

STAMFORD, Conn., July 9, 2015 — Worldwide PC shipments totaled 68.4 million units in the second quarter of 2015, a 9.5 percent decline from the second quarter of 2014, according to preliminary results by Gartner, Inc. This was the steepest PC shipment decline since the third quarter of 2013. PC shipments are projected to decline 4.4 percent in 2015.

There were many contributors to the decline of PC shipments in the second quarter of 2015, and Gartner analysts highlighted three of the major reasons for the drop in shipments. Analysts emphasized that these inhibitors are temporary events, and they are not changing the PC market’s structure. Therefore, while the PC industry is going through a decline, the market is expected to go back to slow and steady growth in 2016.

The price hike of PCs became more apparent in some regions due to a sharp appreciation of the U.S. dollar against local currencies,” Mikako Kitagawa, principal analyst at Gartner. “The price hike could hinder PC demand in these regions. Secondly, the worldwide PC market experienced unusually positive desk-based growth last year due to the end of Windows XP support. After the XP impact was phased out, there have not been any major growth drivers to stimulate a PC refresh. Lastly, the Windows 10 launch scheduled for 3Q15 has created self-regulated inventory control. PC vendors and the channels tried clearing inventory as much as possible before the Windows 10 launch.”

Lenovo maintained the top position in worldwide PC shipments in the second quarter of 2015 (see Table 1), but the company suffered a year-on-year shipment decline for the first time since the second quarter of 2013. EMEA, Latin America and Japan were tough regions for Lenovo, as the company experienced double-digit shipment declines. HP also experienced a shipment decline after five consecutive quarters of PC shipment growth. HP showed a steep decline in EMEA, which was potentially due to the currency impact. The company was also impacted by tight inventory controls in the consumer market before the Windows 10 launch.

Table 1
Preliminary Worldwide PC Vendor Unit Shipment Estimates for 2Q15 (Thousands of Units)

Gartner - Preliminary Worldwide PC Vendor Unit Shipment Estimates for 2Q15 -9-July-2015Notes: Data includes desk-based PCs, notebook PCs and ultramobile premium (see “Market Definitions and Methodology: Consumer Devices”). All data is estimated based on a preliminary study. Final estimates will be subject to change. The statistics are based on shipments selling into channels.
Numbers may not add up to totals shown because of rounding.
Source: Gartner (July 2015)

For the second consecutive quarter, Dell experienced a decline in PC shipments. Dell’s decline was relatively moderate in EMEA compared with Lenovo and HP. Analysts said this could be partly attributed to Dell’s lower presence in the consumer market, which created less impact to Dell from the Windows 10 prelaunch inventory control.

In the U.S., PC shipments totaled 15.1 million units in the second quarter of 2015, a 5.8 percent decline from the second quarter of 2014 (see Table 2). The decline was led by a double-digit decline of desk-based shipments, which offset single-digit growth of mobile PCs. Based on preliminary results, the desk-based PC shipment decline was the steepest since 2009 when the market was hit by the economic crisis.

“The weakness of desk-based PC shipments in the second quarter of 2015 is partly due to relatively large shipments in the second quarter last year when the market was driven by the end of XP support,” Ms. Kitagawa said. “Despite inventory controls for the Windows 10 launch, mobile PC shipments grew in the quarter, which resulted in five consecutive quarters of mobile PC growth in the U.S. Affordable thin/light notebooks are attracting more business buyers.”

HP maintained the top position for PC shipments in the U.S. in the second quarter of 2015 despite a 10.1 percent decline (see Table 2). Dell narrowed the gap with HP compared with a year ago. Lenovo was the only vendor showing year-over-year PC shipment growth among the top five vendors in the U.S.

Table 2
Preliminary U.S. PC Vendor Unit Shipment Estimates for 2Q15 (Thousands of Units)

Gartner - Preliminary U.S. PC Vendor Unit Shipment Estimates for 2Q15 -- 9-July-2015Notes: Data includes desk-based PCs, notebook PCs and ultramobile premium (see “Market Definitions and Methodology: Consumer Devices”). All data is estimated based on a preliminary study. Final estimates will be subject to change. The statistics are based on shipments selling into channels.
Numbers may not add up to totals shown because of rounding.
Source: Gartner (July 2015)
[The Ultramobile (Premium) category includes devices such as Microsoft’s Windows 8 Intel x86 products and Apple’s MacBook Air. Source]

PC shipments in EMEA totaled 18.6 million units in the second quarter of 2015, a 15.7 percent decline from the second quarter of 2014. In Europe, vendors spent most of the quarter trying to manage already high inventory levels. They tried clearing that inventory with promotions, having to absorb this with lower margins. In the third quarter of 2015, vendors should see better “sell-in” into the channel with new Windows 10-based devices.

Asia/Pacific PC shipments reached 24.2 million units in the second quarter of 2015, a 2.9 percent decline from the same period last year. Both desk-based and mobile PC shipments declined from the second quarter of 2014. PC shipments in China are estimated to have declined 4 percent in the quarter as demand for consumer PCs remained weak.

These results are preliminary. Final statistics will be available soon to clients of Gartner’s PC Quarterly Statistics Worldwide by Region program. This program offers a comprehensive and timely picture of the worldwide PC market, allowing product planning, distribution, marketing and sales organizations to keep abreast of key issues and their future implications around the globe.

See also
July 16, 2015, Forbes: Why Are IDC And Gartner’s PC Market Stats Different, And Does It Even Matter? by Scott McCutcheon

July 9, 2015PC Market Continues to Decline Ahead of Windows 10 Release, According to IDC

FRAMINGHAM, Mass.–(BUSINESS WIRE)–Worldwide PC shipments totaled 66.1 million units in the second quarter of 2015 (2Q15), according to the International Data Corporation (IDC) Worldwide Quarterly PC Tracker. This represented a year-on-year decline of -11.8%, about one percent below projections for the quarter.

The slow PC shipments were largely anticipated as a result of stronger year-ago shipments relating to end of support for windows XP as well as channels reducing inventory ahead of the release of Windows 10. In addition, weaker or changing exchange rates for foreign currencies have effectively increased PC prices in many markets, thereby reducing purchasing power and also complicating investment planning.

“Although the second quarter decline in PC shipments was significant, and slightly more than expected, the overall trend fits with expectations,” said Loren Loverde, Vice President, Worldwide PC Trackers & Forecasting. “We continue to expect low to mid-single digit declines in volume during the second half of the year with volume stabilizing in future years. We’re expecting the Windows 10 launch to go relatively well, though many users will opt for a free OS upgrade rather than buying a new PC. Competition from 2-in-1 devices and phones remains an issue, but the economic environment has had a larger impact lately, and that should stabilize or improve going forward.”

“The U.S. market was in line with forecasts, declining -3.3% from a year ago, after avoiding the global market declines over the past five quarters. Soft retail demand, short term weakness from inventory reductions, some cannibalization from competing devices, and low demand for large commercial refreshes are among the factors that reduced PC shipments,” said Rajani Singh, Senior Research Analyst,Personal Computers. “Nevertheless, moving forward, we expect a healthy second half as inventory and purchase decisions pick up following the launch of Windows 10. Emerging product categories will remain a bright spot as attention shifts to convertibles and Chromebooks in the commercial as well as consumer segments.”

Regional Highlights

United States – With shipments totaling nearly 16.4 million PCs in 2Q15, the U.S. market shrank -3.3% from the same quarter a year ago. Although most vendors saw volume decline, gains from Apple and Lenovo helped limit the overall decline. A tough year-on-year comparison contributed to a decline in desktop shipments, while portable PCs shipments continued to grow.

Europe, Middle East, and Africa (EMEA) – In EMEA, weakening demand and high inventory levels inhibited sell-in, driving results below expectations. Vendors continued to clean stock ahead of the back-to-school season and Windows 10 launch. Moreover, unfavorable exchange rates led to increasing prices and continued to affect demand both in the business and consumer spaces. The commercial market also faced a difficult year-on-year comparison with 2Q14, when the end of support for Windows XP boosted sales.

Asia/Pacific (excluding Japan) – China was impacted by excess commercial notebook inventory from earlier quarters as the anti-corruption campaign continues to suppress commercial spending. Currency fluctuation also remained a key factor in many countries in the region, contributing to lower demand. Nevertheless, volume was close to expectations, reflecting a slight decline in growth from prior quarters.

Japan – continued to see low growth as the weak Yen contributed to a difficult market. The Japanese PC market faced a particularly difficult comparison to year ago shipments that were boosted by the end of support for Windows XP and also changes to Japan’s tax code. As the market responds to these shifts and managing inventory, Yamada Denki (one of Japan’s major electronics stores) announced the closure of unprofitable stores in both urban and rural markets.

Vendor Highlights

Lenovo held onto the top position with shipments of 13.4 million units. Volume was up 1% from the prior quarter, but down -7.5% from the prior year. The vendor continued to aggressively court expansion outside of Asia/Pacific, leading to share gains in the U.S. and EMEA.

HP remained the number 2 vendor, but saw shipments decline -10.4% from a year ago. Slowing business demand and inventory control of entry notebooks contributed to the dip. While most of the slowdown was from outside of the U.S., the vendor also saw its U.S. volume contract nearly -7%.

Dell came in at number 3, shipping more than 9.5 million units and registering a year-over-year decline of -8.7%. Strong results in 2Q14 contributed to a poor year-over-year comparison. Stronger performance in Asia/Pacific and EMEA were offset by slower growth in the U.S.

Apple continued to outperform other vendors, with growth of 16.1% globally. The vendor has largely avoided the price competition affecting other players and may be benefitting from some of the uncertainty around the launch of Windows 10, along with refreshed products like the 12-inch MacBook and a relative concentration of shipments in the U.S.

Acer continued to see growth in Chromebooks with more models introduced. However, the vendor also struggled with the larger pullback in the market, particularly in EMEA where it had seen a rebound in mid-2014. The vendor ended 2Q14 with a volume of 4.33 million, a significant decline from the prior quarter and year ago volumes.

ASUS was statistically tied* with Acer for the number 5 position. ASUS has also been affected by currency factors and inventory management, but strong growth in the U.S. boosted overall results.

IDC - Top 5 Vendors, Worldwide PC Shipments, Market Share, and Year-Over-Year Growth for the Second Quarter of 2015 -- 9-July-2015Source: IDC Worldwide Quarterly PC Tracker, July 9, 2015
* Note: IDC declares a statistical tie in the worldwide PC market when there is less than one tenth of one percent difference in the revenue share of two or more vendors.

In addition to the table above, an interactive graphic showing worldwide PC market share for the top 5 vendors over the previous five quarters is available here. The chart is intended for public use in online news articles and social media. Instructions on how to embed this graphic can be found by viewing this press release on IDC.com.

IDC - Top 5 Vendors, United States PC Shipments, Market Share, and Year-Over-Year Growth, Second Quarter of 2015 -- 9-July-2015Source: IDC Worldwide Quarterly PC Tracker, July 9, 2015

Table Notes:

  • Some IDC estimates prior to financial earnings reports.
  • Shipments include shipments to distribution channels or end users. OEM sales are counted under the vendor/brand under which they are sold.
  • PCs include Desktops, Portables, Ultraslim Notebooks, Chromebooks, and Workstations and do not include handhelds, x86 Servers and Tablets (i.e. iPad, or Tablets with detachable keyboards running either Windows or Android). Data for all vendors are reported for calendar periods.

IDC’s Worldwide Quarterly PC Tracker gathers PC market data in over 80 countries by vendor, form factor, brand, processor brand and speed, sales channel and user segment. The research includes historical and forecast trend analysis as well as price band and installed base data.

Tablet and smartphone market trends

September update: Qualcomm’s smartphone AP revenues declined 17% year-over-year in the second quarter of 2015, Strategy Analytics estimated. Qualcomm maintained its smartphone AP market share leadership with 45% revenue share, followed by Apple with 19% revenue share and MediaTek with 18% revenue share. For the rest 18%: After a difficult 2014, Samsung LSI continued to recover and more than doubled its smartphone AP shipments in the second quarter of 2015 compared to the same period last year. Samsung LSI capitalised on its Galaxy S6 design-win in Q2 2015. In addition the company featured in multiple mid-range smartphones from Samsung Mobile. Full report: Smartphone Apps Processor Market Share Q2 2015: Samsung LSI Maintains Momentum
… The global tablet AP market declined 28% year-over-year to reach US$679 million in the second quarter of 2015, according to Strategy Analytics. Apple, Intel, Qualcomm, MediaTek and Samsung LSI captured the top-five revenue share rankings in the market during the quarter. Apple led the tablet AP market with 27% revenue share, followed by Intel with 18% revenue share. Qualcomm ranked number three, narrowly behind IntelGT400150821[1]Full report: Tablet Apps Processor Market Share Q2 2015: Apple and Intel Maintain Top Two Spots

Digitimes Research saw global tablet shipments fall to 45.76 million units in second-quarter 2015, showing a 10% decrease on quarter and representing more than a 15% decrease on year. Full report: Global tablet market – 2Q 2015 End of September update 

Investors.com comments on tablet and smartphone market trends — Q2’2015:Investors.com comments on tablet and smartphone market trends -- Q2'20151. Apple, Samsung lose ground in tablet market — LG and Huawei gain
2. Apple, Huawei [and Xiaomi] buck slowing smartphone sales trend

As the commenting articles by Investors.com are based on press releases of 2 market research companies I will give the web reference here for those press releases themselves, as well as 3 other press releases not commented on by Investors.com (if there are trend indications in the press releases themselves I will copy them alongside the web reference):

  1. July 29, 2015Worldwide Tablet Market Continues to Decline; Vendor Landscape is Evolving, According to IDCIDC on the Top 5 WW Tablet Vendors between 2014Q2 and 2015Q2“Longer life cycles, increased competition from other categories such as larger smartphones, combined with the fact that end users can install the latest operating systems on their older tablets has stifled the initial enthusiasm for these devices in the consumer market,” said Jitesh Ubrani, Senior Research Analyst, Worldwide Mobile Device Trackers. “But with newer form factors like 2-in-1s, and added productivity-enabling features like those highlighted in iOS9, vendors should be able to bring new vitality to a market that has lost its momentum.”
  2. July 30, 2015Huawei Becomes World’s 3rd Largest Mobile Phone Vendor in Q2 2015 [says Strategy Analytics]
    Strategy Analytics - Huawei becomes world's 3d largest phone vendor in 2015Q2 -- 30-July-2015

    • Woody Oh, Director at Strategy Analytics, said, “… Smartphones accounted for 8 in 10 of total mobile phone shipments during the quarter. The 2 percent growth rate of the overall mobile phone market is the industry’s weakest performance for two years, due to slowing demand for handsets in China, Europe and the US.”
    • Neil Mawston, Executive Director at Strategy Analytics, added, “… Samsung has stabilized volumes in the high-end, but its lower-tier mobile phones continue to face intense competition from rivals such as Huawei in Asia. … Apple outperformed as consumers in China and elsewhere upgraded to bigger-screen iPhone 6 and 6 Plus models.”
    • Ken Hyers, Director at Strategy Analytics, added, “… Huawei is rising fast in all regions of the world, particularly China where its 4G models, such as the Mate7, are proving wildly popular. Huawei has finally overtaken Microsoft to become the world’s third largest mobile phone vendor for the first time ever.”
    • Neil Mawston, Executive Director at Strategy Analytics, added, “Microsoft shipped 27.8 million mobile phones and captured 6 percent marketshare worldwide in the second quarter of 2015. Microsoft’s 6 percent global mobile phone marketshare is sitting near an all-time low. Microsoft continues to lose ground in feature phones, while its Lumia smartphone portfolio is in a holding pattern awaiting the launch of new Windows 10 models later this year. Xiaomi shipped 19.8 million mobile phones and captured 5 percent marketshare worldwide in Q2 2015. Xiaomi remains a major player in the China mobile phone market, but its local and international growth is slowing and Xiaomi is facing intense competition from Huawei, Meizu and others. As a result, Xiaomi may struggle to hold on to its top-five global mobile phone ranking in the coming quarters.”
  3. June 17, 2015Business smartphones shipments in Q1 up 26% from last year, now 27% of total smartphone market [says Strategy Analytics]
    Strategy Analytics - 1Q15 Worlwide Business Smartphone Shipments -- 17-June-2015Android was the most dominant OS in terms of business smartphone shipments in Q1, accounting for nearly 60% of all business smartphones (corporate- and personal-liable). It was also the dominant BYOD device; 68% of personal-liable shipments in Q1 were Android. Apple iOS accounted for only 27% of BYOD shipments in Q1, but was the dominant platform in terms of corporate-liable smartphones, with 48% of Q1 CL shipments. The difference in Android/iOS shipments between the CL and IL categories reflects the continuing corporate perception that iPhones are “safer” than Android-based devices.

    • Shipments of personal-liable smartphones (i.e. “bring your own device,” or BYOD, phones) drove market growth in Q1
    • Strategy analytics defines personal-liable devices as devices purchased by the end-user and expensed back to the company or organization, or devices purchased outright by individual users but used primarily for business purposes linking to corporate applications and backend systems.
    • While personal liable devices dominate worldwide business smartphone shipments, some regions are more resistant to the BYOD trend than others. Such regions include Western Europe and Central Europe, where corporate-liable devices are the dominant types of business smartphones. In Western Europe in Q1, 61% of the 10 million business smart phones were corporate-liable. Central and Eastern Europe had a slightly higher rate of BYOD devices shipped in Q1 — 41% — but the majority of smartphones shipped in this regions was also corporate-liable. This a sharp contrast to North America, where three-quarters of business smartphone shipments are personal-liable. The trend in Western and Eastern Europe reflects the more corporate-centric approach businesses take to mobility in these regions.
  4. July 29, 2015Mobile Broadband Tablet Subscriptions to Double to 200 Million by 2021, says Strategy Analytics Strategy Analytics - Mobile Broadband Tablet Subscription forecasted till 2021 - 29-July-2015

    • Strategy Analytics forecasts global mobile data subscriptions on tablets will more than double from 2015 to 2021, reaching over 200 million
    • Around the globe, over 100 million wireless connections on cellular enabled tablets will be added through 2021. By 2021 tablets will only account for 2 percent of total mobile subscriptions, a 2.7 percent population penetration rate.
  5. July 29, 2015Intel Maintains Top Spot in Non-Apple Tablet Apps Processors in Q1 2015 says Strategy Analytics
    Strategy Analytics - 1Q15 Tablet AP Revenue Share $733M -- 29-July-2015
    ⇒The global tablet applications processor (AP) market declined -6 percent year-over-year to reach $733 million in Q1 2015

    • According to Sravan Kundojjala, Associate Director, “Intel maintained its top spot in the non-Apple tablet AP market in unit terms in Q1 2015. Strategy Analytics estimate Android-based tablets accounted for over 70 percent of Intel’s total tablet AP shipments in Q1 2015. We expect Intel’s Atom X3 cellular tablet chip product line to help Intel maintain its momentum in the tablet AP market.”
    • Stuart Robinson, Executive Director of the Strategy Analytics Handset Component Technologies (HCT) service added, “Strategy Analytics estimates that baseband-integrated tablet AP shipments accounted for over one-fourth of total tablet AP shipments in Q1 2015, helped by a strong push from Qualcomm, MediaTek and Spreadtrum. We expect continued momentum for integrated APs as IntelRockchip and others join the bandwagon.”
  6. July 30, 2015Windows Tablet Shipments Nearly Double in Q2’15, says Strategy Analytics
    ⇒Global Tablet Shipments and Market Share in Q2 2015 (preliminary)
    Strategy Analytics - Global Tablet Shipments and Market Share in Q2 2015 (preliminary) -- 30-July-2015

    • Windows-branded Tablets comprised 9 percent of shipments in Q2 2015, up 4 points from Q2 2014
    • Android-branded Tablet shipment market share was flat at 70 percent in Q2 2015
    • Apple continued its slide in market share down to an all-time low of 21 percent in Q2 2015, 4 points lower than Q2 2014
    • Vendors with strong 3G and LTE connected Tablet strategies such as Huawei, LG, and TCL-Alcatel gained market share as leaders like Apple, Samsung, and the White Box community lost ground
Tablet & Touchscreen Strategies Senior Analyst Eric Smith added, “Windows share continues to improve as more models become available from traditional PC vendors, White Label vendors, and Microsoft itself though a healthy Surface lineup and distribution expansion. The key going forward will be if the coming wave of 2-in-1 Detachable Tablets is a hit with consumers or if they go the way of the Netbook—we remain cautiously optimistic on this point.”
Tablet & Touchscreen Strategies Service Director Peter King said, “Apple’s fortunes will turn around soon as it will launch the 12.9-inch iPad Pro as well as an iPad mini 4 in Q4 2015. New features in iOS 9, which are exclusive to iPad such as multi-tasking and a more convenient soft keyboard, will also help compel upgrades by owners of older iPad models. Meanwhile, Huawei and LG have posted fantastic growth primarily due to well-executed 3G and LTE connected Tablet strategies.”

Then I will add 2 additional information pieces from  Strategy Analytics:

Oct 8, 2014: Replacement Demand to Boost PC Sales in 2015, says Strategy Analytics

Having experienced negative growth since 2012, global PC sales are expected to rise 5 percent in 2015 driven by replacement of an ageing installed base according to Strategy Analytics’ Connected Home Devices (CHD) service report, “Computers in the Post-PC Era: Growth Opportunities and Strategies.”

Click here for the report:

http://www.strategyanalytics.com/default.aspx?mod=reportabstractviewer&a0=10146

  • PC sales will fall by 4 percent in 2014 before returning to modest growth in 2015 and beyond to support replacement demand.
  • Strategy Analytics’ consumer research of computing device usage in developed markets indicates that PCs remain essential computing devices despite healthy Tablet sales.
    • Frequent Tablet usage has grown by 22 percentage points from 2011 to Q4 2013 up to 32 percent of all households while frequent Mobile PC (excluding Tablets) usage has stayed steady through this period, as 63 percent of all households indicated they frequently used Mobile PCs.
    • Frequent usage of all PCs (including Mobile and Desktop PCs and excluding Tablets) remained above the 90 percent mark of all households, falling only 3 percentage points during this period.

Strategy Analytics - Global Computing Devices Installed Base 2009-2018 -- 8-Oct-2014Quotes:

Eric Smith, Analyst of Connected Home Devices, said: “Multiple PC ownership is falling as Tablet sales supplant replacement demand for secondary PCs mainly used for casual tasks. Still, PCs will remain essential devices as households eventually replace their primary PCs used for productivity tasks such as spreadsheet and video editing or personal banking.”

David Watkins, Service Director, Connected Home Devices, added: “The modern Tablet user experience is quickly arriving on the PC thanks to more affordable 2-in-1 Convertible PCs and new operating systems which blend traditional PC and Tablet user experiences. We see development of these forces aligning perfectly with an older PC installed base ripe for replacement in 2015.”

May 1, 2015: Children Change Disney’s Digital Strategy: “App TV” Now Central To Content Planning by David Mercer

Multiscreen TV behaviour is at the centre of television’s stormy transformation – viewing of broadcast, linear TV on the TV screen is apparently in decline while consumption on smartphones and tablets is increasing. Making sense of the big picture is increasingly challenging, and legacy players like broadcasters and the major content owners are inevitably somewhat resistant to the idea that their traditional businesses are under serious threat.

Strategy Analytics - The New TV - Global TV Capable Screens Installed Base -- 1-May-2015We have monitored the early stages of this transformation for the past decade and see its results in our own research, and we continue to predict further industry disruption in our forecasts. But sometimes it is only when you hear the evidence given in person by a senior executive at a leading global player that the scale of the challenge and opportunity are finally brought home.

This happened at last week’s AppsWorld event in Berlin, where I chaired the TV and Multiscreen conference. The speaker was Andreas Peters, Head of Digital for the Walt Disney Company Germany, Austria and Switzerland. Andreas presented some of the most compelling evidence I have yet heard that television is truly a multiscreen medium for the next generation of viewers.

Disney’s challenge in Germany was to launch a television show called Violetta aimed at 8-12 year old girls. It had been introduced successfully in Argentina but had failed in the UK. As it often does, Disney had invested considerable amounts in merchandising and retailers were eagerly anticipating sales of the new product lines. The show was first broadcast on German free TV on May 1st 2014 but it achieved only very low ratings.

The question for Disney managers was whether traditional TV had stopped working. A crisis meeting was held with a view to writing off the investment. Disney had previously not made its shows available online in Germany but the Violetta situation was so serious they were persuaded to experiment. Two episodes were made available on Youtube with a link to Disney’s own website. Viewing of the content on Youtube very quickly went viral until Disney had achieved a reach of 50% of 8-12 year old girls and eight million views. Violetta went on to become a success in German-speaking markets.

The evidence was clear: for some shows at least, younger children cannot now be reached using the traditional broadcast TV/big screen model. Peters explained that the Violetta experience was transformative for the Disney organisation and led to the inclusion of online and digital media as a key element in the business case for many products. In fact it also led to the development and launch of Disney’s own Watch App, which includes live streaming and seven-day catch-up programmes from the broadcast Disney Channel.

Even after the Violetta experience Disney was sceptical that an app was needed – there was a feeling that the website would be sufficient. Nevertheless the app was launched and Disney had planned for 20,000 downloads. Instead it has passed one million downloads in its first six months. Peters noted: “This was a real shock for us. We completely underestimated the demand.” Around 500,000 viewers are now using the Disney Watch app for linear television viewing, in addition to millions of shows being downloaded for catch-up viewing. Peak app viewing hours are between 6am and 8am and then between 1pm and 9pm on school days, with a different pattern at weekends. Peters made it clear that children did not want lots of features built in to the app – just like TV, they just want to hit “play” and watch.

“Our TV colleagues of course don’t want to believe this,” said Peters. “But the world has changed and it will continue to change.” Disney has also seen a knock-on effect from its app launch with an increase in free-to-air broadcast TV viewing. But the firm is now clear that mobile is not just an add-on to TV or a promotional tool; it must be an integral part of the entire process.

There are many implications for content strategy. TV and Digital have to “understand each other”, which is a challenge when the KPIs in each world are very different. As we have often heard, the video industry is crying out for a set of common metrics which can apply and support advertisers in both TV and online worlds. Video consumption patterns vary and different content may be relevant to different platforms.

But the overall lesson is clear: “TV” is not just the big screen in the corner of the living room. It must embrace multiscreen distribution strategies in order to reach its maximum potential. TV companies are betraying their audiences and their investors if they don’t target the 6.4bn addressable screens available to them.

ASUS EeePC revival with the $199/€199 EeeBook X205 at IFA 2014: the Chromebooks alternative based on Windows 8.1 with Bing

To be available in the U.S. and Europe starting in November. Plus information about:
– InstantGo (previously known at Connected Standby) from Microsoft aimed to bring smartphone-type power management capabilities to the PC platform, as well as increasing physical security,
– InstantGo combined with ICS (Internet Connection Sharing commonly referred to as tethering) for Connected Standby Hotspot funcionality, and
– touch gestures in Windows 8.1 supported by Smart Gesture technology of the X205 touchpad that is 36% larger compared to the ones found on the 14-inch ASUS laptop models.

Also compare with The growing Chromebook challenge for Windows laptops: promises from Google I/O are getting realized with new Chromebooks introduced at IFA 2014 post of mine as of September 5, 2014.

Information still to come (by November):
– monetization by Microsoft on the back end with Bing integration as well as MS services attach (as just mentioned by Satya Nadella on MSFT July 25 Earnings Conference Call)

See also my already existing posts about Intel Bay Trail-T, especially the Intel CTE initiative: Bay Trail-Entry V0 (Z3735E and Z3735D) SoCs are shipping next week in $129 Onda (昂达) V819i Android tablets—Bay Trail-Entry V2.1 (Z3735G and Z3735F) SoCs might ship in $60+ Windows 8.1 tablets from Emdoor Digital (亿道) in the 3d quarter of April 11, 2014. See also PadNews articles on Type 3 Z3735 (Bay Trail-Entry V2.1) based tablets (i.e. the same SoCs to be used in EeeBook X205):
– Z3735G (http://www.padnews.cn/?tag=Z3735G) and
– Z3735F (http://www.padnews.cn/?tag=Z3735F)


DETAILS

ASUS EeeBook X205 199 Euro Laptop Hands on [Steve Paine YouTube channel] with Intel’s Bay Trail-T (i.e. tablet) platform

http://umpcportal.com for more. This is the ASUS EeeBook X205 a 199 Euro laptop based on Z3000-series running Windows 8 with Bing. The model shown here has 1GB and Z3735G but other models are said to have 2GB RAM.

From ASUS Sep 3, 2014 press release:

EeeBook X205, chic and compact

EeeBook X205 is an affordable, chic and compact 11.6-inch laptop that weighs less than 1kg and is designed for on-the-go students and young professionals. Powered by Windows 8.1 with Bing — for maximum application compatibility — EeeBook X205 offers users a convenient smartphone-like experience, thanks to its use of Connected Standby technology. Connected Standby enables almost-instant resume from sleep mode and gives users an enhanced internet experience, as they are always connected to all their social apps and email — even when X205 is in standby mode. Available in four distinctive colors — black, white, gold and red — EeeBook X205 is designed with smooth curves and tactile surfaces to make it the ideal take-anywhere laptop.

ASUS EeeBook X205 Hands On – $199 Netbook unveiled at IFA 2014 [Mobilegeeks.de YouTube channel, Sept 3, 2014]

ASUS EeeBook X205 http://www.mobilegeeks.com The ASUS EeeBook X205 is 11.6 inches with an Intel Atom Z3735 is based on the Bay Trail-T architecture and is backed by 2GB of RAM and either 32G or 64GB of storage. Connectivity includes 2 USB 2.0, a Micro HDMI port, audio jack, microSD card slot plus WiFi b/g/n and Bluetooth 4.0. Don’t gorget to check out our coverage of the ASUS EeeBook X205 here: http://www.mobilegeeks.com/asus-zenbook-ux305-hands-video-ifa-2014/

ASUS announces the EeeBook X205 at IFA 2014 by Brandon LeBlanc [Blogging Windows, Sept 3, 2014]

Today at IFA 2014, ASUS has announced the EeeBook X205 – an affordable 11.6-inch laptop with Windows 8.1 with Bing priced at just $199 (U.S.). The EeeBook X205 comes powered by an Intel Atom quad-core processor and features InstantGo (previously known at Connected Standby) giving it an almost-instant resume from sleep mode with up 8 hours [up to 12-hours of web browsing see below] of battery life. It’ll run Microsoft Office smoothly as well as other desktop apps and apps from the Windows Store.

The EeeBook X205 has a compact and ergonomic design for people constantly on-the-go – like students for example. It weighs less than 1kg and has a full-size, one-piece seamless chiclet keyboard with 1.6mm of key travel for comfortable typing. It also has a 36% larger touchpad compared to the ones found on the 14-inch ASUS laptop models. And the touchpad uses Smart Gesture technology that supports touch gestures in Windows 8.1.

The EeeBook X205 will come in four colors – black, white, gold, and red – and available in the U.S. and Europe starting in November.

ASUS EeeBook X205TA [product page]

Easy to Learn, Work and Play.

  • ASUS EeeBook X205-blackWindows 8.1 with Bing
  • Weighs 980g with compact, space-saving design that fits in a small suitcase and carry bag.
  • 12 hours of battery life* for an Always On Always Connected experience
  • Windows 8.1 with Bing provides 100% capability with software and peripherals compares to other OS.

*Disclamer: 12-hours of web browsing

EeeBookX205 is an affordable, chic and compact 11.6-inch laptop that weighs less than 1kg and is designed for on-the-go students and young professionals. Windows 8.1 with Bing gives EeeBook X205 maximum application compatibility; while Connected Standby technology gives users a smartphone-like computing experience.This enables almost-instant resume from sleep mode and gives users an enhanced internet experience, as Connected Standby means they are always connected to all their social apps and email, even when X205 is in standby mode. Available in four distinctive colors — black, white, gold and red — EeeBook X205 is designed with smooth curves and tactile surfaces to make it the ideal take-anywhere laptop.

ASUS EeeBook X205-colors

Specification

Processor

Quad core Intel® Atom™ Bay Trail-T Z3735 processor running at up to 1.83GHz

Display

11.6-inch LED backlit HD (1,366 x 768)
High-contrast gloss finish

Operating System

Windows 8.1 with Bing

Storage

eMMC 32/64GB
115GB Microsoft OneDrive free for 2 years (15GB for life)
500GB ASUS WebStorage free for 2 years

RAM

2GB

Connectivity

802.11a/b/g/n dual-band Wi-Fi
Bluetooth 4.0

Input

2x USB 2.0
Micro HDMI out
1x 3.5mm headphone/mic combo jack
Micro SD card slot (SDXC, up to 64GB)

Camera

Front-facing VGA

Audio

2x 2W high-quality stereo speakers
High quality microphone

Battery

38Wh, 12 hours for web browsing

Dimensions

286 x 193.3 x 17.5mm

Weight

980g

Colors

Black, White, Red and Gold

We should note here that the Bay Trail SoCs for the EeeBook X205 are the specifically developed ones according to the following Intel slide:


1 MRD7 and MRD8/10 are Android* only. Windows is for selected ODMs with committed volume.

A significant SoC and PCB cost reduction effort (with design for “China Technical Ecosystem”) is lying behind those, so called Bay Trail Entry Z3735F/G products:

The original Windows capable Bay Trail-T already used in tablets since Oct’131: The Bay Trail-Entry version of Bay Trail-T specifically designed for heavy PCB cost reduction (used in X205):
– Z3745D (1.83 GHz, 25×16 LCD)
with DDR3L, and 8L2 HDI3 (Type4 packaged SoC based) PCBs

1 Dell Venue 8 Pro ($299+, now $249+)
2 8L PCB = 8-layer Printed Circuit Board;
3 HDIHigh Density Interconnects (aka Type 4 packaging) PCBs are utilizing blind, buried or microvia technologies.

– Z3735F (1.83GHz, <=2GB, <=19×12 LCD)
– Z3735G (1.83GHz, 1GB, <=12×8 LCD)
both with DDR3L, and 6L4 Type 3 packaged SoC based PCBs

4 6L PCB = 6-layer Printed Circuit Board
+ New PMIC for higher integration

In broad respects see the latest Z3735E, Z3735D, Z3735F, Z3735G comparison table of Sept 6, 2014, and in the most specific form the below table (taken from Z3600 and Z3700 Series Datasheet as of April 2014 when Type 3 SoC related information was added):

image

From MSFT Earnings Conference Call [July 22, 2014]

Satya Nadella, chief executive officer:

We feel good about the progress we are making with Windows. Developed markets continue to show stability, and we’re encouraged by the initial response from OEMs to our new consumer offerings like Windows with Bing.

In April, we released an update to Windows 8.1. To start, we improved the core desktop experience with mouse and keyboard advancements. For enterprises, we released Internet Explorer Enterprise Mode and extended our mobile device management capability. With the Windows 8.1 update, we also lowered the hardware spec required so OEMs can build tablets and clamshells at lower price points.

In addition, we made the decision to evolve the Windows business model. Now, Windows licenses are zero dollars for any OEM building a device less than nine inches. We also added a low-cost Windows offering with Bing integration for OEMs. This new offering combined with lower hardware specs means OEMs will bring a fantastic line-up of value-based notebooks and tablets to market this holiday.

We will have our OEM monetization, and some of these new business models are about monetizing on the back end with Bing integration as well as our services attach, and that’s the reason fundamentally why we have these zero priced Windows SKUs today.

Windows 8.1 with Bing for OEMs [April 2, 2014]

The Windows 8.1 with Bing edition sets Bing as the default search engine within Internet Explorer. Users will be able to manually change default search settings and install additional browsers of their choice.

Windows 8.1 with Bing is based on the feature set available in Windows 8.1 Core and incudes all of the latest updates, including Windows 8.1 Update. Windows 8.1 with Bing is available for 32-bit and 64-bit platforms.

What’s new for OEMs?

Windows 8.1 with Bing is similar to other editions of Windows and should be imaged, updated, and deployed the same as any other Windows edition. However, OEMs will not be able to change the default search engine with the SearchScopes unattend setting, Registry key, or 3rd party installation tools. When a user starts Internet Explorer, Bing is automatically set to the default Search Engine and will override any OEM-configured search provider. No other Internet Explorer defaults are changed.

Helping our hardware partners build lower cost Windows devices by Brandon LeBlanc [Blogging Windows, May 23, 2014]

Over the next couple weeks leading into Computex in Taipei, you’re going to see many of our hardware partners announce new Windows devices.

Microsoft was built on the foundation of partner opportunity and our goal remains mutual success for us and our partners. This means a continued commitment to helping ensure our hardware partners are able to build innovative, differentiated and competitive devices on the Windows platform. Over the past year, we have done a lot of work to scale Windows to an even greater number of customers with more partners and new devices at a broader range of price points. In 2013, we began to ease our approach to device certification and reduced some hardware component requirements, helping to empower our partners to drive further device differentiation and price competitiveness. And most recently with the Windows 8.1 Update, we are enabling our hardware partners to build lower cost devices with only 1GB of memory and 16GB of storage that provide customers with the fast and fluid experience they expect from a Windows device. We also announced that Windows will be available for 0 dollars to our hardware partners for Windows Phones and tablets smaller than 9-inches in screen size.

As we move forward, many of these lower cost devices will come with a new edition of Windows called Windows 8.1 with Bing. Windows 8.1 with Bing provides all the same great experiences that Windows 8.1 offers with the Windows 8.1 Update, and comes with Bing as the default search engine within Internet Explorer. And of course customers will be able to change that setting through the Internet Explorer menu, providing them with control over search engine settings. This new edition will be only be available preloaded on devices from our hardware partners. Some of these devices, in particular tablets, will also come with Office or a one-year subscription to Office 365.

The end result is that more people—across consumer and commercial—will have access to an even broader selection of new devices with all the awesomeness that Windows 8.1 provides, and get Office too, all at a really affordable price. Additionally, as reach expands, the opportunity for developers and their apps also increases.

We’re excited for our partners and the new devices that will be in market soon, and we’ll continue to work closely with our partners deliver innovative and high quality devices based on the Windows experience.

Stay tuned for more as these new devices get announced by our hardware partners over the coming weeks!

InstantGo: a better way to sleep by Kevin A Chin [Blogging Windows, June 19, 2014] (see also the InstantGo article on Wikipedia)

You may have heard about InstantGo in Windows 8.1 (known as Connected Standby in Windows 8 and Windows RT), and how it has replaced the traditional sleep or standby function in many Windows 8.1 and Windows RT 8.1 systems. What you might not know is how fundamentally different—and better—it is, and why.

First, let me give you a little background. These days, a lot of modern computing is performed on System on Chip (SoC) designs. These single chips tightly integrate the components for what used to be a complete motherboard, and allow for hardware that is thinner, lighter, and more power efficient. There are SoC designs with processors from both Intel and ARM running Windows.

These innovations in hardware go beyond just extending battery life—they actually make new user experiences possible. InstantGo is a great example of what SoC makes possible: network connectivity with very low power consumption and instant resume capabilities. With the right hardware, whether it’s a Windows powered tablet, or a convertible 2-in-1, it’s always ready for interaction.

What is InstantGo?

InstantGo maintains network connectivity when your screen is off in standby mode, allowing the system to update things in the background, and keeping it ready to instantly resume. For example, it can sync your email while your screen is off so new mail is ready and waiting as soon as you come back. Or if you want to be reachable via Skype even when you step away from your PC, you can go ahead and turn the screen off, and your calls will still come through. Power consumption in this connected standby mode is very low, and yet the system is always ready to spring back to life with your next interaction.

Common misconceptions

We’ve seen some misconceptions about InstantGo out there on the Internet, so I’d like to clear up a few of these. First of all, if your PC doesn’t already have Connected Standby (in Windows 8 or Windows RT) or InstantGo (in Windows 8.x or Windows RT 8.x), you can’t just add it as a feature – as mentioned, it’s built into the hardware and the operating system, and so it’s either there from the beginning or it isn’t. Furthermore, it isn’t limited to a particular processor architecture – it might be present on ARM, x86, and x64 systems. Finally, InstantGo is not just for tablets. You can have it on a 2-in-1 system that looks very much like a traditional laptop. You might even see two systems running the same CPU or SoC architecture, and one of them has InstantGo while the other one doesn’t. It’s really up to the hardware manufacturer to decide which systems they want to design with this capability.

Here’s a summary of the common misconceptions:

Misconception

Fact

InstantGo is a Windows software feature.

InstantGo depends on tight integration between hardware, software (drivers), and operating system to deliver new user experiences.

InstantGo only runs on ARM architecture systems.

InstantGo systems exist for ARM, x86, and x64 architectures.

InstantGo is only useful if I’m connected to a network.

All InstantGo systems allow you to turn the screen on and off almost instantly.

InstantGo is only available on Surface Pro and Surface 2.

Numerous systems support InstantGo. Examples include: Dell Venue Pro 8 , Dell Venue Pro 11, Asus T100TA, ThinkPad Tablet 2, Surface, Surface 2, and more.

InstantGo runs exclusively on Windows RT.

All Windows RT systems support InstantGo. But Windows 8 and Windows 8.x systems with the proper hardware may also support InstantGo.

InstantGo only runs on tablets.

InstantGo systems include tablets, convertibles with docks, and even some laptops.

Do you already have InstantGo?

As InstantGo is not limited to a particular form factor (tablet or laptop), or a particular architecture (ARM, x64, or x86), you might not know if you have it or not. InstantGo requires Windows RT, Windows 8, or any of the updates released after Windows 8, as well as tightly integrated hardware and software. You can see if you have it or not by running the powercfg option from a command prompt. When you type powercfg /a and press Enter, you’ll see the Standby (Connected) option only if you have InstantGo:

image

After using Windows on an InstantGo system, I’ve come to expect all my computers to have long battery life and still instantly resume from sleep.

For more on InstantGo (known as Connected Standby in Windows 8), see these articles:

In my next blog post, I’ll talk about Sleep Studyan easy way to measure your battery life while in the connected standby state.

Windows 8.1 ICS and InstantGo (Connected Standby Hotspot) [Steve Paine YouTube channel, Oct 17, 2013]

http://umpcportal.com with a 3G-capable, Connected Standby capable Windows 8.1 PC. Demonstration of a hotspot under Connected Standby conditions.

See also:

In Windows 8.1, Internet Sharing, commonly referred to as tethering, has been added to enable users to share their mobile broadband network connection with one or more other devices that are not mobile broadband-capable. Traditional tethering mechanisms include Bluetooth and USB. However, Wi-Fi can provide the fast and easy mobile broadband connection sharing mechanism, such as personal hotspots, mobile hotspots, and so on, since it requires little configuration, enables high-speed data transmission, and relies on the familiar Wi-Fi connection process.
Windows 8.1 extends the Internet sharing capability further by enabling customers to turn on and connect to PCs that have Internet Sharing configured, known as a tethering access point, just as if it was a standard Wi-Fi network.

Sleep Study: Diagnose what’s draining your battery while the system sleeps by Kevin A Chin [Blogging Windows, June 26, 2014]

In my last post, I introduced you to InstantGo (previous to Windows 8.1, we called this Connected Standby), a new power model used on some Windows 8.x systems. InstantGo is a tight integration of software (firmware, drivers, OS) with System on Chip (“SoC”) hardware to provide a sleep mode with long battery life and a connected, instant-on user experience.

In this post, I’d like to introduce you to Sleep Study, a new tool available on Windows 8.x systems with InstantGo that can help you identify sources of battery drain that occurred while the PC was in sleep mode (that is, when the screen was off).

Sleep Study tells you how well the system slept and how much activity it experienced during that time. While in the sleep state, the system is still doing some work, albeit at a lower frequency. Because the resulting battery drain is not easily perceptible (you can’t see it draining), we built the Sleep Study tool in Windows 8.1 to allow you to track what is happening. We thought of simply using traditional logging to do this, but ironically, the logging itself would drain the battery. With this in mind, we designed the Sleep Study tool to minimize its own impact on battery life, while tracking the battery draining activities.

The Sleep Study report

You can use Sleep Study to see which apps and devices are most active during a sleep session. Sleep Study reviews all the sleep sessions longer than 10 minutes and provides you with a report that color codes each session according to its power consumption.  A session is defined as the period from Screen Off to Screen On. In cases when the system is plugged into AC power, the policies are less stringent than when on battery power. While the tool still tracks connected standby activity on AC power, it is more useful to identify unexpected drains on battery, or DC power.

To help you easily identify apps, devices and services with higher power consumption, these are highlighted in red or orange in the report, and represent opportunities to extend your battery life.

In this video, we walk you through a typical Sleep Study report.

[SleepStudy powercfg command for connected standby]

The ASUS EeeBook touchpad uses Smart Gesture technology that supports touch gestures in Windows 8.1: Touch: Swipe, tap, and beyond [Windows Help, Nov 12, 2013]

If you want to know what we mean when we mention swiping, tapping, or other ways of interacting withWindows 8.1 or Windows RT 8.1 when you’re using a touchscreen, take a look at this table.

What we say

How to do it

What it does

Tap

image

Tap once on an item.

Opens, selects, or activates whatever you tap. Similar to clicking with a mouse.

Press and hold

image

Press your finger down and hold for about a second.

Shows info to help you learn more about an item or opens a menu specific to what you’re doing. For example, press and hold a tile on the Start screen to rearrange, resize, or pin it. Only works for some items.

Similar to right-clicking with a mouse.

Pinch or stretch to zoom

image

Touch the screen or an item with two or more fingers, and then move the fingers toward each other (pinch) or away from each other (stretch).

Visually zooms in or out, like with pictures or maps. A good place to explore this is the Start screen.

Slide to scroll

image

Drag your finger on the screen.

Moves through what’s on the screen. Similar to scrolling with a mouse.

Slide to rearrange

image

Press and briefly drag an item in the direction opposite the way the page scrolls, then move it wherever you want. (For example, if you would scroll left or right, drag the item up or down.) When you’ve moved the item to the new location, let it go.

Moves an item. Similar to dragging with a mouse.

Swipe to select

image

Swipe an item with a short, quick movement in the direction opposite the way the page scrolls. For example:

• If the page scrolls left or right, swipe the item up or down to select it.

• If the page scrolls up or down, swipe the item left or right to select it.

Selects an item, and often brings up app commands. A good place to explore this is in the Mail app.

Swipe or slide from the edge

image

Starting on the edge, either swipe your finger quickly or slide across the screen without lifting your finger.

• Open the charms (Search, Share, Start, Devices, Settings). Swipe in from the right edge.

• Open a recently used app. Swipe in from the left edge. Keep swiping to switch between all of your recently used apps.

• Open another app at the same time. Slide in from the left edge without lifting your finger and drag the app until a divider appears. Then move the app where you want it, and slide the divider to adjust the app size.

• See a list of recently used apps. Slide in from the left edge without lifting your finger, and then push the app back toward the left edge.

• Show commands for the current apps, like New and Refresh. Swipe in from the top or bottom edge.

• Close an app. Slide down from the top edge without lifting your finger, and then drag the app to the bottom of the screen.

Rotate

image

Put two or more fingers on an item and then turn your hand.

Rotates items in the direction you turn your hand. Only some items can be rotated

Satya Nadella on “Digital Work and Life Experiences” supported by “Cloud OS” and “Device OS and Hardware” platforms–all from Microsoft

Update: Gates Says He’s Very Happy With Microsoft’s Nadella [Bloomberg TV, Oct 2, 2014] + Bill Gates is trying to make Microsoft Office ‘dramatically better’ [The Verge, Oct 3, 2014]

This is the essence of Microsoft Fiscal Year 2014 Fourth Quarter Earnings Conference Call(see also the Press Release and Download Files) for me, as the new, extremely encouraging, overall setup of Microsoft in strategic terms (the below table is mine based on what Satya Nadella told on the conference call):

image

These are extremely encouraging strategic advancements vis–à–vis previously publicized ones here in the following, Microsoft related posts of mine:

I see, however, particularly challenging the continuation of the Lumia story with the above strategy, as with the previous, combined Ballmer/Elop(Nokia) strategy the results were extremely weak:

image

Worthwhile to include here the videos Bloomberg was publishing simultaneously with Microsoft Fourth Quarter Earnings Conference Call:

Inside Microsoft’s Secret Surface Labs [Bloomberg News, July 22, 2014]

July 22 (Bloomberg) — When Microsoft CEO Satya Nadella defined the future of his company in a memo to his 127,100 employees, he singled out the struggling Surface tablet as key to a future built around the cloud and productivity. Microsoft assembled an elite team of designers, engineers, and programmers to spend years holed up in Redmond, Washington to come up with a tablet to take on Apple, Samsung, and Amazon. Bloomberg’s Cory Johnson got an inside look at the Surface labs.

Will Microsoft Kinect Be a Medical Game-Changer? [Bloomberg News, July 22, 2014]

July 23 (Bloomberg) — Microsoft’s motion detecting camera was thought to be a game changer for the video gaming world when it was launched in 2010. While appetite for it has since decreased, Microsoft sees the technology as vital in its broader offering as it explores other sectors like 3d mapping and live surgery. (Source: Bloomberg

Why Microsoft Puts GPS In Meat For Alligators [Bloomberg News, July 22, 2014]

July 23 (Bloomberg) — At the Microsoft Research Lab in Cambridge, scientists track animals and map climate change all on the off chance they’ll stumble across the next big thing. (Source: Bloomberg)

To this it is important to add: How Pier 1 is using the Microsoft Cloud to build a better relationship with their customers [Microsoft Server and Cloud YouTube channel, July 21, 2014]

In this video, Pier 1 Imports discuss how they are using Microsoft Cloud technologies such as Azure Machine Learning to to predict which the product the customer might want to purchase next, helping to build a better relationship with their customers. Learn more: http://www.azure.com/ml

as well as:
Microsoft Surface Pro 3 vs. MacBook Air 13″ 2014 [CNET YouTube channel, July 21, 2014]

http://cnet.co/1nOygqh Microsoft made a direct comparison between the Surface Pro 3 and the MacBook Air 13″, so we’re throwing them into the Prizefight Ring to settle the score once and for all. Let’s get it on!

Surface Pro 3 vs. MacBook Air (2014) [CTNtechnologynews YouTube channel, July 1, 2014]

The Surface Pro 3 may not be the perfect laptop. But Apple’s MacBook Air is pretty boring. Let’s see which is the better device!

In addition here are some explanatory quotes (for the new overall setup of Microsoft) worth to include here from the Q&A part of Microsoft’s (MSFT) CEO Satya Nadella on Q4 2014 Results – Earnings Call Transcript [Seeking Alpha, Jul. 22, 2014 10:59 PM ET]

Mark Moerdler – Sanford Bernstein

Thank you. And Amy one quick question, we saw a significant acceleration this quarter in cloud revenue, or I guess Amy or Satya. You saw acceleration in cloud revenue year-over-year what’s – is this Office for the iPad, is this Azure, what’s driving the acceleration and how long do you think we can keep this going?

Amy Hood

Mark, I will take it and if Satya wants to add, obviously, he should do that. In general, I wouldn’t point to one product area. It was across Office 365, Azure and even CRM online. I think some of the important dynamics that you could point to particularly in Office 365; I really think over the course of the year, we saw an acceleration in moving the product down the market into increasing what we would call the mid-market and even small business at a pace. That’s a particular place I would tie back to some of the things Satya mentioned in the answer to your first question.

Improvements to analytics, improvements to understanding the use scenarios, improving the product in real-time, understanding trial ease of use, ease of sign-up all of these things actually can afford us the ability to go to different categories, go to different geos into different segments. And in addition, I think what you will see more as we initially moved many of our customers to Office 365, it came on one workload. And I think what we’ve increasingly seen is our ability to add more workloads and sell the entirety of the suite through that process. I also mentioned in Azure, our increased ability to sell some of these higher value services. So while, I can speak broadly but all of them, I think I would generally think about the strength of being both completion of our product suite ability to enter new segments and ability to sell new workloads.

Satya Nadella

The only thing I would add is it’s the combination of our SaaS like Dynamics in Office 365, a public cloud offering in Azure. But also our private and hybrid cloud infrastructure which also benefits, because they run on our servers, cloud runs on our servers. So it’s that combination which makes us both unique and reinforcing. And the best example is what we are doing with Azure active directory, the fact that somebody gets on-boarded to Office 365 means that tenant information is in Azure AD that fact that the tenant information is in Azure AD is what makes EMS or our Enterprise Mobility Suite more attractive to a customer manager iOS, Android or Windows devices. That network effect is really now helping us a lot across all of our cloud efforts.

Keith Weiss – Morgan Stanley

Excellent, thank you for the question and a very nice quarter. First, I think to talk a little bit about the growth strategy of Nokia, you guys look to cut expenses pretty aggressively there, but this is – particularly smartphones is a very competitive marketplace, can you tell us a little bit about sort of the strategy to how you actually start to gain share with Lumia on a going forward basis? And may be give us an idea of what levels of share or what levels of kind unit volumes are you going to need to hit to get to that breakeven in FY16?

Satya Nadella

Let me start and Amy you can even add. So overall, we are very focused on I would say thinking about mobility share across the entire Windows family. I already talked about in my remarks about how mobility for us even goes beyond devices, but for this specific question I would even say that, we want to think about mobility not just one form factor of a mobile device because I think that’s where the ultimate price is.

But that said, we are even year-over-year basis seen increased volume for Lumia, it’s coming at the low end in the entry smartphone market and we are pleased with it. It’s come in many markets we now have over 10% that’s the first market I would sort of say that we need to track country-by-country. And the key places where we are going to differentiate is looking at productivity scenarios or the digital work and life scenario that we can light up on our phone in unique ways.

When I can take my Office Lens App use the camera on the phone take a picture of anything and have it automatically OCR recognized and into OneNote in searchable fashion that’s the unique scenario. What we have done with Surface and PPI shows us the way that there is a lot more we can do with phones by broadly thinking about productivity. So this is not about just a Word or Excel on your phone, it is about thinking about Cortana and Office Lens and those kinds of scenarios in compelling ways. And that’s what at the end of the day is going to drive our differentiation and higher end Lumia phones.

Amy Hood

And Keith to answer your specific question, regarding FY16, I think we’ve made the difficult choices to get the cost base to a place where we can deliver, on the exact scenario Satya as outlined, and we do assume that we continue to grow our units through the year and into 2016 in order to get to breakeven.

Rick Sherlund – Nomura

Thanks. I’m wondering if you could talk about the Office for a moment. I’m curious whether you think we’ve seen the worst for Office here with the consumer fall off. In Office 365 growth in margins expanding their – just sort of if you can look through the dynamics and give us a sense, do you think you are actually turned the corner there and we may be seeing the worse in terms of Office growth and margins?

Satya Nadella

Rick, let me just start qualitatively in terms of how I view Office, the category and how it relates to productivity broadly and then I’ll have Amy even specifically talk about margins and what we are seeing in terms of I’m assuming Office renewals is that probably the question. First of all, I believe the category that Office is in, which is productivity broadly for people, the group as well as organization is something that we are investing significantly and seeing significant growth in.

On one end you have new things that we are doing like Cortana. This is for individuals on new form factors like the phones where it’s not about anything that application, but an intelligent agent that knows everything about my calendar, everything about my life and tries to help me with my everyday task.

On the other end, it’s something like Delve which is a completely new tool that’s taking some – what is enterprise search and making it more like the Facebook news feed where it has a graph of all my artifacts, all my people, all my group and uses that graph to give me relevant information and discover. Same thing with Power Q&A and Power BI, it’s a part of Office 365. So we have a pretty expansive view of how we look at Office and what it can do. So that’s the growth strategy and now specifically on Office renewals.

Amy Hood

And I would say in general, let me make two comments. In terms of Office on the consumer side between what we sold on prem as well as the Home and Personal we feel quite good with attach continuing to grow and increasing the value prop. So I think that’s to address the consumer portion.

On the commercial portion, we actually saw Office grow as you said this quarter; I think the broader definition that Satya spoke to the Office value prop and we continued to see Office renewed in our enterprise agreement. So in general, I think I feel like we’re in a growth phase for that franchise.

Walter Pritchard – Citigroup

Hi, thanks. Satya, I wanted to ask you about two statements that you made, one around responsibly making the market for Windows Phone, just kind of following on Keith’s question here. And that’s a – it’s a really competitive market it feels like ultimately you need to be a very, very meaningful share player in that market to have value for developer to leverage the universal apps that you’re talking about in terms of presentations you’ve given and build in and so forth.

And I’m trying to understand how you can do both of those things once and in terms of responsibly making the market for Windows Phone, it feels difficult given your nearest competitors there are doing things that you might argue or irresponsible in terms of making their market given that they monetize it in different ways?

Satya Nadella

Yes. One of beauties of universal Windows app is, it aggregates for the first time for us all of our Windows volume. The fact that even what is an app that runs with a mouse and keyboard on the desktop can be in the store and you can have the same app run in the touch-first on a mobile-first way gives developers the entire volume of Windows which is 300 plus million units as opposed to just our 4% share of mobile in the U.S. or 10% in some country.

So that’s really the reason why we are actively making sure that universal Windows apps is available and developers are taking advantage of it, we have great tooling. Because that’s the way we are going to be able to create the broadest opportunity to your very point about developers getting an ROI for building to Windows. For that’s how I think we will do it in a responsible way.

Heather Bellini – Goldman Sachs

Great. Thank you so much for your time. I wanted to ask a question about – Satya your comments about combining the next version of Windows and to one for all devices and just wondering if you look out, I mean you’ve got kind of different SKU segmentations right now, you’ve got enterprise, you’ve got consumer less than 9 inches for free, the offering that you mentioned earlier that you recently announced. How do we think about when you come out with this one version for all devices, how do you see this changing kind of the go-to-market and also kind of a traditional SKU segmentation and pricing that we’ve seen in the past?

Satya Nadella

Yes. My statement Heather was more to do with just even the engineering approach. The reality is that we actually did not have one Windows; we had multiple Windows operating systems inside of Microsoft. We had one for phone, one for tablets and PCs, one for Xbox, one for even embedded. So we had many, many of these efforts. So now we have one team with the layered architecture that enables us to in fact one for developers bring that collective opportunity with one store, one commerce system, one discoverability mechanism. It also allows us to scale the UI across all screen sizes; it allows us to create this notion of universal Windows apps and being coherent there.

So that’s what more I was referencing and our SKU strategy will remain by segment, we will have multiple SKUs for enterprises, we will have for OEM, we will have for end-users. And so we will – be disclosing and talking about our SKUs as we get further along, but this my statement was more to do with how we are bringing teams together to approach Windows as one ecosystem very differently than we ourselves have done in the past.

Ed Maguire – CLSA

Hi, good afternoon. Satya you made some comments about harmonizing some of the different products across consumer and enterprise and I was curious what your approach is to viewing your different hardware offerings both in phone and with Surface, how you’re go-to-market may change around that and also since you decided to make the operating system for sub 9-inch devices free, how you see the value proposition and your ability to monetize that user base evolving over time?

Satya Nadella

Yes. The statement I made about bringing together our productivity applications across work and life is to really reflect the notion of dual use because when I think about productivity it doesn’t separate out what I use as a tool for communication with my family and what I use to collaborate at work. So that’s why having this one team that thinks about outlook.com as well as Exchange helps us think about those dual use. Same thing with files and OneDrive and OneDrive for business because we want to have the software have the smart about separating out the state carrying about IT control and data protection while me as an end user get to have the experiences that I want. That’s how we are thinking about harmonizing those digital life and work experiences.

On the hardware side, we would continue to build hardware that fits with these experiences if I understand your question right, which is how will be differentiate our first party hardware, we will build first party hardware that’s creating category, a good example is what we have done with Surface Pro 3. And in other places where we have really changed the Windows business model to encourage a plethora of OEMs to build great hardware and we are seeing that in fact in this holiday season, I think you will see a lot of value notebooks, you will see clamshells. So we will have the full price range of our hardware offering enabled by this new windows business model.

And I think the last part was how will we monetize? Of course, we will again have a combination, we will have our OEM monetization and some of these new business models are about monetizing on the backend with Bing integration as well as our services attached and that’s the reason fundamentally why we have these zero-priced Windows SKUs today.

Microsoft Surface Pro 3 is the ultimate tablet product from Microsoft. What the market response will be?

imageWith the jury still out (as one can judge from the value of Microsoft shares – on the right) it remains to be seen whether Microsoft will be able to crack the high-end tablet market with this product.

The Microsoft product site is entitled New Surface Pro 3 Tablet – The Tablet That Can Replace Your Laptop clearly indicating the main positioning of this 3d generation product. See also the press release for additional details, as well as the remarks by Satya Nadella, Chief Executive Officer, and Panos Panay, Corporate Vice President, Microsoft Surface, at the press event held in New York City, May 20, 2014. The brief summary video of the event is below, while a full on-demand Webcast is here. There are also several “first impression” type media feedbacks given after the brief video report.

Microsoft’s Surface Pro 3 event in under six minutes [The Verge YouTube channel, May 20, 2014]

“You’ve been told to buy a laptop, but you know you need a laptop.” Though freshly-minted Microsoft CEO Satya Nadella gave the opening remarks, today’s Surface event was all about Surface creator Panos Panay — dropping tablets, playing with scales, pushing hinges, and giving more than a few shout-outs to Wall Street Journal editor (and former Verge editor) Joanna Stern. Here’s everything you need to know from the event in under five minutes.

Microsoft Introduces a Larger-Screen Surface Tablet [By SHIRA OVIDE in The Wall Street Journal , May 20, 2014]

First Look: Microsoft Surface Pro 3
[WSJDigitalNetwork YouTube channel, May 20, 2014]

Microsoft tries again to combine the laptop and tablet. WSJ Personal Tech Columnist Joanna Stern has the first look. Photo/Video: Drew Evans for The Wall Street Journal

Microsoft Corp. MSFT -0.18% introduced a larger-screen version of one of its Surface tablet computers, offering a lighter and thinner device that the company cast as a potential successor for laptop PCs.

The software company introduced the new device, called the Surface Pro 3, at an eventTuesday in New York. The device, like prior Pro models in the Surface line, is powered byIntel Corp. INTC 0.00% computer chips. Microsoft said the new version’s display measures 12 inches diagonally, compared with the 10.6-inch screens of existing Surface devices.

Microsoft said the Surface Pro 3 will start at $799 without a keyboard. A keyboard that doubles as a device cover will cost $129.99. The top end of the product line, with the most powerful Intel chip, lists for $1,949 without a keyboard.

At the event Tuesday, Microsoft officials repeatedly compared the Surface Pro 3 with laptop personal computers like AppleInc.‘s MacBook Air, rather than discuss competitors in the tablet market, where Microsoft remains a bit player. The MacBook Air costs $899 and up.

Microsoft’s positioning underscores its troubles in becoming a major competitor in tablets, where price tags of less than $200 have become commonplace for consumer-oriented models. The company’s share of the market was less than 4% last year, according to research firm IDC.

Microsoft Chief Executive Satya Nadella and other officials stressed what they said were limits of existing tablet computers for activities like writing documents or other work that isn’t Web surfing or reading digital books. They also stressed drawing and note-taking with an upgraded digital-pen accessory that comes with the Surface Pro 3.

“This is the tablet that can replace your laptop,” Panos Panay, a Microsoft executive working on Surface devices, said about the Surface Pro 3.

Microsoft said it would start taking orders Wednesday for the new device.

Steven Sinofsky, a former Microsoft executive who helped spearhead development of the Surface, said Tuesday the Surface Pro 3 “realizes the ‘no compromises’ vision of Surface.”

Dating back to the early 2000s, Microsoft officials have used the expression “no compromises” to describe their vision of a device that combines the best features of tablets and laptops.

Microsoft also has been developing for months a tablet similar to Apple’s 7.9-inch iPad Mini, and some media reports had indicated that device would be announced Tuesday. Smaller tablets accounted for more than half of all tablets sold last year.

In an interview Tuesday, Mr. Panay said Microsoft is “looking at an array of devices. It comes down to what customers need right now.”

He also addressed a different type of Windows software used on more iPad-like tablets, including one model of Surface devices. That operating software, Windows RT, isn’t compatible with many older PC applications or software. Windows RT “is a critical element as well,” Mr. Panay said. “It’s still pumping.”

Some analysts said Tuesday Microsoft was sensible for targeting businesses and workers, rather than consumer applications, with the Surface Pro.

“This is a smart move by Microsoft,” said Patrick Moorhead, president of research firm Moor Insights & Strategy. “Surface Pro 3 is more of a laptop replacement than a device that replaces your seven-to-eight-inch tablet.”

As Microsoft touts the abilities of Surface to replace laptops, it has the potential to anger companies like Dell Inc. that also make tablets and laptops powered by the Windows operating system. At the event, however, Mr. Nadella said Microsoft isn’t trying to compete with its computer-hardware partners.

Some Microsoft investors don’t want Microsoft to make its own computing devices at all. The company incurs a loss on each Surface it sells, and the company’s critics say Microsoft hasn’t made a compelling case for expanding its hardware ambitions.

Microsoft officials, including Mr. Nadella on Tuesday, say homegrown devices like the Surface are the best showcase for Microsoft software like Office, Skype and digital file-storage service OneDrive.

“We are not building hardware for hardware’s sake,” Mr. Nadella said during a brief appearance at the Surface event. “We want to build experiences that bring together all the capabilities of our company.”

Daniel Ives, a Microsoft analyst with FBR Capital Markets, said Surface Pro 3 “appears to be an impressive” device, but he said persuading consumers to buy the Surface “remains a Kilimanjaro-like challenge given intense competition.”

—Joanna Stern contributed to this article.

The most popular “Surface Pro 3” YouTube videos 19 hours after the launch:

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Surface Pro 3—The Tablet that Can Replace Your Laptop by surface 19 hours ago  440,030 views
Witness the next evolution of productivity. Introducing the Surface Pro 3, the tablet that can replace your laptop.
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Surface Pro 3 hands on at Surface NYC event 
by Windows Phone Central  16 hours ago   26,585 views
We go hands on with the Surface Pro 3 from the Surface NYC event. More details: …
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TLDR: My Surface Pro 3 Thoughts  by LockerGnome’s Geek Lifestyles 11 hours ago 3,005 views
Become a patron for bonuses ASAP: http://ChrisPirillo.com/ Patron video bonus today: …
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Microsoft Unveils 12-inch Surface Pro 3 Tablet – IGN News  by IGN  16 hours ago  19,373 views
Microsoft has just unveiled its latest Windows-powered tablet: the Surface Pro 3.
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CNET Update – Surface Pro 3 aims to replace laptops — and paper  by CNET   15 hours ago   8,526 views
With an improved kickstand, keyboard, and stylus pen, Microsoft says the new Surface solves the productivity problem of tablets.
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Microsoft Surface Pro 3 Hands On | Mashable
by Mashable   16 hours ago     9,936 views
Microsoft’s third-generation Surface Pro 3 aims to be “the tablet that can replace your laptop.” Here’s Mashable’s Pete Pachal and …
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This is the Surface Pro 3 (hands-on)
by The Verge    18 hours ago    48,815 views
Dan Seifert takes a hands-on look at Microsoft’s 12-inch Surface Pro 3, the “tablet that can replace the laptop.”
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Surface Pro 3 Hands-on    by Booredatwork.com
15 hours ago      5,288 views
Surface Pro 3 Pre-order link: http://bit.ly/1m07g9M Loot Crate:http://www.lootcrate.com/booredatwork 10% Code “booredatwork” …
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Hands-on with the Microsoft Surface Pro 3
by CNET   14 hours ago     16,412 views
The Surface Pro 3 is a new high-performance Windows 8.1 tablet designed to get rid of the “conflict” between owning a tablet and …
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Hands-on with Surface Pro 3    by expertzone
19 hours ago   19,040 views
Ben “The PC Guy” Rudolph goes hands-on with the all-new Surface Pro 3. Faster, thinner, lighter, and with a larger screen, this is …
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Surface Pro 3 Launch Reactions & Impressions
by lachlanlikesathing   8 hours ago    864 views
My thoughts on the Surface Pro 3 launch announcement! Surface Pro 2 long term review: http://youtu.be/hlsiNom5a3o Thanks …
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Surface Pro 3 — Finally a Tablet that can replace your Laptop?!?  by SourceFed   13 hours ago   61,977 views
The SurfacePro3 was announced today — larger, lighter, and able to stream 4k! Are all the bells and whistles in the SurfacePro3 …
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Surface Pro 3 Hands On    by Geek.com
16 hours ago     2,523 views
Microsoft has a made a splash today with an all new Surface Pro, which is a 12-inch device that manages to be thinner, lighter, …
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Microsoft Surface Pro 3 Hands-On   by laptopmag
13 hours ago    2,519 views
We go hands-on with Microsoft’s latest hybrid tablet and give you an overview of the design, specs, and price. For more coverage …
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Microsoft reveals thinner, faster Surface Pro 3 tablet
by CNET   17 hours ago   13,905 views
Microsoft’s Panos Panay shows off the company’s latest tablet at a press event in New York City. The new 12-inch tablet weighs …
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Surface Pro 3 Unboxing , Hands On , and First Impression Review  by Sean Ong   6 hours ago  326 views      In this video I do my very first product unboxing as I show off the shiny new Surface Pro 3! I give my first impressions of the device …

Microsoft BUILD 2014 Day 2: “rebranding” to Microsoft Azure and moving toward a comprehensive set of fully-integrated backend services

  1. “Rebranding” into Microsoft Azure from the previous Windows Azure
  2. Microsoft Azure Momentum on the Market
  3. The new Azure Management Portal (preview)
  4. New Azure features: IaaS, web, mobile and data announcements

Microsoft Announces New Features for Cloud Computing Service [CCTV America YouTube channel, April 3, 2014]

Day two of the Microsoft Build developer conference in San Francisco wrapped up with the company announcing 44 new services. Most of those are based on Microsoft Azure – it’s cloud computing platform that manages applications across data centers. CCTV’s Mark Niu reports from San Francisco.

Watch the first 10 minutes of this presentation for a brief summary of the latest state of Microsoft Azure: #ChefConf 2014: Mark Russinovich, “Microsoft Azure Group” [Chef YouTube channel, April 16, 2014]

Mark Russinovich is a Technical Fellow in the Windows Azure Group at Microsoft working on Microsoft’s cloud platform. He is a widely recognized expert in operating systems, distributed systems, and cybersecurity. In this keynote from #ChefConf 2014, he gives an overview of Microsoft Azure and a demonstration of the integration between Azure and Chef

Then here is a fast talk and Q&A on Azure with Scott Guthrie after his keynote preseantation at BUILD 2014:
Cloud Cover Live – Ask the Gu! [jlongo62 YouTube channel, published on April 21, 2014]

With Scott Guthrie, Executive Vice President Microsoft Cloud and Enterprise group

The original: Cloud Cover Live – Ask the Gu! [Channel 9, April 3, 2014]

Details:

  1. “Rebranding” into Microsoft Azure from the previous Windows Azure
  2. Microsoft Azure Momentum on the Market
  3. The new Azure Management Portal (preview)
  4. New Azure features: IaaS, web, mobile and data announcements

[2:45:47] long video record of the Microsoft Build Conference 2014 Day 2 Keynote [MSFT Technology News YouTube channel, recorded on April 3, published on April 7, 2014]

Keynote – April 2-4, 2014 San Francisco, CA 8:30AM to 11:30AM

The original video record on Channel 9
Day 2 Keynote transcript by Microsoft


1. “Rebranding” into Microsoft Azure from the previous Windows Azure

Yes, you’ve noticed right: the Windows prefix has gone, and the full name is now only Microsoft Azure! The change happened on April 3 as evidenced by change of the cover photo on the Facebook site, now also called Microsoft Azure:

image

from this cover photo used from July 23, 2013 on:

image

And it happened without any announcement or explanation as even the last, April 1 Microsoft video carried the Windows prefix: Tuesdays with Corey //build Edition

We can’t believe he said that! This week, Corey gets us in trouble by spilling all sorts of //build secrets. Check it out!

as well as the last, March 14 video ad: Get Your Big Bad Wolf On (Extended)

Go get your big bad wolf on, today: http://po.st/01rkCL


2. Microsoft Azure Momentum on the Market

The day began with Scott Guthrie, Executive Vice President, Microsoft Cloud and Enterprise group, touting Microsoft progress with Azure for the last 18 months when:

… we talked about our new strategy with Azure and our new approach, a strategy that enables me to use both infrastructure as a service and platform as a service capabilities together, a strategy that enables developers to use the best of the Windows ecosystem and the best of the Linux ecosystem together, and one that delivers unparalleled developer productivity and enables you to build great applications and services that work with every device

  • Last year … shipped more than 300 significant new features and releases
  • … we’ve also been hard at work expanding the footprint of Azure around the world. The green circles you see on the slide here represent Azure regions, which are clusters of datacenters close together, and where you can go ahead and run your application code. Just last week, we opened two new regions, one in Shanghai and one in Beijing. Today, we’re the only global, major cloud provider that operates in mainland China. And by the end of the year, we’ll have more than 16 public regions available around the world, enabling you to run your applications closer to your customers than ever before.
  • More than 57 percent of the Fortune 500 companies are now deployed on Azure.
  • Customers run more than 250,000 public-facing websites on Azure, and we now host more than 1 million SQL databases on Azure.
  • More than 20 trillion objects are now stored in the Azure storage system. We have more than 300 million users, many of them — most of them, actually, enterprise users, registered with Azure Active Directory, and we process now more than 13 billion authentications per week.
  • We have now more than 1 million developers registered with our Visual Studio Online service, which is a new service we launched just last November.

Let’s go beyond the big numbers, though, and look at some of the great experiences that have recently launched and are using the full power of Azure and the cloud.

Titanfall” was one of the most eagerly anticipated games of the year, and had a very successful launch a few weeks ago. “Titanfall” delivers an unparalleled multiplayer gaming experience, powered using Azure.

Let’s see a video of it in action, and hear what the developers who built it have to say.

[Titanfall and the Power of the Cloud [xbox YouTube channel, April 3, 2014]]

‘Developers from Respawn Studios and Xbox discuss how cloud computing helps take Titanfall to the next level.

One of the key bets the developers of “Titanfall” made was for all game sessions on the cloud. In fact, you can’t play the game without the cloud, and that bet really paid off.

As you heard in the video, it enables much, much richer gaming experiences. Much richer AI experiences. And the ability to tune and adapt the game as more users use it.

To give you a taste of the scale, “Titanfall” had more than 100,000 virtual machines deployed and running on Azure on launch day. Which is sort of an unparalleled size in terms of a game launch experience, and the reviews of the game have been absolutely phenomenal.

Another amazing experience that recently launched and was powered using Azure was the Sochi Olympics delivered by NBC Sports.

NBC used Azure to stream all of the games both live and on demand to both Web and mobile devices. This was the first large-scale live event that was delivered entirely in the cloud with all of the streaming and encoding happening using Azure.

Traditionally, with live encoding, you typically run in an on-premises environment because it’s so latency dependent. With the Sochi Olympics, Azure enabled NBC to not only live encode in the cloud, but also do it across multiple Azure regions to deliver high-availability redundancy.

More than 100 million people watched the online experience, and more than 2.1 million viewers alone watched it concurrently during the U.S. versus Canada men’s hockey match, a new world record for online HD streaming.

RICK CORDELLA [Senior Vice President and General Manager of NBC Sports Digital]: The company bets about $1 billion on the Olympics each time it goes off. And we have 17 days to recoup that investment. Needless to say, there is no safety net when it comes to putting this content out there for America to enjoy. We need to make sure that content is out there, that it’s quality, that our advertisers and advertisements are being delivered to it. There really is no going back if something goes wrong.

The decision for that was taken more than a year ago: Windows Azure Teams Up With NBC Sports Group [Microsoft Azure YouTube channel, April 9, 2013]

Rick Cordella, senior vice president and general manager of digital media at NBC Sports Group discusses how they use Windows Azure across their digital platforms


3. The new Azure Management Portal (preview)

But in fact a new way of providing a comprehensive set of fully-integrated backend services had significantly bigger impact on the audience of developers. According to Microsoft announces new cloud experience and tools to deliver the cloud without complexity [The Official Microsoft Blog, April 3, 2014]

The following post is from Scott Guthrie, Executive Vice President, Cloud and Enterprise Group, Microsoft.

On Thursday at Build in San Francisco, we took an important step by unveiling a first-of-its kind cloud environment within Microsoft Azure that provides a fully integrated cloud experience – bringing together cross-platform technologies, services and tools that enable developers and businesses to innovate with enterprise-grade scalability at startup speed. Announced today, our new Microsoft Azure Preview [Management]Portal is an important step forward in delivering our promise of the cloud without complexity.

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When cloud computing was born, it was hailed as the solution that developers and business had been waiting for – the promise of a quick and easy way to get more from your business-critical apps without the hassle and cost of infrastructure. But as the industry transitions toward mobile-first, cloud-first business models and scenarios, the promise of “quick and easy” is now at stake. There’s no question that developing for a world that is both mobile-first and cloud-first is complicated. Developers are managing thousands of virtual machines, cobbling together management and automation solutions, and working in unfamiliar environments just to make their apps work in the cloud – driving down productivity as a result.

Many cloud vendors tout the ease and cost savings of the cloud, but they leave customers without the tools or capabilities to navigate the complex realities of cloud computing. That’s why today we are continuing down a path of rapid innovation. In addition to our groundbreaking new Microsoft Azure Preview [Management] Portal, we announced several enhancements our customers need to fully tap into the power of the cloud. These include:

  • Dozens of enhancements to our Azure services across Web, mobile, data and our infrastructure services
  • Further commitment to building the most open and flexible cloud with Azure support for automation software from Puppet Labs and Chef.
  • We’ve removed the throttle off our Application Insights preview, making it easier for all developers to build, manage and iterate on their apps in the cloud with seamless integration into the IDE

<For details see the separate section 4. New Azure features: IaaS, web, mobile and data announcements>

Here is a brief presentation by a Brazilian specialist: Microsoft Azure [Management] Portal First Touch [Bruno Vieira YouTube channel, April 3, 2014]

From Microsoft evolves the cloud experience for customers [press release, April 3, 2014]

… Thursday at Build 2014, Microsoft Corp. announced a first-of-its-kind cloud experience that brings together cross-platform technologies, services and tools, enabling developers and businesses to innovate at startup speed via a new Microsoft Azure Preview [Management] Portal.

In addition, the company announced several new milestones in Visual Studio Online and .NET that give developers access to the most complete platform and tools for building in the cloud. Thursday’s announcements are part of Microsoft’s broader vision to erase the boundaries of cloud development and operational management for customers.

“Developing for a mobile-first, cloud-first world is complicated, and Microsoft is working to simplify this world without sacrificing speed, choice, cost or quality,” said Scott Guthrie, executive vice president at Microsoft. “Imagine a world where infrastructure and platform services blend together in one seamless experience, so developers and IT professionals no longer have to work in disparate environments in the cloud. Microsoft has been rapidly innovating to solve this problem, and we have taken a big step toward that vision today.”

One simplified cloud experience

The new Microsoft Azure Preview [Management] Portal provides a fully integrated experience that will enable customers to develop and manage an application in one place, using the platform and tools of their choice. The new portal combines all the components of a cloud application into a single development and management experience. New components include the following:

  • Simplified Resource Management. Rather than managing standalone resources such as Microsoft Azure Web Sites, Visual Studio Projects or databases, customers can now create, manage and analyze their entire application as a single resource group in a unified, customized experience, greatly reducing complexity while enabling scale. Today, the new Azure Manager is also being released through the latest Azure SDK for customers to automate their deployment and management from any client or device.

  • Integrated billing. A new integrated billing experience enables developers and IT pros to take control of their costs and optimize their resources for maximum business advantage.

  • Gallery. A rich gallery of application and services from Microsoft and the open source community, this integrated marketplace of free and paid services enables customers to leverage the ecosystem to be more agile and productive.

  • Visual Studio Online. Microsoft announced key enhancements through the Microsoft Azure Preview [Management] Portal, available Thursday. This includes Team Projects supporting greater agility for application lifecycle management and the lightweight editor code-named “Monaco” for modifying and committing Web project code changes without leaving Azure. Also included is Application Insights, an analytics solution that collects telemetry data such as availability, performance and usage information to track an application’s health. Visual Studio integration enables developers to surface this data from new applications with a single click.

Building an open cloud ecosystem

Showcasing Microsoft’s commitment to choice and flexibility, the company announced new open source partnerships with Chef and Puppet Labs to run configuration management technologies in Azure Virtual Machines. Using these community-driven technologies, customers will now be able to more easily deploy and configure in the cloud. In addition, today Microsoft announced the release of Java Applications to Microsoft Azure Web Sites, giving Microsoft even broader support for Web applications.

From BUILD Day 2: Keynote Summary [by Steve Fox – DPE (MSFT) on MSDN Blogs, April 3, 2014]

….
Bill Staples then came on stage to show off the new Azure [management] portal design and features. Bill walked through a number of the new innovations in the portal, such as improved UX, app insights, “blade” views [the “blade” term is used for the dropdown that allows a drilldown], etc. A screen shot of the new portal is shown below.

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Bill also walked through the comprehensive analytics (such as compute and billing) that are now available on the portal. He also walked through “Application Insights,” which is a great way to instrument your code in both the portal and in your code with easy-to-use, pre-defined code snippets. He completed his demo walkthrough by showing the Azure [management] portal as a “NOC” [Network Operations Center] view on a big-screen TV.

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The above image is at the [1:44:24] point in time of the keynote video record on Channel 9 and it is giving more information if we provide here the part of transcript around it:

BILL STAPLES at [1:43:39]: Now, to conclude the operations part of this demo, I wanted to show you an experience for how the new Azure Portal works on a different device. You’ve seen it on the desktop, but it works equally well on a tablet device, that is really touch friendly. Check it out on your Surface or your iPad, it works great on both devices.

But we’re thinking as well if you’ve got a big-screen TV or a projector lying around your team room, you might want to think about putting the Microsoft Azure portal as your own personal NOC.

In this case, I’ve asked the Office developer team if we could have access to their live site log. So they made me promise, do not hit the stop button or the delete button, which I promised to do.

[1:44:24] This is actually the Office developer log site. And you can see it’s got almost 10 million hits already today running on Azure Websites. So very high traffic.

They’ve customized it to show off the browser usage on their website. Imagine we’re in a team Scrum with the Office developer guys and we check out, you know, how is the website doing? We’ve got some interesting trends here.

In fact, there was a spike of sessions it looks like going on about a week ago. And page views, that’s kind of a small part. It would be nice to know which page it was that spiked a week ago. Let’s go ahead and customize that.

This screen is kind of special because it has touch screen. So I can go ahead and let’s make that automatically expand there. Now we see a bigger view. Wow, that was a really big spike last week. What page was that? We can click into it. We get the full navigation experience, same on the desktop, as well as, oh, look at that. There’s a really popular blog post that happened about a week ago. What was that? Something about announcing Office on the iPad you love. Makes sense, huh? So we can see the Azure Portal in action here as the Office developer team might imagine it. [1:45:44]

The last thing I want to show is the Azure Gallery.

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We populated the gallery with all of the first-party Microsoft Azure services, as well as the [services from] great partners that we’ve worked with so far in creating this gallery.

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And what you’re seeing right here is just the beginning. We’ve got the core set of DevOps experiences built out, as well as websites, SQL, and MySQL support. But over the coming months, we’ll be integrating all of the developer and IT services in Microsoft as well as the partner services into this experience.

Let me just conclude by reminding us what we’ve seen. We’ve seen a first-of-its-kind experience from Microsoft that fuses our world-class developer services together with Azure to provide an amazing dev-ops experience where you can enjoy the entire lifecycle from development, deployment, operations, gathering analytics, and iterating right here in one experience.

We’ve seen an application-centric experience that brings together all the dev platform and infrastructure services you know and love into one common shell. And we’ve seen a new application model that you can describe declaratively. And through the command line or programmatically, build out services in the cloud with tremendous ease. [1:47:12]

More information on the new Azure [Management] Portal:

Today, at Build, we unveiled a new Azure [Management] Portal experience we are building.  I want to give you some insights into the work that VS Online team is doing to help with it.  I’m not on the Azure team and am no expert on how they’d like to describe to the world, so please take any comments I make here about the new Azure portal as my perspective on it and not necessarily an official one.

Bill Staples first presented to me almost a year ago an idea of creating a new portal experience for Azure designed to be an optimal experience for DevOps.  It would provide everything a DevOps team needs to do modern cloud based development.  Capabilities to provision dev and test resources, development and collaboration capabilities, build, release and deployment capabilities, application telemetry and management capabilities and more.  Pretty quickly it became clear to me that if we could do it, it would be awesome.  An incredibly productive and easy way for devs to do soup to nuts app development.

What we demoed today (and made available via http://portal.azure.com”) is the first incarnation of that.  My team (the VS Online Team) has worked very hard over the past many months with the Azure team to build the beginnings of the experience we hope to bring to you.  It’s very early and it’s nowhere near done but it’s definitely something we’d love to start getting some feedback on.

For now, it’s limited to Azure websites, SQL databases and a subset of the VS Online capabilities.  If you are a VS Online/TFS user, think of this as a companion to Visual Studio, Visual Studio Online and all of the tools you are used to.  When you create a team project in the Azure portal, it’s a VS Online Team Project like any other and is accessible from the Azure portal, the VS Online web UI, Visual Studio, Eclipse and all the other ways your Visual Studio Online assets are available.  For now, though, there are a few limitations – which we are working hard to address.  We are in the middle of adding Azure Active Directory support to Visual Studio Online and, for a variety of reasons, chose to limit the new portal to only work with VS Online accounts linked to Azure Active Directory.

The best way to ensure this is just to create a new Team Project and a new VS Online account from within the new Azure portal.  You will need to be logged in to the Azure portal with an identity known to your Azure Active Directory tenant and to add new users, rather than add them directly in Visual Studio Online, you will add them through Azure Active directory.  One of the ramifications of this, for now, is that you can’t use an existing VS Online account in the new portal – you must create a new one.  Clearly that’s a big limitation and one we are working hard to remove.  We will enable you to link existing VS Online accounts to Active Directory we just don’t have it yet – stay tuned.

I’ll do a very simple tour.  You can also watch Brian Keller’s Channel9 video.

Brian Keller talks with Jonah Sterling and Vishal Joshi about the new Microsoft Azure portal preview. This Preview portal is a big step forward in the journey toward integrated DevOps tools, technologies, and cloud services. See how you can deliver and scale business-ready apps for every platform more easily and rapidly—using what you already know and whatever toolset you like most

Further information:


4. New Azure features: IaaS, web, mobile and data announcements

According to Scott Guthrie, Executive Vice President, Microsoft Cloud and Enterprise group:

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[IaaS] First up, let’s look at some of the improvements we’re making with our infrastructure features and some of the great things we’re enabling with virtual machines.

Azure enables you to run both Windows and Linux virtual machines in the cloud. You can run them as stand-alone servers, or join them together to a virtual network, including one that you can optionally bridge to an on-premises networking environment.

This week, we’re making it even easier for developers to create and manage virtual machines in Visual Studio without having to leave the VS IDE: You can now create, destroy, manage and debug any number of VMs in the cloud. (Applause.)

Prior to today, it was possible to create reusable VM image templates, but you had to write scripts and manually attach things like storage drives to them. Today, we’re releasing support that makes it super-easy to capture images that can contain any number of storage drives. Once you have this image, you can then very easily take it and create any number of VM instances from it, really fast, and really easy. (Applause.)

Starting today, you can also now easily configure VM images using popular frameworks like Puppet, Chef, and our own PowerShell and VSD tools. These tools enable you to avoid having to create and manage lots of separate VM images. Instead, you can define common settings and functionality using modules that can cut across every type of VM you use.

You can also create modules that define role-specific behavior, and all these modules can be checked into source control and they can also then be deployed to a Puppet Master or Chef server.

And one of the things we’re doing this week is making it incredibly easy within Azure to basically spin up a server farm and be able to automatically deploy, provision and manage all of these machines using these popular tools.

We’re also excited to announce the general availability of our auto-scale service, as well as a bunch of great virtual networking capabilities including point-to-site VPN support going GA, new dynamic routing, subnet migration, as well as static internal IP address. And we think the combination of this really gives you a very flexible environment, as you saw, a very open environment, and lets you run pretty much any Windows or Linux workload in the cloud.

So we think infrastructure as a service is super-flexible, and it really kind of enables you to manage your environments however you want.


We also, though, provide prebuilt services and runtime environments that you can use to assemble your applications as well, and we call these platform as a service [PaaS] capabilities.

One of the benefits of these prebuilt services is that they enable you to focus on your application and not have to worry about the infrastructure underneath it.

We handle patching, load balancing, high availability and auto scale for you. And this enables you to work faster and do more.

What I want to do is just spend a little bit of time talking through some of these platform as a service capabilities, so we’re going to start talking about our Web functionality here today.

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[Web] One of the most popular PaaS services that we now have on Windows Azure is something we call the Azure Website Service. This enables you to very easily deploy Web applications written in a variety of different languages and host them in the cloud. We support .NET, NOJS, PHP, Python, and we’re excited this week to also announce that we’re adding Java language support as well.

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This enables you as a developer to basically push any type of application into Azure into our runtime environment, and basically host it to any number of users in the cloud.

Couple of the great features we have with Azure include auto-scale capability. What this means is you can start off running your application, for example, in a single VM. As more load increases to it, we can then automatically scale up multiple VMs for you without you having to write any script or take any action yourself. And if you get a lot of load, we can scale up even more.

You can basically configure how many VMs you maximally want to use, as well as what the burn-down rate is. And as your traffic — and this is great because it enables you to not only handle large traffic spikes and make sure that your apps are always responsive, but the nice thing about auto scale is that when the traffic drops off, or maybe during the night when it’s a little bit less, we can automatically scale down the number of machines that you need, which means that you end up saving money and not having to pay as much.

One of the really cool features that we’ve recently introduced with websites is something we call our staging support. This solves kind of a pretty common problem with any Web app today, which is there’s always someone hitting it. And how do you stage the deployments of new code that you roll out so that you don’t ever have a site in an intermediate state and that you can actually deploy with confidence at any point in the day?

And what staging support enables inside of Azure is for you to create a new staging version of your Web app with a private URL that you can access and use to test. And this allows you to basically deploy your application to the staging environment, get it ready, test it out before you finally send users to it, and then basically you can push one button or send a single command called swap where we’ll basically rotate the incoming traffic from the old production site to the new staged version.

What’s nice is we still keep your old version around. So if you discover once you go live you still have a bug that you missed, you can always swap back to the previous state. Again, this allows you to deploy with a lot of confidence and make sure that your users are always seeing a consistent experience when they hit your app.

Another cool feature that we’ve recently introduced is a feature we call Web Jobs. And this enables you to run background tasks that are non-HTTP responsive that you can actually run in the background. So if it takes a while to run it, this is a great way you can offload that work so that you’re not stalling your actual request response thread pool.

Basically, you know, common scenario we see for a lot of people is if they want to process something in the background, when someone submits something, for example, to the website, they can go ahead and simply drop an item into a queue or into the storage account, respond back down to the user, and then with one of these Web jobs, you can very easily run background code that can pull that queue message and actually process it in an offline way.

And what’s nice about Web jobs is you can run them now in the same virtual machines that host your websites. What that means is you don’t have to spin up your own separate set of virtual machines, and again, enables you to save money and provides a really nice management experience for it.

The last cool feature that we’ve recently introduced is something we call traffic manager support. With Traffic Manager, you can take advantage of the fact that Azure runs around the world, and you can spin up multiple instances of your website in multiple different regions around the world with Azure.

What you can then do is use Traffic Manager so you can have a single DNS entry that you then map to the different instances around the world. And what Traffic Manager does is gives you a really nice way that you can actually automatically, for example, route all your North America users to one of the North American versions of your app, while people in Europe will go routed to the European version of your app. That gives you better performance, response and latency.

Traffic Manager is also smart enough so that if you ever have an issue with one of the instances of your app, it can automatically remove it from those rotations and send users to one of the other active apps within the system. So this gives you also a nice way you can fail over in the event of an outage.

And the great thing about Traffic Manager, now, is you can use it not just for virtual machines and cloud services, but we’ve also now enabled it to work fully with websites.

[From BUILD Day 2: Keynote Summary [by Steve Fox [MSFT] on MSDN Blogs, April 3, 2014]]
Scott then invited Mads Kristensen on stage to walk through a few of the features that Scott discussed at a higher level. Specifically, he walked through the new ASP.NET templates emphasizing the creation of the DB layer and then showing PowerShell integration to manage your web site. He then showed Angular integration with Azure Web sites, emphasizing easy and dynamic ways to update your site showing  deep browser and Visual Studio integration (Browser Link), showing updates that are made in the browser show up in the code in Visual Studio. Very cool!!
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He also showed how you can manage staging and production sites by using the “swap” functionality built into the Azure Web sites service. He also showed Web Jobs to show how you can also run background jobs and Traffic Manager functionality to ensure your customers have the best performing web site in their regions.

So as Mads showed, there are a lot of great features that we’re kind of unveiling this week. A lot of great announcements that go with it.

These include the general availability release of auto-scale support for websites, as well as the general availability release of our new Traffic Manager support for websites as well. As you saw there, we also have Web Job support, and one of the things that we didn’t get to demo which is also very cool is backup support so that automatically we can have both your content as well as your databases backed up when you run them in our Websites environment as well.

Lots of great improvements also coming in terms of from an offer perspective. One thing a lot of people have asked us for with Websites is the ability not only to use SSL, but to use SSL without having to pay for it. So one of the cool things that we’re adding with Websites and it goes live today is we’re including one IP address-based SSL certificate and five SNI-based SSL certificates at no additional cost to every Website instance. (Applause.)

Throughout the event here, you’re also going to hear a bunch of great sessions on some of the improvements we’re making to ASP.NET. In terms of from a Web framework perspective, we’ve got general availability release of ASP.NET MVC 5.1, Web API 2.1, Identity 2.0, as well as Web Pages 3.1 So a lot of great, new features to take advantage of.

As you saw Mads demo, a lot of great features inside Visual Studio including the ability every time you create an ASP.NET project now to automatically create an Azure Website as part of that flow. Remember, every Azure customer gets 10 free Azure Websites that you can use forever. So even if you’re not an MSDN customer, you can take advantage of that feature in order to set up a Web environment literally every time you create a new project. So pretty exciting stuff.

So that was one example of some of the PaaS capabilities that we have inside Azure.


[Mobile] I’m going to move now into the mobile space and talk about some of the great improvements that we’re making there as well.

One of the great things about Azure is the fact that it makes it really easy for you to build back ends for your mobile applications and devices. And one of the cool things you can do now is you can develop those back ends with both .NET as well as NOJS, and you can use Visual Studio or any other text editor on any other operating system to actually deploy those applications into Azure.

And once they’re deployed, we make it really easy for you to go ahead and connect them to any type of device out there in the world.

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Now, some of the great things you can do with this is take advantage of some of the features that we have, which provide very flexible data handling. So we have built-in support for Azure storage, as well as our SQL database, which is our PaaS database offering for relational databases, as well as take advantage of things like MongoDB and other popular NoSQL solutions.

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We support the ability not only to reply to messages that come to us, but also to push messages to devices as well. One of the cool features that Mobile Services can take advantage of — and it’s also available as a stand-alone feature — is something we call notification hubs. And this basically allows you to send a single message to a notification hub and then broadcast it to, in some cases, devices that might be registered to it.

We also support with Mobile Services a variety of flexible authentication options. So when we first launched mobile services, we added support for things like Facebook login, Google ID, Twitter ID, as well as Microsoft Accounts.

One of the things we’re excited to demo here today is Active Directory support as well. So this enables you to build new applications that you can target, for example, your employees or partners, to enable them to sign in using the same enterprise credentials that they use in an on-premises Active Directory environment.

What’s great is we’re using standard OAuth tokens as part of that. So once you authenticate, you can take that token, you can use it to also provide authorization access to your own custom back-end logic or data stores that you host inside Azure.

We’re also making it really easy so that you can also take that same token and you can use it to access Office 365 APIs and be able to integrate that user’s data as well as functionality inside your application as well.

The beauty about all of this is it works with any device. So whether it’s a Windows device or an iOS device or an Android device, you can go ahead and take advantage of this capability.

[From BUILD Day 2: Keynote Summary [by Steve Fox [MSFT] on MSDN Blogs, April 3, 2014]]
Yavor Georgiev then came on stage to walk through a Mobile Services demo. He showed off a new Mobile Services Visual Studio template, test pages with API docs, local and remote debugging capabilities, and a LOB app that enables Facilities departments to manage service requests—this showed off a lot of the core ASP.NET/MVC features along with a quick publish service to your Mobile Services service in Azure. Through this app, he showed how to use Active Directory to build the app—which prompts you to log into the app with your corp/AD credentials to use the app. He then showed how the app integrates with SharePoint/O365 such that the request leverages the SharePoint REST APIs to publish a doc to a Facilities doc repository. He also showed how you can re-use the core code through Xamarin to repurpose the code for iOS.
The app is shown here native in Visual Studio.

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This app view is the cross-platform build using Xamarin.

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Kudos to Yavor! This was an awesome demo that showcases how far Mobile Services has come in a short period of time—love the extensibility and the cross-platform capabilities. Very nice!

One of the things that kind of Yavor showed there is just sort of how easy it is now to build enterprise-grade mobile applications using Azure and Visual Studio.

And one of the key kind of lynchpins in terms of from a technology standpoint that really makes this possible is our Azure Active Directory Service. This basically provides an Active Directory in the cloud that you can use to authenticate any device. What makes it powerful is the fact that you can synchronize it with your existing on-premises Active Directory. And we support both synch options, including back to Windows Server 2003 instances, so it doesn’t even require a relatively new Windows Server, it works with anything you’ve got.

We also support a federate option as well if you want to use ADFS. Once you set that environment up, then all your users are available to be authenticated in the cloud and what’s great is we ship SDKs that work with all different types of devices, and enables you to integrate authentication into those applications. And so you don’t everyone have to have your back end hosted on Azure, you can take advantage of this capability to enable single sign-on with any enterprise credential.

And what’s great is once you get that token, that same token can then be used to program against Office 365 APIs as well as the other services across Microsoft. So this provides a really great opportunity not only for building enterprise line-of-business apps, but also for ISVs that want to be able to build SaaS solutions as well as mobile device apps that integrate and target enterprise customers as well.

[From BUILD Day 2: Keynote Summary [by Steve Fox [MSFT] on MSDN Blogs, April 3, 2014]]
Scott then invited Grant Peterson from DocuSign on stage to discuss how they are using Azure, who demoed AD integration with DocuSign’s iOS app. Nice!

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This is really huge for those of you building apps that are cross-platform but have big investments in AD and also provides you as developers a way to reach enterprise audiences.

So I think one of the things that’s pretty cool about that scenario is both the opportunity it offers every developer that wants to reach an enterprise audience. The great thing is all of those 300 million users that are in Azure Active Directory today and the millions of enterprises that have already federated with it are now available for you to build both mobile and Web applications against and be able to offer to them an enterprise-grade solution to all of your ISV-based applications.

That really kind of changes one of the biggest concerns that people end up having with enterprise apps with SaaS into a real asset where you can make it super-easy for them to go ahead and integrate and be able to do it from any device.

And one of the things you might have noticed there in the code that Grant showed was that it was actually all done on the client using Objective-C, and that’s because we have a new Azure Active Directory iOS SDK as well as an Android SDK in addition to our Windows SDK. And so you can use and integrate with Azure Active Directory from any device, any language, any tool.

Here’s a quick summary of some of the great mobile announcements that we’re making today. Yavor showed we now have .NET backend support, single sign-on with Active Directory.

One of the features we didn’t get a chance to show, but you can learn more about in the breakout talk is offline data sync. So we also now have built into Mobile Services the ability to sync and handle disconnected states with data. And then, obviously, the Visual Studio and remote debugging capabilities as well.

We’ve got not only the Azure SDKs for Azure Active Directory, but we also now have Office 365 API integration. We’re also really excited to announce the general availability or our Azure AD Premium release. This provides enterprises management capabilities that they can actually also use and integrate with your applications, and enables IT to also feel like they can trust the applications and the SaaS solutions that their users are using.

And then we have a bunch of great improvements with notification hubs including Kindle support as well as Visual Studio integration.

So a lot of great features. You can learn about all of them in the breakout talks this week.

So we’ve talked about Web, we’ve talked about mobile when we talk about PaaS.


[Data] I want to switch gears now and talk a little bit about data, which is pretty fundamental and integral to building any type of application.

image

And with Azure, we support a variety of rich ways to handle data ranging from unstructured, semistructured, to relational. One of the most popular services you heard me talk about at the beginning of the talk is our SQL database story. We’ve got over a million SQL databases now hosted on Azure. And it’s a really easy way for you to spin up a database, and better yet, it’s a way that we then manage for you. So we do handle things like high availability and patching.

You don’t have to worry about that. Instead, you can focus on your application and really be productive.

We’ve got a whole bunch of great SQL improvements that we’re excited to announce this week. I’m going to walk through a couple of them real quickly.

One of them is we’re increasing the database size that we support with SQL databases. Previously, we only supported up to 150 gigs. We’re excited to announce that we’re increasing that to support 500 gigabytes going forward. And we’re also delivering a new 99.95 percent SLA as part of that. So this now enables you to run even bigger applications and be able to do it with high confidence in the cloud. (Applause.)

Another cool feature we’re adding is something we call Self-Service Restore. I don’t know if you ever worked on a database application where you’ve written code like this, hit go, and then suddenly had a very bad feeling because you realized you omitted the where clause and you just deleted your entire table. (Laughter.)

And sometimes you can go and hopefully you have backups. This is usually the point when you discover when you don’t have backups.

And one of the things that we built in as part of the Self-Service Restore feature is automatic backups for you. And we actually let you literally roll back the clock, and you can choose what time of the day you want to roll it back to. We save up to I think 31 days of backups. And you can basically rehydrate a new database based on whatever time of the day you wanted to actually restore from. And then, hopefully, your life ends up being a lot better than it started out.

This is just a built-in feature. You don’t have to turn it on. It’s just sort of built in, something you can take advantage of. (Applause.)

Another great feature that we’re building in is something we call active geo-replication. What this lets you do now is you can actually go ahead and run SQL databases in multiple Azure regions around the world. And you can set it up to automatically replicate your databases for you.

And this is basically an asynchronous replication. You can basically have your primary in rewrite mode, and then you can actually have your secondary and you can have multiple secondaries in read-only mode. So you can still actually be accessing the data in read-only mode elsewhere.

In the event that you have a catastrophic issue in, say, one region, say a natural disaster hits, you can go ahead and you can initiate the failover automatically to one of your secondary regions. This basically allows you to continue moving on without having to worry about data loss and gives you kind of a really nice, high-availability solution that you can take advantage of.

One of the things that’s nice about Azure’s regions is we try to make sure we have multiple regions in each geography. So, for example, we have two regions that are at least 500 miles away in Europe, and in North America, and similarly with Australia, Japan and China. And what that means is that you know if you do need to fail over, your data is never leaving the geo-political area that it’s based in. And if you’re hosted in Europe, you don’t have to worry about your data ever leaving Europe, similarly for the other geo-political entities that are out there.

So this gives you a way now with high confidence that you can store your data and know that you can fail over at any point in time.

In addition to some of these improvements with SQL databases, we also have a host of great improvements coming with HDInsight, which is our big data analytics engine. This runs standard Hadoop instance and runs it as a managed service, so we do all the patching and management for you.

We’re excited to announce the GA of Hadoop 2.2 support. We also have now .NET 4.5 installed and APIs available so you can now write your MapReduce jobs using .NET 4.5.

We’re also adding audit and operation history support, a bunch of great improvements with Hive, and we’re now Yarn-enabling the cluster so you can actually run more software on it as well.

And we’re also excited to announce a bunch of improvements in the storage space, including the general availability of our read-access geo-redundant storage option.

So we’ve kind of done a whole bunch of kind of deep dives into a whole bunch of the Azure features.

More information:

It has been a really busy last 10 days for the Azure team. This blog post quickly recaps a few of the significant enhancements we’ve made.  These include:

  • [Web] Web Sites: SSL included, Traffic Manager, Java Support, Basic Tier
  • [IaaS] Virtual Machines: Support for Chef and Puppet extensions, Basic Pricing tier for Compute Instances
  • [IaaS] Virtual Network: General Availability of DynamicRouting VPN Gateways and Point-to-Site VPN
  • [Mobile] Mobile Services: Preview of Visual Studio support for .NET, Azure Active Directory integration and Offline support;
  • [Mobile] Notification Hubs: Support for Kindle Fire devices and Visual Studio Server Explorer integration
  • [IaaS] [Web] Autoscale: General Availability release
  • [Data] Storage: General Availability release of Read Access Geo Redundant Storage
  • [Mobile] Active Directory Premium: General Availability release
  • Scheduler service: General Availability release
  • Automation: Preview release of new Azure Automation service

All of these improvements are now available to use immediately (note that some features are still in preview).  Below are more details about them:

… With the April updates to Microsoft Azure, Azure Web Sites offers a new pricing tier called Basic.  The Basic pricing tier is designated for production sites, supporting smaller sites, as well as development and testing scenarios. … Which pricing tier is right for me? … The new pricing tier is a great benefit to many customers, offering some high-end features at a reasonable cost. We hope this new offering will enable a better deployment for all of you.

Microsoft is launching support for Java-based web sites on Azure Web Sites.  This capability is intended to satisfy many common Java scenarios combined with the manageability and easy scaling options from Azure Web Sites.

The addition of Java is available immediately on all tiers for no additional cost.  It offers new possibilities to host your pre-existing Java web applications.  New Java web site development on Azure is easy using the Java Azure SDK which provides integration with Azure services.

With the latest release of Azure Web Sites and the new Azure Portal Preview we are introducing a new concept: Web Hosting Plans. A Web Hosting Plan (WHP) allows you to group and scale sites independently within a subscription.

Microsoft Azure offers load balancing services for [IaaS] virtual machines (IaaS) and [Webcloud services (PaaS) hosted in the Microsoft Azure cloud. Load balancing allows your application to scale and provides resiliency to application failures among other benefits.

The load balancing services can be accessed by specifying input endpoints on your services either via the Microsoft Azure Portal or via the service model of your application. Once a hosted service with one or more input endpoints is deployed in Microsoft Azure, it automatically configures the load balancing services offered by Microsoft Azure platform. To get the benefit of resiliency / redundancy of your services, you need to have at least two virtual machines serving the same endpoint.

The web marches on, and so does Visual Studio and ASP.NET, with a renewed commitment to making a great IDE for web developers of all kinds. Join Scott & Scott for this dive into VS2013 Update 2 and beyond. We’ll see new features in ASP.NET, new ideas in front end web development, as well as a peek into ASP.NET’s future.

When creating a Azure Mobile Service, a Notification Hub is automatically created as well enabling large scale push notifications to devices across any mobile platform (Android, iOS, Windows Store apps, and Windows Phone). For a background on Notification Hubs, see this overview as well as these tutorials and guides, and Scott Guthrie’s blog Broadcast push notifications to millions of mobile devices using Windows Azure Notification Hubs.

Let’s look at how devices register for notification and how to send notifications to registered devices using the .NET backend.

New tiers improve customer experience and provide more business continuity options

To better serve your needs for more flexibility, Microsoft Azure SQL Database is adding new service tiers, Basic and Standard, to work alongside its Premium tier, which is currently in preview. Together these service tiers will help you more easily support the needs of database workloads and application patterns built on Microsoft Azure. … Previews for all three tiers are available today.

The Basic, Standard, and Premium tiers are designed to deliver more predictable performance for light-weight to heavy-weight transactional application demands. Additionally, the new tiers offer a spectrum of business continuity features, a [Data] stronger uptime SLA at 99.95%, and larger database sizes up to 500 GB for less cost. The new tiers will also help remove costly workarounds and offer an improved billing experience for you.

… [Data] Active Geo-Replication: …

… [Data] Self-service Restore: …

Stay tuned to the Azure blog for more details on SQL Database later this month!

Also, if you haven’t tried Azure SQL Database yet, it’s a great time to start and try the Premium tier! Learn more today!

Azure HDInsight now supports [Data] Hadoop 2.2 with HDInsight cluster version 3.0 and takes full advantage of these platform to provide a range of significant benefits to customers. These include, most notably:

  • Microsoft Avro Library: …
  • [Data] YARN: A new, general-purpose, distributed, application management framework that has replaced the classic Apache Hadoop MapReduce framework for processing data in Hadoop clusters. It effectively serves as the Hadoop operating system, and takes Hadoop from a single-use data platform for batch processing to a multi-use platform that enables batch, interactive, online and stream processing. This new management framework improves scalability and cluster utilization according to criteria such as capacity guarantees, fairness, and service-level agreements.

  • High Availability: …

  • [Data] Hive performance: Order of magnitude improvements to Hive query response times (up to 40x) and to data compression (up to 80%) using the Optimized Row Columnar (ORC) format.

  • Pig, Sqoop, Qozie, Ambari: …

Microsoft is transitioning to a world with more usage and more software driven value add (rather than the old device driven world) in mobility and the cloud, the latter also helping to grow the server business well above its peers

Quartely Highlights (from Earnings Call Slides):

Cloud momentum helps drive Q3 results

  • Outstanding momentum and results in our cloud services; total Commercial Cloud revenue more than doubled again this quarter
  • Office 365 Home currently has 4.4 million subscribers, adding nearly one million new users this quarter
  • Windows remained the platform of choice for business users, with double-digit increases in both Windows OEM Pro and Windows Volume Licensing revenue
  • With focus on spend prioritization, we grew our operating expenses only 2%, contributing to solid earnings growth

Microsoft CEO offer bright future [‘Saxo TV – TradingFloor.com’ YouTube channel, April 25, 2014]

Willing to change, that was the message new Microsoft CEO Satya Nadella was pushing as the firm released third quarter earnings.

Microsoft beat Wall Street analysts’ expectations, driving the company’s stock price up 3 percent on Thursday after earnings were released. Growth came from the company’s surface tablet sales and commercial business sector, according to Norman Young, Senior Equity Analyst at Morningstar. Results were also aided by a less severe decline in the PC industry.

Young believes the company has already demonstrated continued growth for the fourth quarter and remains optimistic about the company’s new direction.

Nadella is shifting the traditionally PC focused company towards more mobile and cloud based technology. On the quarterly call with Wall Street he said, “What you can expect of Microsoft is courage in the face of reality; we will approach our future with a challenger mindset; we will be bold in our innovation.” Analysts are excited about the company’s future trajectory as he continues to push Microsoft’s business into the mobile and cloud computing world.

The company’s stock has increased 8 percent since Nadella assumed the role of CEO in February.

From Earnings Release FY14 Q3 [April 24, 2014]

“This quarter’s results demonstrate the strength of our business, as well as the opportunities we see in a mobile-first, cloud-first world. We are making good progress in our consumer services like Bing and Office 365 Home, and our commercial customers continue to embrace our cloud solutions. Both position us well for long-term growth,” said Satya Nadella, chief executive officer at Microsoft. “We are focused on executing rapidly and delivering bold, innovative products that people love to use.”

Devices and Consumer revenue grew 12% to $8.30 billion.

  • Windows OEM revenue grew 4%, driven by strong 19% growth in Windows OEM Pro revenue.
  • Office 365 Home now has 4.4 million subscribers, adding nearly 1 million subscribers in just three months.
  • Microsoft sold in 2.0 million Xbox console units, including 1.2 million Xbox One consoles.
  • Surface revenue grew over 50% to approximately $500 million.
  • Bing U.S. search share grew to 18.6% and search advertising revenue grew 38%.

Commercial revenue grew 7% to $12.23 billion.

  • Office 365 revenue grew over 100%, and commercial seats nearly doubled, demonstrating strong enterprise momentum for Microsoft’s cloud productivity solutions.
  • Azure revenue grew over 150%, and the company has announced more than 40 new features that make the Azure platform more attractive to cloud application developers.
  • Windows volume licensing revenue grew 11%, as business customers continue to make Windows their platform of choice.
  • Lync, SharePoint, and Exchange, our productivity server offerings, collectively grew double-digits.

From Microsoft’s CEO Discusses F3Q 2014 Results – Earnings Call Transcript [Seeking Alpha, April 25, 2014]

From the prepared comments: “This quarter we continued our rapid cadence of innovation and announced a range of new services and features in three key areas – data, cloud, and mobility. SQL Server 2014 helps improve overall performance, and with Power BI, provides an end-to-end solution from data to analytics. Microsoft Azure preview portal provides a fully integrated cloud experience. The Enterprise Mobility Suite provides IT with a comprehensive cloud solution to support bring-your-own-device scenarios. These offerings help businesses convert big data into ambient intelligence, developers more efficiently build and run cloud solutions, and IT manage enterprise mobility with ease.”

Satya Nadella – Chief Executive Officer:

As I have told our employees, our industry does not respect tradition, it only respects innovation. This applies to us and everyone else. When I think about our industry over the next 5, 10 years, I see a world where computing is more ubiquitous and all experiences are powered by ambient intelligence. Silicon, hardware systems and software will co-evolve together and give birth to a variety of new form factors. Nearly everything we do will become more digitized, our interactions with other people, with machines and between machines. The ability to reason over and draw insights from everything that’s been digitized will improve the fidelity of our daily experiences and interactions. This is the mobile-first and cloud-first world. It’s a rich canvas for innovation and a great growth opportunity for Microsoft across all our customer segments.

To thrive we will continue to zero in on the things customers really value and Microsoft can uniquely deliver. We want to build products that people love to use. And as a result, you will see us increasingly focus on usage as the leading indicator of long-term success.

  • advancing Office, Windows and our data platform
  • continue to invest in our cloud capabilities including Office 365 and Azure in the fast growing SaaS and cloud platform markets
  • ensuring that our cloud services are available across all device platforms that people use
  • delivering a cloud for everyone on every device
  • have bold plans to move Windows forward:
    – investing and innovating in every dimension from form-factor to software experiences to price
    – Windows platform is unique in how it brings together consistent end user experiences across small to large screens, broadest platform opportunity for developers and control and assurance for IT
    – enhance our device capabilities with the addition of Nokia’s talented people and their depth in mobile technologies
  • our vision is about being going boldly into this mobile-first, cloud-first world

So this mobile-first cloud-first thing is a pretty deep thing for us. When we say mobile-first, in fact what we mean by that is mobility first. We think about users and their experiences spanning a variety of devices. So it’s not about any one form factor that may have some share position today, but as we look to the future, what are the set of experiences across devices, some ours and some not ours that we can power through experiences that we can create uniquely. …

… When you think about mobility first, that means you need to have really deep understanding of all the mobile scenarios for everything from how communications happen, how meetings occur. And those require us to build new capability. We will do some of this organically, some of it inorganically.

A good example of this is what we have done with Nokia. So we will – obviously we are looking forward to that team joining us building on the capability and then execution, even in the last three weeks or so we have announced a bunch of things where we talked about this one cloud for everyone and every device. We talked about how our data platform is going to enable this data culture, which is in fact fundamentally changing how Microsoft itself works.

We always talked about what it means to think about Windows, especially with the launch of this universal Windows application model. How different it is now to think about Windows as one family, which was not true before, but now we have a very different way to think about it.

[Re: Microsoft transition to more of a subscription business]

The way I look at it … we are well on our way to making that transition, in terms of moving from pure licenses to long-term contracts and as well as subscription business model. So when you talked about Platform-as-a-Service if you look at our commercial cloud it’s made up of the platform itself which is Azure. We also have a SaaS business in Office 365.

Now, one of the things that we want to make sure we look at is each of the constituent parts because the margin profile on each one of these things is going to different. The infrastructure elements right now in particular is going to have different economics versus some of the per-user applications in a SaaS mode have. It’s the blending of all of that that matters and the growth of that matters to us the most in this time where I think there is just a couple of us really playing in this market. I mean this is gold rush time in some sense of being able to capitalize on the opportunity.

And when it comes to that we have some of the best, the broadest SaaS solution and the broadest platform solution and that combination of those assets doesn’t come often. So what we are very focused on is how do we make sure we get our customer aggressively into this, having them use our service, be successful with it. And then there will be a blended set of margins across even just our cloud. And what matters to me in the long run is the magnitude of profit we generate given a lot of categories are going to be merged as this transition happens. And we have to be able to actively participate in it and drive profit growth.

From the prepared comments: “Office Commercial revenue was up 6%, driven by Office 365 as customers transitioned to our cloud productivity services. Office 365 revenue grew over 100%, and seats nearly doubled as well. Our productivity server offerings continue to perform well, with Lync, SharePoint, and Exchange, collectively growing double-digits.

… to me the Office 365 growth is in fact driving our enterprise infrastructure growth which is driving Azure growth and that cycle to me is most exciting. So that’s one of the reasons why I want to have to keep indexing on the usage of all of this and the growth numbers you see is a reflection of that.

[Background from him in the call:] Office 365 I am really, really excited about what’s happening there, which is to me this is the core engine that’s driving a lot of our cloud adoption and you see it in the numbers and Amy will talk more about the numbers. But one of the fundamental things its also doing is it’s actually a SaaS application and it’s also an architecture for enterprises. And one of the most salient things we announced when we talked about the cloud for everyone and every device and we talked about Office 365 having now iPad apps, we also launched something called the enterprise mobility suite which is perhaps one of the most strategic things during that day that we announced which was that we now have a consistent and deep platform for identity management which by the way gets bootstrapped every time Office 365 users sign up, device management and data protection, which is really what every enterprise customer needs in a mobile-first world, in a world where you have SaaS application adoption and you have BYOD or bring your own devices happening.

[Re #1: about the new world in terms of more usage and more software driven rather than device driven, and the reengagement with the developer community in that world]

Developers are very, very important to us. If you’re in the platform business which we’re on both on the device side as well as on the cloud side, developers and their ability to create new value props and new applications on them is sort of likes itself. I would say couple of things.

on the cloud side, in fact one of the most strategic APIs is the Office API. If you think about building an application for iOS, if you want single sign-on for any enterprise application, it’s the Azure AD single sign-on. That’s one of the things that we showed at Build, which is how to take advantage of list data in Sharepoint, contact information in Exchange, Azure active directory information for log-on. And those are the APIs that are very, very powerful APIs and unique to us. And they expand the opportunity for developers to reach into the enterprises. And then of course Azure is a full platform, which is very attractive to developers. So that gives you a flavor for how important developers are and what your opportunities are.

From the prepared comments: “Devices and Consumer Other revenue grew 18% to $1.95 billion, driven by search advertising and our Office 365 Home service. Search revenue grew 38%, offset by display [advertising] revenue which declined 24% this quarter. Gross margin grew 26% to $541 million. The combined revenue from Office 365 Home and Office Consumer, reported in the Devices & Consumer Licensing segment, grew 28%. … Office Consumer revenue increased 15% due to higher attach and strong sales in Japan, where we saw customers accelerate some purchases ahead of a national sales tax increase. Excluding that estimated impact, Office still outpaced the underlying consumer PC market.”

[Re: how you could potentially make what has been traditionally a unit model with Windows OEM revenue into something potentially more recurring in nature?]

… the thing I would add is this transition from one time let’s say licenses or device purchases to what is a recurring stream. You see that in a variety of different ways. You have back end subscriptions, in our case, there will be Office 365, there is advertising, there is the app store itself. So these are all things that attach to a device. And so we are definitely going to look to make sure that the value prop that we put together is going to be holistic in its nature and the monetization itself will be holistic and it will increase with the usage of the device across these services. And so that’s the approach we will take.

From the prepared comments: “Zero dollar licensing for sub 9-inch devices helps grow share and creates new opportunities to deliver our services, with minimal short term revenue impact

[Re: the recent decision to offer Windows for free for sub 9-inch devices and its impact of Microsoft share in that arena, about Windows pricing in general, the kind of play in different market segmentations, and how Windows pricing is evolving]

Overall, the way I want us to look at Windows going forward is what does it mean to have the broadest device family and ecosystem? Because at the end of the day it’s about the users and developer opportunity we create for the entirety of the family. That’s going to define the health of the ecosystem. So, to me, it matters that we approach the various segments that we now participate with Windows, because that’s what has happened. Fundamentally, we participated in the PC market. Now we are in a market that’s much bigger than the PC market. We continue to have healthy share, healthy pricing and in fact growth as we mentioned in the enterprise adoption of Windows.

And that’s we plan to in fact add more value, more management, more security, especially as things are changing in those segments. Given BYOD and software security issues, we want to be able to reinforce that core value, but then when it comes to new opportunities from wearables to internet of things, we want to be able to participate on all of this with our Windows offering, with our tools around it. And we want to be able to price by category. And that’s effectively what we did. We looked at what it makes – made sense for us to do on tablets and phones below 9 inches and we felt that the price there needed to be changed. We have monetization vehicles on the back end for those. And that’s how we are going to approach each one of these opportunities, because in a world of ubiquitous computing, we want Windows to be ubiquitous. That doesn’t mean its one price, one business model for all of that. And it’s actually a market expansion opportunity and that’s the way we are going to go execute on it.

From the prepared comments: “Our universal app development platform is a big step towards enabling developers to engage users across PCs, tablets, and phones with a common set of APIs

[Re #2: about the new world in terms of more usage and more software driven rather than device driven, and the reengagement with the developer community in that world]

Developers are very, very important to us. If you’re in the platform business which we’re on both on the device side as well as on the cloud side, developers and their ability to create new value props and new applications on them is sort of likes itself. I would say couple of things.

One is the announcements we made at Build on the device side is really our breakthrough worked for us which is we’re the only device platform today that has this notion of building universal apps with fantastic tooling around them. So that means you can target multiple of our devices and have common code across all of them. And this notion of having a Windows universal application help developers leverage them core asset, which is their core asset across this expanded opportunity is huge. There was this one user experience change that Terry Myerson talked about at Build, which expands the ability for anyone who puts up application in Windows Store to be now discovered across even the billion plus PC installed base. And so that’s I think a fantastic opportunity to developers and we are doing everything to make that opportunity clear and recruit developers to do more with Windows. And in that context, we will also support cross platforms. So this has been one of the things that we have done is the relationship with Unity. We have tooling that allows you to have this core library that’s portable. You can bring your code asset. In fact, we are the only client platform that has the abstractions available for the different languages and so on.

From the prepared comments: “Server product revenue grew 10%, driven by demand for our data platform, infrastructure and management offerings, and Azure.

  • SQL Server revenue grew more than 15%, and continued to outpace the data platform market; we continue to gain share in mission critical workloads
  • Windows Server Premium and System Center revenue showed continued strength from increased virtualization share and demand for hybrid infrastructure

[Re: about the factors that have enabled Microsoft to continue growing server business well above its peers, and whether that kind of 10% ish growth is sustainable over fiscal 2015]

It’s a pretty exciting change that’s happening, obviously it’s that part of the business is performing very well for a while now, but quite frankly it’s fundamentally changing. One of the questions I often get asked is hey how did Windows server and the hypervisor underneath it becomes so good so soon. You’ve been at it for a long time but there seems to have something fundamentally changed I mean we’ve grown a lot of share recently, the product is more capable than it ever was, the rate of change is different and for one reason alone which is we use it to run Azure. So the fact that we use our servers to run our cloud makes our servers more competitive for other people to build their own cloud.

So it’s the same trend that’s accelerating us on both sides. The other thing that’s happening is when we sell our server products they for most part are just not isolated anymore. They come with automatic cloud tiering. SQL server is a great example. We just launched a new version of SQL which is by far the best release of SQL in terms of its features like it’s exploitation of in-memory. It’s the first product in the database world that has in-memory for all the three workloads of databases, OLTP, data warehousing and BI. But more importantly it automatically gives you high availability which means a lot to every CIO and every enterprise deployment by actually tiering to the cloud.

From the prepared comments: “Commercial Other revenue grew 31%, to $1.90 billion, driven by Commercial Cloud revenue which exceeded our guidance as customers transitioned to our cloud solutions faster than expected; Gross margin increased 80% as we realized margin expansion through engineering efficiencies and continued scale benefits; Enterprise services revenue grew 8%

So those kinds of feature innovation which is pretty boundary less for us is breakthrough work. It’s not something that somebody who has been a traditional competitor of ours can do if you’re not even a first class producer of a public cloud service. So I think that we’re in a very unique place. Our ability to deliver this hybrid value proposition and be in a position, where we not only run a cloud service at scale, but we also provide the infrastructure underneath it as the server products to others. That’s what’s driving the growth. The shape of that growth and so on will change over time, but I feel very, very bullish about our ability to continue this innovation.

64-bit ARM (ARMv8-A) outlook: full smartphone penetration by 2018, volume start in servers next year, plus strong presence in enterprise networking

Previous ‘Experiencing the Cloud’ posts on the subject:

From: ARM Holdings plc, Q1 2014 Roadshow Slides [April 22, 2014]

Licensing Drives Market Share

ARM gains share by winning designs at leading semiconductor companies:

image
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    • imageWith choice of suppliers, OEMs are innovating with new types of products
      • ARM technology can be used for applications processing, connectivity and storage
      • Standard software is available today and enables all form factors to connect to the internet and display all the web pages, play videos, network with friends …

Mobile computers include handheld computers, tablets, and laptops

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Assumptions in Smartphones
– 100% penetration of Cortex-A processors
– 100% penetration of big.LITTLE in mid-range and premium
– 30% to 50% penetration of Mali graphics

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ARMv8-A Opportunity:

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The first quarter of 2014 saw particularly strong uptake of ARM’s most advanced ARMv8 processor technology with five licenses signed by four semiconductor companies. These customers are planning to develop chips for automotive infotainment systems, carrier networks and high performance computing. During the quarter we saw announcements from Marvell, Mediatek and Qualcomm on how they are developing multicore ARMv8 based processors for use in mid-range and premium smartphones and tablets. There were also announcements from Broadcom and Freescale, they plan to deploy ARMv8 based chips into data centers and enterprise networking equipment. ARMv8 is now the computing platform of choice for future chip designs not just in mobile computing but increasingly in consumer electronics, the data center and networking infrastructure.

We have had very strong licensing as you’ve seen in the numbers here and we have seen a number of exciting products announcements from some of our licensees. At Mobile World Congress recently we saw three key announcements from Qualcomm, from Marvell, from Mediatek talking about ARMv8 based chips for mid-range and high-end smartphones and tablets. Now those devices will take time to conclude, they will take time to get into products, take time to ship. But I think we’re in good track in generally in terms of the deployment of those version 8 of the architecture.

I think it’s worth pointing out that the v8 licensing cycle is in its relatively early stages. We have done sort of 30 licenses plus [out of the total 43 at the moment] compared with well over a 100 in v7.

ARM Progress in Servers:

image

I don’t have the exact numbers on the top of my head but certainly there were more architecture licenses earlier in the lifetime of v8 than there were in v7, that was driven more about the addressing different markets. So most of the early architecture licensees for v8 in fact all the architecture licensees for v8 have been looking at markets that hasn’t traditionally served with our own base products and when it gets to market very early as some of the early guys took an architecture license, companies like Cavium, companies like Applied Micro, who really wanted to target the enterprise space, the data center, high end networking which wasn’t where ARM had traditionally played and that was a vehicle to enable them to get into that market using ARM technology. So that’s been a great vehicle for us because it has allowed us to broaden the penetration of the ARM architecture into new markets and we see that as part of our strategy for long term growth.

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In terms of SBSA [ARM Server Base System Architecture covering operating systems from Linux to Microsoft] the main purpose of that work was to accelerate the deployment of SoCs into the data center. The great beauty of our model is that every customer of ours can design a chip that’s different from any other customer and when it comes to enterprise software though there is great benefit in having some of the system architecture that is actually not differentiating, standardized, so it’s easier for software developers to write code that’s going to run on these chips. So SBSA was all about standardizing the right points of the chip to accelerate software development and hence accelerate deployment of real systems. So it’s less so about SoC development as it was about software development. We have seen the uptake of SBSA in the SoC architecture by a number of our licensees. Those chips are coming to market now and with a more clearly defined target architecture for software developers the work to we should see more on deployments in ARM based service sooner. But that’s what that’s all about.

Re: Can you give us an update on the server market? Where are you in terms of the ecosystem? And roughly by when do you think we can see commercial shipments of ARM-based servers? Is that something we can see before the end of this year, or is that likely to be more a 2015 phenomenon?

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So let me just briefly talk about servers, I think progress there is good. We’re starting to see silicon devices, we’re seeing a lot of effort go into software development for ARM based servers. I mean recently as an example we just saw Oracle introduce Java SE, which brings Java to many ARM-based devices and that’s very important technology for servers but again SBSA as a vehicle for accelerating software development, it is also very important and I think we will start to see commercial deployments later this year. I have been saying that sometime I still think that’s on track to happen and we will start to see volume start to take off I think probably next year but I do expect to see commercial deployment this year.

Re: … enterprise networking … since that’s quite a wide market, which goes from low-end stuff, like network interface cards, all the way up to base stations, routers, et cetera., the growth that you’re seeing, where is it coming from? …

ARM in Enterprise Networking:

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On enterprise networking you mentioned there is a whole wide range of end markets that could be targeted and where are we seeing success. It really is across the range, I mean we have been in routers for a long time, more kind of commercial grade. We’re starting to see use of ARM is switches, in base stations, big base stations, small base stations. It really is across the board and in that enterprise space that is something that’s very positive for our blended average royalty rate and we’re seeing effects of that. I mean a lot of the bigger chips that I was saying are using multiple-cores. There are large numbers of Cortex-A15 is being used for example in some of the bigger chips today and that obviously has a positive impact on the royalty rate per chip on average but again given the volumes this is one of those things where every little helps and makes a small change.

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ARM for the Datacenter – Ian Drew [Open Compute Project YouTube channel, Jan 31, 2014]

OCP Summit V – January 29, 2014 – San Jose Convention Center, San Jose, California ARM for the Datacenter – Ian Drew, Chief Marketing Officer, ARM

ARMv8-A Licensee Fact Sheet [April 23, 2014]

ARMv8-A

  • Over 25 companies have licensed ARMv8-A technology
  • Over 40 licenses signed for ARMv8-A technology
  • Qualcomm, NVIDIA, Mediatek and Marvell have announced ARMv8-A chips for mobile devices
  • LG, Rockchip and Samsung have stated their intentions to release ARMv8-A chips for mobile
  • The first 64-bit mobile devices were based on ARM and shipped in 2013
  • ARMv8-A 64-bit kernel and tools are available today

ARMv8-A Public Licensees

  • Altera Altera’s FPGA with an embedded Cortex-A53 processor will be manufactured on Intel 14nm process.
  • AMD AMD’s Opteron A1100 server chips comes in two variants: 4x or 8x Cortex-A57 processors.
  • AMCC AMCC’s X-Gene server chip will feature in HP Moonshot systems this year.
  • Broadcom Broadcom will release a 3Ghz 16nm ARMv8-A chip optimized for Network Function Virtualisation.
  • Cavium Project Thunder SOCs will target the cloud and datacenter markets.
  • Huawei Lead partner on Cortex-A57
  • LG Lead partner on Cortex-A50 family and next-generation Mali GPUs. For LG devices.
  • Marvell Armada PXA 1928 contains a quad-core Cortex-A53 with integrated LTE modem. Sampling Mar 2014.
  • Mediatek MT6732 contains quad-core Cortex-A53 and Mali-T760.
  • Nvidia The 64-bit Tegra K1 contains a dual-core ARMv8-A processor. Mobile and automotive.
  • Rockchip Licensed Cortex-A57 and Cortex-A53 processors. Mobile internet and smart home markets.
  • Samsung Samsung has said its first 64-bit chip for mobile devices will be based on an ARM-designed processor.
  • STMicro The Sti8K range of SOCs for the Digital Home is based on Cortex-A53 and Cortex-A57 technology.
  • Qualcomm Snapdragon 410, 610 and 810 chips contain Cortex-A50 processors; the 810 uses big and little cores.

Accelerating ARMv8-A Powered Server Adoption Through Collaborative Platform Standardization (SBSA) [Jeff Underhill in Smart and Connected Blog of ARM, Jan 29, 2014]

When we saw the very first silicon based on the ARMv8-A architecture appear from ARM partner Applied Micro last year, I said the server world would never be the same again!

And why did I say that? I said it because as a partnership, we’re disrupting the data center market which is now in a period of unprecedented innovation. It may not be obvious but the ARM partnership has been disrupting the data center for years, as the architecture at the heart of the majority of mobile devices and many smart connected devices we’ve been indirectly impacting how hyper scale data centers are architected to address these new classes of cloud and web based workloads.

When the data center is fundamental to operating your business, as opposed to just providing supporting functions, cost savings become extremely important as they directly impact your bottom line. That’s why companies such as Facebook, Google, Twitter, Microsoft, Amazon and many more are laser-focused on reducing their Total Cost of Ownership (TCO). However, early adoption of new innovation must be balanced with deployment and management costs since the ‘T’ in TCO represents ‘Total.’ Standards are fundamental to ensure ease of deployment and cross-platform portability in the data center, and that’s why we’re excited to announce a new foundational specification that we’ve been collaborating on for a while – the Server Base System Architecture (SBSA) specification.

For those of you wanting to jump right in and read the specification you can download it here.

Competition is good; Choice fosters competition

A few years ago several ARM partners set about revisiting server design to better meet these new classes of workloads in a way that would provide the next step function efficiency improvements and, ultimately, TCO. The ARM partnership showed the world what was possible when you challenge convention and empower engineers with innovative, enterprise-grade technology building blocks whose DNA is strongly rooted in the power-efficient mobile world. Collectively we’ve already changed the industry as incumbent players have taken note and adjusted their roadmaps in favor of system-on-chip (SoC) designs.

While we’ve seen initial server success with 32-bit ARMv7 architecture-based solutions from Marvell & Texas Instruments, the arrival of 64-bit ARMv8-A architecture-based solutions marks a significant increase in the number and diversity of solutions. In addition to Applied Micro, AMD, Broadcom and Cavium have all made 64-bit announcements. Choice gives data center operators the opportunity to select best-of-breed solutions that enable them to meet their TCO goals. As a result, there is clear and growing demand for more workload-optimized solutions by a server market that was largely devoid of choice for the past 20+ years. However, as mentioned earlier data center operators are responsible for managing complex environments, and they must balance new technology adoption with any potential complexities (that a heterogeneous environment may bring).

Standards accelerate time-to-market and ease deployment

Imagine for a moment that you have a data center with thousands of existing servers. You may have a single OS running throughout your data center or you may have multiple OS’s, but either way you will likely have a single variant of each OS that deploys across all servers in your data center. Having to adopt a new and unique OS in order to roll out new and innovative hardware is not acceptable. It would quickly become unwieldy to manage and cause significant maintenance overhead (especially managing updates and patch sets to fix major bugs or security issues).

With multiple ARMv8-A architecture-based server solutions coming to market this year, it’s important to ensure that OS, firmware and software developers can rapidly develop and deploy on ARM-based servers, especially since there will be more choice and a broader diversity of solutions. The ARM partnership worked together to help ensure this would be the case when ARMv8-A architecture-based servers became a reality, and this is why the release of the ARM Server Base System Architecture (SBSA) specification is such an important milestone. The SBSA specification has been in development for some time (as evidenced by compliant silicon already existing), and represents close collaboration across the ARM partnership from software companies, OEMs and silicon partners, including: AMD, Applied Micro, Broadcom, Canonical, Cavium, Citrix, Dell, HP, Linaro, Microsoft, Red Hat, SUSE and Texas Instruments.

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A large part of the ARM value proposition stems from a licensing model that empowers partners with technology building blocks on which they can innovate and develop compelling solutions. This means standardization efforts must strike a balance to avoid diluting or eliminating innovation. As owners and stewards of the ARM architecture, we are pleased to collaborate with other industry leaders to drive standards that help strike that balance and enable OS, firmware and software developers to rapidly develop and deploy on ARM-based servers.

The SBSA is a foundational specification that will evolve over time; encompassing additional capabilities such as live migration of virtual machines between different ARMv8-A architecture-based systems. It is a hardware specification that firmware, OS and virtualization companies will use to target a logical progression of platforms to accelerate development and ensure cross-platform portability.

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SBSA standardizes low-level CPU and SoC attributes such as timers, interrupt controllers, watch dog timers, performance counters and also specifies minimum hardware requirements that firmware and OS vendors expect to be present. It stipulates adherence to industry standards for boot devices so that they can be managed in a consistent manner, and requires all hardware be describable or discoverable, to eliminate the need for explicit platform knowledge baked into the OS kernel. In order to provide a logical platform progression over time, the specification defines levels of standardization.  This provides a common language for the ecosystem to describe SoC and software capabilities, and ensure they intersect. In the example below, each level introduces additional requirements and is a superset of the previous level (unless explicitly documented). Silicon vendors are permitted to support capabilities beyond a given level as long as software created for that level is able to run unmodified. OS vendors are able to develop support for multiple levels in a single OS offering, thereby accelerating time-to-market and reducing maintenance by ensuring they can run across all ARMv8-A architecture-based server platforms:

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The ARM partnership has consistently demonstrated its ability to collaborate and address common challenges that benefit the ecosystem at large. Linaro, a not-for-profit engineering organization founded 3.5 years ago, is another great example of this.  More specifically, the Linaro Enterprise Group (LEG) is focused exclusively on the development, test and up streaming of server-specific open source software. Linaro, through close collaboration with the open source community, is helping to implement some of the key software components in support of the SBSA specification. Linaro is also identifying potential areas for additional standardization that will benefit the open source community and improve software development and long-term maintainability. It’s a symbiotic relationship that will help ensure good software support exists in the Linux upstream:

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ARM is excited to reach this important milestone, especially with the support of a vibrant and growing ecosystem, and we also realize there is still much work ahead to achieve the goals we’ve set for ourselves. This year represents an important inflection point for the ARM partnership as ARMv8-A architecture-based server solutions emerge and significantly extend our reach across a broader set of data center workloads representing a much broader market opportunity. The SBSA is the first of multiple specifications we expect to publicly release … so watch this space!

In the meantime, “you are now free to move around the ARM-based server ecosystem!”

ARM Ecosystem Collaborates to Deliver Initial Server Platform Standard [press release, Jan 29, 2014]

Accelerates data center software development for ARM-based servers

Cambridge, UK – 29 January 2014 – ARM® today announced the collaborative development and immediate availability of a platform standard for ARMv8-A based (64-bit) servers, known as the ARM ‘Server Base System Architecture’ (SBSA) specification. This effort included input and support from software companies such as Canonical, Citrix, Linaro, Microsoft, Red Hat and SUSE, and original equipment manufacturers (OEMs) including Dell and HP along with a broad set of silicon partners. This specification provides a framework for the deployment of innovative ARM architecture-based solutions in data center applications, and it will help accelerate software development and enable portability between ARM-based platforms. This specification is focused on aligning the ARM partnership around key system elements; empowering the ecosystem to build differentiated, value-added solutions that accelerate innovation and choice in the marketplace.

Data centers demand standards-based software and hardware offerings to ensure ease of deployment and manageability. Releasing the SBSA specification marks the beginning of a broader standardization activity that will simplify the development and deployment process for the entire developer ecosystem – from silicon to software, and all the way through to end-users. This initiative will accelerate the software ecosystem for ARM-based servers by providing operating system vendors (OSVs) and independent software vendors (ISVs) the ability to deliver technology that addresses the entirety of the ARM server community, featuring a rich, broad set of devices and platforms in a common way.

“As ARM’s data center ecosystem continues its rapid growth, this milestone enables partners to focus on their innovation while building on standards that help simplify their development and accelerate their time-to-market,” said Mike Muller, chief technology officer, ARM. “As owners and stewards of the ARM architecture, we are pleased to collaborate with other industry leaders to drive standards that enable OS, firmware and software developers to rapidly develop and deploy on ARM-based servers.”

“We are extremely pleased to see ARM take these steps, which we believe are very much in line with the principles of the Open Compute Project,” said Frank Frankovsky, president and chairman, Open Compute Project Foundation. “These standardization efforts will help speed adoption of ARM in the datacenter by providing consumers and software developers with the consistency and predictability they require, and by helping increase the pace of innovation in ARM technologies by eliminating gratuitous differentiation in areas like device enumeration and boot process.” Mobility and the Internet of Things (IoT) are driving the rapid adoption of cloud-based services, and data center operators have to adapt to the shifting characteristics of these new workloads. In order to efficiently meet these demands, the industry is seeking a richer choice of targeted solutions where software portability and standardization are key deployment considerations.

ARM Partner Quotes

AMD:
“Adopting industry standards and defining base platforms are essential for creating a healthy ARM-based 64-bit server ecosystem,” said Dr. Leendert van Doorn, corporate fellow and corporate vice president, AMD. “AMD is excited to have worked with ARM on the Server Base System Architecture requirements, and the public release of this specification will accelerate the adoption of ARM-based 64-bit servers.”

AppliedMicro:
“With X-Gene as the first product in the industry to be SBSA compliant, AppliedMicro is in full support of the ARM server standardization efforts,” said Dr. Paramesh Gopi, president and chief executive officer, AppliedMicro. “Bringing together OS vendors, server OEMs and silicon providers to work cohesively is providing a fully inter-operable standard platform at the same time fostering innovation resulting in compelling server solutions.”

Broadcom:
“Broadcom strongly believes in the value of standardization and ensuring software interoperability for the long-term success of the 64-bit ARM architecture,” said Ron Jankov, senior vice president and general manager, Processors and Wireless Infrastructure, Broadcom. “With the ARM 64-bit architecture, Broadcom is uniquely positioned to provide leadership in the 64-bit ARM ecosystem with server-class CPUs, best-in-class hardware acceleration, and data-center networking expertise.”

Canonical:
“ARM-based servers have the potential to transform the datacenter ecosystem back into a dynamic, innovative market,” said Christian Reis, vice president, Hyperscale Computing, Canonical. “We see the SBSA effort removing barriers to adoption by providing a framework for system implementation that any technology supplier can easily understand and follow. Canonical fully supports this effort and is committed to SBSA compliance for our Ubuntu Server product family.”

Cavium:
“Cavium’s Project Thunder will provide a family of multicore ARMv8 64-bit server-class processors for the cloud and data centers,” said Gopal Hegde, vice president and general manager, Data Center Processor Group, Cavium. “Working closely with ARM and the ecosystem, the Thunder product offering will provide a comprehensive workload optimized portfolio solution that will be interoperable across multiple management and orchestration standards. We applaud ARM’s leadership in spearheading the Server Platform Standard that will accelerate the adoption of the ARM architecture in the data center and cloud environment.”

My insert here: CAVIUM 64bit SoCs for Base Stations at MWC 2014 [Charbax YouTube channel, Feb 28, 2014]

Cavium talks about and shows their latest enterprise, data center, wired and wireless networking OCTEON and OCTEON Fusion SoCs based on ARMv8 64bit and MIPS, making customized optimized core designs for each in use for cloud servers and base stations among other. CAVIUM claims that their ARMv8 64bit enterprise/server design, due to be released later this year, provides more performance at lower power consumption than Intel´s x86.

Citrix:
“Citrix is the cloud company that enables mobile workstyles. Citrix is committed to open standards and has been recently engaged in the Server Base System Architecture discussion. We see the publication of the document as a positive move for the industry,” said Ahmed Sallam, vice president and chief technology officer, Hardware, Security, Emerging Solutions and IP, Citrix Systems. “The SBSA will foster the ARM-based server ecosystem and will act as a foundation for the coming years. Citrix will remain engaged in SBSA discussions and we will continue to provide our input based on what benefits our industry, partners and customers.”

DELL:
“Open and standards-based technologies have been a cornerstone of Dell’s philosophy for 30 years,” said Brian Payne, executive director of server solutions for Dell. “As multiple ARMv8 server system-on-chips become available, it’s important that we can effectively deliver new innovations and freedom of choice to our customers. A well-defined, standards-based platform is instrumental in providing OS portability and a familiar user experience to our customers seeking to deploy these new classes of server offerings. We are pleased with the progress the ARM ecosystem has made towards achieving this significant goal.”

HP:
“HP has supported ARM’s standardization effort since its inception, recognizing the benefits of an extensible platform with value-added features,” said Dong Wei, HP fellow. “With the new SBSA specification, we are able to establish a simplified baseline for deploying ARM-based solutions and look forward to future HP products based on the ARM architecture.”

Linaro:
“The ARM architecture and business model is unique in enabling rapid innovation from multiple ARM licensees. Many companies are now building innovative and differentiated solutions for the next generation low-power data center,” said David Rusling, chief technical officer, Linaro. “ARM’s SBSA is a critical component of enabling technology to standardize the common part of these solutions, and we look forward to working with ARM and ARM’s licensees on utilizing this technology to accelerate the deployment of a broad range of ARMv8-based server products.”

Red Hat:
“Today’s announcement of ARM Server Base System Architecture (SBSA) underscores the importance of having standards for the successful adoption and deployment of modern computer architectures, such as ARMv8,” said Jon Masters, Chief ARM Architect, Red Hat. “Red Hat’s support for standards via our participation in the Linaro Enterprise Group, our unique insight as the world’s leading supplier of Open Source server technologies and the collaborative ecosystem effort led by ARM, has enabled us to contribute to the creation of a unified common platform capable of supporting the ARM Architecture at Hyperscale”.

SUSE:
“SUSE has worked on and supported development around ARM processors for several years, and we anticipate ARM processor adoption in cloud, big data and high-performance computing applications,” said Ralf Flaxa, vice president of engineering, SUSE. “SUSE welcomes the SBSA standardization efforts and is proud to contribute to the server platform standard’s development. As the market emerges, this standard will become a key factor determining success in the enterprise ecosystem, and we look forward to working with platforms that implement it.”

Texas Instruments:
“As an early innovator of unique server-grade KeyStone SoCs that combine digital signal processors, ARM Cortex processors, packet processing, security acceleration and Ethernet switching, TI applauds the ARM ecosystem for its collaboration on delivering the SBSA specification, ” said Bill Mills, chief technologist for open source, Texas Instruments. “Standardizations, such as SBSA, enable software simplification without impacting the innovation our heterogeneous compute elements bring to high-performance compute customers.”

To download a copy of the Server Base System Architecture specification, go to: http://infocenter.arm.com/help/index.jsp?topic=/com.arm.doc.den0029/index.html.

SBSA: The Right Level of Server Standardization [Ian Ferguson on Smart and Connected Blog of ARM, Jan 29, 2014]

At the January Facebook OpenCompute Project event in San Jose, ARM announced the public release of the system base architecture specification (SBSA). Jeff Underhill [see earlier] has gone into some detail in his blog about the details included in this document. As one of the renegades that started the ARM server program several years ago, I felt it appropriate to share some thoughts as to why Jeff and I initiated this work and how it fits into the server program that ARM and its partners are feverously working on.

About a year ago, I moved out of the server marketing program to lead a number of other vertical market initiatives. I have continued to monitor (some may say I have “separation anxiety issues”) the excellent progress being made by those that have taken over the reins, including Lakshmi Mandyam who now leads this initiative.

In any market initiative, the success of ARM technology is achieved by finding the right balance between standardization and innovation. Standardization enables a software ecosystem to coalesce. To quote my business friend Frank Frankovsky, the pioneer and visonary behing the OpenCompute Project at Facebook, we need to avoid “gratuitous differentiation”; namely differences between devices that offer limited differentiation at the platform level yet cause challenge for the software ecosystem. Innovation enables silicon partners to integrate functionality that will provide specific benefits for the particular application or a set of applications. This approach encourages multiple companies to enter a particular application, giving end users and platform builders a choice of solutions from which to select. Competition is good. The pace of innovation continues at an incredible pace.

From the outset, the goal of server initiative was to bring the level of innovation seen in the mobile world to a market devoid of disruption and change for so long. This sounds easy. However achieving this balance is challenging, especially as ARM’s model is to agree on these specifications with a consensus driven culture across the partnership as opposed to mandating and imposing a particular direction. It is important for our partners to feel there are areas of system functionality that they can implement while remaining compliant with the SBSA. A reader of this specification will soon realize that the document does not prescribe the functionality of an ARM based server down at the connector or form factor level. To this end, Jeff Underhill started this standardization work when I was leading the server initiative. It is fantastic to see it coming into the public domain today.

As the press release indicates, a number of companies have come together to work on this specification. Beyond the companies that have made public announcements about their activities in the ARM server domain, little should be implied about commitments by the companies list here to build ARM products for this domain. Merely that through partnership, there is a “recipe” for ensuring a 64-bit server operating system will boot in a standard way irrespective of the ARMv8-based SoC that a platform is based on.

As I mentioned above, ARM believes that it is important to have many silicon partners pursuing a specific application domain. It fuels innovation and enables companies further down the value chain to select the device that best meets their requirements. The emergence of cloud computing has changed the mix of compute, memory and IO in the workloads. I expect this to change even more with the plethora of connected sensors that will start to communicate with hosted services. As Mike Muller, ARM’s CTO states, “Big Data starts with Little Data”. When it comes to infrastructure equipment, one size does not fit all. As many press and market analysts observed, Calxeda ceased operations last month. Calxeda was a strong pioneer in this domain and it is disappointing to seem them close their doors. That said, as evidenced at OCP with the product announcement by AMD of their Opteron™ A1100 Series based on the Cortex-A57 processor and the demonstrations of the X-Gene product in platforms by Applied Micro, there are several others rising up to carry the torch. I expect other semiconductor companies that have publically declared their intent to pursue this domain such as Broadcom & Cavium to share progress updates in the coming months and quarters.

It is perfectly fair (and indeed natural) for some industry analysts, end customers and system builders to remain skeptical. It is down to the ARM Ecosystem to demonstrate the benefits promised for server applications to shift the opinions of the doubters. Icebergs have about 90% of their mass under the surface. Just like the SBSA announcement did today, additional elements of the program will start to rise above the surface and become visible in the public domain in the coming months and years that will also help crystalize the direction of the program. I remain incredibly confident of the value proposition and the vector on which ARM and its partners are headed.

OCP Summit V 2014 kicks off the year of ARM servers [Lakshmi Mandyamon Smart and Connected Blog of ARM, Feb 15, 2014]

The last week in January was a great week for the ARM server ecosystem and we had a great week at the Open Compute Project (OCP) Summit. My OCP summit week started with an interview with my friends at ‘theCUBE’ lakshmi mandyan – YouTube. We talked about how much OCP summit had grown with attendance almost doubling from 2013 to 2014. The other conversation we had was about how OCP summit was creating a voice for “hobbyists” or the “maker movement”. Well at ARM we have been feeding the maker movement across the spectrum right from our Cortex M0 based MBED to Arduino to Rasberry Pi and now with some of the OCP platforms that were announced at the show from partners like AMD and Applied Micro the momentum continues.

The morning of OCP summit featured a “group hug” in the guise of AMD, Applied Micro and Intel all going one after the other with keynotes. Andrew Feldman of AMD delivered a great presentation on how the world has changed and the implications that change has for the data center Disruptive Technologies for the Datacenter – Andrew Feldman – YouTube he also announced that the Opteron A1100 chip, featuring 8 Cortex-A57 processors and a plethora of other integration, will be sampling in March and that they made an OCP contribution based on this processor.

Paramesh Gopi CEO of Applied Micro also shared his vision on where the X-GENE product line is evolving [with next gen X-Gene and X-Weave] to with FinFet, 16+ cores [on a die], RDMA over Converged Ethernet (RoCE [240G I/O]) continuing to drive higher integration that will drive down TCO Paramesh Gopi, Applied Micro – YouTube

OCP Summit V – January 28, 2014 – San Jose Convention Center, San Jose, California Paramesh Gopi, Applied Micro

On day2 our CMO Ian Drew delivered a great key note titled “ARM in the Data Center”  ARM for the Datacenter – Ian Drew – YouTube [was included earlier into this post] where he announced the collaborative creation and public release of the Server Base System Architecture (SBSA). My colleagues Jeff Underhill and Ian Ferguson have already blogged about that announcement in detail the links to their blogs can be found here and here respectively.

There were several articles published about the SBSA launch. A couple of my favorite quotes were:

    • “We can only applaud these efforts: it will eliminate a lot of useless time investments, lower costs and help make ARM partners a real option in servers. With the expected launch of many ARM Cortex-A57 based server SoCs this year, it looks like 2014 can be a breakthrough year for ARM servers.” – Johan De Gelas, AnandTech
    • “The more powerful, 64-bit designs are a threat to Intel Corp., which controls more than 95 percent of the market for chips in servers that use personal-computer processors. ARM, whose designs are found in chips that run Apple Inc.’s iPhone and iPad, is betting that the regulated designs will be cheaper to use and create a wider market for the chips.” – Amy Thomson, Bloomberg News

During the fireside chat following Ian’s keynote, Marc Andreessen was bullish on ARM in the Data Center http://youtu.be/O-gENvy0F-w . He shared how he believed that the cost burden that data centers were under was demanding a broader supply chain including players in the current smartphone supply chain. He talked about the grand unification of the data center and smart phone supply chain and how ARM based chips would be the first case study.

The momentum has continued beyond OCP summit. Dell was one of the first OEM partners for ARM when they announced their Dell Copper platform. They are continuing to invest in ARM programs, a great example being the recently announced proof of concept with Applied Micro for Hyperscale development Dell offers 64-bit ARM microserver proof-of-concept for hyperscale on the heels of Open Compute Summit momentum – Dell4… .

Last week I was doing a number of press and analyst briefings in Europe with our partner AMD on their announcement and people are clearly excited about the history AMD brings to the ARM party in terms of being a credible vendor of server technologies. It has also been fun watching them share their story about why ARM will win in the long run!
2014 is the year of ARM servers!