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Microsoft Pri0

Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times technology reporter Matt Day.

January 27, 2015 at 4:44 PM

Apple, Microsoft going opposite ways in China

Microsoft and Apple are having very different weeks.

The same day Microsoft’s stock plunged the most in 18 months on a middling earnings report and gloomy outlook, old rival Apple released a spectacularly good earnings report. The Cupertino, Calif., company earned more profit in the last three months of 2014 than any publicly traded company has ever reeled in during a quarter.

Microsoft sold $26.5 billion in software and devices, taking home $5.8 billion of that in profit. Apple, propelled by sales of its iPhone 6, logged sales of $74.6 billion, and a profit of $18 billion.

Nowhere is the contrast between the rivals clearer than their diverging fates in China.

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Comments | More in Apple | Topics: apple, china, iphone

January 27, 2015 at 9:09 AM

Microsoft stock plunges as investors digest earnings

Update 1:49 p.m.:

Microsoft’s stock recorded the largest decline in 18 months after the company lowered the bar for its financial year ahead.

Microsoft released a mixed set of quarterly financial results Monday. The company’s profit met Wall Street expectations, but the report brought some signs that Microsoft’s Office and Windows businesses were stumbling more than investors had expected.

On a rough day for stocks across the board, Microsoft was hit particularly hard. Shares fell $4.35, or 9.3 percent, to close at $42.66 a share. The decline wiped out about 40 percent of the gains made in the 11 months since Satya Nadella was appointed as Microsoft’s third chief executive.

Tuesday’s swoon came as investors reacted to Microsoft’s dour outlook for the rest of its fiscal year.

The company’s expectations for how much cash it will bring in during the current quarter were “shockingly low,” John DiFucci, an analyst with Jefferies, said in a note to clients.

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Comments | More in Financial | Topics: earnings, microsoft, stock

January 26, 2015 at 6:06 PM

Microsoft’s earnings: Looking under the hood

Microsoft’s most recent quarter was a good news, bad news affair.

The company’s business-focused cloud-computing unit continued its pattern of double-digit sales growth, weighing in as a $5.5-billion-a-year business. But Microsoft’s biggest moneymaker — its commercial licensing group, which sells businesses Windows, server products, and Office — stumbled a bit. One-time charges, from employee severance bills to a tax adjustment from the IRS to the pain of a stronger dollar, wiped out a few hundred million dollars in profit.

Our big-picture story on the 11% drop in Microsoft profit during the three months ended in December lives here. For a geekier take on how Microsoft’s two main business units fared, read on.

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Comments | More in Financial | Topics: earnings, microsoft, office

January 23, 2015 at 4:31 PM

Microsoft earnings coming Monday: Holiday sales, the cloud and freebies

Microsoft plans to release its quarterly earnings after the stock market closes on Monday afternoon.

Not to spoil the surprise, but Microsoft almost certainly pulled in a ton of money during the last three months of 2014. How much, and where, exactly, is what Wall Street analysts are going to focus on.

Here are some things to watch out for:

Holiday sales. Microsoft, as usual, flooded the airwaves with ads (this year focused on selling its Surface Pro 3 tablet), and offered discounts and software bundles to get folks to buy an Xbox. Microsoft’s occasionally maligned Surface unit narrowly turned a profit in the three months ended in September (by a metric that excludes advertising and other costs). Did the Surface, mammoth holiday ad campaign and all, turn in another positive performance?

Record revenue, lower profits. Analysts polled by Bloomberg think Microsoft racked up a record $26.3 billion in sales in the quarter. But Microsoft’s profit is expected to dip, to about $6 billion (71 cents a share, excluding one-time items), from $6.56 billion (78 cents a share) a year earlier. Why? Part of the reason is Microsoft is now firmly embedded in the hardware business after buying Nokia‘s phone unit. Hardware is typically a lower margin business than software. Think of it this way: for every phone or Xbox Microsoft sells, the company has to buy the parts and labor to put it together. Copies of Microsoft Office software can be sold by the millions with much less in embedded costs. Holiday sales, weighted as they are toward gadgets, tend to drag on Microsoft’s profitability.

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Comments | More in Financial | Topics: earnings, microsoft, second quarter earnings

January 23, 2015 at 10:31 AM

Microsoft to buy Revolution Analytics

Microsoft says it has reached an agreement to buy Revolution Analytics.

Revolution sells businesses software and services for “R,” the open-source programming language used by statisticians and other data crunchers. Revolution’s customers, Microsoft machine learning vice president Joseph Sirosh says in a blog post about the deal, include large banks and financial services firms, pharmaceutical companies, as well as manufacturing and technology companies.

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Comments | More in Deals | Topics: big data, deals, microsoft

January 22, 2015 at 10:46 AM

Bill Gates to guest edit tech site The Verge

Microsoft Co-Founder and Technology Advisor Bill Gates (Photo by Microsoft)

Microsoft Co-Founder and Technology Advisor Bill Gates (Photo by Microsoft)

Bill Gates, a man who on his own wields an impressive megaphone, will make use of a bit of a different platform next month.

The Microsoft-co founder, fresh off the release of an ambitious list of human development goals in an annual letter released this week, will guest edit technology and science site The Verge in February.

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Comments | More in Bill Gates | Topics: bill & melinda gates foundation, bill gates, microsoft

January 20, 2015 at 4:21 PM

Microsoft previews Windows 10 in Redmond

Microsoft's Joe Belfiore, corporate vice president of Operating Systems Group, demonstrates new features of Windows 10. (Elaine Thompson / The Associated Press)

Microsoft’s Joe Belfiore, corporate vice president of Operating Systems Group, demonstrates new features of Windows 10. (Elaine Thompson / The Associated Press)

Update: 11:39 a.m.: A quick Q&A with chief executive Satya Nadella and Myerson later, and that wraps up the program.

Some highlights: Asked by colleague Brier Dudley if the talk of subscription services meant that users would have to pay an annual fee for Windows, Nadella said “There is no fundamental shift to our business model.”

Another questioner asked Nadella if he could share the financial impact likely from the free upgrade offer. Nadella pointed to Microsoft’s quarterly earnings report, slated for release on Monday, and declined to share more details.

Update: 10:55 a.m.: Meet Microsoft HoloLens, the device said to bring holographic interactions to Windows 10. Microsoft introduces the headset — a wireless, see-through display that projects holograms into the world around its user.

“I know this sounds perhaps crazy, maybe even a little impossible,” said Alex Kipman, a technical fellow at Microsoft. We’ll see. He hinted that the assembled journalists and analysts in the audience will get a chance to try one out later today.

Update: 10:39 a.m.: We have our first gadget of the day: The gigantic, 84″ touchscreen “Surface Hub.” Microsoft folks demonstrated how it can help facilitate meetings. It’s yet another nod to the workplace at a consumer-focused Windows event.

Update: 10:09 a.m.: Windows 10 will indeed come loaded with a new web browser, codenamed, for now, “Spartan.”

Among its features: the ability to freeze web pages, annotate them with a stylus on a touchscreen device (or keyboard on a regular laptop), and share those pages with friends. The software will come with a reading mode that strips out extraneous web content to display text and save for offline viewing. Our new friend Cortana will also live in Spartan.

Update: 9:42 a.m.: Cortana, the search assistant released for Windows Phone last year, is coming to the PC.

The software — akin to Apple’s Siri, for the bulk of the world that doesn’t own a Windows Phone — will be integrated into Windows 10. Microsoft user experience executive Joe Belfiore demonstrated a few of the things Cortana can help with, from looking up files and applications (both on a user’s PC and their data stored on the web), to dictating a short email and turning on music with voice or typed commands.

Update: 9:24 a.m.: Operating systems chief Terry Myerson gives us our first glimpse of the Windows 10 business model.

In short: expect free upgrades.

For the first year after the launch of Windows 10, Microsoft will offer users of Windows 8.1, Windows Phone 8.1, and Windows 7 free upgrades to the new operating system.

The offer for Windows 8.1 users was expected. Few thought Microsoft would charge customers for the privilege of updating from the widely panned operating system. But in offering a free upgrade to Windows 7 users — who account for roughly 60% of the Windows customer base — Microsoft is indicating it’s going all in on Windows 10.

Follow along via tweets from the event by me and tech columnist Brier Dudley:

Earlier:

Microsoft is ready to give consumers a peek at the progress it’s making on its most famous product.

A daylong Windows 10 preview event in Redmond is set to begin at 9 a.m. Pacific Wednesday and will be webcast live. Expect to hear from Chief Executive Satya Nadella, operating systems head Terry Myerson, user experience designer Joe Belfiore, and Xbox leader Phil Spencer.

In Windows 10, Microsoft has at least three major goals:

  • Overcome the stumbles of Windows 8. That operating system, released in 2012, was a bold leap forward, an effort to woo the emerging tablet market with a touchscreen-optimized interface. But it went too far for many consumers (and had little appeal to businesses), creating a jarring transition between tablet-optimized mode and the old, familiar Windows desktop. Windows 10 is Microsoft’s bid to create a user experience that makes sense on the entire spectrum of devices, from smartphones to wall-sized displays.
  • Lay the groundwork for a resurgence outside of the PC. Microsoft is trailing badly in the smartphone and tablet markets. Part of the reason why: developers don’t see much of a need to spend the hours developing applications for Windows Phone or the Windows store after already releasing versions for Google’s Android or Apple’s iOS. Microsoft brass hope Windows 10 will make it easier for developers to write applications that can be relatively painlessly re-purposed for the operating system’s smartphone, laptop, and tablet variants.
  • Persuade businesses to jump from Windows 7. Microsoft made its initial pitch to enterprises during the unveiling of Windows 10 back in September. And though Microsoft has telegraphed that Wednesday’s event will target individual consumers, the line between business and home computing is blurry in a bring-the-iPad-to-work world. Don’t be surprised if Microsoft execs also highlight their plans for software that helps people get things done, particularly under the catchall “productivity” mantra.
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Comments | More in Windows | Topics: microsoft, windows 10

January 20, 2015 at 9:47 AM

Microsoft buys text analysis startup Equivio

Microsoft seems to like something about Israeli data-analysis startups.

The company announced today that it has acquired text-analysis firm Equivio, a few months after buying cloud security machine-learning startup Aorato.

Equivio’s algorithms sift through documents and emails to group related documents and identify which ones might trigger a company’s confidentiality provisions or other legal labels. With email and computers facilitating an explosion in the amount of documents companies and governments produce, sorting through those can quickly turn into a task that requires many hours of work by humans.

The Rosh HaAyin-based company, which on its website also lists an office in Rockville, Md., says its clients include the U.S. Justice Department and auditing and consulting giants KPMG and Deloitte.

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Comments | More in Deals | Topics: deals, equivio, machine learning

January 14, 2015 at 9:07 AM

Microsoft launches two budget Lumia smartphones

Microsoft's Lumia 435 (Photo by Microsoft)

Microsoft’s Lumia 435 (Photo by Microsoft)

Microsoft continues to hammer away at the cheaper side of the market in its bid to grab smartphone market share.

The company Wednesday announced two new smartphones — the Lumia 532 and 435 — designed to target first-time smartphone buyers. The 532 is expected to sell for 79 euros ($93) before taxes and subsidies, and the 435 is expected to start at 69 euros ($81).

Microsoft’s use of the European common currency for its price listing isn’t a coincidence: don’t expect the phones on store shelves in the U.S. soon. The company said it will start rolling out the phones in markets in Europe, Asia and Africa next month.

Microsoft, badly lagging and losing share in developed markets like the U.S. and western Europe, has staked its claim for relevance in smartphones in the developing world. By offering reasonably priced phones that offer smartphone features, Microsoft is hoping that it can persuade basic cellphone users to upgrade to a Windows Phone smartphone instead of devices running Google’s Android or Apple’s iOS.

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Comments | More in Mobile | Topics: lumia, lumia 435, lumia 532

January 13, 2015 at 11:12 AM

Microsoft drops free support for Windows 7

Windows 7 has started its long journey to the dustbin: The operating system is, as of today, no longer eligible for free help and support from Microsoft.

It’s not exactly going to blink out of existence anytime soon, however.

Windows 7 still powers more than half of the computers running Windows. Users of the software will still receive security patches from Microsoft, but technical support and non-essential updates now come with a cost attached. Microsoft plans to phase out those programs in 2020.

The beginning of the end for the popular Windows 7, released in 2009, comes as Microsoft gets set to unveil the latest version of its flagship product. Microsoft is expected to offer more details on Windows 10 at a press event in Redmond next week, with general availability expected sometime in the second half of this year.

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Comments | More in Windows | Topics: microsoft, windows 10, windows 7

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