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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.

July 10, 2012 at 6:00 AM

More confident Microsoft serves up full plate of plans

[This story is running in the print edition of The Seattle Times July 10, 2012 – Janet I. Tu]

TORONTO — Does Microsoft have its mojo back?

The company has been on a roll lately, from the announcement of Surface, its own branded tablet, to news about the next version of its Windows Phone, to its recent acquisition of business social-networking hot kid, Yammer.

On Monday, at the company’s Worldwide Partners Conference in Toronto, Microsoft announced even more news:

* The company said it’s on track to release Windows 8 — the major revamp of its flagship operating system — to manufacturers by the first week in August, with general availability of devices running Windows 8 on store shelves by late October.

* It’s acquiring Perceptive Pixel, a New York-based company that specializes in large, multitouch displays.

* It’s launching Office 365 Open, allowing its partners to package Microsoft’s Office 365 with the partner’s own value-added services, and allowing those partners to bill their customers for all of that in a single invoice.

This will be “the most epic year in Microsoft history,” CEO Steve Ballmer said in his keynote address to the conference Monday morning.

Some 16,000 of Microsoft’s 640,000 partners worldwide are at the conference, which runs through Thursday.

It’s the largest number of attendees for the event, which brings together Microsoft’s far-flung partners — including resellers, consultants, distributors and others — so they can hear about the company’s product road map for the year ahead.

And what the partners heard seemed to excite them, despite worries that might have arisen about their value since Microsoft announced last month it is making its own branded Windows computing device for the first time.

“For the first time in a long time, I’m seeing Microsoft charged about their own products and confident that they can win. That’s a big deal,” said Lee Nicholls, director of global solutions for KPN, a Dutch telecommunications company.

In his keynote, Ballmer tried to allay any fears among PC manufacturers.

The Surface tablet, he told the audience at the Air Canada Centre, is “a design point” that has a distinct niche among the many Windows 8 devices, including tablets, to be sold.

(Ballmer said the forecast is for 375 million new Windows PCs to be sold in the next 12 months.)

But he isn’t expecting mass quantities of Surface sales. “We may sell a few million of the 375 million,” Ballmer said.

“The importance of thousands of partners will not diminish.”

Not much on Surface

Ballmer and other executives did not show or talk extensively about Surface during the keynote, somewhat of a surprise to some attendees.

“The reason for that is obvious,” said Nicholls of KPN, which sells Office 365 and Windows Intune to business customers.

“They’ve got to keep courting the OEMs [original equipment manufacturers]. HP and Fujitsu are big sponsors of this conference. Samsung and Dell are also sponsors. So going out on stage, waving your own piece of hardware, is not a great way to manage your OEMs.”

Nicholls, specifying he was not speaking for KPN, said he thinks Surface will end up being “a kind of luxury device to compete with Apple,” with the two versions of Surface tablets priced comparably to the iPad and the MacBook Air.

Microsoft’s manufacturing partners, such as Samsung and Hewlett-Packard, will probably end up charging much lower prices for their Windows 8 tablets than Microsoft will charge for its Surface devices, Nicholls predicts.

He likens the anxiety of hardware partners over potential competition with Microsoft to that felt a few years ago by some partners when Microsoft announced its own online services, such as Office 365 and Windows Intune — a cloud service for PC security and management.

“But it’s necessary to move things forward,” Nicholls said. “OEMs do a good job. But until Microsoft makes its own device, they can’t truly compete with quality.”

Nicholls said he’d rather have that than what he’s seen in years past, when Microsoft almost seemed to apologize for its products — as in Windows 7 being an apology for the much criticized Windows Vista.

Acquisition applauded

Another well-received part of the morning’s keynote was Microsoft’s announcement that it was acquiring New York-based Perceptive Pixel.

The 6-year-old company, which has 70 employees scattered between New York Wilsonville, Ore.; Mountain View, Calif., and Washington, D.C., focuses on creating large multitouch displays.

How that meshes with Windows 8 was on display during Monday’s keynote in which Perceptive Pixel founder Jeff Han demonstrated Windows 8 on a conference room-sized Perceptive Pixel display.

He easily pinched and zoomed, swiped between pages, marked up content with a stylus while manipulating the page and content with his other hand.

“It’s so nice to find another company that has aligned visions with our own,” Han said later in an interview. “The transaction means an accelerant in achieving our vision” of large touch screens in the workplace.

Neither Han nor a Microsoft representative would give a price for the acquisition.

Perceptive Pixel’s Wilsonville operation, south of Portland, will remain there, while its Mountain View office will move to the Puget Sound area.

Han himself will move to Redmond, where he will report directly to Kurt DelBene, president of Microsoft’s Office division.

Han said that because Windows 8 works on Perceptive Pixel’s large screens, the plan for now is to develop new software and apps to run on Windows 8.

Gathering cloud

Another subject at the conference is the fast-growing cloud-services arena.

Some partners are concerned whether there was room for them in this business, given that Microsoft’s Azure and Office 365 are complete cloud offerings in and of themselves, said Birger Steen, CEO of Renton-based Parallels, which offers virtualization and automation software.

“Microsoft has been perceived as heading toward less room for partners in recent years,” he said.

But Steen thinks the pendulum is swinging the other way, especially after Monday’s keynote. He said Ballmer seemed to place equal importance on clouds hosted by Microsoft, partners or customers.

“What they [partners] want to hear is: ‘Yes, there is a role for the greater ecosystem in the cloud as well,’ ” Steen said. “I think that was being said very clearly today.”

The proof, he said, was how well attendees received news of Office 365 Open, a program that allows Office 365 to be sold and billed as part of a partner’s own value-added package.

That makes it easier for the partner and less complicated for the partner’s customer. It also avoids highlighting the monetary value of Office 365 vs. other elements of the package, said Steen.

Wandering the exhibition halls, Steen noticed something else this year, he said: More exhibitors and people focused on cloud companies and gadgets.

“Up until recently, there hasn’t been much gadget excitement at (the Worldwide Partners Conference.),” he said. “I think this year, there is a palpable gadget excitement.”

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