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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.

April 29, 2013 at 11:38 AM

Six months after Windows 8’s launch, how is Microsoft doing?

In case you missed it, this story — looking at how Microsoft is faring six months after the launch of Windows 8 — is running in the print edition of The Seattle Times today.

Here are some additional thoughts from analysts that didn’t make it into the story:

Rick Sherlund, Nomura:

  • “Windows 8 is trying to reposition Microsoft in the tablet market and at the same time trying to preserve its presence in the traditional Windows market. And so far, it hasn’t resonated well in the tablet market. I think the real opportunity for Microsoft will be in the evolution of notebooks as they converge with these tablets.”
  • “I think it’s really hard for Microsoft to break into the consumer tablet market where Apple already dominates with their product and with iTunes for content. Google is probably the real competition, long term, to be concerned about.”
  • On rumors that Microsoft may be coming out with a 7-inch tablet device: “Office is where Microsoft has the most leverage. … I don’t know that the 7-inch form factor is a very good device for using Office. I don’t know if I would expect that to be a big seller for Microsoft. But you have to be there (in the 7-inch/small tablet space)  – it’s obviously a big seller for consumers.”
  • On rumors that the smaller tablet might be branded an Xbox tablet or have a strong Xbox branding or gaming component: “I like that idea – it appeals more and leverages more of their strength on the consumer side. (If Microsoft did this), it would be a more netbook style model: a Windows-type device at a lower price point, reduced capabilities. And try to throw in some Office capability for those who want Outlook and the ability to read and edit some attachments. … But if you don’t really need Office, then I think it’s important that Microsoft try to find some lever to try to find demand for their products. If you can leverage some Xbox capabilities that would appeal to a consumer, maybe throw some Skype in — Microsoft has to throw in a hook to leverage its appeal to the consumer.”

Al Gillen, IDC:

  • “I don’t know that Windows 8 creates a drag on sales. At the same time it hasn’t created a boom either. … The real problem isn’t Windows. It’s competition with smartphones, tablets and phablets.”
  • “Here’s the thing about cloud: There’s a lot of excitement around cloud. The incorrect but simple way to think about it: that cloud replaces everything out there today and if you don’t capture it, you’re lost. That’s too simplistic. When thinking about cloud, it’s going to bring a new paradigm to the industry but the old stuff is not going away any time soon.”

Rob Sanfilippo, Directions on Microsoft:

  • On rumors about Blue, the upcoming wave of expected updates to Microsoft products and services. One of the rumors is that the Start button is coming back to Windows 8 – although it’s unclear whether the button will bring up the traditional Start menu or just direct users to the Start tile screen. Another rumor is that Windows 8 users will be able to boot directly to desktop: “I don’t know that those are the two things that are going to stop the confusion or the upset reaction that we’re [seeing] from Windows 8. I think what the discussion is asking for is: ‘Bring back the Start menu. And keep me on the desktop – I don’t want to see the Modern UI at all.’ And that’s not what these new versions are (likely) to bring.”

Wes Miller, Directions on Microsoft:

  • “What stood out to me [in Microsoft’s Q3 earnings report] is Windows enterprise sales. There’s something in there but I’m not sure what. Usually, [increased multi-year licensing revenue is] an indicator that companies are willing to sign on to long-term iterations of Windows. But enterprise agreements also gives companies downgrade rights. So it could be enterprises agreeing to longer-term agreements because of aggressive prices. So just because Windows enterprise numbers are strong doesn’t necessarily reflect that Windows 8 is rockin’ and rollin’ in the enterprise.”
  • “The best thing Microsoft has going for them right now is that, unlike Apple, which has hardware, Microsoft has three pillars that hold them up. Though they’re all different-sized legs, they’re all strong today in the company: Windows, Office and Server and Tools.”

Todd Lowenstein, HighMark Capital Management:

  • On the disclosure that activist investor ValueAct holds about about a $1.9 billion stake in Microsoft shares: “It’s hard to be influential when you hold less than 1 percent of the stock. But I think it’s important symbolically.ValueAct’s got a reputation of working with mangement teams, thinking of total shareholder returns, highlighting really what are undervalued assets.”

Comments | More in Microsoft | Topics: blue, office, server and tools

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