March 2008 - OurView: The Opinion Blog

Microsoft made a $44.6 billion offer to buy Yahoo! on February 1, 2008, and since then we've been waiting to see what happens next.  While nothing officially has been announced, there is speculation that the deal may be nearing its next phase.  Yahoo! hasn't come up with a miracle deal to save the company, and can only stall so long.  Yahoo! has already delayed the voting for a new Board of Directors, but Microsoft "reserves the right to pursue all necessary steps to ensure that Yahoo!’s shareholders are provided with the opportunity to realize the value inherent in our proposal", and according at least to TechCrunch, is ready to take over the Board if it should become necessary.

However, beating Yahoo! up to perhaps get a better price, or dragging them through the mud with an acrimonious proxy takeover, really does Microsoft no good.  Microsoft wants the Yahoo! brand intact, has big plans for it in fact, and a bitter fight over the acquisition will not serve Microsoft well.  Rumors are swirling that Microsoft and Yahoo! are talking, and that some kind of a deal will be announced fairly soon.  While Microsoft really has no reason to up the price, as there are no better offers, expect some sort of rearrangement of the numbers to make Yahoo! save some face, which of course in the end is a good thing for the brand, and as such for Microsoft.  Clarification of ownership issues regarding Alibaba, which is not very interested in being owned by Microsoft, may further change the numbers.  And even if Microsoft just straight out ups the price, that may be seen as confirmation of Yahoo!'s worth, a good thing once Microsoft takes possession.

So let's say Yahoo! ends the stalling and comes to the table.  Lots of questions will still have to be answered.  Here's a list of five:

Word seems to be filtering out about a move to a more modular core for Windows 7, with additional pieces layered on top.  Mary Jo Foley first wrote about it last week, with a hint at what's to come for Windows Live:

One of my sources close to Microsoft recently told me that “major parts are being removed from Windows 7 (mail, photo, video)” but still will be available as user-selectable services. This plan, if it comes to pass, ought to help lessen the Windows attack surface that has been the target of various Microsoft competitors and antitrust regulators who’ve been critical of Microsoft bundling everything but the kitchen sink into Windows.

..and then Ken Fisher at Ars Technica expounded a bit, with a somewhat different take on what it will mean for users:

So, Windows 7 will be modular, but to an unknown degree. I personally expect the modularization to focus on value-adds, as did Anytime Upgrade on Vista. It allows Microsoft to draw lines between what is and isn't "in" the OS for DoJ compliance issues. Whether it be Live Services, Windows Media Player, or even Internet Explorer, Microsoft could roll those into modules and then say, "Hey, look, that's not part of Windows, we're charging extra for that!" Foley says that she's heard from sources that Microsoft is working on a Photo + Mail + Video module that would exist apart from the OS, for instance. I've heard less specific groupings myself.

...

The software+services side of modularization is what is surely driving this change at Microsoft. As I argued last summer, this is all a critical piece of Microsoft's software subscription dreams. In "2010, a 'Windows 7' software subscription odyssey," I noted that Microsoft has been reinventing its approach to Windows in order to facilitate the continued sales of multiple levels of the Windows "experience." Microsoft has confirmed that there will be multiple SKUs for Windows 7 and that there will be different subscription services built around the OS.

So what is going on, here?  Will Windows start charging subscriptions for added services that up until now have been part of the OS?  My guess is probably not.  Let's look at the reasons why shipping a lean mean Windows 7 with "free" value adds makes sense for Microsoft, and might just make a lot of sense for consumers:

• Slimming down a bloated OS.  Windows, like many mature systems, is bloated, hard to manage, and hard to change.  Major steps were taken in Windows Vista to begin to move away from the old "everything and the kitchen sink" model, although MS is taking a beating in the marketplace and in public perception because of it.  Windows 7 will begin to build on the foundation laid by Vista.  Yes there will be value adds, but getting rid of the bloat allows for innovation at the core, upgrades to the additions outside the core development cycle, and continued focus on security and performance without tripping over problems wrought by peripherals.
   
• Consolidating Live Services.  The three pieces Mary Jo Foley mentions, Photo, Mail, and Video, all exist in some fashion as part of Vista now.  However up until last year, they were being developed separately from their Windows Live counterparts.  Microsoft had double the engineering and double the resources working on what really are not very difficult engineering challenges, and were getting in the way of Windows innovation.  By stripping out Windows Mail, Windows Photo Gallery, and Windows Movie Maker, among others, and replacing them with Windows Live add-ins (as is done now, actually, but with a lot of redundancy - add in Windows Live Mail and you still have Windows Mail on the machine - totally unnecessary), the experience is much cleaner on the consumer end, and much easier to maintain, on a lot of levels, on the backend.
   
• Ending monopolistic practices.  While it's enough of an incentive to strip out the live services to gain efficiencies outlined above, an even greater gain comes from how this will play out with the EU, etc.  Microsoft isn't happy about having to continue to shell out money to anti-trust litigations.  Rather than being a lock in service, as Ken Fisher thinks, Microsoft most likely will structure these add-ins as open ended.  In other words, if you want to use Firefox instead of IE, no problem.  If you want to use a different mail client, go for it.  Of course Microsoft will push hard to bundle its own services with new computer sales, and we've seen how well Windows N did in Europe - an OS with no bells and whistles is just no fun.  But there won't be lock in, the costs involved with fighting the EU over another OS are just too great for Microsoft to endure.  They need to change direction, and they may be about to do just that.
   
• Software + Services.  Microsoft, with Ray Ozzie at the lead, is about to place a big bet on Software + Services, showcased by Live Mesh and the upcoming Live Mesh Technology Preview.  While Windows Live offers an interesting set of services, Live Mesh may just be the killer app it has been looking for.  For once, instead of forcing it down our throats, Microsoft just may have a service that's compelling enough to go out and get.  If Microsoft can learn from the mistakes Apple just made with their iTunes/Safari upgrade (see: Windows Live Suite Installer), but instead offer a simple, up-front way to install Windows Live services that "just work", and offer them to a combined Microsoft/Yahoo! customer base, things might just get very interesting indeed.

Internet Explorer and Windows Media Player, along with the Windows Live services, are already "free", and there's no reason to think that Microsoft would expect people to stand for paying extra for them (especially when there are free alternatives).  Some services may indeed come subscription based, but a modular Windows 7 isn't about locking consumers into subscriptions.  The advantages to Microsoft in cleaning up Windows are clear, the complaints about monopolistic practices are loudly heard, and there is a real change taking place, led by Ray Ozzie, to embrace a more open model.

Microsoft has already made moves away from duplicating Windows/Windows Live redundancies, so some stripped out features will come as no surprise.  How much of a modular system Windows 7 will come to be remains to be seen, but one thing is certain: computers, with lots of processing power and lots of storage space, aren't going away anytime soon.  What Microsoft is putting together, with a lean OS, a readily available services layer, a robust cloud storage platform, and a way to synch it all together, may prove to be the right package for both Microsoft and consumers.

Ray Ozzie gets criticism for speaking too generally, but we're finding out that he was speaking pretty specifically, at least in his keynote at Mix08.  We kind of like this penchant Ozzie is developing for dropping code names into keynotes :)

Just imagine the possibilities enabled by centralized configuration and personalization and remote control of all your devices from just about anywhere. Just imagine the convenience of unified data management, the transparent synchronization of files, folders, documents, and media. The bi-directional synchronization of arbitrary feeds of all kinds across your devices and the Web, a kind of universal file synch.

Just imagine the possibilities of unified application management across the device mesh, centralized, Web-based deployment of device-based applications. Imagine an app platform that's cognizant of all of your devices. Now, as it so happens, we've had a team at Microsoft working on this specific scenario for some time now, starting with the PC and focused on the question of how we might make life so much easier for individuals if we just brought together all your PCs into a seamless mesh, for users, for developers, using the Web as a hub.

While it's easy to take this as more Ozzie hand-waving futuristic talk, this time he is describing a specific product, one that we've been calling Horizon, and Mesh, and is now being referred to internally as "Live Mesh".  For the sake of consistency (and to acknowledge two new urls we found: www.LiveMesh.com, and www.mesh-beta.com ) we'll start calling it Live Mesh here, until we hear different.  This is Microsoft, and the naming has only been referenced, and not officially announced, so of course it is subject to change. 

I'm not a road warrior.  I've attended three Butterfly Tours, two MVP Summits, two Gnomedexes, and some various one day events (mostly in Redmond), but this is the first big tech conference I've attended outside of Seattle.  Just to get the logistics out of the way, I had great flights both ways, on time with no problems.  Of course everyone attending conferences in Las Vegas all left on Friday afternoon, and the security lines were long, but moved quickly.  Apart from having some trouble finding my way out of the Venetian (where Mix was held) to my hotel at the Imperial Palace ("next door"), once I got that figured out all was well.

Mix itself as an event was first class.  I don't remember any problems with anything not working; nothing was late, or botched, a well organized and run event all around.  Both the keynote (while it was long) and the Steve Ballmer /  Guy Kawasaki discussion ran like clockwork.  In one of the sessions one of the guys from Vertigo said that the keynote ended "70 seconds early".  His own part ran 7 seconds long, for which he caught some good natured grief backstage.

I'm really trying to think through what my focus should be in future events like these - and PDC in October looks like it is firmly on the list.  Certainly I need to blog more.  However while I didn't get much of what was happening around me recorded, if anything the paraphernalia of technology hindered more than it helped.  If it wasn't wifi connection, it was battery power, or "where's a plug", or stopping to dig through a bag looking for (yet another) cord.  I spent far more time packing my electronics than I did clothes, and hauling a laptop bag and a camera bag around was cumbersome and limiting.

Which brings us to the conversations.  Starting with the plane ride down (I live in Seattle, so the plane to Vegas on Tuesday afternoon was at least half Softies, including both seatmates), to meeting Long Zheng at the airport and finding our way through the casino maze to hotel check-in, conversations were what this conference was all about.

So while I carried all this crap around with me, and checked up on the news of the world and email, I found it much more comfortable to just talk to people.  I had great conversations with Softies; John Nogrady from the Microsoft Emerging Business Team,  Windows Live Platform Technical Evangelist Catherine Heller, Frank Arrigo, Kris Hoet, Loke Uei Tan, Angus Logan, the guys from the Windows Live Platform booth in the Open Spaces area, Scott Guthrie, Jeff Sandquist, Brian Groth (thanks for sharing the cab to the airport!), IE Architect Chris Wilson, Travis and Tim Harris and all the guys on DPE, Scott Hanselman, Samantha "you're famous" McManus from Waggener Edstrom, Director of Windows Marketing Communications for Vista Chris Flores (who got down and dirty to help Long Zheng get his laptop working - above and beyond the call of duty and done with grace and style), and David Treadwell, my only "interview", which will be up shortly.  There were others as well, and many more, like Steve Clayton and Jacky Mok, who I wanted to meet up with but it just didn't happen.  Maybe if I wasn't looking for a plug, or plugged into a recharging station, I would have had more time to find you.

But the great thing about Mix over something like the MVP Summit, is although it is Microsoft-centric, there are developers and designers, press, and business people from outside of Microsoft and all over the world attending, and I think I most enjoyed talking to them.  Gilber Corrales (my Twitter "friend"), Marc Canter, Mary Jo Foley, Molly Holzschlag, Rob Howard, Robert Scoble,  Long Zheng, Rafael Rivera, Bryant Zadegan, were all people I had talked to before, but had great conversations with them again.  I also met a lot of new people; waiting in lines, eating breakfast, in between sessions and in the hallways.  While I didn't have a press pass (only because I had access thanks to DPE from Mix n Mash), I did spend a bit of time in the press room.  However it's not somewhere I see myself fitting in.  There's so much more going on out in the hallways, I doubt I'll spend much time in press rooms in any upcoming event.

Some of the new people I met: Wolfgang Henseler from Syzygy,  a large creative agency from Germany; Tim Back, also from Germany, from SAP; Ajay Jain, a journalist and blogger from India; Paul Thurrott, and many many others.

It was fun talking about Microsoft/Yahoo (even Softies could talk about it, because there's no insider information for them to worry about spilling), about standards, about Feedsync, and about Ozzie and Ballmer.  I'm thinking about how to approach the next events - while I didn't get much use out of the live streaming, it worked, and there's certainly some potential - but when the technology gets in the way of the conversation, the conversation will win out, and we'll figure out how to go from there.

So with only a few days to go until Mix08 starts, we thought it was time to take a quick look at the keynoters and join the dots to what we think they will be showing:

 - Dean Hachamovitch - Internet Explorer 8 beta, yes no real guessing required here. Screenshots of the installer are already going around the internet, here's out contribution showing how IE8 and Windows Live will start fitting together. Long its non-fuzzy just for you (click to enlarge).

 - Scott Guthrie - Silverlight 2 will undoubtably be the key thing, but there may be some other bits and pieces in there too (not quite so easy to predict). The only thing that remains to be seen is whether Scott switches over to the new Windows Live Messenger library for his future demos ;)

 - Ray Ozzie - ?????

Ah yes, as always its Ozzie that proves to be the elusive one. We want to go out on a limb and say Ozzie will show off Horizon, but given how much of a perfectionist he is, we don't think that's actually going to happen. Lets just hope its not more hand-waving and Jedi mind-tricks but instead something real and palpable.

Update: Nick Carr thinks it could be Microsoft's strategy around cloud-based computing. I was talking to somebody else this week and they'd heard similar chatter from Microsoft Partners, though not necessarily about Microsoft's own products. The plot thickens.

If you're interested in meeting up, drop us an email as Kip will be at the conference.