Is the PC finally dead?

It has been an interesting week. On the one hand Windows 10 has surpassed 200 million in terms of installed base. On the flip side at this years Consumer Electronics(CES) show in Las Vegas the reports are there is next to zero presence by hardware vendors and next generation PC’s.  Microsoft has scaled back. Dell has scaled back.  HP has scaled back.  It’s as if no one cares anymore. There has been discussion of the demise of the PC for years now and many times I think it is misunderstood.  It is not like the PC is going away, it has just become a commodity.  I need it like I need tires for my car.  This does not however mean there is no future for the PC, it just means the sex appeal of the PC is kind of dead, actually it is really dead.  Is the future, one of death for the PC?  Can it be resurrected?  Is technology transforming so fast that the PC will fade into memory?  All valid questions, but maybe a bit to doom and gloom for me.  There is a place for the PC, it just may not be as central as it once was.

There are still a lot of companies out in the world who rely on PC’s to drive growth – still a lot of the big names out there that includes Acer, Toshiba, Lenovo, HP Consumer, Dell etc..All good companies with good products, but in an age defined by Apple and Google in the consumer space they have all found it hard to stay relevant.  This does  not mean the PC is dead, we just need to reassess where it fits into our lives.  Is it cutting edge or has it become more like my refrigerator? Maybe a better question is my household appliance becoming more like my PC?  If we look at some of the big announcements at CES a fair amount were around old household appliances like the Samsung Family Hub Refrigerator which has three camera inside and you can connect via a Mobile app so when you are at the store you can check if you may have forgotten anything.  It also has a screen on it with the possibility of streaming video content to the fridge.  It was cool this year but I think it will be even bigger next year.  For hardware manufacturers they need to figure how they co-exist in this new world.  More importantly how do they offer value to anew tech consumer market that will be much larger than their traditional market .

What does this have to do with PC sales?  The way to look at with each new IoT device a piece of functionality of the PC is being distributed so I do not need to stop and sit down on the couch and boot to perform a task or view content. When I stream content to my TV I use Google Chromecast and my iPhone as I can get all content via the iPhone almost immediately.  Where time is spent then over time it is usually monetized.  With the rules changing minute by minute and the traditional tech experience being transported across every item ever created by mankind our reliance of a confined experience is dissipating.  Samsung and Google are leading the way.  Samsung does everything from phones to PC’s to kitchen appliances.  Showing and understanding that these are all in some way connected.  Google via its acquisition if NeST is connecting the home and allowing you to control your home environment anywhere at anytime.

A question is where does this leave Microsoft? Where does the Windows experience go from here?  A company that laid the ground work for where we are today needs to recreate its identity or more importantly recreate the user experiences.  We are continually being given new ways of interacting with technology.  New home heating systems we tap into via an app and wi-fi connection. Home security systems we can view from our mobile device our laptop..  The challenge for many of these new Internet of Things scenarios is that they don’t need all the functionality and overhead that Windows provides but a very specialized subset, more suited for a OS like Linux.  That being said it makes sense for Microsoft, given its history, to be a major player in this space. It will have to make significant changes in how it thinks about an operating system.

For all the strides we have made I still find at times the PC an extremely frustrating piece of technology.  It still can lock up on me.  Provide me the blue-wheel of death. The mouse touch=pads at times can be way to sensitive this causing mysterious things to happen.  Boot times have improved but are no where close to what I have on my tablet.  These distributed tasks to new devices and form factors are welcome, as they are simplified and available immediately upon request.  My technology horizons are expanding as every day technology touches something new in my life, down to the clothes I wear.  As is so often the case with gadgets they always seem to get smaller and brighter.

Where does this then leave the PC?  The PC had been around for over thirty years now and has lost its glamorous sex appeal.  It is not the center of the technology world anymore, nor has it been for a long time.  Will we not need them?  Absolutely not as certain task are still best designed for a PC.  The need to have a keyboard.  But as noted earlier the big change is the need to actually sit down and use a PC is not as great and more scenarios will crop up that further distribute our use of technology beyond the PC.  The PC has become more of a commodity for the general user.  I believe that I will have a PC until I leave this earth, however my time spent with it will continue to diminish, never to zero, but even less than it is today.  I do not foresee the PC ever gaining its former glamour and luster, at least not in the current from factors.  However the offspring to the PC shall lead us into a brighter future.

Good Night and Good Luck

Hans  Henrik Hoffmann January 12, 2016


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Waiting for the Next Big Thing

With the release of the latest Star Wars I have thought a lot about the basic concept of impact. The film genre of science fiction had been around since the film industry had started but all of a sudden one film caused our expectations of what science fiction film should be had been changed.  I have been around technology for 25 years and seen a lot of great things happen in that time. Some of the simple things are amazing to me like PC’s with terabyte hard drives, memory in terms of gigabytes,flat screens, tablets that are useful, the list could get rather long. But things are happening in corporate america, the start-up community, venture capital, research labs etc..that will shake the very foundation the industry has been built upon over the last half century.  In a lot of ways these change agents are interlinked.  Terms we hear a lot of today in the industry: robotics, big data,artificial intelligence, cloud services,..these are all linked together as they share information between one another.  But when size-mic shifts happen they cause everyone in the industry to change focus.

We have been through a couple big changes in the industry.  The birth of the consumer internet.  It was unique in that the internet had been around a long time, but was really restricted to academics.  With the Netscape IPO in 1995 this all changed as all of a sudden every company and every person needed to be connected.   Companies panicked.  People were excited. We tolerated painful access and download speeds.  Video was not coming and where it existed was choppy and poor quality.  But the seeds had been sewed and the internet has changed how we interact on nearly every level of society.  The one problem we had with the internet was early on we were locked to our desktop.  Always needing to be connected to a power outlet.  Even laptops only took us so far.  Needing wi-fi access with limited battery life.  That all changed in June 2007 when Apple launched the iPhone.  It gave remote internet access a new meaning.  Our browsing experience was changed on a mobile device and more importantly we had apps to make the mobile web more accessible.  Touch screen was flawless.  We could stream video.  It changed the industry once again as all of a sudden every company needed a mobile app developer.

It has been a while since the iPhone and the last major technological impact.  Not to say nothing has happened.  A lot has happened.  In terms of the next great impact I do not think it will be “a single event” this time that transforms us overnight, but a broad brush stroke of multiple events happening in rather quick succession. The velocity at which technology is changing is driving fast changes in how society operates.  As I mentioned earlier we have Cloud, Big Data Robotics etc..On the horizon there are a lot of people making big bets with big money.  Elon Musk predicts they will have a fully self driving car within two years.  This seems ambitious and I am not sure it will happen but the sheer audacity of predicting something like this and believing in it is amazing and Elon Musk has a pretty good track record of delivery.  We have a space race going on, but this time it is not the Soviet Union versus the United States. A space race not funded by the public sector (NASA) but the private sector.  It is happening in the private sector as billionaires are building new rockets that can return to earth. Jeff Bezos with Blue Origin,Paul Allen with Stratolaunch, Elon Musk with SpaceX, and Richard Branson’s Virgin Galactic. Even discussions of a mission to Mars and a Martian colony.  Other areas will be impacted as well.  As I am going through the wonderful process of choosing a healthcare provider I begin to think of my own mortality and my bodies limitations as my fiftieth year looms large, but the future will be bright for healthcare.  There is talk of 3D printed organs.  No need for a kidney donor, we will take your DNA and print a new kidney.   This year as part of his New Year’s resolution Mark Zuckerberg of Facebook wants to create a virtual assistant with AI,  Seems like the film ex-Machina is progressing quicker from fantasy to reality than anticipated.

All these great things seem to be converging upon us at the same time driving innovation further and faster.  The demand for engineers across disciplines has never been higher.  Great design will be ever more important to take form the simple engineering mind and making cutting ideas usable (sorry I have been around enough useless geeky presentations to slightly slam them).  There will be new opportunities as well  s displacement.  Every technological change in human existence has been met with trepidation and fear.  There have been protest already against a robotic future. Based on Mark Zuckerberg’s New Years resolution I am sure executive assistance may be worried.  Many companies are racing to buy AI startups, robotics companies the race heats up it will only intensify.  It is what we will call the Internet of Things world.

The impact of all these converging technologies will change the face of mankind in a way we have not seen before.  In part because it will happen very fast and challenge basic concepts of humanity.  How we exist, how we work, play communicate, entertain, it may even beg the question of should human race even exist?  Large questions to ponder and at this point cannot be answered.  Can we pull back?  I am afraid not.  the train has left the station and is only accelerating.  It is part of the human race to move forward quickly and in search of a greater future, not willing to recognize the consequences.  The next big thing is coming quickly and by the time it comes we will look back upon its rise before we know what has happened.  As I have quoted before and I shall quote Bill Baker again “The future comes slowly, change happens quickly”..

Good Night and Good Luck

Hans Henrik Hoffmann January 7. 2016


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Life on Camera

Admit it most if us have gone to the movies and come out dreaming, “one day that could be me”. As our heads fill of fantasy, cameras flashing, nice clothes, big houses etc..It seems a very romantic life.  But as we look around us today it is becoming more apparent that we are becoming a society that is always on camera.  We see video posts via Facebook, Twitter, YouTube etc..These are then increased in velocity as mainstream media picks them up and distributes via our television to the world. We live in a time where we go from anonymity to fame in a few beats of the human heart. Weather that fame is warranted or desired is a question only for the star or the victim.  It does raise questions of privacy and our obligation to our fellow human being.  Video has become so prevalent that we have become a society immune to its impact and at times the volume of what we witness via a screen becomes clouded and overbearing.  As much as Edward Snowden fights for our privacy against tyrannical governments, he did not go far enough as our beloved capitalism seeks to enhance revenues by taking every click and trying to learn about us and how better to monetize every human being on earth.  The ability of video to capture every aspect of our daily lives knows no boarders, as much as we try to define, the more clouded it becomes.

Rodney King was a violent case study of what can go wrong in race relations, but I feel in the end that is not at all what Rodney King has come to signify.  What he signified was one of the first instances where someone using a camera caught on tape and distributed via local media, and then watched it then go viral via global media.  It was the first instance that empowered an individual to hold law enforcement accountable for its actions . This was 1992, so it was pre-internet, but it showed the power of an individual to shape human events.  Since the LA riots of 1992  we have been increasingly been fed a diet of negative content via the web,  Journalism has left the hands to the newspaper reporter to private hands as technology has empowered us all to report and comment on the day’s news.  I am skeptical of much of it as it usually reads like a USA Today headline and I am stuck having to search for the full story before making commentary.  Unfortunately it seems most of society only has the attention span for the USA Today headline.  What came out of Rodney King, as horrific as it was to watch, has been overall positive for society at large.  The law is important for any stable democratic society to succeed, however when abused we are all left a little bit less

If we fast forward to today I would not want to be in law enforcement these days.  Before the advances in technology it was already a high stress job.  Periodically via mass media we would hear of mistakes and crooked cops (a Hollywood tradition).  Now it seems on a daily basis  we are fed a regular diet of illegal and horrific cop shootings. This morning I saw a video of police taking a black man to the hospital. He was unruly when they got to the hospital so they tasered him repeatedly and took him into custody and drove back to the police station. He died one hour later.  I wish this was a singular incident, but it seems like we see this kind of thing on television everyday.  These lead to civic unrest and a general lack of faith in law enforcement.  The question becomes is this a good or bad thing?  It is positive in that in roots out some generally bad police practices in certain police departments, the down side is it has led to a generalization of our views of law enforcement.  I think many have a poor view of law enforcement these days based not on who they know but on what they see.  The fact that many cities will have cameras on police officials moving forward will hopefully lead as to have better faith in our local police officers, but it is up to the media to paint a complete picture.

This may all sound negative but law enforcement has been active with technology as well.  Many are looking at drones as a form of surveillance.  Little cameras in the sky, scouting to see if any illegal activity is occurring in areas that used to be out of their reach.  Many city councils have shut these down, but in the end I believe this will be a reality as the private sector lobby’s to allow them to ship products via drone.  But as this happens law enforcement will say should we not have the right as well? That is all still a ways in the future, but then I ask has anyone received a speeding ticket via mail?  Or perhaps you were in a HOV lane for a 100 feet and received notice you needed to pay $2.50 for use of such lane (for my 3 readers in Brazil this is an express lane which in some areas in the US you pay a monthly fee for)?  Can we argue these fees?  No the rules are clear and if you want to contest they have the video to show you. For local governments it is kind of like printing money.

Beyond the dramatics of criminal activity we see on video we now will have cameras everywhere in the skies as drones multiply and now have to be registered with the FAA.  The challenge with having so many eyes in the sky is how to define parameters.  Amazon is taking a lead as it wants to distribute all packages under 5 lbs via drone. Great.  Problem is those Amazon eyes will witness a lot of things and store those somewhere in the cloud.  If a crime is being committed is Amazon supposed to report? I would hope so.  If you are doing something embarrassingly inappropriate poolside does that get stored in the cloud?   When you answer the door to receive your package does the Amazon eye scan your attire to use to profile you and send new items to sell you?  Does it look behind you to do a quick scan of your entry way?  Do you have paintings? Frames? Plants?  A new world of scenarios,where do your rights to privacy begin and end?

Any building you walk into has camera’s focused on you.  The lobby of a high-rise.  The stair case at the local YMCA, where they even have a sign that says “smile you are on camera”.  A convenience store.  The bank, obvious.  The parking garage, I hope so.  All this content that is created needs to be stored for future reference.  It just dies not go away.As we have learned in the world of terrorism everyone leaves a digital trail.  Committing a robbery these days in the old-fashioned way seems rather dumb as we usually have video of the criminal doing the act.  Beyond the obvious remember that the mundane is being regularly captured. Walking up the stairs, if you have an embarrassing itch that is also captured.  Though you may feel alone you are not and probably never will be.

Thanks to the camera on your XBox, a scenario at Microsoft was it would be great to see how are users are interacting with our technology.  As far as I know they did not do that because they were not invited into people’s homes,  It does however tell us that the internet is not just people at home looking out onto the web, it also provides companies, individuals, governments etc..the ability to look into our daily lives.  The cameras that come with every smart phone, tablet and laptop are the seeing eyes of the internet universe.  This extends into the world of social media as most content today ia Twitter or Facebook is actually video content.

Video is nearly omnipresent now.  It is capturing more and more of our lives as it happens.  In our homes.  At our work. It is a peeping Tom paradise.  We may all just give up on clothes.  It has created a new world of terror while allowing us to combat crimes in ways once limited to movies.  Every time we log onto access the web we are foregoing some of our preconceived notions of privacy.  Orwell’s Big Brother still rings clearly, but his classic “1984” was more influenced by the absolute power and tyranny of Stalin’s U.S.SR.   The big brother of today will be more of a hybrid between the private and public sector.  In our desire for consumption we sacrifice much of our privacy to both government and corporations.  On the web we get so many notices of compliance and agreement that if we took the time to read and understand every legal disclaimer we would literally have time for nothing else.  In addition some bright PhD or group of really smart people will develop an algorithm that will crawl the web and search for every reference, photo and video of a person and stitch them together thus documenting a persons entire life from birth to death and put it on a thumb drive. How heart warming.

Good Night and Good Luck

Hans Henrik Hoffmann December 17, 2015

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Windows 95 – 20 yr anniversary

With the launch of Windows 95 celebrating 20 yrs I thought I would re-post my blog from 6 yrs ago.  Posted on my 43rd BDay – enjoy!!

The biggest event in Microsoft history was the launch of Windows 95. Make no mistake about it. I don’t care what Ballmer, Sinofsky, Turner or whatever other exec you want to parade out and say xyz product was bigger. I don’t care that Microsoft says Windows 7 is the best OS they have ever made (they would be correct on that point). Windows 95 was huge. To put it all into perspective before we get to the launch event itself we should understand where the industry was at the time before Windows 95.

From a OS perspective one needs to remember that even though Windows 3.0 and Windows 3.1 had been huge successes there were essentially two things that limited it, primarily visa vi when you were comparing to a Mac.

Windows 3.1 and earlier all had one thing in common, they were built on top of and dependent on DOS. Memory Management which was so critical in those days was controlled by the Mac killer — DOS. I will say this over and over again. You can love your Mac it’s great stuff, but to lose to DOS, from a technical perspective, is shameful. Don’t tell me Microsoft was stupid when Apple had it burnt in their forehead.
Windows to this point was a 16 bit OS. The Mac was 32 bit which meant theoretically the Mac should be much faster than a Windows-based system. Windows 95 was going to a be a 32 bit OS. For the non-technical folk the easiest way to think of this is a 2 lane highway versus a 4 lane highway.
The PC at the time of launch was really starting to take its place in day-to-day like. The vision of a PC on every desktop and in every home was starting to come into view. People in general were getting used to and excited about technology. To work at Microsoft at this time was like being a rock star. Did not matter what you did at Microsoft, you were there. You were at the cutting edge. The nineties was the golden age of the geek.

Windows 95 was code-named “Chicago” in beta. We had played around with it in my group. It was cool. The UI was radically different from Windows for Workgroups 3.11, which we were all running at the time. It really took the graphical user interface to the next level at Microsoft. It really has not changed a whole lot since that release. The best story from the beta was in Chicago, when BillG had his demo guy, Chris Capposella launch the demo only to have the “big” crash occur. Chris has gone on to become a successful exec at Microsoft, but that was his shining moment of fame.  Funny that his shining moment was a failed moment.

Two of the primary drivers behind Windows 95 were Brad Silverberg and Brad Chase. When they stood onstage earlier that summer in Toronto for the Microsoft Global Sales Summit (I was not there but I saw the video), they received the loudest and longest standing ovation from the Microsoft sales force I had ever heard. I realized watching that neither would likely ever accomplish something so huge again in their life. Both have since left Microsoft, Brad Silverberg launched a venture capital firm. He leads a cushy life from what I understand.  The VC made money but has not done anything great.  Brad Chase has entered the world of, “where is he now”?

One of the key new features to Windows 95, which remains in the OS to this day was the “Start” button (they tried to kill it with Windows 8, but were crucified for their efforts). Leading up to launch Microsoft needed to do advertising. As the story goes BillG was at an event where also in the crowd was Mick Jagger (I have yet to be to such a party). Bill liked the idea of using the Rolling Stones classic “Start Me Up” for the ad blitz so he asked Mick, “How much would it cost?”. Keep in mind today we take these type of Rock Star meets corporate America for granted. In those days it was not quite so common (not to say it did not exist – Michael Jackson and Pepsi had been around for years).

The launch day that August was truly amazing. Starting at midnight with crowds lined up all over the country the amount of media buzz was overwhelming. Granted I was local, so in the Seattle area the coverage was over the top. Every TV station was covering the event and the soccer fields at Microsoft had been transformed into a circus seen complete with a big top tent. The event had a host, none other than Jay Leno. The Stones, “Start me up” was blaring everywhere and all the time. Helicopters were flying overhead all day long. It turned into a complete frenzy as radio reports stated to say that Keith Richards had been sighted at the airport (this proved to be false), which just added to the hysteria. Outside the tent were booths set up for Microsoft partners to show off demo’s of their Windows 95 products. Billg was on TV from that morning until the evening, doing interview after interview. There was food for everyone. It was just a huge party.

Compare all this with the Windows 7 launch, it was just a different ball game. I also think the metrics of success have changed. When I watched Steve Ballmer on the today show at the launch of Windows 7. Matt Lauer asked him, “So why should I buy Windows 7, I mean what is so great?” Without hesitation Steve responded “Faster boot time”. As I get older perhaps I get jaded, but that was not exactly the most exciting or interesting of answers. I honestly do not get that excited about OS upgrades anymore. At the end of the day the OS needs to support my devices and run my apps. Beyond that there is not a whole lot of excitement in an operating system. But when the industry was younger and before the internet the OS was a really big deal.

The Windows 95 launch was one of those events that will likely not happen in the industry again. That same month a IPO would launch for a small company called Netscape. The dawning of internet time was upon Microsoft and the industry would march toward overdrive, but that is the next blog. Have a great weekend:-)

Hans Henrik Hoffmann December 12, 2009

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Alphabet – The new Google

It was a big announcement. Larry Page and Sergey Bryn have decided to create a holding company called Alphabet, which will house a slimmed down Google and other companies.  Larry and Sergey will run the new company and hand over the CEO title of Google to Sundar Pichai.  Should we be shocked by this announcement? Maybe.  To be honest it is the kind of big thinking we have grown used to with  Sergey and Larry.  Google has always been about pushing boundaries.   They created the search engine business model that would rule all others.  Beyond search they bet early on video and bought Youtube.  They developed Android and Chrome. They thought mapping would be interesting and have grown the business to where it is on almost every smart phone on the planet.  They have used Project Moonshot to explore new businesses like driver less vehicles.  They have smart glasses and watches, though not huge success they continue to drive interest.  Now they are thinking, “we are a $50 billion business how do we invest and invent the next great business, but not get bogged down by our own size”?  There is debate on is this a bold move or not.  I would not categorize this as bold, but I think it is smart The first question is what does this mean to Google’s business?

One thing Wall Street has been clambering for is better transparency into Google’s different business units, in particular those “project moonshot” spin offs. A team like Google Fiber will now report earnings and what and why it did things the way they did. NEST will be broken out as separate entity, Life Sciences,  Calico, Investment arm of Google and Project X.   It’s smart as it gives investors visibility into different groups.  The core components of Search, Android, Chrome, YouTube etc..will remain as part of Google.  By creating these financial boundaries Google can create smaller nimbler divisions that can focus on big ideas, big visions, big opportunities.  It is important that they retain the entrepreneurial flare that has guided them to great success thus far and can keep them relevant for the future.  In the end it is one of those games companies hate to play, but have to play once they are a publicly traded company.  they have to make investors happy.

There are numerous examples of companies in tech that lost their way.  When I started in the industry IBM was at the forefront of companies that had been a leader only to lose their way in an ever changing tech landscape and at that time it was the idea of a personal computer.  They spent years trying to be better than Microsoft, before realizing under Lou Gerstner that they were IBM.  IBM had become an old stale company, grappling with its size and reach.  It was a legend in corporate America.  However Larry and Sergey were not afraid of be becoming IBM.  If you ask me who I think Larry and Sergey are afraid of becoming, it is my old company: Microsoft.  A company that defined the industry in the early days, but went from cool to being the new IBM. I remember quite well as the dotcom era created a booming economy that a challenge that was surfacing at Microsoft was growth.  When Steve Ballmer took over one of his priorities was to successfully manage that growth   He turned to the dean of the business world to find his answers and create his plan, Jack Welch.  The result was less than stellar as Microsoft became slow and monolithic.  The ability to lead seemed to disappear which led to failed projects like MySpace (A Facebook attempt), Soapbox ( a YouTube attempt), Zune (a iPod attempt) and a host of others. I don’t blame Ballmer too much for this because at the time Microsoft was the first of these young and new tech companies to experience this challenge of “hyper” growth.  Steve looked to existing business leaders of big legendary American companies. The big problem from my standpoint was those “other’ companies operated in a different landscape than Microsoft, with roots set before Microsoft even existed.  Though there was some good learning a lot did not transfer so well to a technology company.  Microsoft’s failure would be learning for those to come.

Many have said this move by Google is bold, amazing, giant, etc..I really do not fall in to that camp.  In many ways I think Google is tackling the biggest challenge with growth, which is, “How do you stay relevant?”.  It is ironic that the best quote, to paraphrase, comes from Microsoft CEO Satya Nadella, “This industry does not respect history, it only respect innovation”.  It is a true statement and the answer to the question of relevance. In 2013, Larry Page said”If you’re not doing some things that are crazy, then you’re doing the wrong things.”  Though many of Google’s ideas are out there in the wilderness, it will just take one or two to take off to drive the next $20 billion industry.  Some of Google’s ideas are obvious – driver less cars will happen.  The fact that Google was in early will help it immensely moving forward.  Life Sciences, the only thing I know is health care is at the dawn of a new revolution.  Fiber?  All tech companies hate the fact that they have to work with monolithic telecom carriers.  The challenge will be what kind if investment is involved to replace them?  In telecommunications the one guaranteed thing is every year will require billions of investment in the network.

In my final view I believe Google is doing the right thing.  Trying to create a smaller nimbler environment so that they can continue to innovate and take big risks.  The GE idea has proven to not work at a high level, operationally it has possibilities, but in tech you have to be bold as you move towards the future.  Google I think will try to balance the middle and appease the Wall Street dweebs, while continually investing in crazy ideas that could yield the next big industry shift.  In technology if  you view your business by where it is today it will not be long before you belong to yesterday. Googles move to Alphabet is an opportunity to invest in the businesses of tomorrow, it could fail miserably, however if they stay where they are today their failure will be all but guaranteed.  In technology nothing lives forever as the landscape is ever evolving.  You have to make bets on what you see the future to be like in five or ten years, it is the only way to ensure survival.


Good Night and Good Luck

Hans Henrik Hoffmann August 14, 2015

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A Microsoft Mobile Disaster

Sometimes it is fun to look back on posts I did – this is five years old and dare I say still as relevant today as it was then in light of recent announcements…

As I said when I started my blog this was not just going to be a Microsoft love fest and now we enter an area where I was probably the most disappointed in the company. With the announcement of Windows Phone 7 it may be a good time to look back at Microsoft’s entry into the mobile phone business. It has been a rough ride of late for the mobile business at Microsoft. I will admit even when they thought they were doing well I was never that impressed with the products they were delivering. I may be a “non” Microsoftee on this analysis, but it is how I saw things and though I never worked directly in the group I sat in the building (Building 117) with them for several years and saw how they went about their business. I also covered some of the accounts that they called into; ATT Wireless, Western Wireless and T-Mobile.

The first time I ever saw a Microsoft phone was around 1999 at a Microsoft Telecom Service providers event in downtown Seattle. At the time it was a project code-named “Stingray” or “Stinger”. It was as expected a brick, but it was the first step. For Microsoft it made sense to go into the Mobile space, simply for one reason: During the 90’s the mobile phone had gone beyond being just a phone, it now had a user Interface (UI) which you could do things with, like texting. If there was a UI then there was an opportunity for Microsoft to play, in fact it was so ingrained into Microsoft’s DNA that it had to play and it had to be the leader.

Early on Microsoft tapped a former exec of Symbian, the OS used in most mobile phones at the time, he was a Dane (so naturally I thought that was cool) named Juha Christiansen. Later on they would call back from Asia, Pieter Knook to act as Senior VP reporting straight to Ballmer. They decided early on that Microsoft’s strategy would be to take down Research in Motion (RIM) with their cool Blackberry device. Microsoft wanted to focus on business professionals and the smartphone market. I think this strategy was significant as it meant that Microsoft would not provide consumers with an offering for mobile phones. Second I will add I am not a big fan of the term “smartphone”. To me all that means is feature creep, as phones get more powerful they add more features and before you know it all phones are “smartphones”, but I guess marketing people like these kind of things to show they are monitoring something important, no matter how obvious it is.

A second thing that Microsoft was thinking was the role of software with the phone. Microsoft viewed hardware and software as two different things and were still under the guise of Bill Gates who said “you are either a hardware vendor or software vendor but not both”. Microsoft thought it could sell the software separately from the phone, so if you bought a mobile phone and an update came out for Windows Mobile, you could purchase for $5-$10 off of a website and upgrade your phone. Then and today it is still amazing to me how Microsoft was so not in tune with the end-user. Microsoft also wanted to replicate the OEM channel like it had with the PC by getting Motorola, Samsung, LG, Ericsson, and all the big mobile phone providers, minus Nokia to act as a channel. The problem here is unlike the PC, which was virgin territory and created companies like Dell, Compaq, and Gateway, Microsoft was dealing with mature established companies. These companies did not need to be educated about the mobile market place.

A third area was Microsoft did not get SMS (texting). Texting had become a global phenomena, driven by the younger audience. It is a crude technology as you have a limit of 160 characters (140 bytes). It looks like a mobile version of DOS. But it is useful. I asked one of my nieces once why she liked it (we shall call her the Russian Princess) and the Russian princess relied, “A lot of times I just have a question I need answered and I do not want the formality of a phone call”. Smart girl. I can only guess here what the discussions were at Microsoft but based on the actions of the Bus Development folks, I think Microsoft looked at SMS as old, simple and stupid. Why not use a rich email client to do the same thing? Microsoft Outlook offered way more for the end-user than a text message. Two reasons why that did not really work: 1) consumers wanted light and simple (outlook is feature rich and big) 2) Telecom carriers make a huge amount of money per text and what Microsoft was offering was part of a flat rate data plan. Telling Fortune 1000 companies to cannibalize their revenue stream was not a smart idea. Today over 2 trillion text message are sent annually around the globe, which in monetary terms equals billions of dollars of profit to telecommunications carriers.

The first task for Microsoft Mobile was to get a carrier to resell the Microsoft phone and that duty fell onto my client ATT Wireless. The hardware manufacturer was a Taiwanese company, HTC. The first phone cannot be called elegant. It was not great, but it was the first and soon thereafter a lot of people on the Microsoft campus had them. It was a significant change as now as an employee you get your email anywhere (at Microsoft email is king). Microsoft was on its way. Pieter Knook had laid out a plan to ship 1 billion phones with Microsoft software in 5 years.

As time went by the phones went global and more manufacturers came on board Motorola and Samsung released Windows Mobile phones and through time I would own about 10 different phones. Some good, some bad none were great. My issues with the Microsoft Mobile offering were more corporate. For starters corporate marketing required that the phone experience be in line with the Windows OS, so the look and feel was Windows. It had a start button. The browser experience was usually not good and sometimes just plain awful. It really highlighted to me a lack of the fundamental understanding of the end-user experience.

A second issue that cane to light was internal politics. As the realm of mobile applications became larger it was natural that other groups within Microsoft would have their own mobile offering. There was CRM ERP and MSN offerings. The problem was from the Mobile team not all offerings were Windows Mobile specific. The MSN team could not limit themselves to Windows Mobile phones since that covered less than 20 percent of the market place. However the bus development folks would make a point of trying to keep them out of accounts. I can certainly understand a passion for your product, I know the people in Windows Mobile worked hard, but at the same time I felt arrogance got in the way of reality. To say you needed to limit MSN offerings like Hotmail to Windows Mobile would cede the market to the main competition at the time: Yahoo and AOL.

Despite all the issues with Windows Mobile through the first part of the decade they did pretty well as they saw global market share increase, but as in many things you do not know reality until you look under the covers. The core code was fragmented and it seemed like rather than innovating new features Windows Mobile was just trying to replicate what others were doing in the market. This would all catch up to Microsoft on June 21, 2007, that was the day that ATT launched the Apple iPhone. It was hilarious in an infuriating way how the Windows Mobile team tried to downplay this launch and provide info on all the things the iPhone could not do. For example it could not copy and paste. Funny I did not know Windows Mobile could do that, but then I have never used Pocket Word to write an essay. How stupid could I be. When Bill Gates saw the iPhone he said, “Microsoft did not set the bar high enough”.

I think Apple hit a home run in several areas. First and foremost was the touch screen which remains to this day the best I have seen and used. It enables everything from there. When I clicked on apps it was responsive. By being so responsive it created the apps for the iPhone phenomena. Finally the browse experience was the best I have seen. It is easy, useful and responsive. In short Apple controlled the whole experience.

It raises significant questions about business models. Apple’s experience is contained in one form factor (there is only one Apple hardware/software experience). RIM does this to a certain extent but has more form factors. Microsoft and Google Android chose to distribute to any hardware vendor who is interested. Microsoft was really big into choice. I always thought this was a big mistake and frankly positioned very poorly. First off consumers always had choice. It was not like Microsoft invented it. You walk into any ATT or Verizon Wireless store you have wall to wall choices in phones. Microsoft does not enable choice the carrier does. Second user experience is very personal and it is based on the hardware and software experience. I met a sharp girl in San Francisco once at a Microsoft dinner. She had a Motorola Razor. Why? She liked the color (Pink) and it was so slim she could put it in her back pocket, without a bulge. Girls do not like to look fat. If Microsoft could develop Mobile software for that, well then they would be on to something.

When I left Microsoft there were 7000 iPhones on the Microsoft network. Certain groups (XBox and Zune) encouraged employees to get an iPhone as a challenge to the Windows Mobile team. They even embarked ona “skunk’ works project to develop a Zune phone. One of the last executives I ever saw talk was Scott Guthrie, VP of development Tools. He had a iPhone and mapped out what was happening. The kernel code for Windows Mobile had to be scrapped and they needed to start over. Andy Lees, VP of Windows Mobile was brought over to revamp the team (Pieter Knook had left and taken a job with Vodafone). Andy did not want the job, but when SteveB tells you this is what you will be doing it is not a negotiation. the few times I have seen Andy speak he has not looked comfortable. I think he realizes that mobile software and the mobile industry in general require sex and sizzle. Andy is a very smart guy but he has no sex and sizzle.

With Ballmer’s recent announcement of the launch of Windows Phone 7 for the holidays (which is 9 months from now) it will challenge the Microsoft partner model. All I can say is every phone I have had though they have the same look the experience is greatly different. The market is also getting very crowded (Apple, RIM, Nokia, Google, Palm, Samsung, LG, Motorola etc..). Form factors are also getting more plentiful as the world of mobility expands. You have Laptops, Tablets, Netbooks, PDA’s, Smartphones etc..It is a very exciting time in the world of mobility but the question will be what is Microsoft’s role?

Good night and good luck.

Hans Hoffmann

February 24th , 2010 (Happy B-day to me eldest son)

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A Microsoft Nokia Mobile Reflection

It did not take as long as I expected but as of last week Microsoft determined its acquisition of the Nokia Mobile device business was a failure. Microsoft announced it was cutting 7,800 jobs and taking a $7.6 billion dollar charge related to its acquisition if Nokia.  Most jobs being removed would be in the mobile device business.  This comes after former Nokia CEO Stephen Elop stepped down from hos role as chief device guy at Microsoft.  It has been along road to get to this point, a little over 8 years since the launch of the Apple iPhone, which started the downward tailspin of what once was an aspiring division at Microsoft.  Sometimes a company’s culture gets in the way of doing what is right and what is needed, but that did not start to change until Satya Nadella took over the reigns of the company

I have to admit the litany of excuses I have heard from Microsoft executives over the years when it comes to mobile makes this move by Satay somewhat satisfying.  Starting with the king himself, Steve Ballmer, the quotes are comical.  I remember, regarding developers for mobile devices “There needs to be a third mobile ecosystem”.  No there does not need to be.  On the Apple iPad, “They will never sell those things”.   Yes they will. On iPhone pricing, “Who wants to pay $500 for a phone?”  Billions and billions of Apple dollars later. On the mobile strategy, “We just got the formula wrong”.  You think, Mr 3% global market share..  All these quotes without ever having the courage to say I failed.  As Bill Gates once said, “It is fine to celebrate success, but it is more important to heed the lessons of failure”.

Before Microsoft acquired Nokia, Microsoft exec Stephen Elop had left Microsoft to become CEO of Nokia.  Early on in his tenure he wrote the now infamous “We are on a burning platform” email to Nokia employees..  After this Nokia was open for business, they needed a new platform as they needed to ditch the aging Symbian.  There were only two contenders, Google’s Android Platform and the Microsoft Windows Mobile platform.  The issue before Nokia was Google wanted Nokia, but they did not need them.  Microsoft, on the other had, desperately needed Nokia.  In the end two sinking ships got together and the Nokia Lumia brand would come to life.  After the deal was announced Nokia VP and ex- Microsoft GM Vic Gudotra tweeted, “Two turkeys do not make an eagle”.

It was rumored at the time of Ballmer’s initial inkling’s to buy Nokia that Satya was not on board withe the idea.  Then over time Satya was persuaded by Steve that it was the right thing to do.  When I first heard this story my reaction was “Satya was not won over to this point of view”.  I think it was more a case of Satya is a team player and since Steve seems hell-bent on doing this I might as well get on board.  As would later come out Steve had wanted all of Nokia but the board restructured the deal and brought it down to a more streamlined acquisition (this effort was led by Bill Gates). When the deal was announced what I always found interesting is that Steve seemed to be buying into the Apple model.  I always viewed the Google model much more in line with Microsoft’s DNA, perhaps it was the open source component of Google’s model that made Microsoft uneasy.  It just seemed more consistent with Microsoft developer and partner story than doing proprietary hardware.

Following the deal there were some exciting announcements and glimmers of hope, they were just that glimmers.  Global market share would go from 4% to 5%.  The challenge with Microsoft was they were never able to sustain momentum.  Thy never could get developers excited.  Steve wanted a third ecosystem, but as former Microsoft executive Ray Ozzie said later after he had left Microsoft, “Developers only have so many calories they can burn”. With each release there was an uptick and then a drop.  Time and time again we were told, “wait until Windows x”.  It has become a “boy who cried wolf” kind of thing.  The bottom line was and a big problem for Microsoft, people were happy with their Apple and Android phones..  To get people to move you have to change the playing field, something Microsoft was simply not able to do, with or without Nokia.  It is hard to get satisfied customer to move.

Is Microsoft done?  No there are plans to release more Windows Phones.  At a reduced pace. I don’t think Microsoft will ever be a major force  in the hardware segment, at least for mobile devices.  However I think Satya is being smart and pragmatic.  What has happened over the last 8 years has been a mobile nightmare for Microsoft.  When you are sitting at 3% global market share that means 97% of the phones on the planet, most users have a near zero percent experience when it comes to having any Microsoft software at all on their device.  Though some may say Steve started development on Microsoft Office for the iPad, which he did, he was slow and failed to pull the trigger.  Satya on the other hand has quickly released these apps to market.  When Microsoft talks about a Cloud First, Mobile first world, I think they understand that they don’t have it all.  The bigger challenge here will be creating those experiences that mobile users have to use, both professionals and consumers.

Following the Nokia mistake the next several years will be critical for Microsoft in the mobile space as it tries a new strategy to make itself relevant. Granted given the big miss with trying to be the operating systems for mobile devices it was necessary.  How Microsoft measure’s success will be important, so they have to win the hearts and minds of business users and consumers to be successful?  Will just one suffice?  Is this yet another attempt to tie the desktop to the device?  Microsoft needs to be relevant in mobile, it’s life depends on it.  In setting the course for this new strategy it also needs to be aware of shifts in the industry, it cannot have another iPhone moment.  That would just breed Nokia 2.0.

Good Night and Good Luck

Hans Henrik Hoffmann July 13, 2015


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