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2011 in High Tech YTD Part 2: Management Shakeups at Google, HP, Microsoft etc.

Laura DiDio — Fri, 06 May 2011 16:36:25 +0000

Revolving Door
In contrast to Apple’s stunning success, the first calendar quarter of 2011 was a revolving door for other Silicon Valley companies and executives. There were management shifts, shakeups and ousters at Advanced Micro Devices (AMD), Google, Hewlett-Packard (HP) and Microsoft. They were variously aimed at jumpstarting product momentum (AMD, Microsoft), polishing a tarnished image and placating stockholders (HP) and providing an orderly transition of power (Google).
You need a scorecard to keep up with all the comings and goings.
AMD’s board ousted chief executive Dirk Meyer in mid-January after only 18 months on the job. It then appointed Senior Vice President and CFO Thomas Seifert, as interim CEO while the search goes on for a permanent chief executive. Siefert continues as chief financial officer and says he does not want to be considered for the permanent CEO position. This is probably a smart move. AMD’s flamboyant co-founder Jerry Sanders spent 33 years as CEO (1969 to 2002), but everyone who’s followed has had a short tenure.
The challenge for any AMD chief executive is to jumpstart momentum and somehow find a way to gain ground on perennial logic chip front runner Intel and Nvidia which dominates the mobile (Tegra 2) and graphics chip market. AMD’s Opteron dual and quad-core processors and the mobile and graphic chips which it acquired in its 2006 purchase of ATI are all solid offerings. However, AMD’s former CEO Hector Ruiz and Meyer elected to focus on optimizing their chips for traditional notebooks instead of the lightweight mobile devices and tablets that are stars in today’s markets. According to statistics published by International Data Corp., Intel’s share of the PC and server chip market is approximately 81% compared with AMD’s 19%.
AMD continues to shuffle its executive ranks. In February, two senior executives, Bob Rivet, executive vice president and chief operations and administrative officer, and Marty Seyer, senior vice president of corporate strategy, also resigned. In late March the company named former HP executive Mike Wolfe as its new chief information officer. Prior to joining AMD, Wolfe served as vice president of information technology for product development and engineering at HP. Wolfe is now responsible for managing AMD’s global technology infrastructure. Ironically, AMD’s former CIO Ahmed Mahmoud, who departed in 2010, went to HP where he is currently the Senior Vice President of the global information technology group.
HP Still Hurting from Hurd Scandal
HP has also had its share of executive shakeups in 2011. All of them stem from the continuing fallout from former CEO Mark Hurd’s exit last summer. The reverberations have tainted the company’s once pristine image and they are as toxic to HP as the radiation leaking from Japan’s Fukushima nuclear power plant. Hurd left under a cloud of scandal amidst charges of sexual harassment and dodgy expense accounting related to an undefined but inappropriate relationship with a female contract employee. A scant week after Hurd’s departure which included a platinum severance package worth $44M — a group of HP shareholders filed suit. The suit alleges that HP board members are guilty of “gross mismanagement and waste of corporate assets.” They claimed the board put the shareholders’ finances at risk by failing to disclose the charges of sexual harassment against Hurd. It sounds reasonable. What’s particularly galling to shareholders and rank and file employees is that Hurd got rewarded for his bad behavior after he spent the last several years cutting tens of thousands of workers from HP’s payroll.
In January, HP replaced four of its board members and added an additional director to the board. The departing HP board members are Joel Hyatt, John Joyce, Robert Ryan and Lucille Salhany. They are replaced by Shumeet Banerji, chief executive officer of Booz & Company; Patricia Russo, former CEO of Alcatel-Lucent; Gary Reiner, former CIO at GE; Dominique Senequier, CEO of AXA Private Equity and Meg Whitman, former president and CEO of eBay Inc.
The new board members provide HP with diversity and wide ranging experience. By overhauling its board, HP seeks to mollify outraged shareholders and distance itself from the Mark Hurd debacle. This is no easy task. HP launched its own investigation of Hurd’s departure. It will be conducted by CEO Leo Apotheker, the new board members and outside legal counsel. Apotheker has wasted no time assembling his team. On April 18, HP announced that Thomas Hogan, who headed the company’s enterprise business sales and marketing, will leave on May 31 to “pursue other interests.” Hogan’s replacement is Jan Zadak (a former Compaq executive). Zadak is presently the managing director for HP’s Europe, Middle East and Africa (EMEA) operations. In mid-April, HP also appointed Marty Homlish as executive VP and chief marketing officer. Homlish will be responsible for overseeing and leading marketing across the company and will become a member of the company’s Executive Council, reporting directly to Leo Apotheker. Homlish and Apotheker worked together before at SAP AG, where the latter was CEO. Prior to joining HP, Homlish spent 10 years at SAP AG, where he served as the global chief marketing officer and corporate officer, as well as president and CEO of SAP Global Marketing, Inc.
There was also a seismic (though amicable) shift at search engine market leader Google. The company announced in January that Eric Schmidt would relinquish his CEO post in April in favor of company co-founder Larry Page. Page took over in early April and immediately reshuffled managers and the reporting structure.
The CEO change at Google is prompted by the desire to aggressively expand into new markets. Page is going to have to prove himself. Wall Street is nervous. In the wake of continuing skirmishes with leading vendors including Microsoft and Apple and latest and somewhat disappointing financials reported on April 14, many on Wall Street are concerned about Google’s prospects. They question the company’s aggressive spending spree. Months ago Google announced plans to hire 7,000 to 10,000 new workers; hand out 10% company-wide salary increases and aggressively pursue new business. That includes technology expansion into everything from smart phones to social networking to mobile and expensive marketing campaigns.
In its latest quarter, Google reported expenses of $2.84 billion; a 54% increase from the prior year. While revenues in the latest quarter ended March 31 rose by 29%, Google’s stock price has decline by nearly 9% since January when it announced that Schmidt was stepping down as CEO. The decrease has wiped out roughly $12.5 billion from Google’s market capitalization which now stands at $173.09 billion (still one of the best in the industry). Google remains the dominant player in the search engine arena with a commanding 65% market share. Its next closest competitor is Microsoft’s Bing which has about 14% and Bing is linked to Yahoo which has another 16% for a combined share of 30%. Google’s Android mobile operating system meanwhile remains the undisputed market leader with a solid 45% market share; twice that of its nearest rival Apple’s iOS.
“Dog Wars” Android App Bites Google’s Image
Meanwhile, Google faces growing and well deserved criticism by the Humane Society, the ASPCA and animal rights activists who are outraged over an Android application called “Dog Wars.” The video game built by Kage Games glorifies dog fighting and depicts a bloodied pit bull next to the game’s logo on Kage’s website. Humane Society President Wayne Pacelle said in a prepared statement that “Dog Wars” could be used as virtual training ground for would-be dogfighters. Even Philadelphia Eagles quarterback Michael Vick who spent 18 months in prison after being convicted of illegal dogfighting, condemned the Android application. “I’ve come to learn the hard way that dogfighting is a dead-end street,” Vick said in a statement posted on the Humane Society’s website. “Now, I am on the right side of this issue, and I think it’s important to send the smart message to kids, and not glorify this form of animal cruelty, even in an Android app.”
Google ducked the issue for two weeks before it was finally pulled from Android Marketplace. on April 28. This incident also shines the spotlight on a larger issue: as Google further expands into the gaming industry via the number one Android operating system, will profits win out over principles and ethics? To further extend the Android mobile OS and solidify its lead, Google launched the new “Games at Google” gaming unit and they are seeking a Product Manager to fill the post. Let’s hope it top management provides some much needed ethical oversight.

Changes are also afoot at Microsoft. In late January CEO Steve Ballmer announced the departure of 23 year veteran Bob Muglia who successfully ran the company’s very profitable Server and Tools business. Under Muglia’s direction, STB recorded a $1.63 billion operating profit on sales of $3.96 billion in the prior fiscal quarter. Muglia will leave sometime this summer. To date, Microsoft has been mum about his replacement and while the company isn’t saying anything publicly word inside the company is that Ballmer forced Muglia out to accelerate Microsoft’s cloud strategy.
Whether or not that’s the case, Ballmer should speed up the search for Muglia’s successor and plug the gaping holes left by other very visible departures. They include: Brad Brooks, a corporate vice president in the Windows consumer marketing group who left to work for Juniper Networks; Matt Miszewski, the general manager of Microsoft’s government business who is taking an executive post Salesforce.com and Johnny Chung Lee, the infamous Wii hacker who partnered with engineers in Microsoft’s Applied Sciences group to develop the Kinect for the Xbox 360. Lee is defecting to Google. Ouch! The Kinect motion camera has been an unqualified success for Microsoft. It sold eight million units in the first 60 day. Microsoft is also betting heavily on its Windows Phone 7, which has garnered generally positive reviews. Microsoft says it has sold over two million units to date but it isn’t clear how many of those units (which have been shipped to partners) have actually been sold. Microsoft will have to bring its “A” game to challenge Android-based smart phones, Apple’s iPhone 4 and RIM’s Blackberry.

ITIC 2011 Reliability Survey: Users Give IBM AIX v7, Windows Server 2008 R2 Highest Security Marks

Laura DiDio — Mon, 04 Apr 2011 15:25:49 +0000

IBM AIX v7 and Windows Server 2008 R2 Highest Security Marks
Nine out of 10 — 90% — of the 470 respondents to ITIC’s 2010-2011 Global Server Hardware and Server OS Reliability survey rated the security of Microsoft’s Windows Server 2008 R2 and IBM’s AIX v7 as “Excellent” or “Very Good.” This was the highest security ratings out of 18 different Server Operating System distributions (See Exhibit below). Three-quarters or 75% of survey participants gave HP UX 11i v3 “Excellent” or “Very Good” security ratings; this was the third highest ranking of the 18 major server OS distributions polled. This was followed by Ubuntu Server 10 and Debian GNU/Linux 5, which tied for fourth. Seven out of 10 survey participants — 71% — of those polled ranked the two most popular open source distributions’ security as “Excellent” or “Very Good.” Red Hat Enterprise Linux v 5.5 and Novell SuSE Linux Enterprise 11, the two most widely deployed Linux distributions trailed Debian and Ubuntu but were nearly tied with each other in security rankings. Just over two-thirds — 67% — of Red Hat users rated its security as “Excellent or Very Good” while 66% of survey participants judging Novell SuSE Linux Enterprise 11 security to be “Excellent” or “Very Good.”
Some 58% of Apple Mac OS X 10.6 survey respondents rated its security as “Excellent” or “Very Good,” putting it at the bottom of the pack, beating only Oracle’s Solaris 10 which was rated “Excellent” or “Very Good” by 63% of respondents.
, which in the past two years has been notching modest gains among corporate users,
Also noteworthy was the fact that only a very small percentage of respondents gave thumbs down “Poor” or “Unsatisfactory” security grades to their server operating system vendors. In this category, Apple had the highest percentage of respondents – 7% — who gave its Mac OS X 10.6 both “Poor” and “Unsatisfactory” marks. This might appear puzzling to some since Apple’s users have long touted the security of the platform. Apple users have long boasted about the fact that there are far fewer viruses and malicious code written targeting Macs compared to Windows. However, now that Apple is once again re-emerging as a significant presence in corporate networks, the Mac OS X 10.6 will no longer enjoy the “security by obscurity” that it claimed as a standalone consumer OS. Macs, iPhones, iPads and tablets are becoming mainstream staples as business tools. Hence, the number of exploits, including such malware as worms, Trojans and bots that target the Mac is increasing commensurately. Apple will have to respond accordingly with tighter security.
Survey Methodology
ITIC and our survey partner GFI Software conducted an independent Web-based survey of 470 corporate IT mangers and C-level executives worldwide from November 2010 through February 2011. The survey’s objective was to poll corporate customers on the reliability of 14 of the most popular server hardware platforms and 18 of the top server OS distributions.
Survey participants came from 23 countries worldwide; approximately 83% hailed from North America. The survey consisted of multiple choice questions and one essay question. ITIC supplemented the Web survey two dozen first person customer interviews. In order to maintain objectivity, ITIC accepted no vendor sponsorship monies.
Solid Security is Essential to Network Reliability
Solid security is an essential element for every network environment. The server operating system upon which corporate middleware and software e.g., databases, word processing applications, spreadsheets and other mainstream line of business (LOB) applications run is the cornerstone of the entire network computing environment. As the saying goes, “the chain is only as strong as the weakest link.” Server and their operating systems literally run the business and incorporate a significant percent of organizations’ sensitive data and intellectual property (IP). If server OS security is flawed, buggy or easily hacked, the entire business and its operations are potentially at risk.
Each GFI/ITIC survey invariably serves up some unexpected responses. And in this survey the biggest came in the responses regarding server operating system security.
The biggest of these, of course, was Microsoft, which like the Bible’s Prodigal Son, has returned home to rejoicing and rave reviews. Over the past decade Microsoft has struggled to shed the stigma that Windows is a porous server OS, perennially plagued with security flaws and easily compromised. It is now nine years since Microsoft publicly launched its Trustworthy Computing Initiative which was designed to make all of the company’s software inherently more secure by default and by design. Based on the survey responses, Microsoft has succeeded – particularly with Windows Server 2008 R2.
Of particular note, Windows Server 2003, Windows Server 2008 and Windows Server 2008 R2 are the only three operating systems out of the 18 different server OSes in the GFI/ ITIC poll in which the majority of the respondents indicated that the security has improved over the past 3 years. This is an 18 percent improvement over Windows Server 2008 and a 30 percent jump in the number of survey participants who gave a similar rating to Windows Server 2003.
It is equally true in analyzing the responses that the Windows Server OS was the platform that most needed to strengthen and shore up its security. Based on the results of prior ITIC surveys as recently as 2008, user perception was that Windows Server security lagged behind nearly all of the other server OSs by a substantial margin.
Other Server Operating Systems Stay the Course
In all of the other 15 distributions, the majority of survey participants indicated that the security of the other server OS platforms “has remained the same.”
If Windows Server 2008 R2 is the Prodigal Son, then IBM’s AIX v 7.1 is the “Good Son” which has consistently delivered superlative security year after year, always garnering top ratings for overall reliability and security in each of the annual ITIC Reliability surveys. The 2010-2011 Global Server Hardware and Server OS Reliability poll was no exception. IBM tied for first place with nine out of 10 respondents – 90% — giving AIX v 7.1 an “Excellent” or “Very Good” rating. Many of the IBM security managers ITIC interviewed, cited the consistency and inherent ‘bullet proof” nature of the server OS source code and the fact that IBM is quick to discover, inform them and issue a fix when a security issue does arise.
Other distributions like HP’s UX, Red Hat Enterprise Linux , Novell SuSE Linux Enterprise and Apple’s Mac OS X 10.x also received high security marks and praise from customers.
The results of ITIC’s latest 2010-2011 Global Server Hardware and Server OS Reliability survey indicated that organizations of all sizes and across all vertical markets feel that it is critical that they monitor the server OS and associated server-based line of business (LOB) applications for vulnerabilities. A 51 percent majority of businesses feel that the security of the OS has an impact on the overall security and reliability of the network. Specifically, 60% of respondents indicated they place equal importance on monitoring the vulnerabilities of all network components followed by 56% that rated the OS as crucial and 42% say they feel the security of their databases and other main LOB applications are pivotal to the overall security of their network computing environments.
Among the other security highlights in the ITIC/GFI 2010-2011 Global Server Hardware and Server OS Reliability Survey:
• In response to the question: “Estimate the impact or perceived impact that server OS security has on overall network reliability”
o 10% of respondents said “No impact, they are separate and distinct”
o 37% of participants said “minimal impact
o 21% said “moderate impact
o 17% said “significant impact
o 12% said “extremely crucial, server OS and security are intertwined”

Based on ITIC’s first person customer interviews, we determined that the biggest customer complaint was not with the inherent security of a specific server OS platform, but rather in finding fixes and getting technical service and support when the organization was stymied. In many of these particular instances, the organizations were very large enterprises and a common complaint was that searching for a fix was akin to finding “proverbial needle in a haystack.” Since the underlying reliability and security of nearly all the server operating systems and server hardware has improved, the majority of the more moderate and severe Tier 2 and Tier 3 outages are mainly due to integration and interoperability issues e.g., incompatible applications or drivers.

Conclusions and Recommendations
Server OS security is fluid and not static. No server operating system, application or hardware component is immune to penetration. Customer perception can and does change the minute a security flaw is found or malware is unleashed that successfully penetrates or threatens to compromise the security of any platform.
None of the server operating system vendors can rest on their laurels. Microsoft has made impressive security gains making Windows Server inherently secure by default, design and deployment, now it must endeavor to maintain the consistency of its security. Windows Server also has the biggest bull’s eye on its back since it is one of the most widely deployed server operating systems. Other server OS distributions, most notably Apple’s OS X 10.6x, which has so far managed to avoid falling prey to very major or public security holes, must likewise maintain its vigilance as the OS increases its presence in corporate enterprises.
Corporations also bear at least 50% of the responsibility for securing their respective environments. Even the most bulletproof server OS can be compromised and undone by configuration errors and failure to install and turn on OS security features. Organizations are also advised to conduct quarterly threat assessments of their environments. Staying current on the latest patches and fixes is also a must, as are regular updates of anti-virus applications and other security packages. Corporations should also review and update their security policies and procedures annually.
These results are especially important considered in light of the ongoing economic crunch which has caused companies to cut their IT budgets and reduce staff. As they strive to accomplish more with fewer resources, IT departments must rely even more heavily on their vendors to deliver more reliable and secure servers and server OS platforms.
Time is literally money. Even a few minutes of downtime – especially when a hack or a suspected security leak occurs — can result in significant costs and cause internal business operations to grind to a halt. Downtime as a result of a security breach can also undermine company’s relationship with its customers, business suppliers and partners. Reliability or lack thereof can potentially damage a company’s reputation and result in lost business.

IBM, Stratus, HP, Fujitsu Top ITIC/GFI Software Hardware Reliability Survey

Laura DiDio — Thu, 27 Jan 2011 15:02:38 +0000

For the third year in a row, IBM AIX Unix operating system (OS) running on the company’s Power System servers scored the highest reliability ratings among 19 different server OS platforms – including other Unix variants, Microsoft’s Windows Server, Linux distributions and Apple’s Mac OS X.
Over three-quarters or 78 percent of survey respondents indicated they experienced less than one of the most common, minor Tier 1 incidents per server, per annum on IBM’s AIX v. 5.3 and AIX v 7.1 distributions
Those are the results of the ITIC 2010-2011 Global Server Hardware and OS Reliability Survey. ITIC partnered with GFI Software (formerly Sunbelt Software) to conduct this independent Web-based survey. It polled C-level executives and IT managers at 468 corporations from 23 countries worldwide from November through January.
The survey data indicated that the reliability and uptime of all the major server OS and server hardware distributions has improved significantly over the past several years.
Microsoft’s Windows Server 2008 and Windows Server 2008 R2 served up the biggest surprise in the survey, scoring impressive reliability gains and making it one of the top three most reliable, mainstream server OSes. Windows Server 2008 R2’s reliability renaissance is especially impressive since Microsoft’s Windows Server OS noticeably lagged behind the majority of the UNIX, Linux and Open Source distributions in the ITIC/Sunbelt 2008 and 2009 Server Reliability surveys. This was particularly evident when it came to chronicling the most severe Tier 3 outages which typically last for four or more hours, involve data loss and require multiple members of the IT department to perform remediation.
An overwhelming 92% majority of Windows Server 2008 R2 users experienced less than one or one Tier 3 outage per server, per annum followed closely by the 90% of respondents using IBM’s AIX 7.1 who said they experienced one or less than one severe Tier 3 incident, per server per annum. Some 86% of Novell SuSE Linux Enterprise Server 11 and 84% of HP UX 11i v3 users also testified to the reliability of those platforms, reporting that they experienced either one or less than one unplanned Tier 3 outage per server, annually.
The survey found that all server OSes continue to make year-over-year reliability gains. The essay comments and first person customer interviews revealed that the majority of the moderate and severe Tier 2 and Tier 3 outages were attributable to integration and interoperability issues such as incompatible drivers, trouble applying patches, (particularly in highly customized environments), misconfigurations and the lack of a specific component or software fix for a particular platform.
Some IT managers also acknowledged that complexity and the IT department’s unfamiliarity with new products, software versions and new technologies like virtualization and private clouds prolonged downtime. This is particularly true in instances where corporations lacked the time or the funds to certify and re-train the appropriate members of the IT staff on new technologies.
The Sun Solaris 10 now owned by Oracle had respectable reliability statistics, though the Solaris on SPARC systems lagged behind most other OS distributions. Nearly 73 percent of respondents reported that Sun Solaris 10 recorded less than one Tier 1 per server, per annum outage, while only 63 percent of Sun Solaris 10 SPARC users achieved those same reliability results. The numbers were similar for the more moderately serious Tier 2 outages with 70 percent of users running Sun Solaris 10 on SPARC systems reporting less than one incident per server, per year. Sun Solaris 10 on x86 systems fared slightly better with 71 percent recording less than one Tier 2 incident per server on an annual basis. With respect to the most severe Tier 3 outages, 70 percent of Sun Solaris 10 on SPARC survey participants say they experienced less than one incident on each server during the year, compared with 74 percent of Sun Solaris 10 running on x86 platforms who reported less than one severe Tier 3 incident per server, per annum.
Overall, with respect to the most severe and prolonged unplanned Tier 3 outages, Sun Solaris 10 also lagged behind all of the major OS distributions with 70 percent of customers reporting less than one outage. That is the approximately the same percentage of organizations that are still using the eight year-old Windows Server 2003 server operating system. Some 69 percent of Windows Server 2003 users reported less than one per server, per annum Tier 3 outage.
IBM Tops in Server Hardware Reliability
IBM hardware was also best in class in terms of reliability, stability and performance. IBM’s System z mainframes recorded the least amount of downtime; 76% indicated System z machines experienced just one-to-five minutes of unplanned outages per server, per year, the equivalent of 99.999% or better availability.
Stratus Technologies’ ftServer 6300 and 4500 series and Fujitsu’s Primequest and Primergy Servers also made impressive showings. Some 75% percent of Stratus ftServer 6300 and 4500 users say they experienced one-to-five minutes of per server, per annum downtime, for five nines of availability. Some 74% of HP’s Integrity and Fujitsu Primequest and Primergy server said they experienced less five minutes or less of unplanned annual server downtime.
Among the other survey highlights:
• A 57% majority of respondents said their server hardware is between one and three years old. One-in-five corporations – 20% – said their servers were three-to-four years old.
• One-quarter – 25% — of businesses refresh their main line of business server hardware “as needed” and 10% said they upgrade a portion of their servers annually.
• Only a very small 2% minority of organizations aggressively upgrade their servers every two years. The majority of companies are on a three, four or five year server refresh cycle with 15% of participants stating they upgrade servers every two years; 15% upgrade every three years and 17% are on a protracted five or six year server upgrade cycle. Another 15% said they have “no specific” server upgrade timetable.
• A higher percentage of users prefer to apply patches manually rather than automatically. Nearly three out-of-10 organizations – 30 percent say they opt to apply patches manually, all or most of the time. Another 35 percent of survey participants say they “sometimes” apply patches manually. Only 16 percent of respondents never apply patches manually.
• Some 26 percent of respondents who always use group policy to apply patches and 16 percent who sometimes utilize group policy methods compared to 52 percent of survey respondents who eschew group policy.
• The manual patch method does take longer than applying patches automatically or using group policies. Overall 61 percent of those polled said they spend more than one hour applying patches to their server platforms for each specific upgrade . Of that figure, just under half – 29 percent – revealed that it takes them in excess of four hours to apply patches for each incident.

The length and severity of Tier 1, Tier 2 and Tier 3 unplanned outages and the patching actions related to each correspond to specific line item capital expenditure (CAPEX) and operational expenditure (OPEX) costs for the business. Reliability, measured by downtime, can positively or negatively impact TCO and accelerate or delay the time it takes to realize ROI.
Improvements or declines in reliability also mitigate or increase technical and business risks to the organization’s end users and its external customers. The ability to meet service-level agreements (SLAs) hinges on server reliability, uptime and manageability. These are key indicators that enable organizations to determine which server operating system platform or combination thereof is most suitable.
Overall, these survey responses provide crucial, comparative reliability metrics to enable customers to make informed choices on which server hardware and server operating system or combination thereof, best suits their specific business and budgets needs.
Conclusions and Recommendations
In summary the ITIC 2010-2011 Global Server Hardware and Server OS Reliability Survey findings indicates that all of the server operating system platforms have achieved a high degree of reliability. However, the IBM AIX 7.1 operating system, followed closely by Windows Server 2008 R2, HP UX 11i v3 and Novell SuSE Enterprise Linux 11 are the top four most reliable server OS distributions.

ITIC Windows 7 Survey Results: 75% of Users Give it High Marks for Performance & Reliability!

Laura DiDio — Fri, 22 Oct 2010 14:43:14 +0000

Thanks to everyone who responded to the independent, joint ITIC/Sunbelt Software survey on Windows 7, Desktop Infrastructure and Cloud Services deployment trends and issues. Please NOTE: no vendors sponsored this survey or in any way influenced the results.
Over 400 of you from 22 countries took time out of your busy schedules to respond to our poll.

Windows 7 is a winner!

As we noted in our previous blog, Windows 7 officially celebrates its 1st birthday, today — October 22nd. And there are plenty of reasons to celebrate. Yes, Windows 7 has sold over 240 million copies, to date making it the fastest selling OS in Microsoft’s (or any vendor’s) history. And yes, many of those sales can be attributed to pent-up demand because the overwhelming majority of the Windows installed base elected to remain on Windows XP and skip Vista. Admittedly, many organizations would opt to remain on Windows XP indefinitely if Microsoft was not ending support for the nearly 10 year old desktop OS. Those disclaimers aside, Windows 7′s success is no fluke.

A three-quarters majority – 73 percent of the 400+ respondents to the latest joint Sunbelt Software/ITIC poll, gave Windows 7 an “excellent,” “very good” or “good” rating.
That’s very close to the 80 percent majority of beta and early adopters who gave the Windows 7 the same high marks in the 2009 survey. The latest responses, coming after corporations have used Windows 7 in production for a full year, provides the best evidence that the Microsoft operating system is living up to the hype and fulfilling business’ needs. Only a small three percent minority of survey respondents gave Windows 7 a “Poor” and/or “Unsatisfactory” rating.
And a 72 percent majority of survey participants say they have already deployed, are in the process of deploying or will shortly deploy Windows 7. Only 7 percent of those polled indicated that they are “unlikely” to deploy Windows 7 at all and none of the respondents said they plan on switching to a rival operation system.
Lack of funds was the chief reason cited by the remaining 21 percent of respondents who said they have no definitive plans to upgrade to Windows 7 over the next 12 months. Anecdotal user comments confirmed that many companies are still in the grip of a recession and will wait until they upgrade their desktop hardware to migrate to Windows 7.
Windows XP is still the most widely deployed desktop OS – with 90 percent of the respondents indicating it was present in their shops. But Windows 7 is catching up quickly: 83 percent of those polled say they’ve deployed Windows 7 compared to only 37 percent who have Windows Vista.
Interestingly, the Apple Mac is the most popular non-Windows operating system as mainstream enterprises continue to adopt it. According to our poll, Apple Macs are present in 28 percent of your networks – which is three times more than the two most popular Linux and open source operating system distributions. Nine percent of survey respondents indicated they use Red Hat Linux and Ubuntu – the latter of which has made steady gains in the last two years.
Among large enterprises, IBM’s AIX was clearly the most popular UNIX distribution, besting both HP UX and Sun Solaris (now owned by Oracle) by a 2 to 1 margin.
Nearly two-thirds or 60% of you indicated you will deploy Windows 7; 30% of you say you’ll migrate to the new Microsoft desktop operating system within the first six months while another 30% say intend to make the transition sometime within the year. Four out of 10 businesses – 40% — have no definitive migration timetable.

Happy 1st Birthday Windows 7; Now Can We Please Cancel Microsoft’s MidLife Crisis?

Laura DiDio — Fri, 22 Oct 2010 14:12:37 +0000

Windows 7 is now officially a year old. Since it was released October 22, 2009, Microsoft has sold over 240 million copies of the operating system — approximately seven copies per second. That makes it the fastest selling operating system in Microsoft’s history or any vendor’s history. Some industry pundits estimate that Windows 7 sales will top 300 million within the next six-to-eight months.
Microsoft has plenty of other reasons to celebrate Windows 7’s first birthday. Windows 7 has also been one of the most stable, reliable and secure releases in Microsoft’s history.
A three-quarters majority – 73 percent of the 400+ respondents to the latest joint ITIC/Sunbelt Software poll, gave Windows 7 an “excellent,” “very good” or “good” rating.
That’s very close to the 80 percent majority of beta and early adopters who gave the Windows 7 the same high marks in the 2009 ITIC/Sunbelt Software survey. The latest responses, coming after corporations have used Windows 7 in production for a full year, provides the best evidence that the Microsoft operating system is living up to the hype and fulfilling business’ needs. Only a small three percent minority of survey respondents gave Windows 7 a “Poor” and/or “Unsatisfactory” rating.
Windows 7’s immediate and intermediate future appears similarly rosy: a 72 percent majority of survey participants say they have already deployed, are in the process of deploying or will shortly deploy Windows 7. Only seven percent of those polled indicated that they are “unlikely” to deploy Windows 7 at all and none of the respondents said they plan on switching to a rival operation system.
Lack of funds was the chief reason cited by the remaining 21 percent of respondents who said they have no definitive plans to upgrade to Windows 7 over the next 12 months. Anecdotal user comments confirmed that many companies are still in the grip of a recession and will wait until they upgrade their desktop hardware to migrate to Windows 7.
So great has been the demand for Windows 7, that it has fueled record revenue and earnings for Microsoft over the last three fiscal quarters. Microsoft recorded record revenue of $16.04 billion for the 2010 fourth fiscal quarter ended June 30.
In fact, Microsoft’s financials and balance sheet over the last several quarters is pure gold (see below) and is or should be the envy of just about any business.

Microsoft by the Numbers
Profit Margin: 30.02%
Operating Margin: 39.51%
Return on Assets: 18.82%
Return on Equity: 43.76%
Revenue: $62.48B

Quarterly Revenue Growth: 22.40%
Gross Profit: $50.09B
Quarterly Earnings Growth: 48.40%
Total Cash: $36.56B

Total Debt: $5.97B

Source: Capital IQ

Instead, many industry experts and observers paint a grim picture of the 35 year-old Microsoft in a midlife crisis, well past its prime and unable to compete in new and emerging markets like smart phones, search engines, online search and advertising and the cloud against edgier rivals, most notably Apple and Google. Recent articles have made much of the fact that Microsoft garners far fewer headlines these days – about one-third to one-half as many mentions – as Apple, Dell, Google, Hewlett-Packard, IBM, Oracle, Research in Motion (RIM) and VMware to name a few.
Press of course, is relative, depending on the type of news one is generating. Still the prevailing sentiments in the news business are that “No news is not good news” and “It’s better to be damned than ignored.”
Microsoft executives are no doubt grateful that for a change, they are not one of the headliners in the increasingly vitriolic verbal volleyball that characterizes HP and Oracle’s disintegrating partnership. Similarly, press reports about Microsoft and its executives have been remarkably devoid of scandals – such as those that have recently rocked the HP board of directors.
That then begs the question, if Microsoft’s financials are so rosy, its core Windows and Office products in the black and thriving, why then are some industry observers writing the company’s epitaph?
A Tale of Two Microsoft’s
The answer of course, is that while the numbers aren’t lying, they don’t tell the whole story. For all intents and purposes, there are two Microsoft’s: one is the company that exists in reality and the other exists in the public’s perception. And the two Microsoft’s are indivisible.
The reality is Microsoft’s core businesses – Windows and Office continue to thrive – for now. The industry however, is inexorably changing. It is morphing from a fixed premises, subscription-based licensing model that has been the foundation of Microsoft’s astounding success and dominance over the past three decades to an increasingly mobile workforce that uses smart phones (Blackberry, iPhone, Android et al); tablets (the Apple iPad) and free Email and applications (Google Mail, Google Docs) to stay connected. In these emerging environments, Microsoft is playing catch-up and struggling to stay relevant as rivals like Google and Apple continually assault its core applications businesses.
It doesn’t help Microsoft’s case when high level executives decide to exit the company “to pursue other interests.” Chief Software Architect, Ray Ozzie, the iconic developer of Lotus Notes, is the latest high profile departure. Ozzie, who was touted as Bill Gates’ successor as Chief Software Architect, announced earlier this week that he was leaving Microsoft. No departure date has been publicly announced and until he exits Ozzie will lend his considerable talents to the entertainment division.
Ozzie’s exit follows on the heels of Robbie Bach and J. Allard’s departures earlier this year as executives in the entertainment and mobile divisions, respectively. Bach and Allard reportedly clashed with Microsoft chief executive and other executives on technology direction. Such divisions were made sharper by the flagging fortunes of Microsoft’s mobile and entertainment initiatives. After suffering the stinging embarrassment of pulling its KIN 1 and KIN 2 phones off the market on June 30, a scant six weeks after the product debuted to near non-existent sales.
The company is now regrouping around the Windows Phone 7, which it is targeting at business users. The new Microsoft mobile OS has garnered good reviews so far, now it has got to get users onto the platform. Microsoft will reportedly spend $400 in a fall and winter marketing campaign throughout the U.S. and Europe. Microsoft has more than just money invested in Windows Phone 7’s success. If it fails to gain tangible and significant traction, Microsoft may effectively be shut out of the lucrative but increasingly competitive and crowded smart phone arena.
Microsoft has other definite challenges – and they are daunting ones. It must:
• Make more headway in the search market. Bing is a very good search engine and does have traction. The latest statistics released by ComScore earlier this month, show Bing with an 11.2 percent market share. However, that is far behind Google’s 66 percent.
• Clarify its Azure and BPOS cloud strategies. Microsoft has made significant strides in its cloud offerings and strategies. But its marketing is still muddy. Microsoft must craft a cogent and cohesive cloud strategy and communicate it so that it resonates with the masses of existing Windows customers and potential users.
• Retain and attract top talent. Truthfully, the number and caliber of executive departures from Microsoft over the past several years has been no better or worse than the majority of high tech firms. But Microsoft is under a microscope and is judged more harshly than most of its rivals. Many of the departures were predictable; coming after decades of tenure and after the executives in question had made millions. That said Microsoft must retain and attract top talent. Easier said than done, I know.

The biggest blow of all of course, was Bill Gates’ decision to retire from day-to-day Microsoft operations to concentrate on his philanthropic pursuits. This is great for Gates and his charities but he’s as close as you get to the indispensable man. Remember how Apple’s stock stumbled when speculation was rampant during 2009 about Steve Jobs’ health? Microsoft has also taken a beating in the press with rumors that Ballmer may leave or be forced out of the top spot. The truth is every high tech firm needs a visible face like Jobs at Apple, the triumvirate of Larry Page, Sergey Brin and Eric Schmidt at Google and of course, Larry Ellison at Oracle. Right now, there are no obvious successors or heirs apparent to Gates or Ballmer. For Microsoft’s sake Ballmer should stay at the helm for the time being.
Despite Microsoft’s issues, it would be a big mistake to write the company off. There are lots of positives. They include:
• Revenue and entrenched market share and continued dominance in the Windows and Office markets which should continue for the next several years.
• The Xbox Kinect and Windows Phone 7 appear to be gaining real traction.
• Broad, deep portfolio of cloud products which has shown impressive growth in the past 12 months.
• Robotics: Microsoft is also a pioneer in another crucial emerging market: robotics. Microsoft’s Surface is a multi-touch, combination hardware/software product that enables users to manipulate digital content via gesture recognition, such as hand signals or real world objects. Available since 2008, it has racked up some impressive wins and is in use at Disneyland’s Tomorrowland, select Sheraton Hotels and Harrah’s Entertainment.
• Security and Reliability improvements in the core Windows products. Microsoft’s 2002 Trustworthy Computing Initiative has been a rousing success. According to the National Institute of Standards and Technology’s (NIST) Common Vulnerability and Exposures Database (CVE) SQL Server is the most secure of the major database platforms, with the fewest number of reported vulnerabilities associated with the platform since 2002. And the results from the ITIC 2010-2011 Global Server Hardware and Server OS Reliability survey indicate that 86 percent of respondents rate the security of Windows Server 2008 and Windows Server 2008 R2 as either “Excellent” or “Very Good.” Similarly, 50 percent of survey participants indicated that Windows Server security has “improved significantly” while 24 percent say it has “improved somewhat” over the last three years. At the same time, none of the survey participants indicated they were contemplating wholesale defections to rival platforms, although the number of individual users deploying Apple Macs and iPads is on the rise.

There is no question that Microsoft will survive and continue to thrive in its core markets. The looming question is can Microsoft get its groove back to aggressively mount a challenge to Apple, Google et al, in the lucrative mobile, online, entertainment and cloud markets. It must go back to its roots and aggressively play to its strengths. Microsoft’s $36.56 billion in cash should buy a lot of advertising and a lot of talent.

Windows 7 is a make or break release for Microsoft

Laura DiDio — Wed, 10 Jun 2009 19:46:56 +0000

The long awaited successor to Windows XP and Windows Vista, will ship several months earlier than planned. Expectations are high industry-wide.

Windows 7 is crucial to Microsoft’s over-arching software business and technology strategy for the next two years. Although it is an incremental upgrade and not a major overhaul of the underlying Vista kernel, Windows 7 represents a crucial upgrade for both consumer and corporate customers.

Practically speaking, Windows 7 must do what Vista didn’t: deliver near seamless, plug and play integration and interoperability with the overwhelming majority of Microsoft and third party applications, device drivers, utilities and hardware peripherals. As a standalone operating system (OS) Vista was fine. Unfortunately, there’s no such thing as a standalone OS. The lack of backwards compatibility between Vista and third party software and even incompatibilities in the file formats between Vista and Office 2007 and other Microsoft products was a nightmare for corporations and consumers alike.

As a result, there is no margin for error. Windows 7 must fulfill users’ expectations, business and technology needs from the first day it ships. Microsoft will not get a second chance to make a good first impression. Failure to do so could send customers running to rival desktop platforms like Apple’s Mac OS X 10.x and Linux distributions, or even online options such as those being pitched by Google. . And if Windows 7 does not deliver the features, integration, interoperability and reliability Microsoft is promising, it may well create a domino effect that adversely impacts the upcoming releases of related solutions like Exchange Server and the Office platform.

Integration and interoperability are the most important criteria, besting even cost, when it comes to choosing a new technology. The results of ITIC’s May 2009 Application Availability survey of 300 businesses worldwide found that 60% of business said integration and interoperability with existing and legacy applications tops the list of “must have” items in new software application and operating system purchases. Cost came in a close second with 56% of the respondents followed by ease of use and installation (55%).

The stakes for Windows 7 are also high because of intensified competition. Rumors abound that Microsoft pushed up the release date by at least three months so that Windows 7 hits the streets in advance of the low cost netbook version of Google’s Android. Microsoft also faces increased competition in its decades-old rival Apple. During the past two years Apple’s Mac OS X 10.x running on Apple’s Intel-based proprietary hardware has been making a comeback in corporate enterprises. Apple products do not represent a significant threat to Microsoft’s corporate desktop dominance, but they can nibble at the fringes, potentially dilute momentum [for Windows 7] and take some market share. In this ongoing global economic downturn, no vendor wants to concede any revenue or even a percentage point of market share.

Microsoft of course is acutely aware of these issues. In recent months, company CEO Steve Ballmer and Senior Vice President Bill Veghte have publicly stated that users were stymied by the incompatibility issues they encountered with Vista. They intend to avoid those problems with Windows 7.

Fortuitously, for Microsoft, there are many factors in Windows 7’s favor. They include:

Pent-up Demand. To date, only 10% of the 700 survey respondents in ITIC’s 2009 Global IT and Technology Trends Global Deployment Survey have deployed Vista as their company’s primary desktop operating system. The results indicated that Windows XP remains the primary desktop OS for 89% of the respondents. Nearly half—45%—of the survey respondents indicated they would skip Vista and migrate from XP to Windows 7. The main reasons for this were cost constraints associated with the bearish economy, and reluctance to undertake a complex OS upgrade with manpower constraints.
The prevailing sentiment among businesses is that they can afford to wait because Windows XP adequate met their business and technology needs over the last two years. ITIC believes this bodes well for Windows 7 deployments in the short and intermediate term. If 20% of the installed base of legacy Windows XP users migrate or indicate their intention to upgrade to Windows 7 within the first three or four months of shipment, Microsoft will be well-positioned. There is a reasonable likelihood of this, providing Windows 7 delivers the goods. And the advance word from customers interviewed by ITIC is generally positive.
New feature set. Windows 7 will have six different versions, but to minimize the confusion that accompanied the Vista launch, only the Home Premium and Professional editions will be widely sold in retail outlets. Specific versions that are designed for enterprise use or developing nations will be aggressively marketed to those specific accounts and geographic regions, thus taking the guesswork out of purchasing. Most importantly: Microsoft says that every one of the versions will include all of the capabilities and features of the edition below it which will help to minimize upgrade woes. Corporations and consumers that want to move to a more feature rich version of Windows 7 can use Windows Anytime Upgrade to purchase the upgrade online and unlock the features of those editions from their desktops.
ITIC interviewed several dozen Windows 7 beta users over the last several months and an overwhelming 9 out of 10 respondents expressed their satisfaction with improvements in many Windows 7’s core capabilities when compared to both Windows XP and Vista. This includes faster boot sequence, better reliability, improved security, a much faster and more comprehensive search engine, and more flexible configuration options. Additionally, Microsoft bolstered the inherent security of Windows 7 with DirectAccess and BitLocker To Go features. The DirectAccess capability is designed to provide remote, traveling and telecommuting workers with the same secure connectivity as though they were local by establishing a VPN “tunnel” to their corporate networks. BitLocker To Go extends the data encryption features introduced in Vista to include removable storage devices such as USB thumb drives support in Windows 7. Users can employ a password or a smart card with a digital certificate to unlock and access their data. And the devices can be used on any other Windows 7-based machine with the correct password. Users can also read, but not modify data on older Windows XP and Vista systems.
Economical and feature rich Licensing contracts. Finally, the terms and conditions of Windows 7 licensing contracts promise to make upgrades easier on corporate IT budgets. In February, Microsoft said it would provide a license that will allow customers to directly upgrade from Windows XP to Windows 7. There is a caveat, though: users will have to wipe their hard drives and perform a clean install – so technically, it’s not an upgrade. Microsoft has not yet released pricing details for Windows 7 but ITIC believes the upgrade license will most likely cost 20% to 40% less than a new license.
Additionally, corporations that purchased Microsoft’s Software Assurance Maintenance and upgrade plan as a standalone product or received it as part of their Enterprise Agreement (EA) licenses, are entitled to free upgrades to Windows 7 since it is an incremental release. Additionally, in order to make life easier for users (and to engender goodwill) Microsoft is letting the Release Candidate (RC) free trial license for Windows 7 last a full year until June 2010! And users looking for a discounted version of Windows 7 to run on low cost, minis or netbooks take note: Microsoft and Intel have agreed that in order for a device to be considered a netbook, the screen must not exceed 10.2” Prior to this, Microsoft allowed customers to get the Windows XP or Vista discount for or devices as large as a 12.1” screen.

In summary, all indications are that Microsoft has learned from its Vista mistakes. As a result, businesses and consumers stand ready to reap significant benefits in compatibility, features, pricing and licensing with Windows 7.