Windows 8 at 6 months: 100 Million strong

We recently surpassed the 100 million licenses sold mark for Windows 8. This number includes Windows licenses that ship on a new tablet or PC, as well as upgrades to Windows 8. This is up from the 60 million license number we provided in January. We’ve also seen the number of certified devices for Windows 8 and Window RT grow to 2,400 devices, and we’re seeing more and more touch devices in the mix.

As we talked about in our last Q&A, Windows 8 is a big, ambitious change. While we realize that change takes time, we feel good about the progress since launch, including what we’ve been able to accomplish with the ecosystem and customer reaction to the new PCs and tablets that are available now or will soon come to market.

Bill Gates on Flying Cars

Wired: Peter Thiel, expressing his dissatisfaction with technology’s progress, recently noted, “We wanted flying cars, instead we got 140 characters.” Do you agree with him?

Bill Gates: I feel sorry for Peter Thiel. Did he really want flying cars? Flying cars are not a very efficient way to move things from one point to another. On the other hand, 20 years ago we had the idea that information could become available at your fingertips. We got that done. Now everyone takes it for granted that you can look up movie reviews, track locations, and order stuff online. I wish there was a way we could take it away from people for a day so they could remember what it was like without it.

 

"Twitter will outlast the New York Times"

In a debate with Andreessen at the Milken Institute Global Conference Monday, Thiel, a co-founder of PayPal, said he expects that Twitter's roughly 1,000 employees will have jobs a decade from now.

The business case for Twitter is solid, Thiel said. He contrasted the future of Twitter with that of The New York Times, a print media vanguard that he says is not guaranteed a future in the digital age. Employees of the paper, Thiel cautioned, should be worried about the longevity of their jobs.

 Sign of the times.

Netflix's House of Cards strategy working

As predicted, Hastings doesn’t offer any real numbers for “House of Cards,” the company’s much-hyped foray into original productions. But he does take credit for building big buzz with “House of Cards” via its decision to release all 13 episodes at once. If Netflix had followed a standard release schedule, you’d be watching the last episode of the series this week, and presumably more people you know would be talking about the show right now. But Hastings says the big bang worked just fine: It ended up “reinforcing our brand attribute of giving consumers complete control over how and when they enjoy their entertainment.”

One House of Cards only good for one quarter, need more such originals to sustain the momentum.

Surface saves the quarter for Microsoft

Surface sells for a much higher average price than the OEM version of Windows -- it retails for anywhere between $499 (for the lower-powered Surface RT) and $999 (for the highest-end Pro version), and that's not including the keyboard/cover. 

Let's assume that Microsoft leaves a reasonable margin for its retail partners, including its own stores. Some analyst estimates put Surface Pro sales around 400,000 for the quarter, and Surface RT sales at maybe 200,000. Let's say that Microsoft collects an average of $700 per unit, including attached peripherals like the cover. 

That would be $420 million. That's about 10% of Microsoft's adjusted Windows revenue of $4.62 billion (that's adjusted downward to make up for how Microsoft accounts for upgrade sales made in previous quarters). Even if those estimates are generous and the number was lower -- say 5% -- it means that Surface was material in helping Microsoft make up for a drop in PC sales this quarter. And those estimates could very well be low, which would mean that Surface was an even bigger factor in saving the quarter.

Charles Arthur breaks down the Microsoft Q3 numbers nicely and shows that Surface saved the quarter for Microsoft. But if the consumers are not coming back combined with slow sales of Surfaces, future quarters will look different.  

Microsoft sells Mediaroom business to Ericsson

Today, Microsoft and Ericsson announced a definitive agreement for Ericsson to acquire Mediaroom, the number one IPTV platform deployed by TV operators around the world. This acquisition is mutually beneficial and strategically aligned for both parties. Ericsson will continue to invest in the growth and success of Mediaroom to the benefit of customers, employees, and the industry. It allows Microsoft to commit 100 percent of its focus on consumer TV strategy with Xbox.

We are proud of the world-class engineering and business achievements within Mediaroom. They have a rich history of driving innovation in IPTV. As early pioneers, they built the infrastructure to stream video on limited bandwidth, and today they enable multiscreen entertainment experiences for pay TV subscribers. Mediaroom has contributed to the evolution of TV and powers 22 million set-top boxes today in 11 million subscriber households.

 [Emphasis mine]

Diamonds, Economics and Culture

Great piece by Rohin Dhar at Priceonomics titled, Diamonds Are Bullshit. Rohin makes some great points regarding Diamonds as investments and why they should be avoided. 

In finance, there is concept called intrinsic value. An asset’s value is essentially driven by the (discounted) value of the future cash that asset will generate. For example, when Hertz buys a car, its value is the profit they get from renting it out and selling the car at the end of its life (the “terminal value”). For Hertz, a car is an investment. When you buy a car, unless you make money from it somehow, its value corresponds to its resale value. Since a car is a depreciating asset, the amount of value that the car loses over its lifetime is a very real expense you pay.
A diamond is a depreciating asset masquerading as an investment.
...
Gold and silver are commodities that can be purchased on financial markets. They can appreciate and hold value in times of inflation. You can even hoard gold under your bed and buy gold coins and bullion (albeit at a ~10% premium to market rates).
But with that caveat in mind, the market for gold is fairly liquid and gold is fungible - you can trade one large piece of gold for ten smalls ones like you can a ten dollar bill for a ten one dollar bills. These characteristics make it a feasible potential investment.
...
Diamonds, however, are not an investment. The market for them is neither liquid nor are they fungible.

Rohin goes on to show how historically diamonds were positioned as status symbol by the likes of De Beers which is a monopoly in the Diamonds space. The bigger the diamond, the more love you have for your partner. Through clever marketing De Beers and the likes were able to establish Diamonds as "symbols of indestructible love". Result being, today, over 80% of women in the US receive diamond rings when they get engaged.

Closing statement from Rohin sums it very well. 

"Diamonds are not actually scarce, make a terrible investment, and are purely valuable as a status symbol."

But then you go through the comments on the article and you can see what fine job Diamond marketers have done on human psyche. The engagement ring is no longer a luxury but a necessity. The engagement ring and the diamond has become symbolic with marriages/proposals. And if not diamond, what do we replace it with? Unless we have something of similar value (and which is a good investment) & significance accompanied by good marketing, we will not be able to do away with Diamonds.

In India there is a tradition of giving sweets (called Mithai in Hindi) on joyous occasions, be it marriage, your birthday or even buying a car. This has been tradition for hundreds of years. But then over the last 10 years or so, Cadbury's to start with followed by Indian brands like Parle and Britannia have made a severe dent to this tradition by replacing Mithai's with Chocolates. This again like Diamonds was driven with very clever marketing, involving some big Bollywood names like Amitabh Bachchan and driven in a very cohesive manner targeting smaller Indian festivals and then going after bigger one and then going across every joyous moments. Today it is difficult to imagine Brother giving any other gift than a chocolate during Raksha bandhan to his sister. While I won't say the Chocolate domination is complete or even close to banishing mithai's from Indian traditions, they surely have made their place in Indian hearts, especially with youngsters. 

While old customs die hard, a good substitute (aided by some intelligent marketing) can help replace market leader. 

Pandora comes to Windows Phone 8

For the last six months or so we’ve been working hard to bring Pandora to the Windows Phone 8 audience. Happy to announce the day has finally come.
While of course Pandora on Windows Phone 8 features the same listening experience you’ve come to expect from us, we really wanted to embrace the unique features of the Windows Phone 8 platform. For example, you can pin your favorite stations directly to the Start screen. Even cooler, the tiles are live and show you what’s currently playing without having to actually launch the app. If you have kids, we’ve also integrated into what Microsoft calls “Kid’s Corner” – just launch Pandora from that starting point and we’ll make sure that no explicit content plays during that session.

And they added some sweetener too, you can listen on Windows Phone 8 ad-free at no cost for the rest of 2013. 

Desperation

On the eve of Samsung’s Galaxy S4 launch, Apple and its marketing chief Phil Schiller spoke with mainstream news publications to slam Android and iPhone competitors. Now, following the launch of the new Samsung device, Apple has opened up an entire new web page to tout why people have loved the iPhone for so many years and to seemingly throw some negative claims against Android and Samsung devices.

Apple has also begun emailing a version of this webpage to its own customers, something that makes this seem more defensive than offensive.

 

Big Data, Big Blunders

Experts who specialize in computer-driven analysis of large streams of information say too many companies throw themselves into big-data projects, only to fall into common traps and end up with nothing to show for their efforts. Some 44% of information-technology professionals surveyed by business-software firm Infochimps Inc., for example, said they had worked on big-data initiatives that got scrapped.

"Haystacks without needles" syndrome.

Netflix’s "House of Cards" all-at-once strategy is revolutionary

There is an ongoing debate about Netflix releasing all 13 episodes of its own produced "House of Cards" TV show at once. This is unlike traditional TV and cable shows which release a weekly episode. The point of contention is that by releasing all 13 episodes at once, Netflix missed out on social media chatter that leads to sustained conversations which aid in increasing the shows audience if the show is good and talked about in right manner.

From Quartz

But that was probably a mistake, and here’s why: By giving up the level of constant social media chatter that accrues to shows that are released episodically, Netflix missed out on the kind of sustained conversations that help a show find its widest possible audience.

This is the first time Netflix, which has been nothing short of a revolution in online-on-demand-anytime-streaming experience, release an entire series produced by itself. So far nobody has really understood the success criteria for such an endeavor so it's easy to understand the reactions as below.

From NYTimes 

It’s not as if “House of Cards” isn’t being talked about — but no one is really talking about the same thing because we all received the whole batch to begin with. The show is being watched on a schedule of our own making. “House of Cards” may be new, but it is probably being watched in pieces like an older show, say Season 1 of “Breaking Bad.” And there is something to be said for the anticipation of a single episode coming out once a week.
“That lack of scarcity, of windowing like traditional television, means that they aren’t going to get those spikes in conversation,” said Mark Ghuneim, chief executive of Trendrr. “After you binge, you don’t have a place to talk about it because everyone is on a different cadence.”

What matters to Netflix and what should matter to everybody is that whether this endeavor is profitable. If it is, it doesn't matter if people continued to talk about it. Good thing is that I haven't read or encountered anyone who has not liked the show. I and my wife binged on the show, multiple times couple of episodes back to back and till it was all over within a week, so much so that Kevin Spacey is now one of our favorite actors. We now wait for season two.

Then as Steve Rosenbaum of Forbes understood (hard way), today it is a world of WWW viewing.

From Forbes

It turns out that waiting for the next episode is an artifact of an earlier era. A linear viewing experience in what is now an non-linear, on demand, always on, world.
It is what my friend Scott Peters explained to me, a world of W. W. W.  Viewers want “What they want”, and they want it “When they want it”,  and they want it “Where they want It.”  WWW Viewing.

The Atlantic Wire ran some numbers the week show was released and came up with a number of 520,834 people to sign up for a $7.99 Netflix subscription for two years for it to break even on this $100 million production.

From Atlantic Wire

With Netflix spending a reported $100 million to produce two 13-episode seasons of House of Cards, they need 520,834 people to sign up for a $7.99 subscription for two years to break even. To do that five times every year, then, the streaming TV site would have to sign up 2.6 million more subscribers than they would have. That sounds daunting, but at the moment, Netflix has 33.3 million subscribers, so this is an increase of less than 10 percent on their current customer base. Of course, looking at Netflix's past growth, that represents pretty reasonable growth for the company that saw 65 percent growth from 20 million to over 33 million world-wide streaming customers.

There you go, this is the number which will tell if "House of Cards" was a success.

Living Bridges of Meghalaya

It rains a lot in Meghalaya, a state in North-eastern India, the name itself means "The Abode of Clouds" in Sanskrit. Here the bridges are not built, they are grown. The roots and vines of trees are stretched and inter-twined horizontally across streams and small rivers enough to sustain it's load and strong enough to be used as a bridge.

Xbox Execs Talk Momentum and the Future of TV

Today, there are more than 76 million Xbox 360 consoles around the world. That’s three times the number of original Xbox consoles sold. And a Kinect sensor now sits next to roughly one third of those Xbox 360 consoles; the company has sold 24 million Kinect sensors since launch.

Social has been an important part of Xbox from the beginning, and that’s true today more than ever. The Xbox LIVE community has grown to 46 million members, a 15 percent growth since last year.

2012 also marked the Xbox’s biggest year for entertainment and games usage. Users enjoyed more than 18 billion hours of entertainment in 2012, with entertainment app usage growing 57 percent year over year globally. Last year in the United States, Xbox LIVE Gold members averaged 87 hours per month on Xbox, an increase of 10 percent year over year.

via microsoft.com

That's one most undisputed success story from Microsoft right now.

Beware the Big Errors of 'Big Data'

Just like bankers who own a free option — where they make the profits and transfer losses to others – researchers have the ability to pick whatever statistics confirm their beliefs (or show good results) … and then ditch the rest.

Big-data researchers have the option to stop doing their research once they have the right result. In options language: The researcher gets the “upside” and truth gets the “downside.” It makes him antifragile, that is, capable of benefiting from complexity and uncertainty — and at the expense of others.

But beyond that, big data means anyone can find fake statistical relationships, since the spurious rises to the surface. This is because in large data sets, large deviations are vastly more attributable to variance (or noise) than to information (or signal). It’s a property of sampling: In real life there is no cherry-picking, but on the researcher’s computer, there is. Large deviations are likely to be bogus.

via wired.com

Fragility and Anti-fragility of 'Big Data'

Microsoft is, and deserves to be, judged by a different standard

Even at 1 million the Surface RT is  considered a dismal failure by pundits.  At the same time Google’s Nexus 4 smartphone, far cheaper (e.g. $50 with a two-year mobile plan commitment) and available at far more retail outlets than the Microsoft Surface, took a few weeks longer than the Surface to hit 1 million units.  And it is considered a runaway success!  You see the Nexus 4 is supply limited.  But wait, so is the Surface Pro and that is a “failure”.  And how about that iPhone 5 introduction?  My wife waited weeks to get her hands on an iPhone 5, because they were sold out from the moment of claimed availability.

Doesn’t it seem like Microsoft is being judged by a higher standard than the rest of the industry?  They are.  And to a surprising extent, as frustrating as it is, it is fair.  Apple has nothing to prove.  Google has nothing to prove.  Amazon has nothing to prove.  Microsoft has a lot to prove.  In the court of public opinion, or at least pundit opinion, Microsoft is expected to have big runaway success stories before it can leave its 20th century legacy behind and deserve to be uttered in the same breath with Apple, Google, and Amazon.

via hal2020.com

You have predefined yardsticks and then you have dynamic, every changing yardsticks. Microsoft - the company which many love to hate gets measured by the latter one, almost always. And talk of persistence, it still goes on and on, keeping every competitor honest.

A billion Office documents on SkyDrive

Last week Office 365 Home Premium launched and we’ve seen a lot of enthusiasm over the seamless integration of SkyDrive for saving and sharing your docs. Recently we reached a big milestone; our customers are now storing over a billion Office documents on SkyDrive! We’re really excited about the feedback we’ve seen around the new version of Office and the deep integration of SkyDrive. We’re taking it a step further today by announcing a new feature in SkyDrive and the Office Web Apps that allows a more seamless sharing and editing experience for our customers.

via blogs.windows.com

Surface Pro versus MacBook Air: Who's being dishonest with storage space?

I’ve done the cold, hard math of looking at disk storage for both devices. Here’s the story, in a single picture:

eb-compare-free-space-mabook-surface

Wait a minute, I can hear you saying. Those bars look remarkably similar. And in fact, the Surface Pro actually has MORE free disk space for user data in one of those bars than the MacBook Pro.

Yes, that’s true.

Here’s the tl;dr version. The MacBook Air 128 gives you 77.3 percent of the advertised storage space for user data. The Surface Pro 128 gives you 75.2 percent of its advertised capacity for storing data. And with one minor tweak that doesn’t affect the system’s capabilities in any way, you can increase the amount of data storage space on the Surface Pro to 81.8% of the advertised capacity.

via zdnet.com

Ed Bott in a fine piece of investigative journalism reveals the truth about storage space in similar capacity Surface Pro and MacBook Air. Now I wonder why such an analysis did not come out from Windows team?

Collapse Video Of A Glacier The Size Of A City

On May 28, 2008, Adam LeWinter and Director Jeff Orlowski filmed a historic breakup at the Ilulissat Glacier in Western Greenland. The calving event lasted for 75 minutes and the glacier retreated a full mile across a calving face three miles wide. The height of the ice is about 3,000 feet, 300-400 feet above water and the rest below water.

Chasing Ice won the award for Excellence in Cinematography at the 2012 Sundance Film Festival, and has won 24 awards so far this year. Playing in theaters now.

via unofficialnetworks.com

The Economics of Netflix's $100 Million New Show

With Netflix spending a reported $100 million to produce two 13-episode seasons of House of Cards, they need 520,834 people to sign up for a $7.99 subscription for two years to break even. To do that five times every year, then, the streaming TV site would have to sign up more 2.6 million subscribers than they would have. That sounds daunting, but at the moment, Netflix has 33.3 million subscribers, so this is an increase of less than 10 percent on their current customer base. Of course, looking at Netflix's past growth, that represents pretty reasonable growth for the company that saw 65 percent growth from 20 million to over 33 million world-wide streaming customers. Much of that growth, however, comes from new overseas markets. But, even in the U.S., from one year ago, Netflix saw about 13 percent streaming viewer growth jumping from 24 million to 27 million.  
via theatlanticwire.com

Great breakdown of Netflix's business model of producing content itself.