Microsoft Doing Better Than Expected

Story first appeared in The Washington Post.

Microsoft produced a surprisingly strong quarter to start the year, pleasing investors looking forward to even bigger things from the software maker’s much-anticipated overhaul of Windows operating system next fall.

The performance announced Thursday defied the conventional thinking that Microsoft would have trouble selling more Windows licenses as more people snapped up tablet computers, such as Apple Inc.’s trendsetting iPad, while other prospective personal computer buyers delayed making their purchases until the next version of Microsoft’s operating system hits the market.

That didn’t turn out to be the case during the three months ending in March as revenue at Microsoft’s Windows division edged up by 4 percent from last year to $4.6 billion. Microsoft attributed the gain to an uptick in businesses who bought licenses for Windows 7. It marked only the second time in the past six quarters that Microsoft has registered a year-over-year gain in the Windows division.

High hopes are riding on the revamped system, Windows 8, because Microsoft designed it to run on devices that can be controlled by touch, as well as keyboards and computer mice. That means Windows 8 can serve a dual purpose: it could help spur the development of sleeker PCs that spur more sales and also give Microsoft a chance to grab a piece of the rapidly growing tablet computer market.

Although Microsoft hasn’t announced a target date yet, most analysts believe Windows 8 will go on sale in September or October.

Microsoft Corp. earned $5.1 billion, or 60 cents per share, during the period marking first three months of the year — the Redmond, Wash company’s fiscal third quarter. That was a 2 percent decline from net income of $5.2 billion, or 61 cents per share, a year ago.

Last year’s results were boosted by a tax benefit of $461 million, or 5 cents per share.

Revenue rose 6 percent from last year to $17.4 billion

Analysts had anticipated earnings of 58 cents per share on revenue of $17.2 billion, according to a FactSet survey.

Microsoft’s shares gained 87 cents, or nearly 3 percent, to $31.88 in Thursday’s extended trading.

While the Windows division held up better than expected, one of Microsoft’s recent strongholds weakened. The deterioration occurred in the entertainment division as Microsoft’s shipments of its Xbox 360 video game console plunged by nearly 50 percent to 1.4 million units. The sagging demand occurred as more people are playing games on phones and tablet computers. Revenue in the entertainment division declined 16 percent from last year to $1.6 billion.

Microsoft’s long-suffering online division, which has struggled for years to compete against Internet search leader Google Inc., managed to narrow its losses in the latest quarter. The division, which includes its Bing search engine, posted an operating loss of $479 million compared to a loss of $776 million at the same time last year. Microsoft’s online revenue totaled $707 million, a 6 percent increase. By comparison, Google’s revenue during the same period surged by 24 percent.


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Microsoft Brings LinkedIn to Windows Live Messenger, Hotmail

Read Write Web

 

Depending on where you are in the world and what profession you are in, Windows Live Messenger is either a professional tool you use every day to keep up with your colleagues or something only teenagers would use. Starting today, Messenger - which Microsoft is already positioning as a social networking client - will become more appealing to professionals, as Microsoft is introducing a deep integration with LinkedIn in the U.S. Thanks to this integration, Messenger users will not just be able to send status updates to LinkedIn and view your colleagues updates, but your Messenger and Hotmail contacts will also be kept in sync across the Windows Live and LinkedIn platforms.

In addition to the Windows Live desktop and web apps, Microsoft's Messenger app for the iPhone will also now offer support for LinkedIn.

Microsoft's Mission: Integrate the Best Products - Don't Reinvent the Wheel

As Dharmesh Mehta, Microsoft's director of product management for Windows Live, told us earlier this week, the company has no interest in building its own social network when tools like Facebook (which is already integrated in Microsoft Messenger and Windows Live) and LinkedIn perfectly good alternatives. Instead, Microsoft is not focused on integrating these services into its own applications. For the most part, these integrations are built on top of open APIs and standards, though the LinkedIn integration also includes some "custom coding," as Mehta described it.

Besides the ability to see LinkedIn updates in your Messenger and post them directly from the application, the most important new feature that this partnership introduces is the unified contacts list that allows you to easily send an email to one of your LinkedIn contacts from Hotmail, for example.

Thanks to this, your LinkedIn contacts are now also available in other Windows Live apps like the Photo Gallery. Due to the nature of LinkedIn, you probably don't want to send a lot of photos to your LinkedIn stream, but, as Microsoft notes, this allows you to easily tag a photo with a contacts name so that you can "put a face to a name."

Of course, you can also use the Windows Live web service to push updates to LinkedIn, though it is probably best to remain vigilant about which updates are appropriate for LinkedIn and which should go to Facebook instead. In addition, you can also syndicate your LinkedIn to your Windows Live feed, so that your friends who are not on LinkedIn can see your updates there.

Bonus: More Hotmail Updates

Earlier today, Microsoft also announced a number of new features for Hotmail. Among these, is the ability to send very large attachments (up to 10GB) by uploading the content to SkyDrive, in-line video support for Dailymotion and Justin.tv, as well as the ability to see the status of your US Postal Service, UPS and DHL packages right in your mailbox (assuming the tracking number is in the email).

Google Dropping Windows Over Security? Good Luck With That

PC World

 

Sources from within Google are claiming that the online search and advertising giant is implementing an official transition away from the Microsoft Windows operating system. According to the reports, the culture shift is intended to reduce security concerns. That makes a compelling headline--especially for a Microsoft rival developing its own operating system--but it doesn't make a very good security strategy.

On one level, it makes perfect sense for Google to abandon Windows. Google has always been a bitter rival of Microsoft, and Google's Android mobile operating system and upcoming Chrome operating system are built on Linux. Of course Google should avoid generating additional revenue for Microsoft and rely on the platform that forms the foundation of what Google expects its customers to use.

Another area where Google should eat its own proverbial dog food is with Web browsers. The Chrome Web browser has been gaining market share since its launch, but it was a zero-day flaw in Microsoft's Internet Explorer Web browser that was exploited to compromise systems and steal data from Google earlier this year. With the exception of key developers that might need to see how things render in IE, users at Google should ostensibly not be using the competing browser.

That brings us to the claim that security concerns are behind the move to abandon Windows. The reports suggest that Google has banned the use of Windows in response to the Operation Aurora attacks which Google alleged were state-sponsored attacks from the Chinese government.

The flaw in that logic is that it assumes the attacker would be unable to compromise alternative platforms like Linux or Mac OS X. Microsoft Windows--by virtue of its dominant market share--is the target of the vast majority of general malware attacks, so switching from Windows may reduce the daily operational risks. But, when it comes to precision, targeted attacks, alternative OS platforms don't provide any better defense so dropping Windows would not have prevented the Operation Aurora attacks.

In fact, alternative platforms may arguably make a precision attack that much easier. The Mac OS X platform has an illusion of superior security because malware developers don't care to invest time and resources developing exploits that only work on five percent of the possible targets. However, year after year Mac OS X is compromised in a matter of minutes--or even seconds--in the annual Pwn2Own contest.

Before Google decides to base its security strategy on which operating system platform it relies on, the Google management and IT administrators should read the venerable information security classic Hacking Exposed--currently in its sixth edition. The first step to an attack is gathering details of the intended target--or footprinting.

Hacking Exposed explains that "The systematic and methodical footprinting of an organization enables attackers to create a near complete profile of an organization's security posture." The bottom line is that Google can use whatever operating system, Web browser, or other applications it chooses, but a professional attack will learn what those are during reconnaissance and design the attack accordingly to exploit whatever software Google is using.

I asked George Kurtz, Worldwide CTO for McAfee, his thoughts. Kurtz explains "Just moving operating systems doesn't always mean an organization will realize greater protection against TARGETED attacks. It certainly could make a difference in reducing the amount of day to day malware that impacts a windows environment. One point that might be worth mentioning is that while targeted attacks can be launched against any OS, there is a tremendous amount of expertise gained over the past five to seven years against the Windows environment. It will take a similar maturation period to develop tools that are just as sophisticated as the Windows environment for say OS X. Things like rootkits and their associated functionality are incredibly sophisticated and relatively mature in the Windows world."

Randy Abrams, Director of Technical Education for ESET, says "The Google response is a marketing / public relations response to attempt to show Google is doing something about security by blaming Microsoft for Google's own patch management and security problems. What were they thinking by running an outdated version of IE 6?"

Abrams agrees "In a targeted attack, the OS is no longer a significant issue. Not only is the OS an attack vector, but installed third-party apps are another attack vector. If an attacker knows your OS and goes after an Adobe flaw, the game still ends up with you on the losing end."

Kurtz added "Layer 8 is generally the biggest security challenge we have. The same people who fall victim to social engineering will do so via e-mail or IM, no matter what browser or OS they are using."

ESET's Abrams sums up with "Google would do much more to improve its security by using current versions of browsers and ensuring greater patch management practices."

Every organization should abandon IE6 and be seriously exploring a transition from Windows XP. Each has inherent security concerns, and the combination of the two almost begs to be hacked. And, Google in particular has valid reasons to abandon Windows and Internet Explorer that go well beyond security.

But, Google needs to remember that it's Google. It is a jackpot of sensitive data and information for a successful attacker. Google needs to understand the nature of targeted attacks and have a better security policy than simply a knee-jerk reaction to ban Microsoft software.