The cloud has overcome a lot of its technical challenges, especially when it comes to security. But the biggest problems in cloud computing now are cultural.
Microsoft's Surface strategy is doing what it was supposed to do
- Hardware has lower margins than software. The beauty of software is that once you've covered your development costs, every additional sale is almost pure profit. That's not the case with hardware -- only Apple has managed to maintain very high margins on its hardware, and even those margins are nowhere close to the 70% to 80% margins Microsoft has historically earned on Windows and Office. Replacing a higher-margin business with a lower-margin business means you have to grow revenue faster -- or cut other expenses dramatically -- in order to keep profits growing at the same rate.
- The move to Windows volume licensing won't spur growth forever. As companies realize they're going to have to subscribe to Windows (i.e., put it on a volume license agreement, which is paid for annually) in order to get the top-of-the-line enterprise features they need, that will create a one-time bump in volume license revenue. But that growth will stop once all the companies who want these features are aboard, and paying their stable annual license fees. In the long run, the only way to keep the growth going is to convince more companies to add more PCs to their licenses -- in other words, to grow the business PC market -- or to raise prices.
As I wrote a couple weeks ago, Microsoft can keep going for a long time, even in a declining PC market. But eventually, business reality kicks in -- the only way to keep growing is to sell more product than you sold last year. In some form or another -- tablets, Surface, traditional business PCs -- Windows unit sales have to pick back up again, or the next five years will look increasingly bleak.
Newsweek made waves this week with an article that claims to unmask Satoshi Nakamoto, the previously anonymous person whose name was the only one listed on the 2008 whitepaper that launched the modern cryptocurrency movement.
IBM has announced a competition to promote the development of apps powered by its Watson cognitive computing platform. But some apps already are in use or in the pipeline.
If you've got a Windows XP machine -- either at home or in the office -- consider yourself lucky. In the past, you'd upgrade to a more recent Windows operating system without a thought. Today, you have many options.