By Justin Mann, TechSpot.com
Published: February 12, 2009, 2:50 PM EST

If you ever had any doubts about the increasing popularity of VoIP, the most recent information coming out of Skype will dispel them. The company's user base is growing very rapidly, with an estimated 380,000 new users signing up every cialis order single day. Those numbers are astounding, almost unreal – I'm skeptical myself as to how accurate that is. If they really are getting more than a third of a million new customers every day, it's unlikely they can carry that momentum for long, but nevertheless it demonstrates that the company is doing very well with them sitting on a user base that is 405 million strong.

There's no detailed usage statistics along with those numbers other than the company’s claims that nearly a third of its registered subscribers now use Skype for business purposes. The increasing number of PDAs and other devices that have Skype clients is helping them, and the service itself is now representing around 8% of the international calls made worldwide.

Skype just recently introduced version 4.0 of their Windows client, which brought with it an interface revamp and improved video quality. The new client has great improvements to usability, which should help them get and retain those mass amounts of customers.

February 3rd, 2009

Posted by Ed Bott

Most analysts who looked at Microsoft’s announcement earlier today of its new lineup of Windows 7 editions have focused on the number of SKUs and are busily debating whether the new selection will make choices more or less confusing for Windows customers. But there’s a more important story buried in the details, one that will only become apparent when Microsoft fills in the rest of the picture by attaching price tags to the members of the Windows 7 family.

Two weeks ago, Microsoft delivered the shocking news that its Windows Client division reported declining revenue on a year-over-year basis, despite selling approximately as many licenses as it did in the previous year. It’s easy to blame the shortfall primarily on netbooks, as Microsoft did. Indeed, those small, cheap PCs are part of the problem. The market figured out that the least expensive Home edition of Windows (XP or Vista) is an ideal choice for netbooks and in fact is perfectly adequate for many tasks on mainstream PCs. That’s why Vista Home Basic is so popular on entry-level business PCs.

The big challenge for Microsoft in the Vista-to-7 transition is how to increase the average price of a Windows license without making users scream or quit in protest. By changing the upgrade game in Windows 7, they’ve created the conditions for a whole new revenue stream – and, paradoxically, have the chance to offer Windows customers an upgrade deal they’ll actually want.

I’ve crunched the numbers, and my rough calculations suggest that this realignment could be worth hundreds of millions, and perhaps billions of dollars in new revenue for Microsoft, even if PC sales remain flat. Here’s how I came to that conclusion.

On new PCs, which make up the overwhelming majority of the PC market, Microsoft’s partners choose which Windows editions will be installed on a given PC at the time of purchase. Their goal is to keep costs as low as possible, which is terrible news for Microsoft’s bottom line. In essence, OEMs make their OS choice based on the total price they want to sell a system for. If you buy a system sold at a retail outlet like Best Buy, customization is impossible: You get what’s preinstalled. Companies that offer build-to-order PCs sometimes give the buyer a choice, but most customers accept the default configuration, which usually includes Vista Home Premium for a consumer PC, Vista Business for models designed for the corporate market, and Home Basic for entry-level systems for home and small business buyers.

OK, cialis order online so you buy a new PC with Vista Home Premium and take it home, and then you discover that you can’t use Remote Desktop to manage that system remotely, and it doesn’t allow you to recover files saved by the Previous Versions feature, and you can’t do image backups. If you want those features, you have to buy an upgrade copy of Ultimate edition at a typical cost of $150 or more. And if you decide to upgrade after the fact, you not only pay through the nose, you also sign up for several hours of downtime as the upgrade completely replaces your existing installation and then migrates your programs and data files.

Long story short, the current Windows upgrade model is completely irrational. As a result, almost nobody upgrades their copy of Windows Vista. You use what came with your PC and Microsoft sees almost nothing in upgrade dollars.

That means, in practical terms, that Microsoft’s revenue from Windows client licenses is set by the mix of PCs in the marketplace and effectively determined by OEMs. To get a handle on how the mix works, I did some very rough back-of-the-envelope calculations. The following table assumes that Microsoft sells 200 million Windows licenses per year. I consulted with a few industry analysts to guess at approximate market shares and OEM costs for those licenses, and came up with the following total.

* Estimate, for illustrative purposes only

** Based on 200 million licenses sold

The only way for Microsoft to adjust that number is to convince OEMS to build new PCs with higher-priced editions (and thus higher price tags) than they previously used. Good luck with that strategy.

So what’s Plan B?

With Microsoft’s latest product mix in mind, let’s look at the numbers for new PCs purchased with Windows 7 in the first full year after Windows 7 ships. All of those buyers in the U.S., Western Europe, and the rest of the developed world who would have purchased a PC with Vista Home Basic will have to choose the higher-price Home Premium edition when purchasing a Windows 7 PC. The only buyers left for Home Basic are in emerging markets, which cuts the percentage of Home Basic buyers down (but not to zero, because emerging markets are booming). At the high end, some buyers who previously would have chosen Ultimate (because they wanted Media Center and Remote Desktop capabilities, for instance) can now choose the less expensive Professional and still have the features they need. Figure that knocks a point off Ultimate’s already low market share.

Here’s what the Windows 7 numbers look like in that case:

* Estimate, for illustrative purposes only

** Based on 200 million licenses sold

Assuming the number of license remains constant, the change in SKUs alone means a bump in the average selling price (and thus the total revenue, assuming flat growth in PC shipments) of 1.87%. Since this is back-of-the-envelope stuff , let’s round it up to an even 2%.

But here’s where it starts to get interesting. With Windows 7, Microsoft has made it technically easy to upgrade, and for the first time they also have the opportunity to price those upgrades reasonably. Imagine that an aggressively priced upgrade program is able to convince a mere 4% of the total Windows customer base to upgrade after the initial PC purchase, with the overwhelming majority going from the dominant Home Premium edition to Professional. Assuming 200 million new Windows-based PCs, that’s 8 million buyers with cash in hand. If they can be convinced to pay an average of $50 each to unlock those Windows 7 Professional features, Microsoft pockets $400 million in extra revenue. No sales get cannibalized; these are buyers who would have never upgraded in the Vista world, because the cost and hassle factors were way too high.

Those assumptions might be too optimistic, but even a 1% upgrade rate translates into $100 million dollars in new revenue over the course of a year, something that Microsoft can’t afford to sneeze at in these tough times. And if they can boost the upgrade rate into double-digit percentages at a higher price, the result could add up to billions in new revenue.

So who loses in this revised model? Entry-level buyers in the U.S. are the most obvious victims in this scenario. With no Home Basic edition, the price of a $400 budget Windows PC is going to rise by about $30, or 7.5%. Ouch.

Anyone trying to squeak by on a netbook with older, slower hardware is going to be stuck between a rock and a hard place, too. The low-priced XP Home is still available for those systems until June 30, 2010, but after that it’s Windows 7 Home Premium (too expensive), or Windows 7 Starter Edition (too limited) or Linux (too not-Windows).

And that model doesn’t factor in the bump in revenue coming from Windows Vista users who are enticed by Microsoft’s “aggressive pricing” and special offers when Windows 7 launches.

All in all, it adds up to a potentially enormous bump in revenue for Microsoft from a seemingly small change.

February 3rd, 2009

Posted by Mary Jo Foley

If you were one of those individuals holding out hope that Microsoft might go the way of Apple and move to one or two SKUs for Windows 7, your prayers have gone unanswered. But there still is some good news in what’s on tap when Windows 7 ships, most likely in the third or fourth quarter of this year.

Microsoft went public on February 3 with its planned version (SKU) line-up — but not pricing — for Windows 7.  After receiving an admittedly very quick SKU overview from the Softies yesterday, here are my first impressions of Microsoft’s new SKU plan.

The Good

Microsoft learned a lot of lessons from Vista — among them, that too many SKUs with too few justifications created customer confusion.

Microsoft is putting the bulk of its marketing dollars and muscle behind just two of the Windows 7 SKUs: Windows 7 Home Premium and Windows 7 Professional. “We think over 80 percent of customers will be on those two SKUs,” Bill Veghte, Senior Vice President of the Windows business said. “That’s where we are putting our marketing focus.”

Another positive: The era of Ultimate promises (and failures) is over. Microsoft is making sure that each, successive version of Windows 7 is a true superset of the SKU just below it. If you pay more money, you get more features the day you buy the product — not some unspecified time in the future.

Finally, for XP users who’ve skipped Vista and are wondering whether they’ll be able to get upgrade pricing when moving straight to Windows 7, the answer is “Yes, we can!” The official statement, from a Microsoft spokesperson: “Customers can purchase upgrade cialis online overnight media and an upgrade license to move from Windows XP to Windows 7; however, they will need to do a clean installation of Windows 7.” (Microsoft still isn’t ready to talk pricing, but at least you know now you won’t have to buy a full license.)

The Bad

While Microsoft is going to emphasize just two SKUs, it still is going to offer five or six (depending on how you count) different Windows 7 versions. (And more, if you count the stripped-down K, N and KN versions the company is required to sell overseas because of antitrust rulings). Here is the full Windows 7 SKU line-up:

• Windows 7 Starter Edition (for emerging market and netbook users)
• Windows 7 Home Basic (for emerging market customers only)
• Windows 7 Home Premium (the main “Media Center” equivalent)
• Windows 7 Professional (the business SKU for home users and non-enterprise licensees)
• Windows 7 Enterprise (for volume licensees)
• Windows 7 Ultimate (for consumers who want/need business features)

Veghte claimed that Microsoft can’t have a one- (or two-) size fits all SKU plan because it has more than a billion customers worldwide running Windows. There are too many diverse needs to shoe-horn them all into two SKUs.

I’m also still confused about the changes Microsoft is making to its Ultimate SKU with WIndows 7. Veghte told me that Microsoft is anticipating Ultimate to be one of the less popular SKUs with a run-rate in the “low single digits). Microsoft is positioning Windows 7 Ultimate as the preferred SKU for consumers who need enterprise features (but aren’t volume-license customers), as well as for OEMs or retailers with “specific offers” they want to sell around. With Vista, the Ultimate SKU was also aimed primarily at enthusiasts, but was Microsoft’s preferred high-end offering for consumers — one to which it tried to convince customers to upgrade. That doesn’t seem to be the case with Windows 7, leading me to believe Microsoft is on the path to phase out Ultimate….

The Ugly

The rumors were wrong; the reality is there is no netbook SKU for Windows 7. Because Windows 7 has been tweaked to have a smaller memory footprint, etc., the full version of 7 can run on many, if not all, netbooks. Microsoft is offering netbook makers a choice: Put Windows 7 Starter Edition or Home Prmium on netbooks.

Unsurprisingly, Veghte was unwilling to discuss how much Microsoft is planning to charge its PC-maker partners per copy for Windows. Here’s the Pandora’s box I foresee: Is Microsoft going to charge PC makers less per copy for Home Premium than it charges to run the exact same Home Premium SKU on a full-fledged notebook or desktop system? Who will be the judge of what is a “netbook”? Will OEMs decide to preload Starter Edition instead to save money? If they do, users may be unpleasantly surprised when they realize they can run only three apps simultaneously on Starter….

(With Windows 7, Microsoft is now allowing PC makers in all countries, not just emerging markets, to preload Starter Edition on new PCs, by the way.)

My ZDNet blogging colleague Ed Bott will be detailing what’s in each of the new SKUs, in case you’re still confused about how the Win 7 line-up will stack up against the comparable Vista/XP ones.

Update: Steven Bink of Bink.nu fame has a handy chart comparing the various Windows 7 SKUs.

February 2nd, 2009

Posted by Mary Jo Foley

Whenever Microsoft releases a new version of Windows, there’s always some period of uncertainty when customers face the choice of moving to the current release or waiting for the new product. This year,  however, that transition period is especially uneasy.

Windows 7 is — by all accounts (except from the Microsoft honchos) — due out later this year and is looking faster, smaller and more stable than any Windows release out there. Windows Vista is here, but not a user favorite (to put it mildly). And eight-year-old Windows XP is still the dominant version of Windows out there.

So what’s a Windows user to do? Follow Microsoft’s corporate guidance and upgrade to Vista now in preparation for 7? Hang on a bit longer with XP? Try mixing and matching the three in your IT shop?

Microsoft’s Windows brass have been reticent to provide a detailed answer to the question “What should my desktop strategy be?” But Mike Fiorina, a Microsoft account cialis online no prescription tech specialist based in New England, grabbed the Windows-upgrade-confusion bull by the horns in a blog post this past weekend.

Fiorina explained that a perfect storm is brewing: XP SP2 mainstream support is set to end in July, 2010 April 2009 (and all support for it by July 2010).  XP SP3 extended support isn’t retiring until April 2014, which, Fiorina said, “gives XP environments some breathing room, but not necessarily as much as you might think.”

Even though Vista SP1 has been out for a year (and Vista SP2 is expected some time in the next few months), Vista still is suffering from both real and imagined limitations, Fiorina admitted. From his January 30 post:

“The one recurring theme in discussions with corporate customers is that (Vista) application compatibility is a problem. Applications may not run in Vista, or maybe they can, but it’s not supported by the vendor. Remediation will be costly and time consuming. We get it. Many of the acquisitions and investments we’ve made in the past few years are targeting that problem specifically (Application Virtualization – SoftGrid, Enterprise Desktop Virtualization – Kidaro, etc.)”

Fiorina noted that the generally positive beta reviews of Windows 7 has meant “we’re hearing from a lot of folks ‘Why should I upgrade to Vista when Windows 7 is right around the corner?’” His answer:

“If we look at it from the perspective of an enterprise with fairly unaggressive adoption cycles, then you’ll see that you may be putting yourself in an untenable situation a few years down the road.”

Untenable? Fiorina continued his line of reasoning with the caveat, “for the sake of argument, make these assumptions”:

• “Company A doesn’t deploy new operating systems or major applications until Service Pack 1 (or a similar bug-fix milestone) has been provided by the vendor
• Company A probably won’t even begin testing their application footprint against the new OS until said SP1 is available
• Windows 7 ships in the fourth quarter of 2009
• Service Pack 1 for Windows 7 would likely not be final until the first half of 2011, if not later (going by our historical timelines for SP1 releases)
• So, Company A would begin testing migration from Windows XP to Windows 7 SP1 in 2011 sometime. How long would it take to perform adequate testing of your application suite to certify\remediate it for Windows 7? For most, this is at least a 6 to 12 month process…so, now we’re in mid-2012.  At that point, you’re ready to start building an image (hopefully using the MDT to make your lives easier).  Maybe the image is ready to go in early 2013. Then you have a little over a year to get it out company-wide until Windows XP hits end-of-life. Is that enough time?  Perhaps…but is it worth backing yourself into a corner?”

Sure, you could argue that Fiorina is a sales guy and is looking for any way possible to chalk up a few more Vista sales while Windows 7 is gaining steam. But, to me, his post highlights what’s likely to be one of the biggest IT questions in 2009: On which version of Windows should I standardize as my corporate desktop?