WPC09 Day 3 and Wrap-Up

Day 3 of Microsoft's Worldwide Partner Conference (WPC) 2009 provided some excellent information about Microsoft's efforts to counteract Apple. Here are the highlights, as well as a show wrap-up.

Microsoft talks retail stores, getting on Apple's nerves

Microsoft COO Kevin Turner provided a few details this week about his company's still mysterious plans to open retail stores: He said the software giant planned to open some retail stores "right next to Apple Stores" beginning in the fall.

Turner also related a funny story about Apple: The Cupertino Mac maker called Microsoft recently and demanded that the software giant stop running its "Laptop Hunter" ads on TV. The ads highlight how expensive Macs are compared to PCs, and how much more choice there is in the PC market. That's a lot of chutzpah, even for Apple: It's annoying "I'm a Mac" ads have been running for years and often include inaccurate information about Windows and PCs.

Turner said this week at Microsoft's Worldwide Partner Conference that his plan for the retail stores was to "transform the PC and Microsoft buying experience." While it's unclear that the best way to do that is to copy Apple's own retail plan so closely that even the locations are similar, Turner says that he expects Microsoft will learn a lot from this experience and then share it with other retailers that sell Microsoft products.

"We're in the game for the long-term here," he said. "And I know something about retail, and we've hired and incredible team to do an incredible job on retail."

Regarding Apple's demands about the "Laptop Hunter" ads, Turner revealed how desperate Apple is to prevent people from realizing how much more expensive Macs are than PCs. "Two weeks ago we got a call from the Apple legal department saying, 'hey, you need to stop running those ads, we lowered our prices,'" he said. "They took like $100 off or something. It was the greatest single phone call in the history that I've ever taken in business."

Finally, Microsoft had gotten to Apple. "I did cartwheels down the hallway," Turner continued. "At first I said, 'Is this a joke? Who are you?' We're just going to keep running them and running them and running them."

Turner noted that the ads work because they're the truth. He talked of reading an ad for an electronics retailer in the newspaper this past Sunday and examining the prices for different computers. "You can get a 13.3-inch Macbook for $1199 from that retailer," he said. "Guess what? That same retailer, you can get the same PC with more RAM, a bigger hard drive, and almost a three-inch bigger screen for $649. This is ... the Apple Tax."

WPC Wrap-up: Microsoft answers my questions

The week before this year's Worldwide Partner Conference (WPC), I wrote an article in which I asked Microsoft some questions. Now that the show is winding down, let's see which questions Microsoft actually answered. (Surprisingly, almost all of them.)

Q: Will businesses be able to get access to Windows 7 and Windows Server 2008 R2 electronically before the October 22, 2009 launch date?

A: Yes. Software Assurance (SA) customers will get access to these products on September 1, 2009.

Q: What about MSDN and TechNet customers?

A: Microsoft says that MSDN and TechNet customers will be able to download Windows 7 and Windows Server 2008 R2 "a couple of weeks" after it announces RTM.

Q: There are still a lot of questions about Windows 7 pricing, availability, and various other upgrade issues. What's up?

A: Frustrated by Microsoft's lack of clarity on this important point, I wrote a scathing blog post the other day in which I blasted the company for this communications snafu and for blaming bloggers about spreading RTM rumors. I've heard from various representatives of the company, privately, about this post and have been promised that they will be more forthcoming in the near future. Stay tuned.

Q: What's up with Office Web Applications?

A: Last October, Microsoft promised that it would deliver a beta version of Office Web Applications by the end of 2008. That still hasn't happened. But Microsoft tells me that it will have a limited release Tech Preview of Office Web Applications available in August, and will deliver a beta version this fall. The final release will ship alongside Office 2010 by mid-2010.

Q: Is it time to give up on Windows Mobile?

A: Looking at three days of WPC keynote addresses, Microsoft mentioned Windows Mobile only infrequently. In the day one keynote, Windows Mobile was only passingly referenced by Microsoft, and then only in the context of Office 2010. Ditto for day two. Finally, on day three, Todd Brix appeared on stage and talked up Windows Mobile, the upcoming Windows Marketplace for Mobile release, and its plans to make Windows Mobile "more accessible for consumers." "A typical user of the Windows phone coming this fall [will] see a wide variety of consumer applications, as well as business," Brix said.

Q: Does it make sense to merge the desktop Windows and Windows Mobile codebases (as Apple essentially does with Mac OS X and the iPhone)?

A: Microsoft never mentioned Windows Mobile 7 or any possible plans to merge the desktop Windows and Windows Mobile code bases.

Q: What about Windows Azure pricing and licensing?

A: Microsoft will offer Azure services in three different ways, including a consumption (pay as you go) model, a subscription model for resellers, and via volume licensing to enterprises. The so-called consumption model appears to be priced comparably with the current leader in this market, Amazon.com, which offers a variety of online services, including hosted Windows and Linux services.

On the consumption plan, Microsoft will charge 12 cents per hour for compute infrastructure services, 15 cents per gigabyte for storage, and 10 cents per 10,000 storage transactions. Users of Microsoft's SQL Azure cloud-based database will incur monthly charges of $9.99 for the Web Edition, which supports up to 1 GB databases, and $99.99 for the Business Edition, which allows up to 10 gigabyte databases. The web developer-oriented .NET Services will cost 15 cents per 100,000 message operations. There are additional bandwidth charges across the three services as well; 10 cents per gigabyte for incoming data and 15 cents per gigabyte for outgoing data.

Q: When will the initial "shipping" version of Azure hit, really?

A: November 2009.

Q: What's the Azure Service Level Agreement (SLA) going to look like?

A: Three nines. (99.9 percent uptime is guaranteed.)

Q: When should customers choose hosted applications and services over self-hosting? And how does Azure fit into the overall Windows Server strategy going forward?

A: This is a tough question to answer right now and of course the answer will change as the market evolves. Microsoft is positioning Windows Azure (and MOS) as a solution for businesses that do not want to host complicated but necessary technology on-site.

Q: With Microsoft having to expand ever sideways in order to find new revenue models, how will this impact its relationships with the partners that used to rely on these revenue models for themselves?

A: Microsoft noted that the opportunities for partners have changed a lot over the years: 15 years ago, Microsoft CEO Steve Ballmer said, the number one partner opportunity on the Windows desktop was adding a TCP/IP stack. But even though Microsoft has simply added that and other one-time partner-based functionality to Windows, the opportunities for partners have only grown over time.

Microsoft announced the formation of the new Microsoft Partner Network (MPN), which replaces the old Microsoft Partner Program. Semantics aside, the MPN is really about addressing the changing roles Microsoft and its partners will undertake in this shifting climate.

There are now four levels of membership: Community, Subscription, Competency and Advanced Competency. (Previously, there were three, the familiar Gold Certified, Certified and Registered.) The Competency level is getting a huge bump in the number of certifications it offers, from 17 to 30, a reflection of the way the market has expanded.

An edited version of the first half of this article appeared in the July 16, 2009 issue of WinInfo Daily UPDATE. --Paul

--Paul Thurrott
July 16, 2009

Related reading

WPC Pre-Show: Some Questions
Day 1: Partners, Office, Win7
Day 2: Ballmer, Azure, Mobile
Day 3: Apple and WPC Wrap-Up