Microsoft goes into drinks business

From BBC NEWS

Microsoft has kicked off a research project to create software that will take over when it retires Windows.

Called Midori, the cut-down operating system is radically different to Microsoft’s older programs.

It is centred on the internet and does away with the dependencies that tie Windows to a single PC.

It is seen as Microsoft’s answer to rivals’ use of “virtualisation” as a way to solve many of the problems of modern-day computing…

Hmmm… Some people think that midori is a “beautiful green color liqueur with refreshing and fruity taste of melon” which “can be used to mix a wide range of juices, spirits”.

Cloud computing terminals worry the PC industry

And so they should. The PC is being commoditized. This from today’s New York Times.

SAN FRANCISCO — The personal computer industry is poised to sell tens of millions of small, energy-efficient Internet-centric devices. Curiously, some of the biggest companies in the business consider this bad news.

In a tale of sales success breeding resentment, computer companies are wary of the new breed of computers because their low price could threaten PC makers’ already thin profit margins.

The new computers, often called netbooks, have scant onboard memory. They use energy-sipping computer chips. They are intended largely for surfing Web sites and checking e-mail. The price is small too, with some selling for as little as $300.

The companies that pioneered the category were small too, like Asus and Everex, both of Taiwan…

What’s strange is that anyone should be surprised by this. It’s been obvious for years that this is what would happen. Outside of the luxury markets, a technology is always commoditized if there’s sufficient demand for what it offers or provides.

Alpha female

Interesting Economist profile of Diane Greene.

ALPHA male, flamboyant, brash, megalomaniacal. Profiles of leading high-tech bosses tend to be littered with these terms, signs of the traits that they seem to need to make it to the top of the computer industry and stay there. But none of them applies to Diane Greene, the chief executive of VMware. Her company, which sells software that makes data centres run more efficiently, has quietly become the world’s fourth-most-valuable publicly traded software company, with a stockmarket value of nearly $20 billion. Its public listing last August was a bit like the heady dotcom days. Since then, the old guard has started ganging up on the newcomer, which boasts quarterly sales of nearly $440m and expects to grow by 50% this year. Microsoft, in particular, has vowed to take on VMware. On June 26th the software giant released its first competing product—predictably, as a free add-on to its flagship Windows operating system. How will Ms Greene play in the rough and tumble of the big league?

Heading into the cloud

Bill Thompson’s most recent BBC column cast a sceptical eye on ‘cloud computing’. “In the real world”, he wrote, “national borders, commercial rivalries and political imperatives all come into play, turning the cloud into a miasma as heavy with menace as the fog over the Grimpen Mire that concealed the Hound of the Baskervilles in Arthur Conan Doyle’s story”.

Quite so. You’d have thought that this rather undermines Nick Carr’s confident prediction of the inevitability of ‘computing as a utility’, so one expected that he would pick up Bill’s piece on his blog. Which indeed he has. But he’s oddly uncommunicative about it, confining himself just to summarising Bill’s views. Or am I missing something?

Down on the server farm

Interesting piece in this week’s Economist about the environmental impact of cloud computing.

Internet firms, meanwhile, need ever larger amounts of computing power. Google is said to operate a global network of about three dozen data centres with, according to some estimates, more than 1m servers. To catch up, Microsoft is investing billions of dollars and adding up to 20,000 servers a month.

As servers become more numerous, powerful and densely packed, more energy is needed to keep the data centres at room temperature. Often just as much power is needed for cooling as for computing. The largest data centres now rival aluminium smelters in the energy they consume. Microsoft’s $500m new facility near Chicago, for instance, will need three electrical substations with a total capacity of 198 megawatts. As a result, finding a site for a large data centre is now, above all, about securing a cheap and reliable source of power, says Rich Miller of Data Center Knowledge, a website that chronicles the boom in data-centre construction.

The availability of cheap power is mainly why there are so many data centres in Quincy. It is close to the Columbia River, with dams that produce plenty of cheap hydroelectric power. There is water for cooling, fast fibre-optic links, and the remoteness provides security. For similar reasons, Google chose to build a new data centre at The Dalles, a hamlet across the Columbia River in the state of Oregon.

Such sites are in short supply in America, however. And with demand for computing picking up in other parts of the world, the boom in data-centre construction is spreading to unexpected places. Microsoft is looking for a site in Siberia where its data can chill. Iceland has begun to market itself as a prime location for data centres, again for the cool climate, but also because of its abundant geothermal energy. Hitachi Data Systems and Data Islandia, a local company, are planning to build a huge data-storage facility (pictured at top of article). It will be underground, for security and to protect the natural landscape…

Why Microsoft wanted Yahoo

From the New York Times

It’s no secret that Microsoft’s online businesses have failed to gain leading market positions. But what is not widely appreciated, perhaps, is that the company’s online initiatives have lately been doing worse than ever.

The last year when Microsoft made a profit in its online services business was the fiscal year that ended on June 30, 2005. Its MSN unit used to do a nicely profitable business providing dial-up Internet access to subscribers. When its users began to switch to broadband services provided by others, however, the earnings disappeared. Microsoft’s Web sites brought in a trickle of advertising revenue, which did not grow fast enough to offset the disappearance of the narrowband access business. AOL suffered in similar fashion.

In the 2006 fiscal year, Microsoft’s online services produced a $74 million loss after the previous year’s profit of $402 million. Since then, the numbers have become uglier, as Microsoft’s online segment has added employees and absorbed growing sales and marketing expenses. In the 2007 fiscal year, the online businesses lost $732 million. In the next nine months, through March 31 this year, they recorded a loss of $745 million, almost double the amount in the period a year earlier. With $2.39 billion in revenue for the nine months, the online segment represents only 5 percent of the company’s total revenue…

Cloud Computing. Available at Amazon.com Today

Spencer Reiss has written a fascinating article in Wired about Amazon Web Services.

Jeff Bezos’ store in the sky is hard to beat for books, CDs, and a zillion other products. It’s also great for quick technology fixes. Say you need a fat HP server for hosting the too-moronic-to-fail Facebook app you plan to launch next week. Only $1,300 and change! Hit 1-Click. Select expedited shipping. What’s for lunch?

But there’s a cheaper, faster, better way to satisfy your hardware jones. Tucked over on the left side of the page, the nerd gnomes in Beacon Hill, Seattle, have embedded an option that blows computer shopping into, well, the clouds. Click on “Amazon Web Services.” Key in your Amazon ID and password and behold: a data center’s worth of computing power carved into megabyte-sized chunks and wired straight to your desktop. Clones of that HP tower cost 10 cents per hour — 10 cents! — and they’re set to start spitting out widgets as soon as you upload the code. Virtual quad cores are a princely 80 cents an hour. Need storage? All you can eat for 15 cents per gigabyte per month. And there’s even a tool for monitoring your virtual stack with an iPhone. No precious cash tied up in soon-to-be-obsolete silicon, no 3 am runs to the colo cage. Outsource your infrastructure to Amazon!

Seminar thoughts

Randal Picker, of the University of Chicago Law School, runs a Tech Policy Seminar in which he evidently encourages students to post to his Tech Policy blog. This semester the topic was Nick Carr’s book, The Big Switch. Many of the student comments are thoughtful, a few are original, but the best (and most detached IMHO) is this one by Max Schleusener. It’s nice when one has students as good as these.

The class has also discussed Jean-Noel Jeanneney’s critique of Google’s Library Project — Google and the Myth of Universal Knowledge.