Windows Weekly 347 (Transcript)


Download and watch the episode here:
Windows Weekly 347

Leo Laporte: It’s time for Windows Weekly! Paul Thurrott and Mary Jo Foley are here. We’ll take a look at Microsoft’s quarterly results; there is some pretty good news for Big Green there. And, Windows 8.1 Update one: Coming soon to a computer near you. It’s all next, on Windows Weekly.

Netcasts you love…from people you trust. This… is TWiT.

Leo: Bandwidth for Windows Weekly is provided by Cache Fly, at c-a-c-h-e-f-l-y.com.

Leo: This is Windows Weekly, with Paul Thurrott and Mary Jo Foley. Episode 347, recorded January 29, 2014,

Welcome to Booty Bay

Windows Weekly is brought to you by ShareFile from Citrix. Try ShareFile today for a 30-day free trial. Go to sharefile.com, click the microphone, and enter “WINDOWS”.  And by SquareSpace, the all-in-one platform that make it fast and easy to create your own professional web site or online portfolio. For a free two-week trial and ten percent off, go to squarespace.com and use the offer code “WINDOWS1”.

Leo: It’s time for Windows Weekly – the show where we cover all the latest news from Microsoft. And here he is ladies and gentlemen, drinking and talking at the same time, the ventriloquil stylings of Mr. Paul Thurrott, from –

Paul Thurrott: Hello Leo.

Leo: Hello Paul, from winsupersite.com. Also Mary Jo Foley, from allaboutmicrosoft.com, wearing her spiffy Lumia headphones… lemon yellow. Hello everybody!

Mary Jo Foley: Hello.

Leo: So we had an earnings call from Microsoft…

Paul: Which now seems like it was a month ago.

Leo: It does!

Mary Jo: I know…

Leo: It was Friday, right? Was it Friday?

Paul: It was Thursday.

Leo: Thursday.

Mary Jo: Thursday, the day after last Windows Weekly, so… [laughs] yeah, we haven’t talked about it.

Leo: Yeah, yeah. Usually they do it during Windows Weekly, but we moved it to –

Paul: Yeah

Leo: Now I’m regretting it, because it was so much fun. On Thursdays, we would wait and wait…

Paul: I kind of expected them to move the Earnings Announcement, but…

Mary Jo: [laughs]

Leo: They aren’t paying attention, apparently, yeah. Well that’s because Rob Greenlee left, you know, and that’s uh…

Paul: Right, right.

Mary Jo: Yep.

Leo: By the way, a tip of the hat to Rob Greenlee who was, for I think eight years, the Podcast Guy at Microsoft. A proto-podcaster—

Paul: The patron saint of Podcasting at Microsoft…

Leo: Yeah…

Paul: Now we’re screwed, though, because… who’s the Podcast Guy now at Microsoft?

Leo: You know, when Rob left they didn’t really say there was somebody taking his place at Microsoft.

Paul: Yeah, they did not.

Leo: So, that’s all! [laughs] Good-bye! And he has taken a new job uh… Where? I can’t remember where though. But, uh, I’m sure I’ll find it. Anyway, very happy for Rob, and his uh…

Paul: It is a podcasting company.

Leo: Yeah.

Paul: But I can’t think of –

Leo: Oh! It’s called, the name is simple: PodcastOne. It is, uh --

Paul: Ok. Actually, I thought – that’s funny.

Leo: No, in fact, I interviewed the founder of PodcastOne, who’s a long-time radio guy who wants to bring the same kind of model for radio broadcast sales to podcasting, which would just be fabulous. [laughs]

Paul: Yeah.

Leo: Norm Pattiz. He’s the guy, you know the guy because you see him court-side at the Lakers games. Every game.

Paul: So he’s not hurting for money.

Leo: He has so much money…

Paul: Yeah.

Leo: … and now he’s decided that he’s going to take all the money from us.

Paul: I’m sometimes seen TV-side at a Celtics game.

Leo: [laughs]

Mary Jo: [laughs]

Leo: With his feet up, and a bowl of nachos in his lap!

Paul: Yep.

Leo: Anyway, congratulations Rob on the new job, and we will miss you, because he’s been a great advocate for podcasting at Microsoft.

Paul: Yeah.

Leo: And he’s uh, I really feel he’s the reason that Windows Phone has a Podcast category and all of that, so…

Leo: However, that did not seem to impact the bottom line at Microsoft… [laughs]

Paul: No…

Mary Jo: [laughing] Didn’t help.

Leo: Who wants to take the lead on this one?

Mary Jo: Let Paul do the… the basic numbers.

Leo: Oh, the heavy lifting?

Paul: Geez…

Mary Jo: Yeah, the heavy lifting.

Leo: I could do it! You want me to do it?

Paul: So Microsoft announced last Thursday that their net income for the most recent quarter, which I believe is their second fiscal quarter but we might think of it as the fourth calendar quarter of 2013, was $6.56 billion. Revenues were $24.52 billion, which was a record for that quarter. And so, you know, the kind of general point there is that this business that is apparently, you know, circling a drain somewhere is in fact going gangbusters, um, against –

Leo: I’ve got to point out one thing, though:

Paul: Mmm-hmm?

Leo: (and I don’t mean this in a negative way)

Paul: [laughing] Okay

Leo: But Apple’s profits were doubled Microsoft’s for that quarter.

Paul: Yeah. Actually, in that quarter –

Leo: And that is, for people like you and me, who have been watching this since the 90s…

Paul: Oh yeah yeah yeah. Yeah.

Leo: That is like such a turn-around.

Paul: Um, Apple’s… if you just look at iPhone…

Leo: It’s all iPhone, of course...

Paul: That business is bigger than all of Microsoft.

Leo: Yeah.

Paul: I’m certainly not –

Leo: It’s amazing.

Paul: It’s particularly true in the quarters where, you know, Apple has an iPhone launch, like they did in that quarter.

Leo: Yeah, this, well… This was also the holiday buying quarter, and I think that –

Paul: Yeah, but –

Leo: – this is bigger in a consumer electronics company like Apple than it is in a company like Microsoft.

Paul: Yeah, and actually, maybe this would be a good way to transition to what Mary Jo had written about this, but (and we’ll probably never stop doing this, comparing Apple and Microsoft) the truth is: I don’t think these companies are all that comparable, and it’s funny because in many ways they were never all that comparable. Um, when Apple wasn’t doing so well and they sold this minority PC platform, I mean it was kind of hard to, you know, compare them to Microsoft.

Leo: But it was in the kind of – well, of course you’re right, it was a hardware company, not an operating systems company,

Paul: Yeah.

Leo: But it was the competing operating system.

Paul: Yeah, and we still compare them.

Leo: Yeah.

Paul: They made that one alternative.

Leo: Yeah.

Paul: One major alternative, anyway, and you know today Apple of course has seen great success with the consumer devices products – iPod first, then iPhone and iPad – but that’s something Microsoft has never done particularly well at. And that business has been huge for Apple, but the one thing that Microsoft has been very consistent about is its performance on the business side, and I think that’s the kind of analysis piece that Mary Jo had written about.

Leo: Yeah.

Mary Jo: Yeah.

Leo:  It’s what you said: Microsoft is still – this is in her All About Microsoft blog – an Enterprise company, and that’s ok.

Mary Jo: Yeah, I mean, I saw so many headlines right after earnings came out, of people saying “This proves they’re on their way to becoming a devices and services company, just look at the numbers.” Well, if you actually do look at the numbers, where Microsoft actually made their money last quarter was in Enterprise software. So, yes, they’re in the midst of transitioning to becoming a devices and services company, but if you use their new classification in terms of how they break out their numbers, the far-and-away biggest part of their quarter came from the part that’s called “Commercial Licensing.” And what’s in that is Windows Enterprise, Server Products, Office Business Products, Dynamics (which is ERP and CRM), and Unified Communications. All software, all business products. No Xbox. No Bing. No consumer –

Paul: Actually, let me ask you a question on that note. You used the word “commercial,” which is the word that Microsoft uses to describe their business products. Is that new language? Because –

Mary Jo: It is.

Paul: I spoke to two different people from Microsoft over the past twenty-four hours, and both of them used the word “commercial” to describe this part of the business. And either I’m demented, and losing it quickly, or I just haven’t been paying attention, or they have never used this language. This is new language, isn’t it?

Mary Jo: It’s definitely –

Paul: “Commercial.”

Mary Jo: I don’t know exactly when they started calling Enterprise “Commercial,” but it’s definitely been within the past few quarters, I would say. So they talk about “Consumer” and “Commercial,” and they don’t talk about “Enterprise” and “Consumer.”

Paul: Alright.

Mary Jo: It’s a little bit confusing, because sometimes when you hear the word “commercial” you’re thinking “retail,” right? But that’s not actually what we’re talking about here. We’re talking about business.

Paul: Yeah, I find it to be an odd term.

Mary Jo: It is. When I hear it, I have to think through it. I’m like “Wait, which segment are we talking about now?”

Leo: [laughs]

Mary Jo: The second-biggest segment – ok, so Enterprise Software totally blew everything else away – second-biggest segment was this part of the company called “Devices and Consumer Licensing.” So, what’s in there? All the Windows sales, Windows Phone OS sales, Office Consumer (for some reason), and IP licensing. That was the second-biggest group of products, in terms of their contribution to net profits and revenues.

Leo: IP Licensing. That’s interesting…

Mary Jo: Yeah. So they call that “Licensing.”

Leo: That would be the five bucks a handset they get from Android, for instance.

Mary Jo: Right. Right. A lot of people were trying to do the math, based on what they announced during Earnings, to figure out how much of the part they call “Windows Phone” is actually patent-licensing revenue versus OS revenue, and it’s a little tricky to break that out. They make it hard to break that out. The way they’ve got their Earnings reporting segments organized now, it’s – I’ve seen some Wall Street analysts say it’s much clearer and more transparent – I actually think it’s much cloudier, and less transparent. And Paul just left. Where did he go? [laughs]

Leo: He doesn’t want to… Ok, pretend nothing happened… There we go! Full-screen Mary Jo. No one knows that Paul Thurrott disappeared briefly.

Paul: My cat came in.

Leo: Oh…

Paul: You know what happened? My cat was going to have a little kitty heart attack if I didn’t let her in my office.

Leo: Awwwww

Paul: She was freaking out.

Leo: I thought you were getting your harmonica. [plays the harmonica]

Paul: She is like a harmonica. You can probably hear her.

Leo: [laughs]

Mary Jo: [laughs]

Paul: So loud.

Leo: Sorry, Mary Jo. Continue, please. [laughs]

Mary Jo: So, the part I’m trying to bring out here - because everybody was so desperately trying to say “look how great they did with Devices, look how great they did with the Cloud…” (actually, they did have an amazing quarter, which really surprised a lot of people on Wall Street, I think) – they had an amazing quarter mostly because of their Enterprise business. And that’s not bad! I mean, they don’t want to be IBM, but they do pretty darn well selling to businesses.

Leo: Yeah. It shouldn’t be a surprise to anybody who’s paying attention at all…

Mary Jo: Yeah, sure.

Leo: It does make one wonder, though, if the Windows 8.1 strategy is quite the thing for that segment.

Paul: Yeah.

Leo: Right?

Paul: Yeah. You know, it’s funny, on 8.1. I’ve often described 8.1 as being an improvement over 8.0 (which of course it is), and the way you describe that improvement is to say it’s interesting because the people that use desktop computers – traditional computers that don’t have multi-touch interface – is that they’ve made it better, to use it just in the desktop. They don’t completely eliminate the Metro stuff, but they mostly eliminate it. I thought that was a good step. For people that do want to use Windows on a tablet, they also made it better for those people, because you don’t have to go to the Control Panel and the desktop as often as you did in the 8.0 release. You know, it’s funny… That’s one measure of success, but the place where Windows 8.1 is no more successful than Windows 8 is in the integration of those environments. It still leaves Windows as this thing that is two separate environments sitting on the same computer. If anything, Windows 8.1 made that divide even more pronounced, because Metro is not particularly well-suited for the desktop, and the desktop is not particularly well-suited for multi-touch.

Leo: Right…

Paul: It’s kind of an interesting, so I think in Update 1 - in Windows 9, however they do it – they’re going to have to address that issue as well. My cat is freaking out…

Leo: [laughs]

Mary Jo: Uh-oh… [laughs]

Paul: Needs to be petted, badly.

Leo: Do the results tell us anything about the direction Microsoft is taking, should be taking, should not be taking? Does this mean Xbox isn’t important, for instance? It seems –

Mary Jo: No, those –

Leo: It seems to me, even if your revenue is Enterprise-bound, you have to always be looking at other categories...

Mary Jo: They do.

Leo: You can’t just rest on your laurels, right?

Mary Jo: Correct, correct. And, you know, they did have a really great quarter for Xbox, as well. In fact, when they put out their press release on Earnings, Xbox was one of the big things they touted, however well they did with that. And they should have, since that was the holiday quarter, and when they launched Xbox One…

Paul: What does that mean? I mean, how did Xbox One contribute in a positive way to the bottom line at Microsoft in that quarter?

Mary Jo: Right.

Paul: Right?

Leo: How could it? I mean, it’s…

Mary Jo: Well, they –

Paul: But she’s right. They basically said “Thanks to the strength of the sales of Xbox One and Surface, Microsoft had a blockbuster quarter.”

Leo: They don’t tell you how much…

Mary Jo: Right.

Paul: That’s not exactly true, is it? [laughs]

Mary Jo: Well, it contributed to their revenues, and they’re very positive.

Leo: They can’t lie, but they could – can they misrepresent… Not “misrepresent,” that’s too strong a word…

Paul: They can choose to highlight what they want.

Mary Jo: Right.

Leo: Highlight what you choose, there you go.  They can spin it.

Paul: Yeah.

Mary Jo: Yeah. Right.

Paul: They certainly didn’t tell you how many Surfaces they sold.

Mary Jo: No… They told us what Surface revenues were, though, right? They actually said they were close to $900 million, is that right Paul?

Paul: It is… should be right there…

Mary Jo: I’m kind of blanking out.

Paul: $893 million.

Mary Jo: 893, right, $893 million worth of Surfaces (although they didn’t break out how many units that was). Again, they can still talk very positively about the contribution to their revenues that these products are making, like Xbox and Surface.

Paul: Yeah, can they, though? I mean, what were the revenues for the iPad at Apple in the same quarter?

Mary Jo: Yeah, I know, right…

Paul: Tens of billions?

Mary Jo: Yeah.

Paul [laughing] I mean, I don’t know – some crazy amount?

Mary Jo: They’re starting small, and working their way up…

Paul: Boy, I did some crazy math – I don’t know if you saw that –

Mary Jo: I know. I did see your math.

Paul: – attempting to figure out the ASP, which is just a wonderful episode for someone who is math-challenged.

Mary Jo: “Average Selling Price,” right?

Paul: Because “Surface” means the devices, but it also means the hardware – you know, the accessories. They mention that most of the sales were RT devices, not meaning Surface RT but Surface RT and Surface 2. So we can make some assumptions there about what percentage they sold of each type of device, what the average selling price of those was, whether they’ve got a keyboard or other accessory… So how many Surfaces did they sell? [pause] Not that many. [laughs]

Mary Jo: Right.

Paul: I came up with about 1.5 million units.

Leo: 1.5 million. Ah… What does that mean?

Paul: Well, it means that Apple sold 26 million iPads, and you can do the math there I guess…

Leo: Yeah.

Paul: That’s what it means.

Leo: Microsoft’s never said what the metric for a success would be, in this case.

Paul: Right,

Mary Jo: Right.

Leo: At least not taking a $900 million write-off…

Paul: That’s true, that’s true.

Leo: They’re selling them. Do you think that that number is high, low, good, bad…? Disappointing, satisfying…?

Paul: I think it’s disappointing, personally, but one of the issues that they had with Surface over that quarter was that they weren’t available.

Leo: Right.

Paul: I was getting emails the entire month of December, and into this month.

Leo: Right, right…

Paul: When did Surface 2 finally come back? Last week?

Leo: They make money on them, right? I mean, it’s not one of them “We’re selling it at cost” items, is it?

Paul: Uh, yeah, Leo, sure they do. [laughs]

Leo: [laughs] Office and Windows are the traditional profit centers for Microsoft, right?

Mary Jo: Well, even more recently, Server and Tools business was the biggest profit center, which is Windows Server and System Center and Visual Studio and all those products…

Leo: Still the case?

Mary Jo: Yes, that is still the case, yes.

Leo: Now, I was talking the other day, I’ve been talking about this a lot lately, thinking about the idea of platforms, and thinking about the history of Microsoft… I had this discussion with Dvorak, who as usual kind of disagreed. The boom of the computer industry in the 80s and 90s was, I think, almost entirely attributable to the fact that Microsoft provided a stable platform that developers could write to. It was a known platform; you knew what you were writing for, you knew that they had a huge installed user base. Microsoft preserved legacy compatibility all along for those twenty years – I mean, they really did a good job in that respect… I guess 90s and 2000s would be the right decades for that. But they world has changed. Microsoft is recognizing that, and it is in face the Cloud that is the new platform, is it not?

Paul: It’s one of them. I think mobile devices are –

Leo: Yeah, I guess mobile…

Paul: Although I guess in many ways mobile apps are just front-ends to online services.

Leo: Yeah, the Cloud, and it started with Amazon web services. In fact, I’m reading this –

Paul: It really is the Netscape thing. I always come back to this, and I really didn’t respect Marc Andreessen too much when Netscape was the thing, and he was talking about how they were going to reduce Windows to a buggy set of device drivers on which their what we would now call a “cloud OS” would run.

Leo: Right.

Paul: Yeah, I think there’s something to that. I think the shock for Microsoft over the past ten years has been that it’s that traditional plan that you were just talking about, where they would respect backwards compatibility and customers would just move along with them, came to a crashing halt.

Leo: Exactly.

Paul: It started with the Apple stuff, right? Because here were these new platforms that weren’t compatible with anything, and things like that never took off before.

Leo: Right.

Paul: And you can argue “but why,” or we could discuss that, but I think that was the big affront to Microsoft.

Leo: So it became very clear – I mean, there’s the Enterprise Cloud, but there’s this larger cloud as a platform for everybody, which Google’s promoting with Chromebooks. I think you nailed it, Paul, when you said that mobile devices are just a front-end to cloud computing. Amazon began this era with Amazon Web Services, the elastic computing cloud, S3 storage… Microsoft and Google are both trying to – actually have parity now, Microsoft first…

Paul: It’s just funny how this technology… It’s weird. It kind of subverts the historic strength of Microsoft, because it makes the PC and the server less relevant. When you can cheaply virtualize a server, up in some cloud service rather than in your own expensive data center, that’s actually a big benefit to customers.

Leo: But it’s commoditized, right?

Paul: Right. It makes that thing that was Microsoft’s bread and butter less viable.

Leo: And a lot of companies – HP, RackSpace, Google – are talking about open stack now, they’re running on open-source software…

Paul: Yeah. The thing is, when you run stuff locally, that’s when the historical backwards compatibility is important.

Leo: Right.

Paul: When you run it up in a service, switching between platforms is no longer a big deal, because you’re not doing the heavy lifting any more.

Leo: It’s true. And in the same way that in the 90s and the 2000s Microsoft powered an entire economy forward, the cloud has done that dramatically. Anybody – a startup – starts in these shared systems that are cheap –

Paul: Leo, Microsoft’s slogan at one time, remember, was “A computer on every desk in every home,” that kind of thing.

Leo: “… running Windows software.”

Paul: “Running Windows software.” That must have seemed so forward-leaning in the 1980s, or whenever they came up with that. That sounds ludicrously old-fashioned today.

Leo: [laughing] It does, doesn’t it!

Paul: A computer?! On a desk?! In my house?! Why would I want that?!

Leo: [laughing] Isn’t that amazing?

Paul: That’s amazing. It is profound, how big of a change.

Leo: So no wonder Microsoft’s struggling a little bit with this.

Paul: [laughing] Well as it turns out –

Leo: They’re still making money, but it’s –

Paul: This quarter does show that –

Leo: They’re still making money.

Paul: They’re still making a lot of money.

Leo: Yeah.

Paul: And the way that they’re doing it is by successfully transitioning the businesses that they can from software to services.

Leo: And that’s what I was leading up to with this ridiculously circuitous route: What is the report card on that?

Paul: I think they’re doing great in that transition. But I think, just to step back a second: Mary Jo and I write about Microsoft but really, we write about Windows, in the sense that Windows is the center of everything, you know? It’s… not, anymore. And that’s the weirdest transition of all…

Leo: Right.

Paul: … because Microsoft can be very successful without the Windows desktop being very successful.

Leo: Right.

Paul: It’s so weird, because Windows was at the center of it all for so long. It was the catalyst for everything else that happened there.

Leo: Huge change.

Paul: So, I think we tend to focus on that stuff – and maybe over-focus on it – because it’s been such a constant for twenty years… twenty-plus years… But it’s changing. And it’s weird, and it’s hard. It’s a hard transition.

Leo: Yup. Do they break out the Cloud stuff, Mary Jo?

Mary Jo: They give you some very vague ideas. They’ll say “We doubled licenses sold compared to last quarter,” but we don’t know what the number sold was last quarter, so we don’t really know, which makes it tricky. The one number that they did break out, which was interesting, was Office 365 Home Premium sales. They’re actually at 3.5 million subscribers for that now, and that is one of their cloud services.

Leo: That sounds pretty good!

Mary Jo: It is; that’s actually very good.

Paul: Yeah.

Mary Jo: What that one is is Microsoft selling to customers, on a subscription basis, the right to install Office 2013 on up to five PCs or Macs.

Leo: That’s the one I have, and it’s what – ten buck a month? I can’t even remember now.

Mary Jo: Yeah, it’s roughly that. It’s $99 a year.

Leo: So that’s a significant – we’re talking some money here.

Mary Jo: Right.

Paul: Yep.

Mary Jo: But they did admit that the one reason that that did so well was they started cannibalizing their own non-subscription Office business.

Leo: But of course.

Paul: Yeah.

Mary Jo: Of course. Right. It’s not a big surprise.

Paul: I don’t know if you caught this – I don’t know where this popped up – but I guess they also said that the Business version (Business versions, I guess) were now at a $1.5 billion revenue run rate.

Leo: Wow.

Paul: And that this is the fastest-growing – yes – commercial product in their history now.

Mary Jo: That’s Office 365, the business ones, right?

Paul: Yeah.

Mary Jo: Nope, I didn’t see that number.

Paul: Yeah, they said that 1 in four of all their business customers have Office 365, and 60% of the Fortune 500 has purchased 365 in the past year.

Leo: So that’s good. That means that this transition to the subscription model is working well. If you say 25% have adopted this for the first year I think that’s good, right?

Paul: I think so.

Leo: That’s very good. That means this new model for software, which is really software as a service, is succeeding. That’s got to be good news for Microsoft. So, is this kind of a stalking horse for Windows becoming a subscription product? I think it is. Microsoft’s always wanted to do that.

Mary Jo: Yeah.

Leo: And they do already, in Enterprise, I guess.

Mary Jo: If you talk about – I mean, the word “cloud” means so many things – if you talk about it as a subscription, and say “Hey, what if we let you buy five Windows licenses that you can install on any of your family’s PCs, if you pay us $99 a year,” or whatever, that’s Windows as a subscription just like Office, right?

Paul: Sure,

Mary Jo: They could do that. Why not?

Paul: I wish they would.

Mary Jo: Or you do something –

Leo: Really? Why, Paul? Why do you want that?

Paul: Well, I think this is the time where Windows is kind of hitting a shortfall, and you’ve got 400 million XP users that aren’t upgrading anytime soon. I don’t think this would help businesses, per se, but just making Windows more easily and cheaply licensable, and providing that same benefit to families that they do with Office, I think is just a no-brainer.

Leo: Remember, though, that in the Windows – well, I don’t remember, I shouldn’t be telling you, you should be telling me  –

Paul: Do tell, do tell…

Leo: [laughing] In the Windows world, there’s business and there’s consumers, but in both cases I think the sense that you get is that you buy the computer with Windows, and you don’t upgrade Windows until you buy the next computer.

Paul: Yeah.

Leo: So what am I paying for with a subscription, and why should I pay anything?

Paul: Sure.

Leo: I’ve already bought the computer.

Paul: You’re competing with devices that get upgrades for free forever – or, for some period of time.

Leo: Right.

Mary Jo: Yeah, right. It’s that kind of –

Leo: So how do you move from that kind of model?

Mary Jo: How do you move from it, or to it?

Leo: To the subscription model from the model which I think exists right now, at least in my mind, that I don’t buy Windows. I buy a computer with Windows on it, and I don’t buy the next copy of Windows until I buy another computer. In fact, I don’t ever buy it. That’s certainly the consumer mindset. Is it also the business mindset?

Mary Jo: Yeah, it definitely is.

Leo: Except for the giant enterprises where they’re buying volume licenses and all that.

Paul: Well, there’s another issue, though, in businesses, where they don’t want to disrupt operations. We ran into this with the Surface stuff that we’ll talk about later, where constant updates was a great idea. Constant upgrades that actually work and don’t impact the reliability of the system is a much better idea.

Leo: [laughing] Much better, yeah.

Paul: And that’s the thing: Enterprise customers, business customers, these are the guys that would never upgrade until SP1 in the old days, and then got burned by Service Packs and didn’t want to upgrade ever. That’s why we have XP. It’s a tough thing, to get from here to there.

Mary Jo: Yeah. If you’re a business customer, and Microsoft says to you “Ok, how about if you buy Windows on a subscription?” it’s almost like Software Assurance then, right?

Leo: Yeah right…

Mary Jo: It’s like you tell us that we’ll give you every update and point release that we do in some set period (like three years for Software Assurance), and that guarantees you get everything.

Leo: Right.

Mary Jo: So that’s another way you come at it.

Paul: A lot of these have that, don’t they? One of the issues that comes up with this XP expiration thing, which is like the great story of our age, is: who are these 400 million customers? Who are these people

Mary Jo: Right.

Leo: Yeah.

Paul: – who haven’t upgraded?

Leo: Yeah!

Paul: I’ve heard from readers, in my Comments section and via email, “Why does Microsoft care about these people? They’re not good customers; they’re still running XP.” The thing is, I actually think that most of those customers are, in fact, business customers and are good Microsoft customers, and that they do have access to newer versions of Windows (not all of them, but some significant percentage, through Software Assurance or volume licensing), and that they have not upgraded because they can’t (or they perceive that they can’t), because they have these legacy applications or web apps or intranet sites, or whatever it is that for whatever reason doesn’t work in a modern web browser or a modern version of Windows, or whatever. They’re kind of stuck on XP for the same reason that people have always been stuck on old versions of software. It’s just…

Leo: They don’t want to buy a new piece of hardware.

Paul: I don’t know. I’m just speculating, but I wouldn’t be surprised if a lot of those guys were, in fact, what we might call good Microsoft customers, in the sense that are paying–

Leo: Yeah.

Paul: – for SA and volume licensing or whatever, but that they just can’t make that move.

Leo: In the consumer space – and maybe the consumer space doesn’t matter, ok.

Paul: Those guys. Screw those guys. [laughs]

Leo: Does the consumer space matter?

Paul: If you’re home running XP? I mean come on. Seriously?

Leo: [laughing] That’s probably most of them, right?

Paul: Listen, you’ve got to come out of your cabin in the woods and realize the 80s are over. It’s time to–

Mary Jo: I don’t think it’s, I mean… I think it’s a mix of those kind of people who just are too cheap, like we’ve talked about before, and then there are people who really can’t move because of peripherals, software applications they’ve built, people who’ve built apps which are dependent on Internet Explorer 6. Like all those people… it’s like you want to encourage them to move, obviously, so that they aren’t going to be infected by any kind of a massive security issue once Microsoft stops updating XP, but I also kind of feel for them. It’s like they’re stuck, right?

Paul: They’re literally stuck. I think that’s the important part, you know.

Mary Jo: They’re literally stuck.

Paul: And they’re not always running ancient hardware. I remember back in the Windows 7 days, when that was first coming out, one of the big concerns then was XP and one of the things with Windows 7 was [to] make sure it ran on older hardware, and there were all these stories about companies buying Windows 7-class PCs, wiping it out, and putting Windows XP on it because they needed it for backwards compatibility. Hopefully. I mean hopefully they weren’t just doing it because they didn’t want to train people how to–

Leo: [imitating a reluctant migratory] “I like XP… it’s a good little operating system…”

Paul: “I like that silver UI that you can put on it, it’s nice.”

Leo:Yeah…” Oh yeah, I do like that, actually… [laughs]

Mary Jo: [laughs]

Paul: Well, I mean, it’s not just stubbornness, right? I think most Office/Windows/whatever you can make a case, “Look, I’m not upgrading to the next version, because this thing I have works fine, and version-to-version there isn’t enough of an advance,” whatever. Then two versions go by, and it’s like “Yeah, I’m still not doing it, I’ve got this.” And then three, four versions go by and it’s like guys, seriously. I mean, you’re running software that is out-of-date. It’s really out-of-date. It’s insecure… So there’s got to be a reason, and it’s got to be this application compatibility stuff.

Leo: “The Fixer,” in the chat room – and again, this is consumers – but he says “I have a customer, I’m trying to get her to update. She’s a home PC user. She said ‘No, I paid $2500 for this PC eleven years ago, and that’s that!’”

Paul: Wow.

Leo: Ain’t buying another one. I hear from people on the radio show all the time… Admittedly, a lot of it is line-of-business software that won’t work on anything but XP, etc., although that’s why Microsoft put XP in Windows 7, right? So you could run it in emulation, and run your line-of-business software.

Paul: We’ve got to do like a “car years” thing, right? This will be living driving around in a car from the 1950s that didn’t have head rests, didn’t have airbags, didn’t have seatbelts…

Leo: But it looks good!

Paul: Didn’t have any… the styling is there, you know, I get it, but–

Mary Jo: It still drives…

Paul: Yeah, it still drives.

Leo: It still drives. There was nothing wrong with this car…

Paul: So what if I need leaded gas? Look–

Leo: It still drives.

Paul: It still drives, yeah.

Leo: But with computers it’s worse, because really, truthfully, computer hardware does not wear out. The only thing that wears out is the hard drive, people replace those.

Paul: Stupid reliable computers.

Leo: Damn, damn them! [laughs]

Paul: [laughs]

Mary Jo: [laughs]

Paul: That is a strange problem, yeah.

Leo: I mean, iPads that are only three years old have been obsoleted, by Apple… I don’t hear the hue and cry around that that we ought to hear…

Paul: Right. They’re a company… In the old days, you could make the case that the user base was fairly small, so they put up with this kind of aggressive obsoleting of old–

Leo: That’s not true anymore.

Paul: Today, you can’t say that any more. They’ve just established this thing where people love to spend money on that stuff, you know.

Leo: So back to my question: Does Microsoft not worry about the consumer market, and just go full speed ahead on Enterprise, or are they unwilling to give that cash cow up?

Mary Jo: No. It’s more… I actually got to ask Steve Ballmer that question last year. I said “Why don’t you just focus on the Enterprise? That’s where you’re killing?”

Leo: Right.

Mary Jo: And he said they believe in the consumerization of IT; that people are bringing their own devices to work–

Leo: Ahh! BYOD killed them.

Mary Jo: Right. They believe in that, and so because they believe in that, they believe they can’t just leave the consumer market, because that will be their death knell, if they do that.

Paul: I know there’s an even worse version of BYOD…

Leo: What’s that?

Paul: It’s called BYOE, and that is “Bring Your Own Everything.” In other words, in the old days you would bring in an iPod or something, which was kind of radical, and they started super-gluing USB ports so you couldn’t attach it to your computer.

Leo: Right…

Paul: Today, a lot of people have their own smart phone, their own tablet, their own computer, and you can do various mobile device management things to connect those to your corporate infrastructure and so forth… The “Everything” bit refers to literally everything else, like Dropbox… consumer services in many ways, that are now being meshed with this stuff that is like corporate data. It gets scary.

Leo: I understand, because the consumer looks at Dropbox and says “I can use this; I can understand it. This ShareFile or whatever, that’s complicated…” I’m sorry, SharePoint.

Paul: Well my VPN is terrible to get into, and I can only do it from my PC.

Leo: Yeah.

Paul: But if I take those corporate files, and I put them in my Dropbox, then I can get to them from my phone, or from my tablet, or from whatever.

Leo: Right! Right!

Paul: You can sort of see the pragmatism of that–

Leo: Yeah

Paul: But you also have to think about the dark side of that.

Leo: Well, the poor IT department, for one thing.

Mary Jo: Yeah. [laughs]

Leo: They’ve completely lost control.

Paul: Yeah.

Mary Jo: Yeah.

Leo: I think Ballmer’s answer makes sense, you know: BYOD is something that killed them, it brought the iPhone into the business place.

Paul: They really are embracing it, though. I mean, to be fair…

Leo: Well, they have to.

Mary Jo: They are.

Leo: Hey, how’s Nokia doing? I think you have Nokia quarterly results as well, right?

Paul: Who?

Mary Jo: That wasn’t me.

[laughter]

Paul: Leo, NSN is going like gangbusters. Actually, I found their quarterly earnings to be interesting on a number of levels. Obviously, what we were looking for was how well did Lumia do, and that kind of stuff…

Leo: Because Microsoft… when does the transition occur?

Paul: Sometime this year.

Mary Jo: It’s supposed to be this quarter.

Leo: Soon, yeah. All the regulatory approval has gone through, so we’re just waiting for the other shoe to drop now.

Mary Jo: Waiting for China still, I think.

Leo: Oh China, that’s right…

Paul: But if you looked at their actual earnings report, they all of a sudden in this quarter pretended that these businesses don’t exist any more. It was really funny; they changed it over as if they had gotten rid of their hardware and services businesses. I can’t remember the exact language they used, but they basically referred to them as their “legacy” businesses. The thing that we think of when we think of Nokia is going away, you know, is going to Microsoft.

Leo: Yeah that, I think, is important, and I always say this wrong. They didn’t buy Nokia, they bought Nokia’s phone business.

Paul: No, they bought Nokia. They bought the soul of Nokia. I mean, come on.

Mary Jo: No… come on…

Leo: Well that’s what Nokia’s at pains to say…

Paul: It’s like a rotting husk back there… They have a Here mapping business that’s good for tens, possibly hundreds, of millions of dollars of revenue a year, and you know, the…

Mary Jo: How about the Patent Licensing business?

Paul: Yeah, yeah, ok, that’s probably worth something.

Mary Jo: Yeah.

Paul: But come on, patent licensing? I’d rather talk about Yahoo than talk about a patent licensing company. There’s not a lot–

Mary Jo: It’s going to make a lot of money, especially if they start suing people over their own patents.

Leo: Right, that’s right… Could be big business!

Mary Jo: I know. It’s a weird thing, but it could be a big business for them.

Paul: The Lumia stuff is actually ok. I don’t know how this started to happen, and I don’t know that this was the first time, but it was weird that people focused on the fact that quarter Lumia sales actually dropped. That’s not usually how you measure such things. Usually, you compare them year over year, and year over year, they were up pretty big. That’s been the trend for them ever since they released the first Lumia. This is not the first time Nokia sold fewer Lumias quarter over quarter. So, it’s not notable in that sense. That has happened in the past. The big question here, of course, is: Microsoft is going to suck this stuff in, and what is it going to look like on the other side? A lot of 30,000 plus employees are coming to Microsoft, they obviously have manufacturing facilities, design facilities, employees of all stripes who do different things… They’ve got devices that they’re going to announce, no doubt, next month at the Global World Congress… I don’t know. Right now, Microsoft sells two Surfaces and an Xbox. In a month or two, they’re going to have eighty-one Nokia devices. A lot of stuff.

Mary Jo: I know. It’s going to be interesting, how this all shakes out, and how Microsoft deals with the branding (Nokia vs. Lumia vs. Asha). There’s all those rumors out there, where we keep seeing screen shots of some kind of phone that’s based on Android, that is supposedly an Asha phone, and supposedly is called the Nokia X (based on stuff that EVleaks is publishing). So there’s a lot of big question marks about how their product lines are going to integrate once they do become a single company. You know, it was funny to see, when Nokia announced that their Windows Phone sales for that quarter were off from the previous quarter, I saw a few people saying “You know what? I wonder if they did this intentionally, because no one wanted to say ‘We have to sell to Microsoft, because we had such a successful business,’ so they had to show that they had an unsuccessful business…”

Paul: There you go. That’s–

Mary Jo: Foil hat time, right, [laughs]

Paul: [laughing] That’s good.

Mary Jo: But I say people saying that, and I was like “Uh, I don’t know, that’s going a little far…” The two numbers, though, that were hard to reconcile... I don’t know if you saw this, Paul… Joe Belfiore came onto Twitter after Nokia’s numbers came out, and said “Well, we had a really huge quarter for Windows Phone activations in the fourth calendar quarter…” So people were trying to make sense of that. If this was the most Windows Phone activations that ever–

Paul: That they ever sold.

Mary Jo: – that there ever were, how could Nokia actually have sold fewer Windows Phones? Nokia phones are like eighty or ninety percent of the whole Windows Phone base.

Paul: Ok, I’m just going to give a theory, because I actually have no idea…

Mary Jo: Me neither.

Paul: I wonder if Nokia doesn’t register a sale where Microsoft does when they sell it in a different channel–

Mary Jo: That could be it.

Paul: – and that those devices have been sitting in distribution centers or retailers and they were sold in the fourth quarter.

Mary Jo: That could be.

Paul: To customers, right. So maybe some of the sales we saw from Q3 last year were, in fact, delivered to customers in Q4F. Just a guess.

Mary Jo: Yeah, that could be.

Leo: Alright… I don’t know how long this show has been, because a lot of it has been mincing around with Mary Jo, but we’re going to have–

Paul: It’s been seven-and-a-half minutes so far.

Leo: Yeah, we’ve really done a few things, but I do want to take a little break. Paul Thurrott, Mary Jo Foley, we’re talking about Microsoft and Windows. Windows 8.1 Update 1, inches closer, we’ll talk about that… Surface: those updates just keep on coming! Office, Windows Phone, Cortana, perhaps? All coming up in just a bit. Our show today brought to you by our good friends at ShareFile. I saw the “S,” SquareSpace is coming up in a second. ShareFile is the place to share files. We were talking about this a bit ago. This is kind of the best of both worlds. It’s from Citrix and it’s business-focused, so it’s a very easy way to  share files without emailing them. Business-appropriate, but is easy to be used as some of those consumer solutions. In fact, there’s an Outlook plug-in that makes it look just like you’re attaching to an email. Obviously, you don’t want to email attachments, although nowadays, in business, practically every business email includes some sort of attachment (a PowerPoint presentation, spreadsheet, contracts, a document, or some other…).  That’s not the way to do it! It’s not secure, anybody can read it along the way. It’s also prone to bounce-backs – you don’t know how big a file their email client can handle, or their email provider can handle. In some cases, there are still plenty of email accounts that limit you to ten megabytes for the whole Inbox! This is why ShareFile is the “must” way to share in business. ShareFile from Citrix lets you send attachments as secure links. You can send files of virtually any size – giant files – with the highest degree of security. You’ll get notifications when your files have been opened, and by whom. ShareFile is easy to use. It integrates into any business. Plus, with ShareFile you can access your own files anywhere –laptop, tablet, or smart phone – so it’s cloud storage, too. [This] happens to me all the time, I use ShareFile to share audio files with radio stations. “Hi, this is Leo Laporte. I’m in Tucson. I’m listening to the radio,” or whatever that is. We send those to the local radio stations via ShareFile. They get a link – they don’t need to have a ShareFile account, they don’t need to log in. They just click the link, download the file… It’s very easy for them. It’s very easy for me to keep track of what they’re doing. I can “expire” those files, I can say “That’s only good for a month (or a year, or it never expires),” I can say how many times they can download it… Just fabulous. By the way, what I do is, I have a ShareFile folder that automatically syncs with the ShareFile app, so I can just put the files in the folder and then I have them on my phone if I forget. For instance, and this happens all the time, I go home and forget to mail the file out. I just launch it on my ShareFile app on my phone, and I can see all the files, and send them along! I love ShareFile. If you’re not using it, I want you to sign up for your free trial now. If you go the sharefile.com, you’ll see three places where it says “Try it for free.” Only one of them helps me. So don’t click the big green button that says “Start your free trial.” Don’t click the menu item that says “TRY IT FREE.” Go way up here, this little tiny (I really wish they’d make this bigger), this little tiny text that says “Podcast Listeners Click Here,” and that little microphone… If you would, I know, please just dome a favor: click that link, and when they ask, say “Windows” as the code. That way, everybody will know where you heard it. It would help us greatly if you’d do that. Start your free trial – 30 days free. Use the offer Code “Windows,” be sure to click that microphone, in the upper top of the page, so that you can start your free trial right now. You don’t even need a credit card for this: sharefile.com. I see they just won a Tabby Award, for Best Data Access and Collection App. Is that your cat, Paul, that gives the Tabby Awards?

Paul: [laughing] It should be!

Leo: [laughs]

Mary Jo: [laughs]

Leo: [makes sound of cat mewing] sharefile.com… We thank ShareFile for their support of Windows Weekly… Windows 8.1 Update 1, the latest news.

Mary Jo: Yes… The latest news is, if Microsoft holds to its current plan, we may see this sooner than a lot of us were thinking. It may actually come out on March 11th

Leo: Wow.

Mary Jo: – which is Patch Tuesday. So that’s kind of curious too. There were rumors that Microsoft might deliver Update 1 via a Windows Update – I was waiting to see – but now I’m hearing from my contacts: “Yes, that is the plan.”

Leo: Really?!

Mary Jo: And that’s how they’re going to get it out to people.

Leo: So, next month, or two months I guess, it will show up. Will it show up as a Critical Update? Will it show up as an Optional Update? I presume it would be optional…

Mary Jo: I’ve heard “Optional Update” on March 11th, and then the next month on Patch Tuesday, which I think April 8th or April 9th, it could show up as a Critical Update. At least “Important;” I don’t know if it will be “Critical.”

Leo: They’ll never require it, will they? Or will they?

Mary Jo: Good question.

Leo: Traditionally, Microsoft has not done that.

Paul: Required it?

Leo: Yeah. I mean, traditionally an update like that is…

Paul: Somebody told me that this thing was basically analogous to what we used to call a “Feature Pack.”

Leo: Right.

Paul: In that the distinction here is that Service Packs are  obviously to fix problems, and a Feature Pack (or what we now are calling an “Update,” for some reason) is more of a functional update. With Service Packs, they reach a point where the support for the OS requires a certain Service Pack level, right, so with Windows 7 they only released one, but it would be “Windows 7 with Service Pack 1…” XP, today through April, is Service Pack 3… I don’t think Windows 8.1 will be around enough for it to matter, but I wouldn’t be surprised if this became what constituted the “base install” of Windows going forward, until Windows 9 ships. So in that sense, I think you’re going to get this on new computers. In fact I think somebody told me that that was the case.

Leo: So, new computers will ship with Update 1 starting… March?

Paul: Yeah whenever… April.

Mary Jo: Yeah.

Leo: And you’ll get getting it as an Update in March, and maybe Required or Critical in April.

Paul: I wouldn’t be surprised if it became Critical over time.

Leo: Yeah.

Mary Jo: Yeah.

Leo: So, there are some Security things in it… It’s not merely a Feature Pack, there are some…

Paul: Actually, that I don’t know.

Leo: You don’t want to require a Feature Pack, it’s just a feature pack…

Mary Jo: Yeah.

Paul: Take the features!

Leo: Take it!

Paul: Take them!

Leo: Take it!

Mary Jo: The reason you might want to require it is because of some of the things that are in there, in terms of how apps are now going to behave, that’s going to change. So if you’re trying to standardize on a version of Windows 8, or you’re a developer and you’re trying to build for the operating system, you want to make sure everybody is on the same page as to how apps open, how they work… So, I can see why they might do that. It’s not as far-fetched as it might seem.

Leo: You’re getting some leaks now on some of the features of Update 1, not Service Pack 1, Update 1…

Mary Jo: Right.

Leo: Paul, I saw you had an article on the mouse…

Paul: Yeah, and I… It’s hard to keep track of when this stuff happened, but a week or so ago we had written some stuff about some leaks at the time, and I talked to a source at Microsoft. He told me a couple things, and one of them didn’t make sense to me so I wrote about the other, the other had to do with mouse usage in Windows 8.1 and so forth. He was talking about this notion that there would be these Contexts menus, and he specifically said “apps.” They way I took that, although I didn’t write about it at the time because it wasn’t making sense to me… He said that they had a very crude Contexts menu that you could click with the mouse, and instead of it bring up the normal Metro UI (which is those app bars), it brings up a menu, like you would see on the Desktop. And it turns out this is in fact exactly what’s happening. It’s for the Start screen and the Apps screen, which is that thing that’s below the Start screen.

Leo: Right.

Paul: So, when he said “apps,” he meant the Apps screen, not “apps.” When you go into an app, and you right-click, the App bar will come up. So what I had originally written in this article was that they were going to be adding this feature to apps – you know, like applications – and that’s not the case.

Leo: Within an app… No…

Paul: Yeah.

Leo: You know, I like this behavior on the Start screen, and Apps menu I guess, because in the past it’s given this kind of non-intuitive, drag-it-down, and you do this little doodle-y dance…

Paul: I like this too, because people that use a mouse are used to this behavior. In fact–

Leo: This is how it should be, yeah.

Paul: I would argue that should, in fact, add this to apps.

Leo: I agree.

Paul: Meaning applications, and that is something they could do seamlessly, without any interaction from developers, because they know what–

Leo: So I could right-click on–

Paul: – buttons will come up.

Leo: Right.

Paul: When that’s put them in a menu.

Leo: Put them there… I can right-click on tile in the Start screen now, and unpin it directly from the Context menu that pops up, or pin it, or uninstall it, or re-size it…

Paul: Because now those things are disconnected. You know, you go up to a tile, and maybe the tile is way up in the right corner of the screen, and you right-click on it to select it. To perform an action on that thing, you then have to move the mouse all the way down into the lower left corner, where those options are, and it’s a weird-ism of the Metro thing that that working ok when you’re holding a device, and you’re touching it, but it makes no sense for the mouse.

Leo: If I press and hold, will I get the same Context menu? With my finger?

Paul: With the mouse?

Leo: With my finger.

Paul: Oh no, no. I think this is mouse-only.

Leo. Mouse-only.

Mary Jo: Right. A lot of the things–

Paul: You’ll–

Mary Jo: I was going to say, a lot of the things in this update are meant specifically for mouse–

Leo: Mouse.

Mary Jo: Mouse users.

Paul: Yeah, that we’ve seen, yeah.

Mary Jo: Mousers. [laughs] Yeah.

Leo: Is it too much for me to… Ok, am I completely off-base? Press and hold should be the same as a right click?

Paul: That is roughly true, yes.

Leo: So shouldn’t a Context menu pop up if I press and hold?

Paul: No, because that’s a mouse interface. That’s what I mean… I think the thing that’s nice about this is that is respects the interaction type. So, if you press and hold on a tile… let me just bring this up on a touch screen, so that I can do that, and not just talk about it… It’s kind of strange, because if you press and hold, it brings up the normal App Bar interface, which is kind of normal… I think that when you think about the way multi-touch works, usually there’s not a screen floating in space, where you’re touching it with a finger. Usually, you’re holding it. So when you’re holding it, one finger is here where those options are going to be. So if you’re using this finger to select stuff, you have this other hand over here that typically is going to be where those options are, and…

Leo: So the App Bar is not going away, it will still be there in touch, but when you’re using a mouse you can also right click…

Paul: That’s what I mean. It’s context-sensitive in the sense that, depending on what type of input device you’re using, it acts differently. But only the Start menu and the Apps screen. [pause] It’s a step, Leo. It’s a step.

Leo: [laughs]

Mary Jo: The other thing that they’re going to change–

Paul: The journey is the reward, Leo.

Mary Jo: I like that they’re putting the Power button and the Search button up near where–

Paul: Yeah, where the User thing is…

Mary Jo: – your name is. Where the User was.

Paul: Is there room for a clock over there? Because I don’t understand–

Mary Jo: Ah, I would love to have a clock over there…

Paul: – why that screen doesn’t have a clock.

Mary Jo: I know, it’s so annoying.

Paul: It’s so crazy.

Mary Jo: So annoying!

Paul: Yeah.

Mary Jo: Yeah, so they’re doing lots of things to make it easier for people who are traditional “Desktop/mouse/keyboard users” to feel more at home with Windows 8.1 with Update 1. One thing they’re doing under the covers, that is more of an OEM feature, is they are going to reduce the memory and the disk-space requirements for Windows, supposedly, as part of this update too. And that’s not something that users are going to care or see as much, it’s more meant to make the operating system work better on cheaper, smaller tablets. So it’s more–

Paul: Well, also just to prevent that SSD shock thing that occurs when you buy a thirty-two gig storage and have eleven gigs free, you know, or whatever the number is.

Mary Jo: Right.

Paul: I think that’s been a big stink with the Surface devices in particular, but the other Windows devices, you know, thirty-two, sixty-four gigs of storage… get the thing home, and there’s no free space.

Mary Jo: Yep.

Leo: So, shrinking that footprint…

Mary Jo: Yep.

Paul: Yep.

Leo. Yep.

Mary Jo: So, the game plan in March 11th. Things can change, still. If they decide it’s not ready, they could push it back until the April patch Tuesday, but right now that’s supposedly the target, the ship target.

Leo: Surface! Which is not the opposite of “Dive!” [laughs] Maybe it is the same, I don’t know.

Paul: [makes submarine red-alert noise]

Leo: [makes submarine red-alert noise] More updates. You call it, Paul, the worst month ever for Surface updates. [laughs]

Paul: Well, I mean, it’s been so stupid…

Leo: There have been a lot of them. Updates to the updates…

Paul: I feel like a lot of positive things have happened at Microsoft over the past year, and this Surface lack-of-communication thing is just like the whole Sinofsky era all over again. I just feel bad about it, it was so unnecessary. They really kind of shot themselves in the foot there.

Leo: So Mary Jo has wrapped it all up, and explained to us all: What the hell happened?

Mary Jo: I tried… although today I found out there are some things I have to change in that article yet again…

Leo: Aw man.. aw man… You just published it yesterday!

Mary Jo: I know!

Paul. Is it February yet?

Leo: [laughs]

Mary Jo: No… Here’s one of the reasons this is so complicated: Microsoft is updating four different Surfaces, or Surfii, or whatever we’re calling them… Surface Pro 2, Surface Pro, Surface 2 and Surface RT (which they call just the plain old “Surface” now). Some of these are running Windows 8.1, and some are running Windows 8.0… I can imagine this could get even more complicated when we have Update 1 come out…

Paul: Yeah.

Mary Jo: So they’re updating all these things differently, based on which operating system, on which hardware you’re running. Not everybody gets the same set of updates across all of these devices. Each one of these different configurations gets different updates. If you look at my list, there are things they updated on the Surface Pro 2 that are different from what they did on the Surface Pro, that are different from what they did on Surface 2... We’ve gone over a lot of these on previous episodes of Windows Weekly, but the main things to know about the Surface Pro 2, which I just found out today, is there was one firmware update that went out this month for everybody, for Surface Pro 2, whether you got the faulty December firmware update or you didn’t. Everybody now supposedly has the same firmware update fix as of January on their machines.

Leo: Right on, daddy-o!

Paul: How confident do you feel about that one?

[laughter]

Mary Jo: Uh, I don’t–

Paul: Just curious…

Mary Jo: – feel that confident…

Leo: You said that kind of hesitantly, yeah…

Mary Jo: I know…

Paul: It just seems like something you should be able to say confidently, but…

Mary Jo: We’ve heard so many different iterations of this story, right? At first, it was like some people are getting one patch and some were getting a different patch, and then some also are getting things called “Hardware Updates,” which I found out today are just driver updates.

Leo: Ah! That’s not hardware!

Paul: I know. How disappointing.

Mary Jo: [sighs] Yeah…

Leo: [laughing] I guess you can’t really push the Hardware Update…

Paul: I just was staring at it… It’s like waiting for toast to happen, maybe the hardware will change in front of my eyes…

Leo: My screen resolution has doubled!!

Paul: My Surface Pro got thinner!

Leo: Thank you, Microsoft! It’s a miracle!

Mary Jo: The good news is we’re almost done with January, so at least the January updates are done. There should be some more February ones coming… [laughs]

Leo: Oh, wow…

Paul: Wow.

Mary Jo: Yeah. The one thing that did not get fixed, by the way, in this month of updates, (because I’ve had a few people ask me about this) was there is a micro SD card issue for the Surface Pro 2, and I believe that none of the updates that anybody got fixed that.

Paul: What is the issue?

Mary Jo: Something to do with battery life, I believe, or when you have a micro SD card in, somehow your battery drops to zero, I’m thinking…

Paul: Wow.

Mary Jo: I can’t remember exactly, although I bet somebody in the chat room will. But whatever that micro SD card was, if I could find my article… I wrote so many on Surface updates this month I can’t even find all of my articles!

Paul: It’s so hard to write about. It’s like ok, I thought I’d covered everything.

Mary Jo: But we haven’t.

Paul: Yeah.

Leo: Where’s the little search doggie when you need him?

Mary Jo: I know.

Leo: [barks] “You look like you’re looking for articles!” [laughs] Can I help?

Mary Jo: Where’s Clippie?! I want my Clippie…

Leo: I need my articles…

Mary Jo: But anyway, that’s it for your Surface. All those updates should be out this month, and supposedly they’re getting it back on track. Let’s see…

Leo: What is this “Windows 2-in-1 PC”?

Paul: So, this is sort of the general term that people use to describe a Surface device, right? It’s a device that–

Leo: It’s a tablet and a computer…

Paul: Yeah. And they take different forms. I actually tend to think of them as “hybrid PCs,” but that picture there is like Lenovo Yoga-type machine, where you get the screen that flips over.

Leo: Right, right…

Paul: And you don’t detach the screen from the keyboard, but it still becomes sort of a tablet, but sometimes–

Leo: It’s a picture frame, it’s a laptop…

Paul: Yeah, right. It’s a floor wax, it’s all those things. I’m going to be looking at these things again. I had sort of decided last year, after a lot of back-and-forth on this, you know, the two generations of 201s that we saw, and of course mini tablets appeared last year finally as well… I don’t know. I always sort of saw this as the future of the PC, and maybe more specifically the future of the Ultrabook. It’s interesting to me, how much resistance there is with PC users, for these kinds of devices. Actually, Mary Jo is a good example of this.

Mary Jo: I am.

Paul: She wants – you want a new computer, you’re not interested in multi-touch, you don’t care if the thing flips around and can be used as a tablet… And I think that’s the big questions, you know. The problem here is, if the 2-in-1 PC is not the future of the PC there is no future for the PC, right? I mean, where do you go from here? Basically, you just stick with the current designs and… I don’t know. It’s kind a low-volume thing there. The 2-in1s have not, to my mind (or at least from what I’ve seen), have not taken off in any appreciable way so far. This is something I'm sort of openly wondering about.

Mary Jo: You know, I think it's like we talk about a lot on Windows Weekly, everybody's use case of a PC is very different. For me, I need something I can type on my lap with and that's not something everybody needs. Even though Surface is supposed to be "lappable"... A lot of these two-in-one hybrid things say they also can be used on your lap, there's nothing as good on a lap for a lot of consistent typing is a PC, a Clamshell PC.

Paul: Right.

Mary Jo: I know that my use case is very different from a lot of people. How many other people sit for hours at a time, typing, not that many. So for me, it makes sense.

Paul: I think I had thrown the notion of yoga by you actually recently, and you weren't interested because you heard it was a touch machine and could flip around and turn around and turn into a tablet. But I mean, does that make the device less viable? Because you don't have to use it that way. You never know. It seems like for testing purposes it would be useful.

Mary Jo: No, I'm one of those people who, I've never been a converged device person. I'm like someone who would still prefer to use a Zune HD over a phone to listen to music because I think you should use the best tool for the best job. I still use my Kindle Paperwhite to read, even though I could read on my Surface. I don't know, and I know I'm not like everybody but I just don't really want a device that's not good at one thing, I want something to be the best at the one thing.

Paul: Right, yeah okay. I wrote something very similar to this last year and I've spent a lot of time fighting with this very issue and as last year drew to a close, I still use the same non-multi touch Ultrabook I've been using for a year and a half. If I want to read a book, I have a Kindle, if I want to watch a movie, I have a tablet. I have a smartphone, obviously, I guess it's a little ponderous having that many devices, but each of them seems to do something really well.

Mary Jo: Yeah, you say what's the future, if it's not the two-in-one. Well, how about a future of at least, one really great Ultrabook? That would be awesome. I'd like to have that as an option and see some people do a little more innovation around Ultrabook.

Leo: Do those not exist?

Mary Jo: They do, but I've been looking, as you guys know because I've brought it up on the show a lot, for the next PC that I want to buy and I find a lot of different Ultrabooks but there's always something wrong with each one. It's either they're so prohibitively expensive for what you get, or the battery life is so so because it has a touchscreen that I don't even care if I use.

Paul: The good ones are always very expensive, that's definitely true.

Leo: Well so the Carbon touch, well you don't want touch, so the Carbon X one.

Mary Jo: Yeah, maybe.

Leo: What do you think?

Paul: Well it's still $1500-$2000, depending on what you've got. They're expensive.

Mary Jo: I don't mind spending for something that's really great but when I do get to see one in a store somewhere, I'll be like oh well this one has really sharp edges, or this one doesn't bend back far enough. There's always something about each one that makes me say I can't spend 2000 bucks if I don't love the thing.

Paul: Aside from my ambivalence about Samsung, I actually really do like the Samsung that I do have. I think the modern versions of this now have super high res screens and multi-touch. I don't know that you can get one without the touch, but I don't think touch being on the screen is going to hurt-It's not like a flip-around device, it's still like a laptop, you know.

Mary Jo: Right. I'm just kind of discouraged about the battery life on all of these things because it feels like since we've introduced a touch idea in Windows laptops, and I don't know if it's because of touch, if it's because of all of these new sensors, or what  it's exactly because of, our battery life is getting worse instead of better. It's a problem.

Leo: You're right, everything sucks.

Mary Jo: Everything sucks!

Paul: Why are we in this business?

Mary Jo: Now I'm holding out hope I'm going to find a good laptop.

Leo: I think a nice Macbook Air would do you great.

Paul: Well you know what? Here's the thing, a couple problems here. Macbook Air, in theory is a great machine. Two problems, two big problems. One is the sharpness of edge thing that she was talking about, Macs are awful for that and Air is particularly. The other one is, it's a great laptop if you want Mac OS10, but if you want to run Windows, it will run Windows, but does not run it well. And that great battery life you get Mac OS10 disappears, the efficiency is gone, and a lot of it is not because Windows sucks, it's because Apple provides these really substandard drivers and there's no way to get around it. It's just unfortunate, you know, I've heard people say that Macs were a better PC, it's a better PC for Windows. And it's not, it really isn't. I mean, you'll get things like the fan kicking in all the time on a Macbook Air when using Windows, that doesn't happen while running Mac OS10. It's just not an efficient way to do it and it's too bad because I would have bought a Macbook Air a year and a half ago.

Leo: Yeah, I don't run Windows on it primarily so I don't have much experience.

Paul: And it's nice that the option is there, but if you're going to run Windows, that's not a good choice.

Leo: Is the Acer Aspire S7 too expensive for you? This is my Windows machine, but it has touch. Would you say I'm not  going to buy it because it has touch?

Mary Jo: No, I would take it. It just wouldn't be something I'm seeking out.

Paul: You would just never touch it.

Mary Jo: I would probably never touch it, yeah.

Leo: It would probably be too sharp for you, it is so thin.

Mary Jo: Is it?

Leo: That's why I like it, it's thinner than a Macbook Air.

Paul: Do you have it there with you now?

Leo: No, it's at home.

Paul: Yeah, I mean, it's a pretty machine.

Leo: It's really beautiful. It's thin, these are Haswell. Some of the things I didn't like about the previous generation was they fixed the keyboard and the mouse, the screen is gorgeous. Somebody is saying that it's a better laptop than the Macbook Air. So I would look at that one, I've been very happy with my S7.

Mary Jo: You know, I'm holding out because you never can find the perfect machine, right? There's always going to be something.

Leo: I'm actually impressed by the variety and quality of machines out there.

Paul: You're not still running XP, are you Mary Jo?

Mary Jo: I am, don't tell anybody.

Paul: I knew it.

Leo: Is this why you're looking?

Mary Jo: No. I am looking because my laptop that I use on the road is a core duo, believe it or not.

Leo: Yeah, it's time.

Paul: Yeah.

Mary Jo: It's time.

Leo: That means it's heavy and battery life is terrible too.

Mary Jo: No, my battery life is great. Because it's an Asus, I'm still getting like 5-6 hours of battery life on that thing. But it's slow, it's getting slow.

Paul: A lot of these machines you can get 11-12 hours, depending on the machine.

Leo: Yeah.

Mary Jo: Sigh.

Paul: Could you cue the Charlie Brown sad music?

Leo: Do you have a deadline Mary Jo? I mean, is this going to have to happen at some point?

Mary Jo: It has to happen pretty soon, relatively soon. I was thinking I was going to get it last year but it didn't work out so now-

(Charlie Brown's sad music chimes in, humoring everyone)

Leo: They should have played that at the beginning of the earning conference call, "The PC market is eroding faster than we thought..'

(Charlie Brown sad music plays again)

Mary Jo: I'm going to get one soon.

Leo: It will be fun to talk about it when you get it, why you chose it and all of that. Somebody in the chatroom says, "No CEO talk?" We haven't mentioned...

Paul: No, I guess we don't really have anythi-

Leo: Nothing to say, right?

Mary Jo: The only thing to say is, a report that just came out this afternoon from Bloomberg TV, who was it that was rumored, Vesterburg? According to one unnamed person, he said he is not interested in the Microsoft job. Well, I don't know how to rank that in terms of denial or non-denial. He hasn't said it publicly still.

Leo: Somebody said Dvorak is going to be right, there were some rumors that John Thompson, the man in charge of the CEO search, would finally pull a Dick Cheney and say-

Paul: I've looked, and I think I am the best choice.

Leo: He wouldn't be a bad choice, right?

Paul: Oh, I think he'd be a great choice.

Mary Jo: He is very qualified.

Leo: It might be the only guy that has enough knowledge to do it.

Paul: Yeah.

Mary Jo: I think Kara Swisher was the one who asked him early on in the search, if he would consider it and he said no, but that still doesn't mean no.

Leo: That's what Dick Cheney said early on in the search.

Mary Jo: Right.

Paul: Although, arguably being the CEO of Microsoft is a little more complex than being the Vice President of the United States.

Leo: Oh, a lot more, a lot more! A lot less fishing involved.

Mary Jo: A different kind of fishing.

Leo: Or hunting. Put down that shotgun Mr. Cheney. Let's talk about Office in general. We've got some- By the way, we've got a name. OneDrive.

Paul: Yeah, that will never come under any legal scrutiny.

Leo: They own "one". Actually, you know what? It's a good name, a better name than Skydrive.

Paul: I agree. I like it, I like it a lot. That's the best part about it.

Leo: The background, everybody knows this probably, but the background is the Rupert Murdoch Sky TV sued, and said we own the sky. So Microsoft said oooh, okayyy. Don't hit me!

Paul: It turns out Microsoft owns half of the bindery member system.

Leo: One is not the loneliest number nowadays. Xbox One is a good name, and I think OneDrive is actually a great name!

Paul: I do too. Windows One, by the way, not a good name. I hope they don't go nuts and do the dot net-

Leo: That wouldn't be good.

Paul: It's like Microsoft's starting over again, Microsoft One. You can just rent the jokes that will occur if they re-brand anything else with One.

Leo: And the business Skydrive Pro will be renamed OneDrive for business.

Paul: Not OneDrive Pro.

Leo: Pro isn't a good name, frankly.

Paul: No, because it doesn't reflect what's really happening.

Leo: It's not meaningful, it sounds like you're teaching golf for a living.

Paul: I also think that it gives them the ability- Well, they do this now, I think. But if you're in the business version of Office 365 and you look up at the menu, it would say Skydrive, not Skydrive Pro, they were using Skydrive as like a, think Skydrive, think storage. You know? So I bet they will just transition that nicely, it will say OneDrive for business,  we'll just say OneDrive. It's a good brand.

Leo: OneDrive. Also, Paul has some updates to Outlook. Particularly the web app UI.

Paul: Yeah, and actually that's part of what you're looking at now in the OneDrive app, right? Like the UI change is starting to kind of come out.

Leo: Yeah this is OneNote-

Paul: It still says OneNote web app but the rumor is that this is changing to-

Mary Jo: OneNote Online.

Leo: So, Skydrive hasn't changed it's look, but it was updated fairly recently. And OneNote Online now, looks a little different. I like it.

Mary Jo: I really hope they do the online branding part of this too and they change the things that are currently called Office Web Apps to Office online.

Leo: So much more sense.

Mary Jo: I think that would be a great branding move, yeah. And the other thing, if they do this, supposedly one of the ways they're going to change things is, if I'm trying to tell my mom how to compose something in Word Web App, I'm like okay, first you have to go to Sky Drive, then hit the Create tab, and then you have to do this, and it's not easy. Supposedly if they do this rebranding like we're hearing of the web apps online, you're going to go to office.com and there's going to be a place that says you want to use Word on the web click here, want to use Excel on the web click here. How awesome would that be? That would be great!

Leo: Sensible.

Paul: Yeah, it makes sense. The first time I saw that I was like this is kind of a fine line between web apps and online, but actually, yeah I think you're right. I think this is a much simpler and better branding.

Mary Jo: Just so much easier to find it, and use it, and you always know where to go.

Paul: One thing though, they appear to be screwing up, and this is a problem today too is, outlook.com. Like, this whole brand is a terrible name in some ways because outlook is the name of an application that is part of the desktop version of Office. Outlook web app, which used to be Outlook web access, is a web-based email front end to exchange and so you see it in Office 365 for business. Then they have this thing called outlook.com, which it used to be Hotmail and is based on completely different technology. It looks like in the new branding they're just going to start calling it Outlook. It's like guys, seriously. They need to find out some way to differentiate outlook.com from Outlook web app, or whatever they call that, from Outlook, the application that is a part Microsoft Office. They have too many things called Outlook. It's a good brand, I get it. But they're kind of abusing it.

Leo: Overloading it, perhaps.

Paul: Yeah.

Mary Jo: Yeah.

Leo: Making it do too much work. But the Office online, that's real, they are going to call it that or no?

Mary Jo: I have screen shots of it from one of my sources, but they haven't announced that they're going to do that.

Leo: And I didn't know this but it was one year ago, today, Office 365 came out. I bought it immediately.

Paul: Yeah, me too. And this is a little delayed, I've been meaning to do a post about all of the stuff they've added to Office 365 in the past year. But the new business versions came out in February, Office 365, the business service has been around since, I want to say 2011. And of course, before that, they had something called Business Productivity online services, I can't believe I got rid of that brand. This thing has kind of existed as a set of online services for a while, the thing we think of as Office 365 today, you know, came out last year, the big bet. I think the two big parts of this are the Home Premium version, which shipped on this day a year ago, and then the Small Business Premium. It was essentially the small business version of Office Home Premium where you get the five licenses per user. I think that's the biggest thing, it just isn't so much the online service aspect of it, as it is the licensing nicety of it. Something that used to be really expensive and unattainable, is now kind of a no-brainer from a cross perspective.

Leo: Yeah, exactly.

Paul: It's crazy how far that came, in one release.

Leo: It's also interesting because Adobe kind of did the same thing with the photoshop and the creative cloud and they made it a monthly subscription, which you kind of had to do.

Paul: Yeah, but they didn't make it $99!

Leo: There's the difference, yeah!

Paul: Across multiple people in a family-

Leo: It tends to create a cloud, compared to the acceptance of I'm going to call it Office Online. It's dramatic, people seem to like Office- What did you just say? 25% adoption rate in business?

Paul: 60% of the fortune 500.

Leo: It's doing very well.

Paul: Yeah, 3.5 million consumers.

Leo: Is there a time frame for the office online name change?

Paul: I bet it's very soon.

Leo: Do it all at once, do one drive, everything. All at once.

Mary Jo: Yeah, I think it'll be around that time.

Paul: I bet this happens very quick, maybe in tandem with the OneDrive switchover.

Mary Jo: Maybe in tandem with Windows 8.1 update One.

Paul: Yeah. Which actually probably should have that One drive branding in it, when you think about it.

Leo: Maybe Cortana could introduce it. By the way, those Cortana videos you've all seen, Paul says they're fake.

Paul: Likely fake, actually though I have a note in here that Windows phone 8.1 has not really leaked in any appreciable way, I mean we saw a picture of a notification center and we know a couple of basic things about it but I've been trying to find out anything I could about Windows phone 8.1, there really is a lot out there. And someone from Microsoft just told me that this thing looks fake, people are calling it fake, and the guy said he faked it or whatever it was but it appears to be based on what it's supposed to look like. The way he described it to me, I'm not saying it's real, but don't automatically assume that's not kind of what it's going to be.

Leo: That's interesting. The tweet that announced it is gone.

Paul: Sure, sure. That from the WP leaks or whatever it's called.

Leo: Something like that, yeah. So, there you go. When you delete the tweet, that's a sign.

Paul: Delete the tweet. I'm surprised Twitter allows that.

Leo: Well, yeah you can delete a Tweet, but Tweets never go away. That's something I've learned. Microsoft is joining the Arm Server Effort.

Mary Jo: Yeah, this is very intriguing. This is news from today at the open compute project Summit out in San Jose. There's a whole group of people who are backing Arm server development and the other backers are red hats who say Cononical, HP, Dell, and then you get Microsoft thrown in there. And Microsoft has never said that they are porting Windows server to Arm, so that's throwing a few people through a loop and seeing does this mean now that we are going to Windows server running on Arm. Microsoft hasn't really said at all, why they're participating, other than they're interested in what happens in the server world and they just want to make sure, given they are partners with some of these companies who are in the coalition, that they are on board with where they're going.

Leo: So what are the issues according to the key note is that there are multiple OS's on these multiple different systems on a chip's version of Arm, so it's kind of a lot of overlap right now.

Mary Jo: Yeah.

Leo: But I don't think they're going to settle on Microsoft, they're going to settle on Lennox, right? I would guess.

Mary Jo: You would think, maybe that's why they're in there. Just to make sure they're not left out.

Leo: Yeah, just to have a vote in the-

Mary Jo: Yeah, and speaking of the open compute, the other big news this week- So Facebook has been the big backer of this thing called the Open Compute Project. Which is supposed to help people who want to design servers that are kind of like no brand servers that are cheaper and better suited for running data centers. Microsoft joined that project this week and they actually open-sourced some of their own data center designs. And the reason that's interesting to users, is say you're someone who is building your own data center in house, as an IT Administrator, you're now going to have access to these designs, if you want them so you can see how Microsoft builds its own servers in its gigantic data centers to see if there's any lessons, any kind of specifications, or reference designs that may be useful to you in terms of bringing down the cost in your own data centers.

Leo: I really love this trend. Facebook did it, Google did it, now Microsoft is doing it and these, of course, are companies that really have to scale. So I think it's fascinating, and it's great that they're doing that. It's not secret sauce anymore, probably.

Mary Jo: It kind of is though in a way, if you think about it. Like, how much money did Microsoft spend to come up with these designs? I mean, it took them years to perfect this and now they run these mega data centers. And I think a lot of reason they're probably backing this whole play is that it's Facebook, and they're trying to be very tightly aligned with Facebook.

Leo: Right. Facebook says the Open Compute Project helped save it $1.2 billion in infrastructure over the last 3 years, this is according to Runningwithscissors, in our chatroom. This is important stuff, you know, this is meaningful for all of us because we're all using those servers, we're the users. So keeping the cost down, the power use down is really important. Thank you Microsoft, for participating there, I think.

Paul: By the way there is one important news story we didn't cover, which is the headline: Kansas Man Runs into Burning Home to Save Xbox.

Leo: But, was it a 360 or a One?

Paul: I don't know, but a bunch of people have sent me this on Twitter over the past couple of days.

Leo: See, the mainstream news never really tells you the things you want to know.

Paul: Well, I have the follow-up which was: If it was a PS4, he would've let it burn.

Leo: Oh, Paul. Oh, Paul. Paul, Paul Paul. Such a partisan!

Paul: Well when it comes to Xbox Leo, what can I say?

Leo: You know what I'll be honest.. I would probably run in to save my Mac Pro.

Paul: I would save basically, like a home server that I have that has important data. I'd probably go for that.

Mary Jo: One time in one of my last apartments, I had a radiator explode in my apartment and the first thing I did was grab my laptop and I ran out of the building with it. And I was standing outside and I'm like, wait! What about everything else in my apartment?

Leo: Wow.

Paul: I forgot my shoes...

Mary Jo: I know.

Leo: I'm naked, but I've got my laptop!

Paul: That natural reaction is so very telling because you can sort of sit here and talk about what's important to you, but I think that shows-

Leo: No, I'm grabbing my laptop. Exactly.... And I'm well backed-up.

Paul: I feel like I'm pretty well backed-up, that's why grabbing the home server in many ways would just be a convenience. Because the truth is, all of that stuff is backed-up. It'd be a stupid and risky thing, to try to pull that off.

Leo: Let's take a break, when we come back we got beer, we've got enterprise, we've got all sorts of stuff because you know, it's Windows Weekly, friends. And that's what we live for, Bing apps and things like that. Our show today brought to you by the good folks at squarespace.com. If it's time for you to upgrade your website. Maybe make it look a little better, run a little faster, maybe it's time to get your first website up, or maybe you're a photographer an artist, and you want to have a portfolio online. Squarespace is the place to get your next website. Constantly improving the platform and because with squarespace, you're getting hosting, yes. But also their great content management system on top of that. It's always up to date, it's always secure. It's a great place to create your next website. Get started for two weeks free, you don't need to give them a credit card or any personal information, just click the 'Get Started' button. You can set up a site and have the full run of the place. Start with those 20 beautiful designer templates, every one of them mobile responsive, and that means you don't have a separate mobile site. all the sites look great, no matter what size the screen. From a 27" monitor to the little iPhone 5s. They always look good. Take a look, these are real sites that some people have designed, based on that template. Each of them unique, reflecting the style, the feeling that each individual user wants to create. They tend to be very visual, and I think it makes sense. The web is visual. Squarespace really knows how to do that. When you upload an image, for instance, they make 9 seperate thumbnails so it will look good on any size screen. They've got some great apps, too if you have not yet seen their mobile apps. They always had a wonderful blogging app, it's called Blog. It lets you post to your Squarespace site and moderate comments and more, but they also have their new Metrics app that lets you keep track of your site. Unique visitors, page views, social media follows and things like that. It's really a nice, nice app. If you go to squarespace.com, tour around take a look, visit all of the different features. And take a look at their support team, by the way, really great support. Stevie award-winning support, 24/7 from the actual people from the Squarespace headquarters in New York. You'll see why this is so great, after you've tried it free for two weeks, you may want to buy, can I tell you $8/month!? $8/month for an annual plan. With the annual plan, you not only get a great price, you also get a custom domain name for free and they'll hook it up for you. The professional plan, which a lot of people use, is really great because you have unlimited everything. Unlimited bandwidth, unlimited contributors, unlimited pages, unlimited galleries, unlimited blogs... Oh this is new! You can now sell up to 20 products if you want to try the E-Commerce on the professional platform. So it's got kind of a simple way to try E-Commerce from Squarespace. If you decide you want to go with a full E-Commerce platform, that's only $24/month! That means unlimited products digital, physical or services. Fully integrated real-time carrier shipping, label printing via ship station, integrated accounting. They've got it all! And you don't need to be a developer, you don't need to know any JavaScript or CSS, but if you do the developer platform is fabulous. It gives you a beautiful access to CSS, html, JavaScript, you can use Git. They've got an editor that has color-coding for Syntax, and with every annual plan you get a custom domain name free. So try it out, the only thing I'd ask, you don't need our offer code to get started, just try it for free for two weeks and if you decide to buy, use our offer code: WINDOWS1 and you'll get 10% off of your new account, and that's pretty nice. Squarespace.com, the best place for your next website, even their code is beautiful. Just elegant stuff, we're big fans and a lot of the people we work with including us, have Squarespace blogs. Our inside TWiT blog is running on Squarespace.

Paul: Yep.

Leo: You wish yours were, I can tell.

Paul: My book blogs are.

Leo: The book blogs are, well there ya' go. Which are Windows 8-

Paul: Phonebook.

Leo: Windowsphonebook.com and windows 8onebook.com.

Paul: Right.

Leo: Let's get a little tip of the week from Mr. Paul Thurrott.

Paul: Actually speaking of windows81book.com, in writing the book, you space out whatever the chapters are going to be and you write them over time, and one of the ones I had been putting off was one that was going to be dealing with the Bing apps that are a part of Windows 8 One, the theory being that this is kind of a boring topic and there's nothing really going on there. Actually, investigating these apps more deeply than I had in the past, what I  discovered is these apps are really kind of incredible and I'll probably be writing a post to the super site detailing some of the stuff but it's kind of a high-level overview. Microsoft shipped, I want to say four or so Bing apps in windows 8, the original version:  news, finance, sports, weather, and actually maps, which has disappeared from Windows. In windows 8 One they added food&drink and health&fitness. Those are like a list of topics that like if you want other things to do when they're making new apps. But these apps are actually far more incredible than I think people realize and most of them share kind of a common navigation scheme beautiful layouts and stuff like that. Most of them have some sense of favorites, like a web browser so you could have favorite places in Maps, you could have favorite recipes in Food&Drink perhaps, favorite sports favorite teams and big sports and all that. So there's a lot of commonality between them, which is cool. They all integrate with the Smart Search feature in Windows, which is really neat, meaning that when you search for something you can often click on a link and it actually loads something in the app, rather than like a webpage somewhere so you get that really rich experience. But I think the really cool thing about these apps and the thing that most people probably don't understand is the deep, deep integration that they have with online integration. I'll provide a few examples, one is that Microsoft has this thing called Health Vault which is an online service for centralizing your health data. That can be things like your track and your weight, your blood pressure, maybe you have diabetes or some other problem, or you're doing exercise tracking whatever it might be and you can go through this kind of central clearing house if you want to. I just lost video, by the way.

Leo: Yeah, we turned it off because it's conserving-

Paul: That's fine. So why would you want to use something like Microsoft Health Vault? Well you can use different mobile app or different web apps to do different forms of tracking today. If you get like a Nike Fuel band like I have, you use the Nike stuff, and it uploads to some Nike service somewhere that's pretty much locked into that. But if you're doing like weight tracking in a different app, you're checking your weight everyday, you can do that, but those two things never kind of connect up and one of the neat things about Health Vault is that if you give it permission to, it can provide information in two different directions. So for example, you can use Bing Health&Fitness to track your weight, your diet, all the food you eat. But maybe you use like a FitBit device or one of those devices that are compatible with Health Vault, even though FitBit doesn't connect to Bing Health&Fitness, it does connect to Health Vault and so that data from your exercise actually does get pushed forward to Bing Health&Fitness through Health Vault, and it's just kind of a neat back and forth. Likewise, your profile information, if you set it up in Health Vault, it gets pushed through to the app of course but this information doesn't go back and forth between compatible services and devices so there are obviously many medical devices and many that are compatible with the service so that to me is kind of incredible. Bing Finance is another example where it integrates with various brokerage type accounts. Etrade, Fidelity, whatever the other ones are I know there are a bunch of them. You get this kind of integration thing where you can sign into your account through the app and can have a tile on your screen in Windows 8.1 that follows your savings portfolio or whatever it is, maybe retirement portfolio. Next to one for your favorite sports team, next to one for the news topic that you're tracking, next to the one for whatever, you know. All of these Bing apps have these type of capabilities and I just think that whole combined quality that they have with the integration with each other, with all these online services many of which don't come from Microsoft, and then the capabilities that they all have. Pinning, favorites, beautiful layouts and everything. It's just like this incredible rich resource of stuff and I don't think anyone even looks at this stuff. Like, I didn't really- Well I used the news app but I really haven't used these apps too much and in really going through them for the book, I'm kind of blown away by, again, because you know in Windows 8, the original four or five, I was really impressed by but, even the new ones. Which I thought were kind of silly, are actually fairly incredible apps. Plus, I learned how to make a cocktail out of beer.

Leo: I like the cocktail app. That's a good app. Well, you can find out all about it as the new chapter hit Windows81book.com

Paul: Yeah, it's hard not to go on and on about it because there's so much to it, the chapter is like 47 pages long, so you can get an idea. It's a lot of stuff there.

Leo: By the way, just news coming from a Neo, and surprise surprise. Turns out there is a cloud based storage app company that has been around for a couple of years called One.com. The owner says they're looking into a lawsuit here.

Paul: Yep.

Leo: Damn! He says I'm surprised Microsoft didn't do more research before they picked One.

Mary Jo: I'm sure they did.

Paul: And there`s also something called Ubuntu One, which a lot of people have been freaking out over.

Leo: Yeah, but this is directly in it's- Actually Ubuntu One is storage, you're right.

Paul: So is One.com, apparently.

Leo: They both are.

Paul: I just don't think it's possible that they didn't know about this stuff.

Leo: Yeah, but you would've thought Metro and Sky, they would've looked into those two.

Paul: Right, but after SkyDrive, now you're renaming SkyDrive. You're going to do the same thing again,, you're going to not look? I think that's part of the process, right? I mean, I don't think this is going to be-

Leo: It's hard to find a name that isn't taken, I will be honest with you. That's why, I mean, I've gone through this, way back in 1994 or '95, we were looking for a name for the new show on MSNBC and even then, you had to register not just the name of the show, but the domain name the email and all of that stuff and then we had to end up calling it The Site.

Paul: I remember.

Leo: Thesite.com because it was so generic, they could still get it and here we are almost twenty years later and it's even worse. Allthegoodnamesaretaken.com, it actually is a website.

Paul: Allthegoodnamesaretaken.com? That would be a great domain name.

Leo: Somebody has it. Unfortunately he isn't doing anything with it, it says nothing to see here yet. It said that for like eight years, but he's got the name. Someday... Microsoft might be looking. Software pick of the week.

Paul: So this one will be quicker than the last one. This week, I guess Rockstar released Grand Theft Auto San Andreas for Windows phone and this is interesting because the mobile version of this game debuted I think in December on iOS and again on Android. This is actually a pretty quick turn-around time for us to get a game like this. The PC or console version of this game dates back ten years. It's actually from 2004 if I'm not mistaken. But yeah, it's just been updated with new graphics and obviously it's been fine tuned to work on touch based devices. It's not my kind of game, and I don't mean in like a violence whatever standpoint. It's like an open-world game, it was one of the early versions of the first person, open-world type game.

Leo: This is not top down though, this is the first person.

Paul: Yeah, it's first person so, interesting. I think a lot of people want to get this. It's expensive for a mobile game, I think it's like $6.99, but I have a feeling a lot of people will be very excited to at least give it a shot so I wanted to at least mention it.

Leo: Absolutely. And now Mary Jo Foley has the enterprise pick of the week.

Mary Jo: Yep. The enterprise pick is Windows In Tune this week. Windows In Tune is Microsoft's device management and security service. It's a cloud service for managing not just Windows based devices, but also iOS and Android these days. And what was really interesting is this week Microsoft opened up publicly about what's coming in the next versions of In Tune and the reason I seem surprised about that is last year we couldn't get them to say barely anything about Windows In Tune, even when they announced the version that was codename, windows in tune e, when they were actually were shipping  it and making it available, we couldn't even get them to tell us what was in it, feature-wise on the week they were  announcing it. Instead this year, they seem to be taking a different approach and they're telling us that next week they're going to have a roll-out with a bunch of new features for In Tune, specifically some changes around how administrators can configure email profiles, some of the new support that they're adding for iOS 7, mobile device management, and remote lock and remote password reset for devices, all being added to In Tune next week for current subscribers. They went one better this week and actually told us about features they're going to have in Windows In Tune before the end of 2014. This probably isn't the whole list of everything they're going to add, but they did get fairly specific in a blog post they put out this week. They talked about some of the new exchange email inbox management that they're going to be adding, a much deeper level of email management. Some new application restrictions that they're going to add, white listing and black listing app supports being added, URL filtering for web browser management, there's a whole bunch of different things. You can go to Microsoft's own in the Cloud blog and see the full list of features. I just thought it was really interesting that this year, instead of doing what they did last year, keeping us in the dark, they're actually being proactive and telling us what's coming. Windows In Tune.

Leo: Very nice, and our codename comes from I think Australia.

Mary Jo: I actually should ask you guys where this codename came from. Its Bootybay. It's a codename, I think from World of Warcraft.

Leo: Oh.

Mary Jo: I'm like the last person who should know of this.

Leo: I think you might be right.

Mary Jo: So here's how it came about, which is very interesting. There's been a lot of controversy in Microsoftland about side-loading of Windows 8 apps. Microsoft has allowed it, but it's required quite a bit of money, you basically have to have been a fairly large ISV or developer with deep pockets and somebody who is willing to navigate some very complex licensing to do Windows 8 app side-loading by publishing through the Windows store, but not having everyone in the world see your app. If it's an app you want to just kind of publish out to your employees, this is what side-loading is. So, there have been a lot of complaints by developers about how complex and expensive this is and Microsoft hasn't really said if they have any kind of resolution to this in the works. So, a group of Microsoft employees in China, who call themselves Lighthouse and they have a Lighthouse blog, they created this app that they're calling BootyBay to get around how onerous Microsoft's restrictions are for side-loading and they uploaded the alpha version to CopLex. So I wrote about it yesterday and they've already pulled it down off of CopLex and destroyed their blog post. Sadly. I feel bad because they were trying to solve these issues. But the good side to this whole BootyBay thing is it brought to light the controversy. Again. And there are some hints that Microsoft might talk about side-loading at Build and they may or may not have something new to say. These guys did jump the gun a little, but they did have a pretty fun codename and they actually had some code that has different. As soon as I published it I put World of Warcraft 3 was the inspiration and immediately people that played it said to me what's World of Warcraft 3- You don't even know what you're talking about! I'm like you're right, I don't.

Leo: But you're right, it was a map in WOW3 Reign of Chaos, so there.

Mary Jo: I guess World of Warcraft 3-

Leo: Here's a shocker. Just crossed the wire from TechCrunch, Lenovo is buying Motorola from Google.

Paul: Wait, what? Are you serious?

Leo: I'm just quoting TechCrunch. "TechCrunch has confirmed reports that state Lenovo is buying Motorola Mobility from Google. This is the division within Google that the company purchased in 2011 for $12.5 billion, the terms of the deal not revealed but we're hearing the price was near $3 billion, a loss of $9 billion."

Paul: Yeah I was going to say that's a lot less than they paid for. Oh, this isn't anywhere, this is only on TechCrunch.

Leo: Wow, that's kind of a shocker.

Paul: Where did you see this?

Leo: TechCrunch.

(Sad Charlie Brown tune)

Leo: I just bought a Motorola X and now I'm wondering maybe that wasn't the right thing to do.

Paul: Honestly, Lenovo is a great company. They just may not be terrible.

Leo: They don't make phones, do they? Or do they in China...

Paul: Yeah, they do. They were planning to expand to the US this year.

Mary Jo: Right, weren't they going to make a Windows phone? Wasn't that a rumor at one point.

Leo: Not anymore.

Paul: It was a rumor but I expect them to stick with-

Leo: They're currently Android phones, so it would make sense.

Paul: I don't see where you see this on TechCrunch, that's so weird.

Mary Jo: News of the potential acquisition comes from writers in China Daily.

Leo: I wonder if that's true. Boy, these are the Lenovo phones available only in, somewhere. Not here. They are all Android phones, wow. "For young doers," it says.

Paul: Okay.

Leo: I just have this report Matt Burns TechCrunch-

Paul: Okay Reuters has it

Mary Jo: Yeah, and China Daily has the story too.

Paul: Actually Reuters was a tweet which they described as a Reuters Exclusive.

Leo: But TechCrunch says they've now confirmed. Interesting, I don't know what confirmed means. That is a shocker-

Mary Jo: China Daily says the deal could be announced Thursday morning in Beijing.

Leo: It's a little disappointing to me, frankly. But we'll talk more about that, This Week in Google is coming up next. $3 billion would be a massive loss, although I'm wondering maybe Google keeps the patents and which is probably the real reason they bought Lenovo.

Paul: That would be hilarious. Thus, giving the light and all that bologna. But I bet that's true. This is still not as big as the story about the guy running into his burning house to get his Xbox. But I understand why you brought it up.

Leo: Yeah, it doesn't say all patents. Roiters says Lenovo is in the final stages with the Google division that includes smart phones, Moto X, and Moto G, as well as certain patents. I bet that's why it's considerably less money.

Paul: I used to just think that most of the value of Motorola mobility was those mobile patents.

Leo: Well, apparently the Moto X isn't selling very well. Which is surprising because it's my phone of choice and I really like it.

Paul: Yeah, it looks great.

Leo: I just ordered another one with bamboo. So that will go over well with our new Chinese Overlords.

Paul: Instead of putting the stenciling on the back, do they like burn something in?

Leo: I don't know, I ordered Chief TWiT on the back of it. We'll see how they do that. They should burn it in with one of those wood burner kits.

Paul: Exactly, that's exactly what I mean.

Leo: You know if they don't I will. Beer pick of the week.

Mary Jo: Yes, the beer pick of the week. I was trying to find something that went with BootyBay as a beer pick. So I ended up with Ballace.victory@sea, kind of sounds like a pirate beer, doesn't it?

Leo: It does, it's got a skull and cross bones on the label.

Mary Jo: Right, this is a great beer for the weather we've been having here on the east coast. It's a very big rich vanilla imperial porter 10.0% ABB. But I have had this a few times and it is just so smooth and delicious. It tastes just like dessert in a bottle.

Leo: smooth and good.

Mary Jo: Yeah it's so good. We've had it on tap here in New York, but also it's findable in bottles. I very thoroughly recommend it if you like big vanilla porters. Paul might like this one.

Paul: It's got vanilla in it?!

Leo: It tastes like vanilla, I don't know that they actually brewed it with vanilla but it's good.

Paul: Have you gotten a chance to try that Spencer Trap of Steel yet?

Mary Jo: I did, I shared your opinion of that. Very clovey.

Paul: Okay so, a little too spicy.

Mary Jo: Paul and I both got to try the first Abby-

Paul: First American kind of strain. Actually it's the first non-Europian trapist ale.

Mary Jo: I think it's going to be good as it ages a little probably.

Paul: Yeah, it needs to calm down.

Mary Jo: It does. It was like very spicy but still pretty cool that we're brewing that in America now.

Paul: Yeah, it's really expensive.

Mary Jo: Yeah, it's from Massachusetts right?

Paul: Yeah, I didn't get the hometown discount for some reason. But yeah it is from somewhere in Massachusetts.

Mary Jo: I think it's from Spencer, right?

Paul: Yeah Spencer, Massachusetts.

Mary Jo: It's called Spencer.

Paul: Where in Massachusetts might it be from?

Mary Jo: I'm glad I got to try it.

Paul: Did you get it on tap? Is that available on tap?

Mary Jo: Nope, a friend of mine brought it back from MA and I got to taste.

Paul: I have more of it, I'll keep trying it. Just purely as a research project.

Leo: I am going to keep tasting it until I like it, dammit. It's not the first beer of the night, it's the last. Paul Thurrott is at the super site for Windows, winsupersite.com. Don't forget his two books free online, or pay a couple of bucks and support Paul's efforts at windows81book.com and windowsphonebook.com, really great places to go to read up on either one of those fine platforms. Mary Jo Foley is at allaboutmicrosoft.com and they both join us every Wednesday at 11am Pacific, 2pm Eastern, 1900 UTC to talk Windows and Microsoft. I always enjoy this show. I apologize for the Skype issues, we're working on that and in fact we were going to try to link with Mary Jo and we're going to see if we can get Microsoft's Links working.

Paul: Something changed though, right. The last hour was fine.

Leo: We changed over to our cable connection

Mary Jo: Yeah, I switched to Cable.

Leo: That was the one that was giving us fits earlier and now it's fine and the DSL is bad. Internet, you can't live with it, can't live without it! We will see you all next week on Windows Weekly!