Windows Weekly 372

Leo Laporte: It’s time for Windows Weekly! Paul Thurrott and Mary Jo Foley are here and thank goodness. We’ve got layoffs to talk about, what does One Windows mean. Paul and Mary Jo will explain everything next on Windows Weekly.

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This is Windows Weekly with Paul Thurrott and Mary Jo Foley. Episode 367, recorded July 23rd, 2014

Let the Bezel Be Big

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It’s time for Windows Weekly! The show where we talk about Windows weekly. Paul Thurrott is here he is the major domo at the supersite for Windows, winsupersite.com. He also writes books like crazy, like nobody’s business. Going way back to the Delpha Super.

Paul Thurrott: It’s literally not like a business at all Leo.

Leo: It’s nobody’s business. Hobby maybe, he’s a masochist let’s face it.

Paul: It’s charity.

Leo: His latest the Windows 8.1 Field Guide, right?

Paul: Yes.

Leo: Then there’s a Windows Music book. There’s lots of stuff. We’ll tell you how to get all of those or you can go to his website they’re all linked there at supersite for Windows winsupersite.com. Mary Jo Foley, allaboutmicrosoft.com that’s where she blogs. That’s where she hangs her Selectric. She writes about Microsoft each and every day.

Paul: She can’t fit a Selectric in her apartment, Leo. She lives in New York city.

Leo: She couldn’t get it through the door. It was too wide to fit through the door.

Mary Jo Foley: Exactly there’s no room for that.

Paul: It’s one of those virtual light keyboards that sits on the desk.

Leo: We actually had a lot of fun with Mary Jo on Monday. We made her our subject on our interview show Triangulation and it was really fun to spend some time talking to Mary Jo. Hope you don’t feel like I wasn’t too intrusive.

Mary Jo: No I thought you asked really good questions. You got me to tell a couple of anecdotes about Bill Gates that I hadn’t ever told publicly so that was fun.

Leo: Is that true, you had never mentioned the locking himself in the bathroom story?

Mary Jo: Not publicly, no.

Paul: Is this like Frost Nixon, kind of?

Leo: It was. I am not going to tell you that.

Paul: It’s not illegal if I do it, Leo.

Leo: It’s the Rush Limbaugh show. I didn’t get to ask because Compuvision in our chat room said ask her about Jobs and Gates. Apparently you were talking to Bill Gates at one point and Steve Jobs came over?

Mary Jo: Yep, that’s a true story.

Leo: What happened?

Mary Jo: That was the very first time I ever interviewed Bill Gates and I was at Comdex. I was interviewing him on the show floor and Steve Jobs walked up and started talking to Bill Gates. But I didn’t know who Steve Jobs was.

Leo: Because this was 83 probably?

Mary Jo: 84, yeah. So Bill just gets up and starts talking to him. I am trying to interview him and I am looking at my watch and I am going sheesh he is eating up all my time. So I yanked on Bill’s pants and I said hey could you ask him to come back later? He said sure. When he walked away Gates said to me do you know who that was? I said nope. He was then like that was Steve Jobs and I was like who’s that?

Leo: You are focused on Microsoft. This is a woman who is focused on her work.

Paul: You had just started back then right?

Mary Jo: Yeah I was brand new that was my excuse at the time.

Leo: Then many years later Walt Mossberg made his fortune by interviewing Bill Gates and Steve Jobs at the same time.

Mary Jo: Yep.

Leo: It could have been you.

Mary Jo: Could have been me if I had only known.

Paul: Should arguably been you.

Leo: Should have arguably, yes. Alright time to talk about Windows enough fun and games kids. Let’s buckle down to the work at hand. Settle down. The layoffs happened

Paul: You know what it seems like that happened a long time ago.

Leo: Well it was the day after the show. You knew it was going to be Thursday.

Paul: I feel like I’ve been through dog years since last week. Because the last time we spoke we were in that meeting room in D.C.

Leo: Oh my God yes.

Paul: And that seems like it was a month ago or something.

Mary Jo: It does, yep.

Leo: It’s true, it’s true.

Paul: Did I go into suspended animation or something. I really feel like this isn’t a week later. This is like 2 months later.

Leo: Rip Van Thurrott.

Mary Jo: So much happened. It was like the day we came back from D.C. suddenly the news cycle was on high speed.

Paul: Oh I landed and I turned my phone on and it was like buzz, buzz, buzz and it was Microsoft. I was like oh man I’ve got to drive home now.

Leo: So 18,000 people will be laid off, 14% of the workforce. But 12,500 of them are Nokia employees.

Paul: By the way I want to put a little perspective on that, that I don’t think anyone has written about but I think it’s just an interesting, not a factoid but a fact. A lot of people were saying upfront before these layoffs were announced that they were coming and that they would be among the biggest in Microsoft's history if not the biggest. Obviously 18,500 is by far the biggest, the previous record if you will which was 5,000 back in 2009. But if you factor out the Nokia employees, the 12,500, what you are left with is 6,000 Microsoft employees, if you will. That is still the biggest layoff in Microsoft’s history. That part of it alone. If you kind of take it at face value, 50% of their, what is it, 90 something 1,000 before Nokia, worked in the Redmond area. It’s likely some 2 to 3,000 people in that area were laid off. Not including the external employees like the V- type employees. I don’t know if we ever got a figure on that. But I know their relationships with Microsoft aren’t being cut just right off but I know that’s declining as well. So the impact of these layoffs on the Redmond/Seattle area I bet is fairly profound.

Mary Jo: I think you have to issue a warning.

Leo: Oh there’s a special kind of.

Mary Jo: Like you have to warn about how many people are being laid off. I think they said in Redmond about 13,071 I think something like that.

Paul: Yikes, and that includes the V dash type people?

Mary Jo: No that does not include them.

Leo: So that’s the local residents.

Mary Jo: That’s the local full time.

Paul: How could it be that many?

Leo: Well because there is more coming over the next 6 months is that what you think?

Mary Jo: I mean, I probably said the wrong number, 1,300, sorry.

Leo: Oh that’s a big difference.

Paul: Oh yeah, yeah.

Leo: Holy cow Mary Jo.

Mary Jo: Whoops sorry!

Paul: I mean the 520 is going to be absolutely free at rush hour.

Mary Jo: No, 1,300 in the Redmond area.

Leo: Oh that’s not so bad. That’s not bad at all. Oh I apologize for those 1,300 it’s a horrible thing.

Mary Jo: That’s a lot though. It is.

Leo: One thing that’s easy to forget in all this coverage is these are people who are out of a job.

Paul: By the way this is something I got into on Twitter the other day. People understand my, I’ve been calling on Microsoft to have layoffs for years. and years. They have too many people, they have too many levels hierarchy, too much management, all that kind of stuff. Obviously adding 25,000 Nokia employees didn’t help. I think people have misinterpreted, I am not cheering this on, I think it was the right thing for them to do sort of pragmatically. But obviously it impacts human beings. Nobody is cheering that aspect of it or mocking those people or anything like that. It’s terrible to be involved with layoffs, it’s terrible to be around layoffs. Even when you’re not being the one laid off. I’ve, Mary Jo to I am sure have heard many reports from people at Microsoft who just kind of standing there with their eyes wide open as people are walking out of meeting rooms crying. It’s a terrible terrible thing and yeah you do need to put that into perspective absolutely.

Leo: But at the same time Wall Street is cheering this on.

Mary Jo: They are.

Leo: Because it’s good business sometimes you have to do this.

Mary Jo: Paul you were asking about the contingent workforce, which is the people who are V-, A- and all that that. The number we know for that is, Microsoft is trying to trim the growth there by 20% every year.

Paul: Do you know what the number is of V- type employees.

Mary Jo: I read somewhere, it might have been on Geekwire, there’s a lot, like 70,000 or something.

Leo: Microsoft has been using this and some might say in a sketchy way. I have a friend who is a V-.

Paul: Some would say in a really military contractor in Iraq kind of way.

Leo: Well it’s a tax thing.

Paul: But it’s the same thing, isn’t it? I mean ultimately?

Leo: Well I think the military contractors in Iraq it’s so you can wash their hands of their actions. I wouldn’t say that’s what Microsoft is doing.

Paul: But they’re washing their hands of taxes.

Leo: Taxes benefits, that’s what they’re doing.

Paul: Insurance as well.

Leo: IRS has some fairly complicated rules about who is a contract employee, who is an actual employee. If you cross the line, the IRS is going to come to you and say hey where is the social security contribution because these are really employees. Microsoft actually hires firms, this is very interesting very convoluted. They hire firms that do the hiring to further distance themselves to it.

Paul: It’s like their marketing efforts. To put what Mary Jo just said in perspective if there are 70,000.

Mary Jo: 71,000 says Geekwire.

Leo: That’s a lot.

Paul: We’re basically talking that there are 200,000 Microsoft employees essentially. That’s an incredibly large company right there.

Leo: Now the business side of that is that’s the sensible thing to do no merely for tax reasons but also because they’re in an industry where there’s a fluxuation. My friend who worked for Microsoft was a technical writer. There’s not full time work as a technical writer for some people. They need special writers at certain and not at other times. So it just makes sense and this is not unique to Microsoft by any means.

Mary Jo: No. I am actually in this boat. I’m considered like a contingent worker because I am a full time freelancer. Like I have to prove.

Paul: Oh I thought you meant with Microsoft.

Mary Jo: No I have to prove, we have to prove to like a firm that I don’t work X percentage, like I diversify.

Leo: For ZD. This is by the way is one of the reasons we are able to get such great people as Paul and Mary Jo as hosts and pay them a pittance is because they are here illegally.

Paul: Because of immigrants. No habla, Leo.

Leo: No one of the requirements of being a contractor is you do this as a business for other people as well. So by doing this show, I just want to hasten to remind you.

Paul: When Leo first hired me for the podcast he drove by the Lows down the street and I just got in the back of the pickup truck.

Leo: Hey you I’ve got some work for you. Speak any English.

Paul: It’s like what do you know about Windows? I don’t clean windows. You’re good.

Leo: No Windows, he kept saying no Windows the whole way, no Windows. No that’s mean. Do you have that in the Boston area where you have people waiting on the corner certain places?

Paul: No, no.

Leo: We have that here at just a gas station.

Paul: No, having visited the West coast, I lived in Phoenix many years, yeah.

Leo: It’s really useful when you have to lift something heavy. Here’s the example by the way. I don’t need a full time employee to lift something heavy. There’s just certain times of the year that I have to lift something heavy.

Paul: Is there a legitimate reason for this conversation?

Leo: Yeah there is a reason, that is a huge number, what is it 70,000?

Mary Jo: 71,000.

Paul: 71,000. That is incredible, it really is incredible.

Mary Jo: So you know these people a lot of them are used for one show or one event, right. They’re not people who work 365 days a year for Microsoft. There are a few of those kind of people among those I am sure.

Paul: I would say there are more than a few. I bet there are more than a few.

Mary Jo: Yeah but again Microsoft got in trouble I forgot how many years ago that was for this whole contingent workforce thing. They had to go back and pay temps and there was a big tadoo over this.

Leo: The rules changed by the way. The IRS got stricter a few years ago.

Mary Jo: They did.

Leo: You’re contract employees, most of the hosts of our shows are. There are some staff hosts and then most of the other hosts are contract employees. I think you have to set your own schedule, you have to be doing it for other people, you can’t do more than a certain amount of time a week. There is some but they are basic rules. But it is a little sketchy when a company goes out and hires 3rd party.

Paul: I think we need to Unionize, Mary Jo. We’ll talk after the show.

Leo: Crap I knew they would do this. Finland says Microsoft betrayed Finland with the layoffs. The Finnish finance minister, we are betrayed.

Paul: Again I am not mocking the human aspect of this. But ever since this happened we’ve been talking about this part of it. In fact there were concerns when Microsoft announced this deal that Finland would squash it because quite obviously they don’t intend or didn’t intend to hold onto all of those employees. To keep open all of those manufacturing facilities. Stephen Elop laid this out in his letter to employees last week. But it’s important, I don’t understand how this isn’t obvious to people, when you’re Nokia, phones are your business. When you’re Microsoft phones are 4% of our market that is probably less than 1% of provider market for computing devices. It’s a little part of it. It just isn’t the focus and there is no way that all those employees come to Microsoft and just continue on for years and years. It is naive to think otherwise.

Leo: So there you have it.

Paul: He does not look happy.

Leo: He’s mad. But I guess part of this is what did Microsoft agree to do. We don’t know, right?

Paul: Well clearly what they didn’t agree to do was not lay half the people off.

Leo: 25,000 employees they don’t need them.

Mary Jo: We had speculated before this happened, a few times on the show. Does Microsoft really want to be in the business of making phones or do they want to outsource that manufacturing. It feels now that we were right. That’s more where they are going.

Leo: Now wait a minute because most of the manufacturing is not in Finland it’s in other places like Brazil.

Mary Jo: Right. But those are the places they closed. They closed factories in China, Hungary, a few other places. They said they are going to consolidate a lot of the work now in Vietnam.

Paul: Plus a lot of the mobile phone stuff is going away. So obviously those places get closed down first and that business gets consolidated into a smartphone factory or whatever. I’ll just speculate here because there’s no way to really know this. But if you think about Microsoft buying Nokia and half of the employees are going to eventually be let go. What are the opportunities there? You could let them go first to make your company more appealing to Microsoft but in doing so you can’t give them these crazy packages that keep them going for years and years. Under the sort of European style welfare style programs that are available over there that probably would have been the case if they had been laid off upfront. But if you’re going to have them go to Microsoft and just lay them off within the first year of course there must have been some guarantee for employees that if you do come along in the journey and you do get laid off you’ll be taken care of to the maximum extent allowable.

Leo: Do you get the sense, actually I do get the sense because Microsoft announced right down 1.5 billion dollars to cover the severance. So do you get the sense that they are being fair to these people and that they’re giving them nice severance packages and trying to place them and take care of them and all that?

Paul: I think so. I don’t know what kind of conversations they had with employees. But I am sure that discussions between Microsoft and Nokia at the time involved these types of things. This size of business is understandable.

Leo: I’ve been through so many of these. I remember on Tech TV I remember the day the people were one by one trooping into the office and one by one coming out crying. It is a horrific thing. I have personally fired people which is just the hardest thing in the world to do. I hate doing it.

Paul: I fired a nanny one time. But I have to say that wasn’t terrible. She was terrible, she was awful.

Leo: Well sometimes you have to. Sometimes you just have to and it’s not a pleasant thing. It is part of business. I don’t know what to say, I mean it’s terrible, we are not overlooking the human.

Paul: Business is all about money, it’s about dollars. It’s about how does it look this quarter, how does it look for next year. It’s about arbitrarily meeting numbers that are themselves arbitrary.

Leo: It’s kind of selfies choice.

Paul: Yeah there is no human element involved.

Leo: The business can’t survive if we keep all these people so in order to save these people we are going to lay these people off. It’s hard to do.

Paul: I think the way to look at Nokia is that it was staffed as a much bigger and successful company because it was.

Leo: It was by the way underscore that. Even falling apart even before Microsoft came along, right. Microsoft saved the company.

Paul: Oh no of course, of course. That’s what happens. I mean this is kind of a psychology thing. You don’t see it coming, you don’t anticipate it and act proactively. It happens. These people were going to get laid off one way or another, unfortunately the Nokia part of it.

Leo: Some Wag said on Twitter, I hope all the people who had Windows 8.1 on their job description got laid off.

Mary Jo: Oh man.

Leo: That did not happen, right?

Mary Jo: Well there were people who were laid off from the Windows org we know. They laid off quite a few testers. I don’t know how many total but that was a pretty big chunk of people.

Paul: They had testers? No I am just kidding.

Mary Jo: They are trying to do this thing now where they are undoing some of that functional management structure that got put in place when Sanofsky and Steve Ballmer were there. Now they are saying you know what it doesn’t really make sense to have these silos of test dev and product management, I mean program management. They instead now they want to combine the role that these dev’s are playing and make sure that is a dev actually is developing stuff and not just testing it. They don’t feel like it was a good model that they just were throwing stuff over to the testers and saying here test instead they want to change the function, right?

Paul: Well this is how they used to treat external beta testers as well. In the beginning there was a lot of feedback about the actual product and then towards the end it was just tell if it works or not. They weren't really interested in user experience functional type feedback. Let me ask you a question about the layoffs because obviously when you hear this, we talk about it and everything. There’s this notion that they are going to do away with hierarchy that they’re going to do away with levels of management. The sort of superfluous extra people that stand between a decision and an implementation. But at least 2 of the people I’ve talked to about this who witnessed these layoffs first hand have both said almost the exactly the same thing. A seemingly arbitrary set of layoffs in their department in one of the 2 cases rendered what they were trying to do almost impossible. That they got rid of key people instead of the driftwood. Have you heard anything about that? Have you heard anything along those lines?

Mary Jo: I think a lot of people because Microsoft has been so siloed don’t realize what’s been going on in other parts of the company. Like I don’t think a lot of people who worked in Windows knew that Microsoft had already done something very similar to Bing and they had also done it in Office and they had done it in Windows server. So if they had known that I think they would have seen the handwriting on the wall that this was probably going to happen to Windows. But because Microsoft has not been One Microsoft and is just in the process of becoming more unified. I don’t think people were ready or aware as to what was going to happen. That’s kind of my feel on that.

Leo: I am told that Joe Belfiore has just tweeted that Xbox music is safe for now.

Mary Jo: Yeah we’ll see how that goes.

Paul: We’re not going to talk about that.

Leo: You do say that Microsoft did not handle this as well as they might have? I think you used the word, boner?

Paul: I did use the word boner. That was in the context of a different story.

Leo: Oh okay sorry. You said there were 4 PR boners this week. I just assumed.

Paul: Actually this isn’t one of them. By the way fair enough this is the 5th one. I should have, I didn’t add that to the list. Like I said this feels like it happened a long time ago. I was listing stuff that just happened this week.

Leo: We knew this was going to happen last. We thought it would be Thursday it was. It’s not surprising the magnitude of this.

Paul: It is and it isn’t though. I mean, Mary Jo did you think it was going to be 18,000 people?

Mary Jo: No I didn’t think it was going to be that many.

Paul: I think the scope of it was a little surprising. Again people misinterpret things like this. It was the right thing to do especially in regards to Nokia. This is a terrible thing to say in many ways, if anything I feel like they could have cut deeper in the part of Microsoft that was already there before this was acquisitioned. We’ll see if all of the talk about efficiencies.

Leo: One thing I thought was interesting was at the end of the Android era at Nokia. Is that right? Is it all done?

Paul: Leo you’ve never seen me actually dance a little jig. But I want to tell you that when I read that I did do you a little dance.

Leo: We were all a little baffled by it. I tried to make sense of the strategy. Stephen Elop announced it before the Microsoft acquisition went through. We speculated a lot just to recap.

Paul: Is Judas a strong term because actually I would say I wasn’t annoyed by it I was aggressively against it. They never adequately explained what possible advantage that this had over Windows phone, simply because Windows phone met all of those requirements on those types of devices better than did Android. With the exception of one thing which was that fair enough it is easier for a developer of an Android app to port their app to the system than it would be to port it to Windows phone. That’s absolutely fair. But nothing sends a message to an already quivering and uncertain developer base more than oh by the way we’ve got this plan B over here in the corner we’re going to do Android and Windows phone. That alone undercut Windows phone potentially permanently. If they had just kept those things going like that side by side I really do think that would have been the end of Windows phone and was a huge huge mistake. So watching them turn that around nicely and very firmly commit to Windows phone.

Leo: Good.

Mary Jo: It felt weird though because right up until and even including this week Microsoft is out there still recruiting developers to build Nokia X Android apps. So it just felt really odd. It was like you guys must have known you were going to discontinue this line but you kept recruiting developers. I thought that was a little strange.

Leo: Yeah. That’s a tough one for a company because you don’t want to telegraph what’s coming.

Mary Jo: I know you don’t. A lot of people speculated that at the time when Microsoft did take over Nokia and they said hey we’re going to come out with another version of these Nokia X phones. People said you know what happened this is how Nokia was trying to force Microsoft’s hand to buy them.

Leo: Yeah that was one theory. Do you think that this confirms that?

Mary Jo: Maybe I don’t know.

Paul: It can’t really confirm it because Microsoft did buy them.

Leo: You pointed out that at some point Stephen Elop must have gone to Microsoft and said hey we’re planning to do this. Do you want us to stop now before we announce this.

Paul: Well for instance Stephen Elop and Nokia adopted Windows Phone and they did an amazing job. In fact if anything they put out to many phones or whatever. They produced a startling number of innovative phone designs, phone models, phone related technology, phone related accessories, phone related apps, they did an amazing job. Guess what they’ve sold fewer and fewer smartphones they make no money per smartphone so they are losing money and Windows phone overall commands less than 4% of the market meaning Nokia commands less than 3% of the market or however that works out. Roughly 3%. So look if you guys don’t buy us we’re going out of business.

Leo: We are moving onto Plan B.

Paul: So they have to do something and their business is phones so you fall back on Android. It’s perfectly logical for that company to do that. It would have had horrible repercussions for Windows Phone had it happened. Which is why I think Microsoft bought Nokia partially.

Leo: They make such nice phones.

Paul: The problem is they announced this after Microsoft announced their intention to buy them. I don’t understand that. It seems like Blackmail. We know that Satya Nadella was against the Nokia acquisition. Maybe as he became clearer and clearer as the leading contender maybe they’re thinking he is going to step in and kill this deal. We can only speculate. Hopefully someday there will be some kind of insider of how all this happened. Them announcing Android based phones a good 6 months after Microsoft announced their intention to buy them. Less than 2 months before the acquisition was finalized, is borderline crazy town. That’s very strange.

Mary Jo: Technically Microsoft legally couldn’t have stopped them.

Paul: Of course.

Mary Jo: Because they didn’t own them yet.

Paul: But I mean them just announcing it, Nokia.

Mary Jo: Yeah, that was rough. I’ll tell you, one thing I’m hearing isn’t killed and it may have been pared back but it isn’t dead. It’s the idea of Microsoft still experimenting with ways to run Android on Windows Phone and on Windows. That did not get killed as part of this layoff.

Leo: But that’s not what X was.

Paul: I am going to hammer my head against a wooden board for a few minutes while we talk about this.

Mary Jo: That’s all I am going to say.

Paul: This makes me crazy.

Leo: Did they also kill Asha?

Mary Jo: They did.

Leo: So that’s the very low end. I think it was based on Symphony on neither Android or Windows phone.

Paul: It was an entry level smartphone, feature phone plus however you want to say that. I actually thought the Asha phones were nice. The stuff that Nokia makes is nice. Even Nokia X’s were probably decent phones, it would have to be, Nokia makes beautiful phones.

Leo: I love the hardware.

Paul: Yeah a little lack of focus. By the way this little Android adventure that they went on is going to impact Lumia’s at least for months and months to come and Windows phone generally for years to come because Microsoft actually made changes to the guidelines for PC, or device makers about what they can and cannot do with Windows phones. Remember when it first came out it was a very controlled platform. You had to have very specific things. It has been kind of peeling off over time, so some of the concessions that they made to device makers like Nokia who wanted to make both a version of an Android and Windows Phone version of a device was around such things as those hardware buttons on the front of the phone can now be soft buttons. They don’t have to have a camera button because Android phones don’t typically have a camera button. Now we’ve seen 2 models so far from Nokia without those features enabled and we’re going to see a 3rd the 530 come out later this summer. Meaning we are now seeing low end Windows Phone handsets that have soft buttons instead of hardware buttons. Which actually is a good thing, I’ll talk about that later in my tip. And without a camera button which is a terrible thing, it’s one of the best features of Windows Phone and it’s one of those things I miss when I use an Android phone or an iPhone. The ability to just pick it up even when it’s locked, just press the button and take pictures. Obviously the software works really good.

Leo: Hey the new Amazon Fire phone will do that. Note to the editors could you put crickets in there.

Paul: Sorry when you said that it took me 5 seconds to realize you were actually talking about a phone.

Leo: I do see the 530 is about to go on sale now. In Europe first.

Paul: That’s an example of one that’s based on this crossover Android design. It’s a phone that you would have seen a Nokia X or whatever with this exact body. In fact it’s on sell in to world for all I know.

Leo: They call it Power for the people. It’s an affordable phone.

Paul: Yeah it’s actually not power for the people but it is cheap for the people and I think that’s the point of it.

Leo: How much is it going to be?

Paul: Under 100 bucks in the U.S. They’ve not actually specified that. But if you remember how the Lumia 520 went, it started 129 ish got to 99 really quick and got to 59 really quick. This thing is super low end though. It has literally only 4GB of onboard storage which is irreprehensible. 512 MB of RAM which is typical Windows Phone for low end but I wish that was a GB. It is expandable on the memory but that onboard storage is actually going to hamper you because there is some stuff you can move to SD. And that’s going to be constraining.

Leo: Well this is a very inexpensive, this is aimed at what the X would be aimed at.

Paul: This is what cheap looks like, yes. There is an international version with dual SIM support for those emerging markets that need that kind of thing. This is a super low end device, though. Even kind of more so than the 520 was a year ago. Given how technology has changed. If you’re familiar with the 635 or the 630 like Mary Jo has. You know that they’ve even changed how the hardware buttons work. They used to be discreet buttons that were connected on the side of the cover and now they’re just pressed out of the cover. There not even that high quality. You can swap that thing out which is nice but it’s amazing how they’ve kind of gone down market.

Leo: But there are people who cannot spend 600 dollars on a phone.

Mary Jo: Right, this is where Microsoft is selling all the phones. Nokia and Microsoft are selling at the low end. So they are going to make a lot more low end phones than they are probably going to make flagship phones. Going forward.

Leo: Interesting. That is where Android owns this space, right? Because Apple has nothing in that offering. Android has a lot in that offering. It’s an opportunity.

Mary Jo: If they are going to take Asha and S4D phones of the market they’ve got to come up with something that is super cheap. Or leave that to their phone OEM’s and say look you’ve got to make something that’s going to compete where those phones are competing now and still runs Microsoft software and certain services. So that will be their challenge.

Paul: This is the nice come up about Windows phone too. Because as I’ve made the argument that Windows phone could deal with this market that they don’t need Asha, they don’t need Nokia X. Well here it is. I think the problem with it is I typically think of those kinds of phones in emerging markets not in the United States. The 530 is going to be sold by T-Mobile in the United States starting in September. I would just say to people even people in the United States if you can’t really afford a phone. The difference in actual total cost of unsubsidized 530 versus the 630. It’s going to be less than 50 dollars and you would be way better off with a 635 actually not a 630. A no contract 635 versus a 530. Even as a media player, a 2nd phone or a phone you are going to give to kid or something a 635 is a much better deal.

Leo: Paul Thurrott, Mary Jo Foley, Windows Weekly on the air brought today by our good buddies at lynda.com. If you want to learn how to use software. I think everybody probably knows about lynda.com in terms of about if you want to learn Microsoft office. Many businesses you’ve exposed people into that at lynda.com because they have enterprise subscriptions. When you get the job they say alright go to lynda.com take the Microsoft Word course. There’s a whole lot of stuff there too for your own personal pleasure. Photography, design, look at the developer section alone. You can actually learn how to write apps. 350 developer courses, 15,000 video tutorials. That’s part of the 2700 plus courses online at lynda.com right now. They’re great too. Beautifully produced, lynda.com has 9 studios down in Santa Barbara. They bring in some of the best teachers, many of them are people you’ve heard on TWIT, like Chris Brean, Bert Monroy. Then they teach you how to do stuff from their own experience, from pros. I think that’s wonderful. It’s the kind of thing you could do for a hobby. For instance, I am fascinated by typography, they have a typography course. I am never going to use that. Paul you probably learned that when you learned graphic design but I never studied that. But I love it. So to learn more about typography is just a fascinating thing. Here’s the deal go to lynda.com all of these courses can be yours for one monthly flat rate. Very affordable, 25 dollars a month that gets you access to the entire course library. They have a premium plan $37.50 a month. It will give you, if you are taking a course where there are, like a Photoshop course where there are files that the instructor is working on. You can have those files on your own computer and work them. A lot of people use lynda.com on a computer with the course here and then Photoshop open and then they follow along. You can do that. But lynda.com also has a lot of courses that you can just watch on your phone or on your tablet while your commuting on the bus. How to negotiate in business, how to create a resume. Courses are for all experience levels, beginner, intermediate and advanced. We are moving to Adobe Premier for editing, all of our editors I think many of them have taken the Final cut courses at Lynda but of course they will be taking the Permier courses to polish their skills. They’re experienced editors but there is always something to learn. Because lynda.com has full transcriptions you can search the transcript for the portion that you want and just study that part as well. Whether you have 15 minutes or 15 hours those courses are your’s to use freely. They’ve got WIndows 8.1. They actually work often with the software companies to make sure that the day the new version of Windows comes out that they have a course so that you can learn it. That’s because they have so many people in businesses who are saying ayayay. They have Windows Phone courses. Developing for Windows phone and other Windows devices. Excell you can learn over 65 tips, tricks and short cuts in the new Excell. Or how to move, copy and analyze large amounts of data in multiple worksheets or workbooks. Pivot tables, things like that. How to use Sharepoint to publish to the web, share documents and manage permissions. That’s for the user, if you’re Sharepoint administrater you can learn how to design workflows to boost your teams productivity. It’s all there. Now you don’t have to take my word for it, we’ve got a special deal for viewers of Windows Weekly. If you go to lynda.com/windows you can get 7 days free. The run of the place, just see what’s there, take at the courses. If you are a business thinking about a subscription for your business you can make sure that the courses that you want for your employees are all there. I gaurentee you they are. lynda.com 7 days free, lynda.com/windows. 2700 courses free for you from us. Thank you Lynda and thanks for supporting Windows Weekly. Paul Thurrott, Mary Jo Foley, Windows Weekly is on the air. I actually jumped ahead in the run down. I don’t know if people know this but Paul and Mary Jo work long and hard to create a carefully honed plan for where the show is going to go.

Paul: Then Leo just throws a grenade right in the middle of it.

Leo: I just leap right in.

Paul: Leo is like what’s going on with Apple.

Leo: Yeah that’s my thing. No I think you buried the lead. The problem is layoffs were almost a week ago.

Mary Jo: I know that seemed like that was such old news.

Leo: But it isn’t, people wait all week long to hear this show to hear what you guys think. So I am sorry.

Paul: We don’t like them, Leo.

Leo: We don’t like it one bit.

Mary Jo: We were definitely going to talk about layoffs, how could you not.

Leo: Oh no, no, no.

Mary Jo: Because it happened the day after.

Leo: But a lot has happened. The earnings have come out. But your lead was Paul, I am going to read this out loud. Do you mind?

Paul: No I don’t mind but the actual title I believe that was from Mary Jo.

Leo: Mary Jo writes Redmond we have a problem. A communication problem. The company we cover, writes Paul, is dysfunctional and cannot communicate effectively and it’s time for intervention. Seriously Microsoft you need help and we’re here for you. What do you mean Paul?

Paul: I am offering them our services. I think they should start pushing stuff through Mary Jo and I because it’s very clear that they think they are speaking with some form of clarity and they are never speaking with any form of clarity. I listed a couple of examples of this just from the past week. The best one is the One Windows bit from Satya Nadella’s post conference call, post earnings conference call. Where he said that Microsoft will streamline the next version of Windows from 3 operating systems into one single converged operating system for screens of all sizes. It sounds like he just announced that they are getting rid of all these versions of Windows and they are going to have one version of Windows and that when you install it on a phone it will be like a phone app and that’s how it will be different. When you install it on your desktop it will be desktop app and that’s how it will be different. The truth is nothing has changed with regards to Windows. There will still be multiple versions of Windows. There will still be versions for the phone, versions for the desktop, version for the server, versions in the embedded space. They just announced a new version for the internet of things. There are all kinds of versions of Windows and within those versions of Windows, there are going to be multiple product versions of Windows. He said on the client alone, when pressed by the way. Somebody asked a question and said excuse me it sounds like you’re just going to have just one version of Windows. Then he said just kidding actually there is going to be a butt load of these things they are going to be everywhere. There is going to be a version for consumers, a version for businesses, a version for enterprise. On and on it goes. Literally nothing has changed.

Mary Jo: But if you judged by the headlines that came out after the earnings call you would think like wow.

Paul: My problem exactly.

Mary Jo: Like what the heck just happened, Microsoft just announced that they are doing away with all versions of Windows except for one. Nope! I kind of feel for Satya Nadella here and I kind of don’t. They are trying to find this balance between not over simplifying but also giving some meaty details. So he was trying to tell people who hadn’t really kept up that you know what we have one team building all the versions of Windows now but that’s been here since last summer, July 2013. We’re going to build on a single core, we’re going to have a unified store, commerce model, one developer platform, universal apps. For a lot of reporters who don’t keep up with Microsoft, I think they either forgot or.

Paul: If you don’t mind I would like to just step through what you just said. These Windows products have always had a common core. That doesn’t change because there is a single team.

Mary Jo: They’ve had a single core for a few years, right?

Paul: Well no I mean mainstream versions of Windows have always been based on the same entity core. Whether it’s on client or server.

Mary Jo: Well I was thinking on Windows Phone. Windows Phone just got the NT version.

Paul: Ok yeah Windows Phone made its way there, yes.

Mary Jo: Pretty recently.

Paul: The store back end for Windows 8, X and Windows phone has actually has always been the same back end. They brought it together in better ways for developers and may possibly do so for consumers. But I actually don’t expect that to be honest. I don’t see any reason for it. That’s kind of a little red herring right there. Even the notion of universal apps is a little bit of BS. I mean from a developers perspective it’s obviously easier to create a set of apps that are very similar that will run across these different platforms. But there is nothing on the road map for a single app that you’ll develop that will then be deployed to all those different things, phone, Windows PC’s, Windows tablets and Xbox I. A universal app is really a consolidated set of apps that are a single solution that share some code but not all code. There’s nothing wrong with that. But it’s not necessary, even the announcement of universal apps back in April and its implementation now Visual Studio is really just a formalization of something that developers have been doing in a mad hawk way already. The expansion of this to Xbox I in the coming year will be very interesting. It is good and I know it will get better and better as time goes on. The truth is none of this stuff is actually really new or even improved or changed since he took over. I agree with you this message was tailored towards a certain audience. But when you speak publicly and you make public remarks in the wake of a quarterly earnings conference call, I actually think you need to be held to a higher level. A higher standard of telling the truth and being clear.

Mary Jo: I am sure this past call is going to be a learning tool for him. He’s only been on 2 calls, this is the 2nd one. I’m sure his handlers are going to take him aside and say, hey, see what happened when you talked about this. You should talk at a higher level or avoid going too deep. That would be my device if I were a handler.

Leo: Yeah he’s a rookie. Just say you did rook but next time do a little better.

Paul: Alright so we are going to give this CEO of one of the most powerful companies on Earth a mulligan, fine. If this had been the only one of these this week. It’s not. It kind of goes on and on we don’t necessarily have to get into these.

Leo: Let’s not go to the next one yet. Before we go too far, isn’t part of the problem that you guys deeply understand what’s going on but the rest of the…

Paul: Let’s leave it at that, the problem is that we know too much.

Leo: You know too much. So the less informed media ran with the headline One Windows.

Paul: Listen I don’t get invited to the White House press room to report on whatever is happening with President Obama. I would misreport stuff because I don’t understand that stuff. So if you’re on the call, if you’re writing about Microsoft, if you’re writing about Microsoft’s finance’s and their business and all that kind of stuff, I would have to argue that you should know something about that topic.

Leo: You should know. But don’t blame Microsoft in that case. Maybe they misinterpreted it.

Paul: Well Microsoft miscommunicated it.

Leo: Well they gave them an opportunity to misinterpret, I guess. I agree.

Paul: Mistakes were made on both sides.

Leo: The problem also Mary Jo, as you said, Nadella has to speak, everything he says is parsed by many different audiences.

Mary Jo: It is, he has to remember that.

Leo: Investors, Users, as well as Media. It’s complicated for him to say one thing.

Paul: Let’s go back for just a second. Remind everybody, when he was providing just his statement he misspoke. He said we’re streamlining to one Windows OS. Stories went out. People wrote stories based on that statement. If you actually continued listening someone in the audience actually said hello are you seriously making one version of Windows? Then he said Oh no we’re not doing that. That’s crazy. Then he explained actually nothing has changed. I was just talking about the engineering back end.

Leo: Oh ok so he created this problem didn’t he.

Paul: He created the problem, people wrote about it and then he was called on it.

Mary Jo: You know what Paul, Paul, Paul, step away from the ledge.

Leo: Talk him down, will you Mary Jo.

Mary Jo: I will say one thing, if you’re a reporter covering this space Bing is your friend or Google. Just check it out. See if somebody might have written about universal apps or One Windows before and then maybe you could learn something before you write a story. Just advise.

Paul: If only somebody had written about that stuff.

Mary Jo: Right, if only somebody had written about that stuff for more than the past 2 years repeatedly on multiple sites.

Paul: Talked about it perhaps weekly in a podcast.

Mary Jo: Perhaps.

Paul: Gone out into the world spoken about it. I don’t know if only those people existed. I don’t know what to say. We all get things wrong that’s not the point.

Mary Jo: It’s hard for us because then people come to us and say did you hear Microsoft is doing one operating system. It’s like um nope actually they’re not.

Paul: By the way Satya Nadella in his prepared statements in the Post Earnings conference call used the word streamlined twice. One was about Windows how they are streamlining that and the other one was about Xbox. That was the part where he suggested that they were possibly getting rid of Xbox music and Xbox video.

Mary Jo: Wait, let’s give the exact statement. Okay here’s the exact statement he said, With our decision to specifically focus on gaming. We expect to close Xbox entertainment studios. We knew that. And streamline our investments in music and video.

Leo: Sounds like he’s closing something.

Paul: That’s what I think. That’s what I think that infers. But let’s be clear he did not say.

Leo: He said streamlined.

Paul: By the way just to be perfectly clear, Paul did not write a story that Microsoft is closing Xbox music. Paul wrote a tweet that said Satya Nadella just said that. That could be bad news for Xbox fans or Xbox music fans. In this case it was buried enough and nobody cares about Xbox music except for us so nobody wrote that story. But in the One Windows story, it’s Windows. Windows is exciting so people wrote stories about that. Now we know from Joe Belfiore because people probably have been hammering him with question all day long. That they are not shutting down or dropping Xbox music as he says or Xbox video. Great. He didn’t actually explain what streamlining meant which would have been helpful. It’s still an example of not effectively communicating. It just so happens that in this case that nobody asked him what he meant by streamlining Xbox music and video. It could just mean they are getting rid of Nokia mixed radio for example. Which they are. It could mean that they are going to make the Xbox team smaller, it could mean all kinds of things. We don’t know, that’s the point we can only present what he says and that’s what he said.

Leo: So I have 2 boners so far, is that right?

Paul: Where are we on the boner list? The Windows one is a big deal. The Office 365 stuff from 2 weeks ago you remember, is kind of a big deal in the sense that it is something that could have been communicated very effectively and wasn’t. But that was 2 weeks ago we don’t have to focus on that too much. The other one was, this is what amazes me. I have all different kinds of ways of gathering news obviously. In my RSS feeds a couple of days ago I guess or was it yesterday? It feels like a million years ago. Whatever it was this week. I started seeing this story, from multiple blogs. Surface Pro III docking station now available for preorder. I thought that’s interesting, I pre-ordered a Surface Pro III docking station on June 21st. Why are people writing stories about this now? So I looked and it’s because Microsoft in a blog post talked about the docking station which we’ve known about for months. And they said hey it’s available for pre-order now. It didn’t actually say this is a new thing. It was kind of a strange thing.

Leo: Ahh it continues to be available for pre-order.

Paul: So the problem is bloggers who don’t necessarily pay attention to what Microsoft does but write about Microsoft for some reason. I’m kind of unclear about that little confluence. But wrote blog posts that this was happening. I’m sorry but that’s not the story. What you find out over time is, you have to kind of do a little research here. Microsoft doesn’t really communicate this anywhere let alone effectively. What changed was the Surface Pro III docking station was available for pre-order in the United States and Canada only on June 20th. As of yesterday or 2 days ago, it is available I originally thought the U.K. only but it’s available elsewhere as well. It’s available in the Netherlands, Switzerland, I don’t want to say off the top of my head but a bunch of countries. So if you live outside the United States or Canada and you want to get this device. Look at the Microsoft store online in your country and see if it’s available for pre-order. The version in the U.S. and Canada will ship to customers on August 15th which by the way they announced a month ago. The version for elsewhere I think ships in September. That’s what really happened but Microsoft didn’t say that. By the way still hasn’t said it if you go to the Surface blog today. Still hasn’t said it.

Mary Jo: It’s been a rough week.

Paul: It’s been a rough week. It gets worse.

Leo: There’s more.

Mary Jo: I am doing the next one, Paul.

Paul: Yeah let Mary Jo.

Leo: Ok Mary Jo you’re on.

Mary Jo: I am going to try and stay a little calm.

Paul: By the way that was me being calm.

Mary Jo: Okay.

Leo: Yeah I didn’t hear him raise his voice.

Mary Jo: No he did well.

Leo: He turned red a little bit.

Mary Jo: He gets a little angry.

Paul: That’s the sun.

Mary Jo: Another one that both Paul and I both spent a lot of time trying to figure out this week. An announcement by Microsoft that they are consolidating a bunch of their IT Pro trade shows into one new unified tech conference. Happening next year in May in Chicago. So okay you would think maybe there would be one blog post that would just explain this and just say this is the replacement for Tech head and the replacement for Link Conference and the Sharepoint conference and the exchange conference. No there were many different blog posts across many Microsofts sites that described this in very different ways. Like keywords were changed in these different posts so we were debating back and forth. Is this the replacement for Microsoft Tech Head? I believe it is, Microsoft doesn’t want to say that because there has been a lot of rumor around. Is Microsoft killing Tech Head and they don’t want to play into that whole thing. But my take is this is the new replacement show for Tech Head plus the Sharepoint, Link, Exchange and project conferences. They are going to consolidate these into one. They are going to have it at one time and everybody is going to come to this one show and it’s all going to be good. Now at Microsoft who runs shows and how they talk about shows dying and being reborn, it’s a really political thing. That’s why I think you saw so many different versions of this story pop up. Everybody kind of wants to say, if you are the group running Tech Head you don’t want to say Tech Head is dead. If you’re the group running the Sharepoint conference you don’t want to say that’s dead either. So we get some kind of convoluted explanations. The only things we know are that this does not replace Build, so Build will continue. It does not replace the partner show. That’s going to continue. But it does replace all those other shows. We also do not know if there will be a sister show to this in Europe or if Tech Head Europe Barcelona is the last Tech Head Europe. They won’t answer that. They won’t tell us what the name of the new show is yet or what the content is going to be. They are saying in September.

Paul: What exactly did they announce. In other words, substantively what did we learn from Microsoft about this? I mean what literally did they say?

Mary Jo: They just said hey we have this new Mega Tech conference in the week of May 4th in Chicago next year. That’s what they said.

Paul: That’s incredible.

Mary Jo: That’s all we know. We know it will be in Chicago, which is pretty cool because we don’t get to go to Chicago very much.

Leo: That’s actually a great city for conferences.

Paul: I can’t wait to go to Chicago.

Mary Jo: I know.

Leo: I haven’t been there since gosh I think it was CES used to do their summer show in Chicago.

Mary Jo: Oh yeah, that’s right.

Leo: Remember that. At the McCormick place and of course it has a metal roof which ensured the sun warmed the metal roof in such a way.

Paul: You feel like an ant under a magnify glass.

Leo: But I am sure they’ve solved that problem since. Awesome that will be fun. Is it summer in Chicago?

Mary Jo: May 4th.

Leo: Oh no that’s a perfect time in Chicago.

Mary Jo: Yeah I think it will be good. So it was just another case of we spent way too much time trying to figure out what was meant on something that should have taken us about 10 minutes.

Leo: But look guys this is a full employment program for you.

Mary Jo: It is; we were joking about that the other day.

Paul: You’re right we should thank Microsoft.

Leo: I know it’s frustrating. I was so frustrated with Windows 8.1. I was reviewing a laptop and then on the radio show on Sunday like 15 people called. I can’t see my Icons, the screen black. All sorts of stuff. By the end of the show, it’s just darn you Microsoft. But then I realized well that’s what keeps me in business. Perspective.

Paul: It’s important to see it like that. It’s hard sometimes.

Leo: It’s very hard.

Mary Jo: Yeah it is. It’s hard when there has been a lot of things happening.

Paul: Yeah, yeah when this stuff piles up it gets bad.

Leo: That’s the problem.

Paul: Before the One Windows thing I would have said actually the worst PR blunder this week in the Windows space was not Microsoft. But now I have to give that title to Satya Nadella.

Leo: What was the worst one?

Paul: It was Lenovo. We don’t know the full story. John Phillips who is a veteran technology writer received an email from Lenovo. I presume and again I have to kind of presume because it wasn’t really specified that readers must have told him or the site, that we cannot order Lanova’s website a Thinkpad 8 or Mix2. Which is that companies mini tablets that are on Windows. They must have gone to Lanova for a comment, what’s going on? Lanova told them we’re not selling them in the United States anymore. We found that our bigger tablets sell better in the U.S. but that our mini tablets are in great demand in places like Brazil, I think China and some other countries. So we’ve moved our stock of that stuff to those countries where they are going to sell better and we’re not doing it anymore. So the story went out.

Leo: It seems like a nice clear statement.

Paul: Yeah Lanova kills Windows mini tablets. It’s simple.

Leo: In the U.S.

Paul: Lanova caught wind of this and then they said we’re not doing that, that’s crazy. They’ve just sold out in the United States. We have new models coming in the fall. We’re going to continue to sell 8 inch tablets in the U.S. But when you look at the kind of back and forth that occurred it’s pretty cleared that I think it was PC world in this case. They actually got the story right. They got a quote from Lenovo that the quote is very clear. We don’t know the full context of the conversation but it’s very clear. The guy told them point blank we’re not selling these things in the U.S. anymore. I guess in North America. So Lenovo is doing a little bit of flip flopping or back peddling. I am sure their plan all along well maybe it wasn’t but we’ll assume it was their plan to introduce these new models whatever they may be in the fall. So they will. The truth is if you want one of these things and they are great devices. When I reviewed all of the mini tablets that were available over the past year on the Windows side. The Thinkpad 8 was easily the best one but it was so much more expensive than the other ones. The best ones it was kind of a tie, the Dell Venue 8 Pro and the Lanova Mix II. They both cost about the same, slightly different style so it’s just your choice of which one you preferred. But they are both great devices for that kind of market. You just can’t buy the Mix II. So you have to go get the Dell if you want a Windows Mini Tablet that’s any good. That’s just the way it is.

Leo: Well that’s not such a great PR move. A little bit of a blunder.

Paul: Look, you’re the world’s biggest PC maker and you’ve just announced that you’re not going to make a particular kind of Windows PC. That’s news guys. You’ve got to pay attention when you say stuff to reporters. That’s news.

Leo: Yeah, they listen and they may even write it down.

Paul: They’re not asking you out of curiosity. Hey I am just sitting here on the beach, I’m curious.

Leo: I was just wondering.

Paul: You’re still doing this stuff right.

Leo: I’m not going to say anything about it.

Paul: Oh now this is just I am curious.

Leo: This is my own personal interest.

Paul: I mean think.

Leo: So we are done with the litany of PR errors, blunders, phopas.

Paul: I didn’t really get onto the Xbox I system updates. But let’s just leave that for now. I feel like maybe we’ve complained enough.

Leo: I am excited I am downloading the Destiny Beta even as we speak.

Mary Jo: Oh wow.

Paul: You are going to enjoy that in 720 non 10DP whatever the heck it is on Xbox.

Leo: Oh who cares. I thank Shadow XPR in the Chat room for sending me an invite to the Beta for that. Public Beta for that I think just reopened today. Maybe it’s not public, the beta reopened today. Flick in the chat room calls it Bestiny Deta. It’s from the Halo folks.

Paul: Yeah it looks good as you would expect it to be.

Leo: It looks like Halo basically. So it's sad about TechHead, but what the heck these things happen. Do you want to talk about earnings? Would this be a good time to talk about that?

Mary Jo: Yeah.

Paul: Yeah, why not?

Leo: I thought it was tomorrow they were going to be announced. Did I get that wrong?

Mary Jo: Well usually, it's Thursday but because Microsoft is having it's big sales conference in Atlanta this week and nadella is working there so they had to move it to Tuesday.

Paul: I thought it was because they copy everything that Apple does, no?

Mary Jo: Yeah, that too. Yeah.

Paul: Sorry.

Mary Jo: Yeah that's the real reason.

Leo: Okay well here's a real quetion, Did they get it out before or after?

Paul: Before Apple, actually... Yeah, just like Zune.

Leo: Mmm mmm.

Mary Jo: Oh man, whoah.

Leo: So was it a good quarter?

Mary Jo: Well, it was a mixed quarter. They had very good revenues, 4.61 billion, but their earnings have been coming in at $55/share and people were expectig 60.

Leo: Never disappoint the analysts.

Mary Jo: Yeah. My colleague at ZDNet, Larry Dignon, had a really good take. He said Microsoft's fourth quarter can be boiled down to two words; Nokia, Hardware. Yeah, so a lot of what happened to them on earnings was around Nokia and they hadn't really been able to give analysts guidance about how Nokia was going to impact 4th quarter earnings because Microsoft only took possession of Nokia in April. So yeah, they had to take some adjustments here and it wasn't pretty. This partially explains the layoffs, right? Yeah, on the plus side though, Microsoft had a really good quarter on their enterprise business, not too surprisingly. They really kicked butt in the Cloud and their server products like Sequel Server and System Center and even the Windows pro version for OEM's, which is the business version. So they did really well with all of those products and that helped offset some of the pain from the Nokia launch. So yeah, analysts like the quarter. Microsoft's stock went up because they're doing things that analysts like. Such as, cutting people and cutting product lines and they're doing what Wallstreet wants.

Leo: Tightening it up.

Mary Jo: Yeah.

Leo: Mary Jo, again, you buried the lead. Satya Nadella said that Bing would be a money maker by 2016.

Mary Jo: Yeah, he just kind of dropped that in the middle of the earnings call and he said, you know what everybody? You're always beating us up about Bing and it's a money pit. We can tell you that by fiscal 2016, Bing is going to be standalone profitable entity which is pretty interesting. And Microsoft had given people guidance about this before and here's how they think about it; If Bing can get to 20-25% market share, which I think they can based on the trajectory they're on right now, once they hit that point they'll be profitable and that's how they're judging it.

Paul: So they almost hit 20% in the US this quarter, so they're at 19. something in the US and they're probably 3% in Europe but whatever. Worldwide, certainly 20-25 is possible.

Mary Jo: Yeah.

Paul: You know, if Microsoft pulls a $21 million profit out of Bing in 2016 that's neat but you realize that this operation has lost a little over $10 billion?

Mary Jo: Right, I know.

Leo: It'll take a little while to come back, yeah.

Paul: So yeah, that will be a neat little milestone I guess but I mean, that's strange.

Leo: How do they become profitable? It's advertising on Bing right? Is that the main revenue?

Mary Jo: Yes, that's the main thing. And they also are kind of turning Bing into a platform now so I don't know how that plays into the whole, is it profitable or not thing but Bing is not just a web search engine now it's something they use across different product groups like for machine learning and all of that so that may also factor into how they're figuring out if it's profitable but I don't know for a fact. But yeah that was one little tid bit he dropped. And I think he also said, I'm trying to find it in the transcript here, that Windows phone, they think it'll be break-even or profitable by 2016 as well.

Paul: That's another classic one. Windows- It's funny because it's like, what does that mean? I believe what he means by that is the Nokia business right, I would assume. Or it combine Nokia plus Windows phone software. Yikes.

Mary Jo: Here's what it says, Amy Hood, who is their CFO said, "We will be on the path to reach operating break-even phone business by the fiscal year 2016."

Paul: Yeah. And we just started fiscal year 2015 so two years at most I guess. We're going to hold them to that.

Leo: You've got to remember you don't say things like that lightly to analysts. Because they do hold you to that.

Mary Jo: They do.

Leo: This isn't like a PR event where you can say, we're only going to have one version of Windows. When you say this to the analysts-

Paul: It's nothing like an event in which you'd say something like that. That is literally night and day.

Mary Jo: They worked this into their financial models.

Leo: Yeah, and aren't there legal forward-looking statements and stuff- There's some weight around saying something like this.

Mary Jo: Yeah you don't say this lightly.

Leo: You must firmly believe, it's not like, oh we're going to make money on Bing, honest! It's like a serious thing. How much did they lose because of Nokia? Was there a number?

Paul: Well no remember when they buy Nokia, that comes out of the cash the company has.

Leo: Right.

Paul: So I believe Nokia was purchased with Microsoft-

Leo: It doesn't count against its profits at all, the money they spent.

Paul: Right, it's essentially the fact that they have the cash.

Mary Jo: Here's what they said for the quarter: Nokia's device business contributed $1.99 billion in the fourth quarter-

Paul: In revenues.

Mary Jo: Right. -An operating loss of $692 million.

Leo: Oh.

Paul: Yeah.

Leo: Well they made money.

Paul: No they didn't. Those were revenues the revenues is not money.

Leo: But they only lost half of that so they made some profit... Or is my math bad?

Mary Jo: No you're right on that but they have all of these other costs like the cost of integration, the cost of the layoffs, the severance and all of that.

Leo: Well yeah they're writing off more than $1 billion on the severance so yeah. But that's not in this quarter that's next quarter.

Mary Jo: But they're distributing it over multiple quarters.

Leo: Ah, okay.

Paul: Through the end of the calendar year.

Leo: But as you point out in your article Mary Jo, enterprise is a very bright story, right? No?

Paul: I think we lost Mary Jo.

Leo: She's thinking, no wait a minute wait a minute....

Paul: She's like one of those fake statues you see in public spaces you know and they may jump out at you.

Leo: She's going to burst into life and we're all going to jump. Alright we'll pause for a moment. Server products including Windows Server, Sequel Server and System Center brought in $11.2 billion and overall enterprise $13.48 billion in revenue.

Paul: Honestly the story from Microsoft hasn't changed. From a financial perspective ie., their commercial stuff is going gang busters. Their commercial Cloud products which include Office 365 of course, but also Azure are on a $4.4 billion annual run rate. It's amazing. I think the figure for just Office 365 was $2.5 billion. So these are major new businesses that are in many ways, based on previous kind of traditional technologies but adapted to the Cloud era and I think that's kind of a big deal.

Leo: And Nadella was at pains to say, we're not giving up on consumers despite the fact that the enterprise- I guess he calls it 'commercial.'

Paul: Yeah Microsoft's been using language since last year so Mary Jo and I have both noted the oddness of it when they first started saying it, right? About a year ago?

Mary Jo: Right, yep. Commercial means business.

Leo: Okay, it's enterprise. But he says, we're not giving up on consumers dual consumer enterprise use is how we reinvent productivity.

Paul: No they don't have to give up on consumers. Consumers are doing that for them. Obviously Microsoft has great consumer services. Outlook.com, Office 365 for Home and Personal, Xbox entertainment stuff, the Xbox Live obviously I mean there is a bunch of good stuff there. But even within my own company, we've been talking about this dual-use stuff for forever and ever. It's like Baywatch nights because you do this thing during the day but you use technology at home too. It's not just like daytime at work it's you know, we're going home and we have our phones and tablets and PC's and things and you know there's obviously cross-over there so a lot of what Microsoft is working on is bridging those gaps and doing the smart wipe stuff on phones which certainly gets rid of the corporate data and so forth and I actually think they're really well position for that kind of stuff.

Leo: Mary Jo you write at the end of the article, 'Microsoft may have switched CEO's in recent months but there's one place in which the company's messaging hasn't changed, in insisting that Microsoft doesn't want to be an IBM and focus on enterprise even if that's what some on Wall Street and a number of enterprise customers would prefer.

Paul: Got to be true to yourself, Leo.

Leo: Yeah well giving up on a consumer gives up on a many many billion dollar business.

Mary Jo: Yeah they still make a lot of money off their consumer stuff too but they're definitely stream-lining it and stream-linings seem to be the word, you know? We talked about Xbox Music and Xbox Video and stream-lining, whatever that means but they also talked about MSN, which is their portal site. And retail stores and hardware and they said, here we don't consider those core to what we're doing. These are just things that are just meant to highlight the core and here, we're going to ensure disciplined financial execution. Those are kind of code words for layoffs and tightening the belt to me. Maybe not, I see that Microsoft told WP Central they're not getting out of the retail store business-

Leo: But they're not going to get into it either.

Mary Jo: They're not going to get deeper into it for sure.

Paul: Right, they're not going to launch a line of movie theaters probably.

Mary Jo: No but it makes me think how many more full Microsoft stores will they launch and will they just do kiosks from now on? And will they expand outside of the US? I mean, that was the plan...

Paul: Will they expand outside of the not New York City area?

Leo: Is it fair to say that Nadella is digging himself out of Ballmer's hole?

Mary Jo: No a lot of people play this as that.

Paul: I don't like to think of it that way. I'm sorry, go ahead.

Mary Jo: I was just going to say some of these decisions that people are giving Nadella credit for in a positive way like Office on iPad, that was Ballmer actually. Not him.

Paul: Right.

Mary Jo: Based on reports that we've all read, we believe that Nadella wasn't in favor of Microsoft buying Nokia, and then he changed his mind, supposedly, about that.

Paul: And then he fired half of them, so not really.

Mary Jo: Right so I think he's trying to get the company realigned around their new stated charter which is being the productivity and platforms company, not the devices and services company, and to me, that's actually a very real distinction and not just words. For them hardware now is just meant to light up software, it's not, we're going to be in the hardware business and make a lot of hardware. That was what Ballmer was thinking and that seems to not be the plan now. On Xbox it seems like they're going back to gaming. Whenever they talk about Xbox now, they say we're committed but we're committed to it being a gaming platform and-

Paul: You know, that one confuses me. Because for years now they've been talking about how 65% of all activity on Xbox is not gaming, it's entertainment.

Mary Jo: Yeah.

Paul: I would also like to say, with regards to Satya Nadella, he's in a honeymoon period still, right?

Leo: Well if this is the honeymoon, I don't want to see...

Paul: Well no but by the way, what are we not hearing around or about these layoffs? "Screw this guy, get him out of there. What does he think he's doing?" I have not seen that anywhere I mean, he's even getting a pass on that.

Mary Jo: Well on a mini Microsoft blog, if you go there, he's being savaged there.

Paul: Well what does that mean, by whom?

Mary Jo: We don't really know if those are Microsoft employees, some of them are claiming to be people being laid off but you can't prove it because they're anonymous.

Paul: I just mean like mainstream sense right. In other words, there has been a lot of public criticism of Steve Ballmer over the years. He still is not getting that. I would just point out that if you look at everything he's ever said or written since he's been CEO, there actually is a lot of substantial stuff going on there. There is a lot of high-minded reach for the stars type stuff but not a lot in the way of actual planning. In fact, aside from firing a bunch of people, I don't think he's publicly done a lot in the way of decisiveness. I think he's the right guy to lead Microsoft, I think he's a smart guy, I think he's an engineer type, I think he's right for the company and all of that kind of stuff but he's still in this period where; a) he's going to get credit for something he didn't do, he's doing some hard stuff that I think people are going to give him a pass on and there's sort of an understanding that Microsoft is struggling in some ways in this new world of the mobile Cloud stuff and so he's going to get that pass but when does that end? At some point, the Android version of Office Touch is going to come out and there's going to be some griping then. At some point he's going to be held accountable for this stuff and so I assume that part of the plan is be able to ship Skype translator or something where we're not just talking about something, we're actually doing it.

Leo: And if you're an employee at Microsoft I wouldn't be surprised if you might be a little disgruntled I mean, they've said there will be more layoffs over the next six months but they didn't say who and so there you are working away at your stuff and you don't know that there's an ax hanging over your head, that can't be much fun.

Mary Jo: Yeah we do know that Terry Myerson, who runs Operating System Group said he's done with his layoffs, we saw his internal memo where he said, I'm done. I did all my cuts and I'm finished now.

Paul: That one was extremely terse.

Mary Jo: It was, I bet there was a second memo too you know that they didn't want to leak to the press.

Paul: Right. Obviously, Microsoft publicly released a memo from Satya Nadella explaining the changes. They released an email from Stephen Elop which a bunch of people jumped all over because he kind of got off to a goofy informal start. How'd he start it again? Like, hey....

Leo: Hey again, hey campers.

Paul: Exactly so I'm not sure what to say about that. But the Terry Myerson one was not publicly released and obviously there are other memos that we haven't seen from other parts of the company but it's a tough thing to communicate to people but I think they just want to put it behind them. Get it done and move forward.

Leo: Yeah, who wouldn't? Pull off the bandaid as fast as you can. He said also that phone hardware, forget Bing, phone hardware is going to be profitable by 2016.

Mary Jo: We'll see, right?

Leo: Does he have the Surface hardware?

Mary Jo: This is kind of funny actually. In the slide deck that Microsoft gave out for the Earnings Call there was a reference to Surface and it said, yeah we're going to take a hit in gross margins because there was a Surface model we didn't release that was planned.

Paul: I actually was under the impression that it was a little more specific. Something like, we made this thing and decided not to release it. Basically confirmed that thing has been sitting in warehouses like we had been saying, and-

Leo: Yeah but we thought they might release it later but you're saying that's it? You think this is the-

Paul: Well they took the hit on the inventory. In other words, they built it- It was this plus the inventory that they had of the remaining Surface RT devices I think they added that together.

Mary Jo: Yeah that was super confusing and that wasn't meant to be added together they took that write down last year, and I asked them about that slide because it was very confusing. But they did say-

Paul: Oh they probably cut and paste.

Leo: So you're saying the Surface Mini is dead.

Paul: No no.

Mary Jo: I wouldn't say that actually. I would say the ones they built, however many thousand they built for test purposes or whatever they're going to do with them - Early release models. Those ones they probably aren't going to be able to use if they decide to still come to Market with this next year, or once we have the Gemini apps and threshold.

Paul: If it doesn't happen this Fall, it's over.

Mary Jo: It's not going to happen this Fall.

Paul: This thing is a hardware design that dates back to late last year. It is today, not up to date and next year it certainly won't be.

Leo: But they didn't go into full production with it.

Paul: No, but they made some.

Mary Jo: I hear they did not. They made some, thousands but they did not go into what I would call full production.

Leo: Well let's not throw them out. If you want to send them out, I'd take one.

Mary Jo: I want one.

Paul: Yeah, no I definitely want one.

Leo: Don't put them in a landfill in-

Paul: Guys, guys I will write a book about this thing, you know?

Leo: There is a history in the tech industry of products that never were released but were made that were great. I think about this one product, the Macintosh Basic that was an amazing basic and Microsoft said to Apple if you ever release this we are going to stop Office probably. Yeah, and so Apple did not release it and I was able to get a pirate copy and it was incredible.

Paul: Microsoft Basic, oh what a piece of crap that was. You know, I had an Amiga and Microsoft made the basic for that and if you want to see a programming language that can literally not take advantage of the hardware in any meaningful way, please look at the Amiga BASIC. What a piece of junk that thing was and that's too bad because Microsoft obviously wielded a certain amount of power over these smaller companies back then.

But at least they learned their ways and stopped doing that a long time ago, right?

Leo: I guess Longhorn would count in that category although I don't know how far along Longhorn was.

Paul: Longhorn was a great PowerPoint presentation.

Mary Jo: Then you have mistakes like the Kin right? The Kin came out and then they killed it.

Leo: I would guess they thought that this was another Kin.

Paul: There were a sample of products that were made that shouldn't have been made.

Mary Jo: This was like let's avoid the Kin incident.

Paul: The Nokia X Line, especially the one they just announced, followed the trajectory of Kin very closely. They must have known this was not happening. We are already killing this thing, here it is, it's new.

Mary Jo: Yep, they said on the record multiple times, you know what we think this phone is a really good idea because it helps us bring new people into the fold who might not be interested in trying a Windows phone, right off. They said this on the record many times, different executives.

Paul: Oh no, I get it. But let me tell you how the people they brought into the fold are going to feel about this phone that they just canceled after being in the market for 3 months. I mean, this is not a great audience.

Mary Jo: They're going to keep supporting it and probably will keep supporting it for some amount of time like two years or something but yeah.

Paul: I still have a Kin I could kick in if my phone dies. A nice little hockey puck sized replacement.

Mary Jo: Here's the exact wording on the thing we believe as the Mini, "During the quarter we reassessed our product road map and we decided not to ship a new form factor that was under development."

Leo: It's pretty obvious the Mini right, I mean what else? Oh it's the Courier, I'm sorry they're talking about-

Paul: Why would they even admit that? You know, they keep drawing attention to this thing they didn't make. It's almost like they want people to know about it.

Mary Jo: I hear they had to though because they made them and they took a hit on their margin because they made them.

Leo: You can't write it down unless you say but you don't have to say too much of the detail what it is.

Paul: You don't have to put it in a PowerPoint presentation, you bury this in some ginormic FCC form you know that someone will line by line define the little details but you don't put that- They put that right in front of us, they just told us about it. Couldn't tell us about one Windows effectively but God, they had no problem communicating about Surface Mini, a product that doesn't exist. It's hilarious, I mean it is really strange.

Leo: Next year Microsoft's going to announce the one customer and that will be exciting.

Paul: And he's got a Mini!

Leo: I want a Mini now, I want a Mini! This is like the stamp with a plane flying upside down. This is, they've created something of real value.

Mary Jo: Anybody out there that has one and wants to send us photos and-

Paul: Yeah I'd love some photos.

Leo: Photos? Hell, send us the Mini!

Mary Jo: Yeah send us the Mini or you could just leave it in Rattlin' Hum on a barstool and I'll just happen by and pick it up, easy.

Leo: There's got to be some way, someone listening.

Mary Jo: Somebody listening.

Leo: What they're in a warehouse somewhere and they're all locked up?

Paul: You don't have to have a super imagination to figure out what this thing is going to look like. It's going to look like a Surface Pro 3, only smaller.

Mary Jo: And supposedly no keyboard, only the pen.

Paul: Oh, right I'm sorry that's right. There's a cover with a stand in it-

Leo: Doesn't it sound like a good product though? Really, seriously.

Mary Jo: Yeah, I think it sounds like a good product.

Paul: Yeah.

Leo: So it's possible there was some major, massive flaw in it you know?

Mary Jo: I think it's because they didn't have the Touch First Office, that's why.

Leo: It's merely the Office?..

Mary Jo: Supposedly, well here's the story and what I keep hearing people say: Satya Nadella looked at it just shortly before the announcement was planned and he said, you know what this isn't differentiated enough. I'm not going to let you guys bring this to market because we don't have Touch First Office and we're building a new version of Windows that should be on this called Threshold and yeah...

Paul: An awkward little meeting. By the way, and we've talked about this a lot, but this was the focus of the event they had in New York.

Mary Jo: Right.

Leo: Right it was going to be the Mini.

Paul: It was Surface Pro, you know Surface Mini and then oh by the way-

Leo: They went right up to the edge of the cliff.

Paul: They really did.

Mary Jo: They did.

Paul: I really believe that the models they built were for us and I believe that they built them specifically for some group of internal people, obviously, in PR and for reviewers. I think that's why they were built.

Leo: All we're asking is you give us the Mini's, we won't talk about it.

Paul: I just went to New York to get a Mini, I did not get a Mini. I'm like the guy looking for his stapler at the end of Office Space. I did not get a slice. I was promised a slice. You told me that if I waited I would get a slice. Alright, I'll burn this place to the ground.

Leo: One more story before Paul just turns bright red, Xbox Music, I think we covered it.

Paul: During the show, that one worked itself out so I can unwind about that.

Leo: Alright, we're going to cheer everybody up with some with a little video entertainment and then we shall continue on with your picks of the week, the back of the book. A lot of attention has been paid lately to parody videos and how exciting they are when you take a well-known song and make your own personal version of it, the One Note team not to be left out- I'm dreading this. -Has done a version of the song of the summer from last year, are you ready?

Mary Jo: Ready.

Leo: Let's do it. There's Cassy, OneNote Master; Patrick, One Note Intern; Nicole, One Note Lyricist; One Note Rockstar...

Paul: I assume that this follows the original video in some way.

Leo: This is the video.

Paul: No, I mean of the actual song.

Leo: Well he's got the afro.

(Capture that screen with a click click friend yeah, this is how I work. Kickstand out while I'm on the go. All the girls they got to know yeah the color comes in blue and purple. I Note on my Surface. I clip on my Surface.)

Leo: So Satya Nadella killed the Surface Mini but let this go?

(I walk in class, this is what I see: Everybody wants my Surface Pro 3. I got the magic in this pen and I 'aint afraid to click it click it click it. I click it and I Note it.)

Leo: I can't believe I worked so hard to play this...

(I click it and I Note it.)

Leo: How many of these people do you think are going to get laid off?

(Yo, when I'm on the street developers just won't leave me be. And when I'm working late I click, click, boom with my work grenade. Check it out...)

Paul: I've got to be honest, this doesn't bother me in the slightest, I think this is funny.

Leo: It's good. I think they're all interns so you have got to give them something to do.

Paul: That's very egalitarian of you.

Leo: Red shirt guy.

(I click it and I Note it.)

Leo: You know one good thing about this, it was very short.

Mary Jo: It was short and you know what, we needed some levity after this week’s episode.

Leo: I wasn't going to say anything but it was kind of a grim episode. Alright, we've got the back of the book coming up, we've got beer. That's what we really need, a little beer coming up. Mary Jo told us on Triangulation- If you haven't seen Triangulation from Monday with Mary Jo Foley- Do watch it because she explained how she got into beer and it was kind of surprising. This is a relatively new thing for you.

Mary Jo: It is.

Leo: What did you drink before you drank beer?

Mary Jo: I drank wine mostly and then I drank bad beer before I drank craft beer.

Leo: You didn't know any better. Well she told us she drank Blue Moon.

Mary Jo: I did.

Paul: You know what, beer is just like coffee. I grew up on Dunkin' Donuts coffee in this part of the world and then you start going to France and then you realize that an espresso is incredible and once you've gone down that route, you can't go back.

Leo: It's true.

Paul: Beer is exactly the same. Once you've experienced really good beer it's over.

Leo: That's why I'm still drinking Rolling Rock because the last thing I need is another addiction. But hey I wanted to talk about another one of our great sponsors briefly before we get to the back of the book, Personal Capital. At personalcapital.com/windows and this is a free tool that is secure, is easy to use, and it's going to solve a big problem in your life: Wealth management. You might say, Leo I have no wealth to manage. That's not true. You don't have wealth now because you haven't managed your money. If you have stocks or investments of any kind, you have a credit card, you've got mortgage, purchases, you've got loans, bank accounts, charge cards. It's hard to keep track of all of that stuff and if you do have some investments, are you getting the right advice? Are you paying too much? Personal Capital solves this by bringing all of your accounts, everything you own, everything you have onto a single screen with a beautiful dashboard. Makes it very easy to keep track of on your computer, your phone, or your tablet and with real-time graphs that are very intuitive, make it very easy to understand- By the way, you're not going to get so excited about it but I've got Personal Capital on my Android Wear Watch.

Paul: Nice.

Leo: I can get up to the minute notifications on how my investments are doing on my watch. Personal Capital will reduce your fees, tell you where you're over paying, and you'll get tailored advice on optimizing your investments. They do have certified financial planners who work not on commission so they give you real objective advice. It's really great, free to sign up, only takes minutes, you never have to pay if you don't want to and big dividends right away. Personalcapital.com/windows. I know that if you're young and just getting started- I told my kids I'd set them up on this. -Because they don't have much but this is how you learn and how you get educated to see where you should allocate your assets because it changes with age, changes with goals, it's really fabulous. Personalcapital.com, it's free and if you want the financial advice you can get it but that's not required. It's absolutely free to use and get all of the value out of this, personalcapital.com/windows. Really a great company, I think a great service for a lot of our viewers. I don't know why there's a big TWiT logo in front of me, I didn't put it there. Um, help me! What did I do? I pushed a button. That's wild, I don't know how that happened. Paul Thurrott and Mary Jo Foley here back with the back of the book. I call it the back of the book because that was always my favorite part of the computer magazines where you go to the back and you get the columns, you get the fun stuff.

Paul: I hope you're not comparing us to Dvorak somehow.

Leo: His column was the end, wasn't it? The last word or something.

Paul: It still is in like PC magazine or something yeah.

Leo: He's no fool, he knows about the back of the book. Let's start with a Windows tip from Paul Thurrott.

Paul: So I mentioned earlier in the show that Microsoft changed the guidelines for hardware makers when they were making Windows phone devices and one of the changes that they made was instead of having those hardware buttons on the front of the phone, they could have software based buttons and they are what Microsoft calls 'soft keys' not to be confused with capacitive buttons which are also allowed they don't have to be physical mechanical buttons.

Leo: Yeah, I have these capacitive buttons on the Nokia.

Paul: Right so imagine that was just an empty space and you got a software strip above it and like how Android. Interestingly- So far at least. -We've only seen 3 phone models that have been released that have this from Nokia and they are the Lumia 630, the 635 and now the 530 all have this software-based button strip navigation bar in the front. So in using the system on the Lumia 635, I discovered that this solves one of the biggest problems with Windows phone, which Mary Jo will appreciate. Mary Jo when you're looking at your phone and you find a great photo or something that you want to show to someone else and you hand it to someone else so they can see it, what always happens?

Mary Jo: The photo goes away..

Leo: They hit the home button.

Paul: Well they hit the search button in this case and so everyone that uses Windows phone knows that when you do that, the person you handed the phone to says, why did you want to show me the Bing page? Or you hit it yourself by mistake. Some people who have looked at pictures of this phone have said, wow why is the bezel so big at the bottom? You know what? Let the bezel be big. This actually solves that problem. By putting that stuff on the screen this basically never happens.

Leo: You say that like Moses. Let the bezel be big!

Paul: Yes, they may all have bezels. So right now there is no high-end Windows phone with this and depending on what carrier they're on there is no phone that has it yet but I wouldn't be surprised if we see this more and more especially with all of those new phone makers that have come aboard on Windows phone this year. So with somewhere between 12 and 15 companies making Windows phones of all kinds up and down the spectrum, I think what we're going to see are phones that use these softkeys because a lot of these companies will want to reuse the hardware designs that they already have for Android phones or swap them back and forth going forward. I would just say you don't have a lot of choices now but down the road when it comes time to upgrade Windows phone and you want to get a new device, look at these models because I actually really prefer it. I sort of didn't understand the point of it, and this frankly wasn't the point of it but now that I see it and now that I've used it actually, there is a significant real world advantage to that so it's just something to kind of keep track of.

Leo: Awesome.

Paul: And if you do have a phone with that thing, it's also customizable so that navigation bar that has the buttons can be different colors, it can match the accent color, it can match your background color, it can just be black so it kind of matches the bezel. You have some choices there too with how you customize that navigation bar.

Leo: Yeah, speaking as an Android user this has happened on Android as well and this is one of the reasons I don't like Samsung phones is because they still have capacitive and a physical button.

Paul: Yeah you're right. That's true. This has been some weirdness in Android about the button placement in which buttons are there and they changed Android so the menu system is built in an all that kind of stuff but...

Leo: And that's why Google did it is they wanted consistency across the board

Paul: Yea that's going to benefit all of us whether you are on Android or windows phone, now those devices will be reused between the platforms and so that's kind of cool. I actually guess I have three software picks so I'll rattle through them pretty quickly. On the Windows side you know one of those perpetual problems on my laptop for example, it’s syncing lots of OneDrive that I didn't know it was doing because I recently resuscitated my laptop; there's almost no free space on it so I'm confused by this. I want to run some kind of app that will show me what that space is taken by, I've often recommended something called WinDirStat which is a great program for what it is but in searching for it online, and I couldn't remember the name for it and I came across something called Wizardry for Windows, which I neglected to hyperlink for some reason. This is a free application that works much like WinDirStat but the advantage that this has over WinDirStat is that Wizardry runs really really quick, in fact it takes just a couple of seconds. I ran it on my desktop you see, I was kind of curious how well it works and it's really really good, it doesn't have that crazy graphical approach WinDirStat has but I actually kind of prefer the user interface on this application, like I said, check this one out.

Leo: Antibody software. So it’s Antibody-Software.com, don't get it from CNETdownloads.com, which is the second result because then you'll get other things you don't want. You've experienced that haven't you? It's just terrible.

Paul: It's important that if you don't get crapware with your PC that you add it later. So I don't know why, this is the way the world is.

Leo: It's a crapware relocation program.

Paul: I also have two picks for Windows phone and actually while we were recording the show, Uber and Microsoft announced that the official Uber app for Windows phone is now available.

Leo: Oh yay!

Paul: So we have that and so I don't use Uber but I think about it and will probably eventually like everybody else but-

Leo: Yeah, I think about it too and then I don't use it. I'm just like you.

Paul: Listen I know it's really popular and this is obviously-

Leo: It was featured on Ray Donovan on Showtime last week. The kid Ubered somewhere and then they showed Uber and Ray Donovan's wife goes, "You got it. You got Jimmy Uber?" It's really funny and it's really good. I wonder if it's paid ad.

Paul: A lot of people are almost addicted to Uber. It's like TiVo, people who use it love it.

Leo: It's exactly like TiVo.

Paul: Yeah, oddly enough I went into the show intending on this pick being the first however, it ended up being the third but this is something called ProShot for Windows Phone 8 and 8.1 and what this is, is a third party camera app. And you're thinking you know Windows phone 8.1 in particular, the Microsoft camera app is excellent, the Nokia camera is obviously fantastic and if you have a Lumia device, why would you ever want a third party app and there are actually a couple of reasons. One is speed, one of the big issues I have on the 1020 in particular is you take a photo, and then count to one, two, three before it comes back and that's annoying and another one is low light performance. For all of the awesomeness of the various Nokia cameras, I found that the recent ones that have the really big megapixel megapixel?

Leo: I know it doesn't sound like the right words to use but it is.

Paul: Megapixel counts, really don't handle low light properly and I've done everything I can to adjust that manually. ProShot works better for that but ProShot has a couple of down sides, first it's $2.00.

Leo: Does it show up as a lens or does it...?

Paul: One of the problems is you can't actually right now anyway, use it as a default camera app. You can go into the settings and say I want this but you actually have to run the app. And the third one is the interface is not in standard so it's going to take you a little while to configure it. It works with the high pixel density on the big Nokia cameras which is great. By default it's kind of weird, it's got like a 4x3 picture that it takes and you can go in and change the settings so that it does HDR and whatever but it takes really good pictures at night, it's super-fast and you can also do something where you set up a unique configuration for the camera and then you pin that to the start screen and so maybe you go to a sporting event or something, and say well I've got this thing I've set up just for sports or night shots or whatever it may be instead of running the default app.

Mary Jo: Beer.

Paul: Beer shots.

Leo: Beer yeah, Rattlin' Hum it's dark.

Paul: So again, regardless of what kind of Windows phone you have, I think you should take a look at this. And this is a trial version, I think you can try it as well but I think it's limited by-

Leo: It's a shame Microsoft fired the programmer who could figure out how to put previews in that mode, they should have kept that one guy.

Paul: Could you just turn your monitor sideways so we can see.

Leo: Can you give me, this is ridiculous, okay never mind.

Paul: So if you look over there at the bottom of the screen that would be the right, you get kind of a peak at some of the non-standard kind of shelf UI that they have but the truth is, any decent camera app on a phone is going to require a little bit of work right. The Nokia app is no different, if you want anything other than pure automatic shots, you've got to kind of figure it out but this is a really powerful app and the big deal for me is it's quick. One big deal is the night shot stuff. I spent a lot of time last week in DC walking around at night and with the default app it's like please please please, no. It just doesn't work and the ProShot app just gave me much better results.

Leo: I'm downloading it right now.

Paul: It's a good one.

Leo: Thank you for the tips and the apps. Mary Jo Foley, it's time for your Enterprise pick of the week.

Mary Jo: It is and I kind of passed over this real quickly last week during the show but I wanted to give it a little more attention. It's the Azure ML public preview. Azure ML is the machine learning service on Azure and last week during the World-Wide Partner Conference Microsoft announced that the public preview is now live. So before last week, almost no one was allowed to try out Azure ML outside the company but now they've opened up the public preview to anyone that wants to try it and on the first day they said that already over 1,000 users had already provisioned 1300 modeling work spaces and run over 2000 experiments so it seems like people do really want to try this thing out. So as part of this tip I also wanted to suggest that if you care about machine learning, you may also want to bookmark or check out the Microsoft machine learning blog. They've posted a lot of interesting things about how Microsoft feels about machine learning and how it came about from the company and where they're going with it and the way to find that is to go to blogs.technet.com/b/machinelearning.

Leo: Do you have a code name this week?

Mary Jo: I do and it's related to one of the stories we talked about earlier on the show, remember when we were talking about how everybody misreported what Microsoft's doing with One Windows? Well there actually is a code name for all of this shared stuff that they're trying to make comment across Windows phone, Windows tablets, their PCs, and Xbox. That core of stuff that they're trying to share going forward is code named OneCore. I've seen a couple sites catch references like on LinkedIn people talking about OneCore but they couldn't quite figure out what it is and what it is, it’s the NT core, which is already common across the platforms and then some other levels of like graphics and some of the other pieces that Microsoft is trying to share across the different platforms. So that's what OneCore is.

Leo: OneCore to rule them all. Somebody in the chat room said if Satya Nadella had just put the word engineering in that stream lining Windows, everybody would have understood that you're talking about OneCore.

Mary Jo: Somebody said to me, remember that Nadella is an engineer so what he means by OS and what other people understand after reading OS are different. He probably meant the NT core plus the other stuff on top that is shared but when we hear one operating system, we think the whole stack.

Leo: Okay so beer time.

Mary Jo: We both have beer picks this week and they're both strong beer picks. My pick is something I had at a beer tasting this week, something from Firestone Walker Brewing in California and it's called Sucaba. And its name usually means a barly wine and they are typically very high alcohol beers that are more like wine level in alcohol content.

Leo: Do they taste like beer?

Mary Jo: They taste like really amazing beer. It's aged in bourbon barrels so that taste is in there but there's a bunch of different tastes to it. It's hard to find now I'm not sure if they're still making it they made this year a part of something called a vintage series which are a bunch of really hard to get beers. but if you ever see this one or anything in that vintage series they're all really fantastic.

Leo: They're in California it looks like.

Mary Jo: I think Paso Robles.

Leo: It sounds like something I'd really enjoy.

Mary Jo: I bet you would love that.

Leo: You guys are going to get me one way or another. Paul has a little tripel box here, a Belgium tripel. But I have turned off his microphone though so we may never know.

Paul: I was trying to tell you I think barley wine beers are winter beers, I think they're seasonal.

Mary Jo: They are.

Leo: Oh interesting that's why they are hard to get.

Mary Jo: But i still had it this past weekend.

Paul: The brewery near me, Blue Hills Brewery, makes one called Fortis Pagus which is, if i had to pick five beers that are just the best I've had ever anywhere, it's just a fantastic fantastic beer.

Leo: Is this that brewery you like so much?

Paul: Yeah, Blue Hills Brewery. This one's from Belgium yes. I went into a Belgium restaurant in Boston, and it was funny, I got two beers, crazy beers I thought from the name and I thought I would be able to check these on untapped and this will be a new check in for me and I in fact, have had both of them before. One was a sour and one was a tripel carmelite surprise.

Leo: This is why untapped exists, so beer drinkers who forget what they've drunk.

Paul: No you've had this before, you're an alcoholic.

Leo: You love this beer Paul.

Paul: In keeping with Mary Jo's story about her entry into this, my first entry into kind of craft beer type stuff as we think of it now, came in late 1990's in Phoenix when I went to a local brewery that was amazing and they made a great hefavite type beer, and hefavite beer is a kind of a unfiltered wheat beers and there is a lot of beer like that like, Belgium Whites are like that, and this beer a Belgium Tripel is like that. And I would say for that kind of beer where there's that kind of clove or banana thing going or even a spice to it almost, this is the perfect rendition of this kind of beer and i have spent years after leaving Phoenix trying to find a beer that kind of fell into that category that was a really good example for it and this is mission accomplished right here, this is fantastic. By the way, not hoppy in the slightest.

Mary Jo: Doesn't have to be hoppy, there are other things

Leo: It doesn't have to be hoppy, no. Well you've given me many things to drink and think about.

Paul: We've done everything we can.

Leo: That's pretty much it on Windows Weekly, Paul Thurrott's at the supersite for Windows, at winsupersite.com, his latest Windows book is a field guide and I bet you it's the first of many field guilds from Paul. Windows81book.com or go to a supersite for Windows that's got to have links for everything. Mary Jo Foley is easy to find too, allaboutMicrosoft.com and one more plug for Monday's Triangulation featuring Mary Jo Foley, learn more about her then you ever thought you could. Thank you Paul, Mary Jo, thank you everybody for being here, we do it Wednesday we do it 11 AM Pacific 2 PM Eastern time 1800 UTC if you want to be here live, we love it when you are. We will occasionally answer questions from the chat room. If you can't, on demand audio and video always available after the fact twit.tv/ww or Stitcher, iTunes, Xbox music, the podcast apps on your mobile device or on twit apps, and number of very nice apps for all the platforms including Windows phone thanks to our developers, in fact Demetri DeAllen who did the Windows phone implementation really did what I think is one of the most beautiful twit apps. Thanks for being here, see you next time on Windows Weekly!