Category: Microsoft

$100 PC Touted by Negroponte for Developing World

$100 PC Touted by Negroponte for Developing WorldA $100 (€76, £53) laptop computer for the developing world has been touted at the World Economic Forum in Davos by Nicholas Negroponte, founding chairman of MIT’s Media Lab.

The computer will have a 14-inch color screen and will run the Linux operating system. According to Red Herring magazine, Negroponte is looking for support from companies such as chip giant AMD, Google, Motorola, Samsung, and News Corporation.

The first units could be ready in about 18 months, Red Herring said.
The developing world is increasingly a target of technology companies – Microsoft has built a slimmed-down version of Windows XP for the Indian, Malaysian, Indonesian and Russian markets, as part of its Windows XP Starter Edition pilot programme. In part this reflects its desire to fight off Linux, which is becoming increasingly popular in these new markets.

Another source of PCs for the developing world is recycling. Every year in the UK 3 million PCs taken out of service, but many are still in good working order. In contrast most schoolchildren in the developing world graduate from high school not having seen a computer in the classroom, and there are a number of charities which take these PCs and reuse them in the developing world.

In related news, MIT has announced that Media Lab Europe, launched in 2000 by the Irish government and MIT will close on February 1 due to a shortfall in financing.

MIT
Red Herring

Real Networks Results, Sales Up but No Profit

RealNetworksRealNetworks is enjoying record sales that have helped the Seattle-based Internet company to trim its fourth-quarter loss. The announcement comes amidst its ongoing cost of litigation against rival Microsoft, with whom it’s suing in a billion-dollar case for unfairly promoting its own media software.

The company reported a net loss of $1.0 million, or 1 cent per share, for the fourth quarter, compared with a loss of $5.3 million, or 3 cents per share, a year earlier. According to RealNetworks’ CEO Rob Glaser, the company’s improved sales have resulted in an increase in ad-supported revenues ($19.1 million of revenue in 2004, up from $8.2 million in 2003), mainly due to a better Google relationship. Its Comcast relationship (on the music side) is going very well, and Video/SuperPass now has lower content acquisition costs.

The company has also discontinued CNN and Nascar video offerings to focus on more profitable products, and noticed a secular trend going on – the move to digital music – in which it will participate in the overall category growth, along with Apple. RealNetworks is also no longer counting on university subscribers.

RealNetworks has been aiming to reach profitability, excluding litigation costs, by the end of 2004, and said it expects to be profitable on the same basis throughout 2005. For 2005, RealNetworks expects revenue to grow 16 to 20 per cent over 2004 with revenue of $266.7 million. Other Q4 highlights include music revenue grew 172 per cent to $21.6 million from $7.9 million in the year-ago quarter, revenues from games sales and subscriptions grew 156 percent to $10.1 million from $3.9 million in the year-ago quarter, although video and consumer software and other revenue was down slightly to $29.1 million compared to $29.3 million in the year-ago quarter.

Paying subscribers to Rhapsody music and premium radio services increased to over 700,000 from over 625,000 at the end of Q3 of 2004, and ad-supported Web services garnered $19.1 million of revenue in 2004, up from $8.2 million in 2003. What’s also helped the company is that Internet video streaming was up 80 per cent in 2004, with 14.2 billion video streams being counted worldwide over the year, according to a new report by AccuStream iMedia Research. The number of video streams last year was up by 80 per cent compared to 2003.

Real Networks

EU Software Patent Causes Controversy

Plans to introduce European-wide laws on computer software patents have caused controversy because of the impact they could have on the cost and availability of commercial and open-source software. Microsoft chairman Bill Gates put the case rather more strongly, describing opponents of the legislation as ‘modern-day sort of communists’ who want to damage industrial innovation.

The software Patentability of Computer-Implemented Inventions aims to clarify existing European laws on patenting software, but could create legal hurdles for IT departments wanting to develop their own software. In the worst-case scenario, the patents could force smaller suppliers and open-source specialists out of business, restricting competition and the choice of software available to users.

To be patented, software has to have a ‘technical application’. This basically means that a company that develops software to control a DVD recorder can patent it, as controlling a DVD recorder is a technical application. However, a company that develops software to automate an accounting system would not be granted a patent. This is because accounting systems are regarded as a business process rather than a technical application. The whole process is governed by European Patent Convention, an international treaty which has so far been implemented in slightly different ways in each country.

The bill has sparked a debate on whether the EU should follow the US model of granting patents to Internet business methods, such as online bookseller Amazon’s ‘one-click shopping,’ or instead restrict patents for computer software. Poland, a large EU member whose backing is crucial for the adoption of the proposed rules, told Reuters last week that it was not ready to back the legislation amid fears it could open the door to the patenting of pure computer software.

The major benefits of the bill is that it would provide European companies with protection for their ideas and encourage innovation, create a level playing-field for patents across all European countries, and clarify existing patent laws, rather than introducing major changes. However, small suppliers will not have enough financial muscle to obtain and enforce patents, thereby reducing choice for IT departments. It could also restrict the availability and functions of open source software, and IT departments may have to conduct patent searches to make sure they are not infringing rights. The saga continues, with adoption of the bill now scheduled for next week.

Digital Lifestyle extolled by Bill Gates at CES

In what has now become a tradition, Bill Gates opened the Consumer Electronics Show (CES) in Las Vegas extolling the virtues of Digital Lifestyles (thanks for the plug Bill).

In a “casual” interview style, US TV chat show presenter, Conan O’Brien, lead Bill through the wonderful world of digital media.

O’Brien started his shtick with a great joke, “When Bill Gates walks onto this stage in a few minutes, the average net worth of each person in this room will be(come) $128 million.”. He then went on to be reasonably rude about most people in the industry. Of particular note was the “CES – The Movie” spoof casting, where well known characters in the industry were matched up with their acting doubles. It’s worth watching, just fire it up and jump to 11m 30s.

Bill Gates then came on stage to give Microsoft’s view of Digital Lifestyles.

Not surprisingly Microsoft pitches the PC as the centre of it, “The PC has a central role to play, (in that) it’s where it all comes together.”

As has been the case since the public started recognising the iPod and iTunes, Bill and his promotional videos took every opportunity to feature ‘other’ music players, while subtly highlighting the virtues of the Microsoft approach.

This covered “Windows Plays For Sure”, the certification process that labels all devices that are able to understand and adhere to Microsoft’s Digital Rights Management (DRM) scheme. Read as, music in Apple’s format can’t play on other devices except Apples.

For the trend spotters among you, Bill referred to this as a “rights management system”, dropping the Digital prefix.

He also pitched monthly subscription services where you have access to all of the music you desire – another thing that Apple iTunes doesn’t offer. He failed to mention that with most subscriptions services, the ability to play the music you’ve paid for access to, stops when the monthly subscriptions fees do.

Media Centre featured large with Gates announcing that PC manufacturers have sold 1.4 million Media Centre models worldwide so far.

Media Extenders, which enables households with networked homes to pull content from their Media Centres to rooms around the house were also brought up again. Dedicated boxes from companies like LG were mentioned as well as a software upgrade for Microsoft’s xBox to provide the same function. The fact that 6.3 million people had bought Halo 2, was also dropped into the conversation.

The LG example was of note. A dedicated DVR with DVD burner, it featured a cut-down version of the Media Center software that retained the familiar user interface (UI), while offering access to music and photo’s stored on the Media Centre PC. Not only that but content recorded on this dedicated device could be transferred to the Media Centre PC and in turn to a smartphone or Portable Media Centre (PMC).

To easily operate the Media Centre, the “simple, single remote control” was also touted, more than once. Microsoft have formed partnerships with Philips, NiveusMedia and Logitech to produce universal remote controls that work with Media Centre, as well as many other devices. All these remotes will feature a “signature” Green Start button. Bill had previously mentioned that some remote controls will have small colour screens on them, allowing video content to be shown on them.

New content partners also got a nod. Discovery will be creating “unique content” that fits on Media Center, with Yahoo and Fox Sports also getting a mention.

One key item was the launch of the Media Centre as a platform. Not just a means of accessing and playing back content, but of broadcasters creating interactive content specifically for it, that combines broadcast and IP delivered content using Online Spotlight. We feel this is the most important item to come out and will be covered in more detail in another piece shortly.

It’s also worth watching the video, if nothing else then to see Bill looking less than comfortable with the interview technique.

Bill Gates CES – Opening Speech

Microsoft Media Player-free Windows in Europe from January

Microsoft has lost its appeal to block antitrust sanctions, originally imposed by the European Commission (EC) in March this year.

Back then, along with a record-breaking near 500m Euro fine, the EC insisted that Microsoft should release two version of their Windows operating system, one without the media player built in and one without. The EC see Windows as the dominant computer operating system and want to try to ensure a more level playing field with the playback of digitally held audio and video. Some networking communication protocols were also opened up to compulsory licensing.

The ruling won’t be a surprise to Microsoft but an unhappy result all the same. When we spoke to senior European Microsoft people back in September, they felt this action was likely, but were spinning a line saying that two version of the OS would confuse the public.

It’s possible that the impact on the consumer may be close to zero. Philip Carnelley, research director with Ovum pointed out an interesting possible problem, “The way that part of the ruling was phrased doesn’t prohibit Microsoft from supplying Windows with Media Player at the same price as the version without, so there’s very little room for competition in the market place. If you can get something for free, why would you not take it?” The pricing issue was confirmed in a teleconference held with Microsoft general counsel, Brad Smith.

Smith revealed that company lawyers wanted to look more closely at the 90-page decision before deciding whether to appeal. Smith confirmed that Microsoft would begin complying with the decision immediately, with a version of Windows that doesn’t include Media Player software being made available to European PC manufacturers in January and to resellers by February. Outside of Europe they have no plans to offer a version of Windows without Media Player.

One long term worry for Microsoft could be that this ruling leaves it open for Europe able to question which extra bundled software could or should be included with Windows.

We’ve got a couple of question about the impact of this ruling:-

The Media player part of the ruling appears to only cover “Client PC’s” versions of Windows, not PDA’s or mobile phone version. We think the EC missed a trick here. If anything, the PDA or mobile player would be of more value to change, given its relative high market demand, than the less-than-furiously fought “Client PC’s” space. This oversight could be due to the age of the original legal action, instigated four years ago, when having media play back on a portable device wasn’t at the forefront of peoples minds.

It is not immediately obvious which media player company will benefit from the removal of Microsoft media player. The only major PC maker to currently install Apple’s QuickTime player is HP, following their iPod deal. As far as we’re aware, Real player doesn’t have deals with major computer maker. Perhaps given this ruling they will accelerate their efforts and other entrants will be stimulated to enter.

A confusing thought for you over the holiday period – will there be version of Windows Media Center Edition available Europe without Windows Media player! FYI – When we contacted the Microsoft team in Brussels said they didn’t think so.

Microsoft ruling, Court of First Instance Order on Interim Measures – Court of Justice of the European

Thomson: ContentGuard and Verisign deals

Paris-based Thomson have been busy. They’ve done two deals that will have an impact.They have become a strategic investor in ContentGuard, a closely-held developer of Digital Rights Management (DRM) intellectual property. With this investment, Thomson enters into a partnership with current investors Microsoft and Time Warner Inc.

Digital Rights Management describes a wide range of technologies that have been developed to allow movies, music and other digital content to be accessed by consumers over the Internet while protecting that content from unauthorised copying and counterfeiting – a technology championed by Microsoft and its Windows Media Player software.

Thomson has agreed to purchase an aggregate 33 per cent voting stake in ContentGuard from Microsoft, Time Warner and Xerox, subject to customary closing conditions and regulatory approvals. The announcement follows Time Warner’s April 2004 purchase of most of Xerox’s stake in ContentGuard.

The three companies (Microsoft, Time Warner and Thomson) are using the announcement to promote the development of inter-operable DRM systems, accelerate the deployment of consumer devices that support Digital Rights Management, and encourage content owners to launch new distribution channels.

The move is also interesting because Thomson is a long-standing technology and services provider to content owners and network operators, thus bringing a unique perspective that should complement the interests of ContentGuard and its co-investors. Thomson also has a lot of experience in IP licensing, which should further help to support ContentGuard’s licensing activities and accelerate and broaden the acceptance of DRM and ContentGuard’s intellectual property.

“The development of Web services and new content distribution systems requires a complete ecosystem of participants. Thomson’s investment alongside Time Warner and Microsoft shows that media, software, devices and services companies are committed to developing the infrastructure for Web services to flourish”, said Bill Gates, chairman and chief software architect, Microsoft. “This partnership will help propel the licensing of DRM intellectual property. With the participation of Thomson, a recognised leader in IP licensing, we add a European headquartered partner that will make this important technology more accessible in other parts of the ecosystem, particularly services and devices.”

“Today’s announcement marks yet another important step in our work on DRM, and expands our collaboration with key partners on this strategic initiative,” said Ron Grant, senior vice president at Time Warner. “We look forward to working with Thomson, Microsoft and others on offering consumers exciting new digital media products and services while simultaneously protecting content.”

In another move, Thomson and VeriSign have joined forces to create an authentication and authorisation service for movies, music and games delivered over digital networks. The new service, which will likely debut next summer, will be used to process secure transactions and for other back-office functions. It is geared at the subscriber digital entertainment market over broadband networks, which is a fast growing industry.

VeriSign’s Internet transaction authentication and network infrastructure technologies will be used, while Thomson will capitalise on its experience in content security, management and distribution. Both companies also plan to develop proprietary technologies to authenticate and authorise digital content and to build an interface for home networking devices such as video recorders, mobile devices and computers. These features could help protect movies and other content from piracy.

Thomson
ContentGuard
VeriSign

SBC sign $400m Microsoft IPTV/TVIP Deal

SBC, the largest supplier of DSL connections in the USA, has announced a deal to spend $400m (~€307m, ~£215m) with Microsoft over the next ten years to purchase their Internet Protocol TV (IPTV) software. SBC has been testing Microsoft’s IPTV platform since June 2004 and they now intend to start field trials in mid-2005 and plan commercial availability in late 2005.

The Microsoft product, whose official name is a bit of a mouthful – Microsoft TV IPTV Edition, provides comprehensive security including subscriber and end-to-end digital rights management (DRM), enabling the content to be taken on to the portable devices that support Microsoft’s DRM.

In the first quarter of 2005, construction is due to begin on the SBC “Project Lightspeed”, the company’s initiative to deploy fibre closer to customer locations, providing significant amounts of bandwidth. It is expected to reach 18 million households by the end of 2007.

Microsoft have, of course, had enough opportunity to get TVIP software right. It has been estimated that Microsoft has spent up to $20Bn pursuing their ambitions of being the supplier of choice for TV software for the next-generation of Set Top Boxes (STB’s). We briefly used Microsoft’s TVIP service at IBC this year and found it pretty impressive.

This is the second major TV announcement for Microsoft this month following the Comcast deal.

As the world moves to IP-delivered content, and the source of that content becomes significantly less important, the power that sits with the broadcaster today becomes transferred to the owner/supplier of the box that is used to access the content – the gatekeeper. It is likely that there will normally only be one gatekeeper per household. The race is now on for companies to establish themselves in that role.

SBC
Microsoft IPTV

Novell wins $536m settlement from Microsoft

Novell, Inc. (Nasdaq: NOVL) a leading provider of information solutions for enterprises, has announced an agreement with Microsoft to settle its claim that Microsoft’s unfair business practices harmed the sales of its NetWare computer operating system in exchange for $536 million in cash. Back in the ’90’s Novell was the prominent networking company. Novell also announced that by the end of this week it will file an antitrust suit against Microsoft in the United States District Court in Utah seeking unspecified damages in connection with alleged harm to the company’s WordPerfect application software business in the mid-1990s.

Novell believes that its NetWare business was damaged by unfair business practices that gave Microsoft’s Windows a stranglehold on the operating system market. “We are pleased that we have been able to resolve a portion of our pending legal issues with Microsoft,” said Joseph A. LaSala, Jr., Novell’s senior vice president and general counsel. “This is a significant settlement, particularly since we were able to achieve our objectives without filing expensive litigation. While we have agreed to withdraw from the EU case, we think our involvement there has been useful, as it has assisted the European proceedings and facilitated a favourable settlement with Microsoft. With the EU case now on appeal, we are comfortable with our decision to withdraw from the proceeding. There is simply not much left for us to do.”

The deal has resolved the NetWare matter between the two companies, but they remain at odds over WordPerfect. Novell acquired WordPerfect for $855 million in 1994 with the intention to launch an office productivity suite to compete with Microsoft’s Office. The effort failed, and, two years later, Novell sold WordPerfect to the Canadian software firm Corel for $186 million. Novell says that WordPerfect was victimised by Microsoft’s unfair business practices.

The suit is based in part on facts proved by the United States Government in its successful antitrust case against Microsoft. In that suit, Microsoft was found to have unlawfully maintained a monopoly in the market for personal computer operating systems by eliminating competition in related markets.

“We regret that we cannot make a similar announcement regarding our antitrust claims associated with the WordPerfect business. We have had extensive discussions with Microsoft to resolve our differences, but despite our best efforts, we were unable to agree on acceptable terms. We intend to pursue our claims aggressively toward a goal of recovering fair and considerable value for the harm caused to Novell’s business,” LaSala concluded.

Having been out of the news headline for a long time, Novell are making the most of their current time in the spotlight. With the headlines they are getting currently, they have synchronized the release of their new Office software, called Novell Linux Desktop (NLD), which runs on SuSE Linux. Initially focused to business users it is charged on the basis of a price-per-seat at $50. Using broadband connections, this could, in time be offered to home users.
Novell

MS announces US Xbox Live start

Microsoft has announced the finalised US release date of its new “online, broadband, multi-player” service for Xbox – Xbox Live, to be 15 Nov. It will retail in shops for around $50 including a years worth of subscription, a headset (enabling players to talk/insult fellow players) and a mini-game.

At launch there will be a minimum of seven Xbox live enabled games with at least sixty publishers working on new titles.

There’s only a small paragraph on how the Xbox will be able to receive and store additional content via the service. I think this is the area that holds some of the most exciting potential but I think they still concerned about highlighting this fact to people, in case people think MS is taking over their lounge – which I’m sure has crossed MS’s minds.