Browsing articles tagged with " Apple"

Wither Dell?

Feb 12, 2013   //   by admin   //   Blog  //  No Comments

Lead Analyst: Cal Braunstein

CEO Michael Dell is coordinating a buyout of Dell Inc. for $24.4 billion in the hopes that the company can more effectively go through its transformation if it does not have to deal with reporting results quarterly to fickle investors. Michael Dell’s MSD Capital (his investment firm), has teamed with Silver Lake Partners to take the company private. Microsoft Corp. will be assisting in the buyout in the form of a $2 billion loan. If the buyout is successful – which it should be at some price – what does it portend for IT executives and commercial accounts?

To understand where Dell needs to go, one needs to first see where it is. Dell started as a low-cost PC company in the consumer market. It gradually switched to a bifurcated model – PC for consumers and PC and servers for the commercial space, primarily the public, small and medium business (SMB), and large enterprise markets. Over the past six years the company acquired 22 companies – 10 in 2012 alone – and expanded into other hardware components, software and services, including cloud services. But the company has lost its momentum. It lost PC market share and sales in 2012 faster than most of its competitors, which is disastrous for a company that derives more than half of its revenues from end-user computing solutions.

Smartphones and tablets have curtailed the growth of the traditional PC market and Dell’s commercial business has not made up for the loss in end-user revenues. In fact, in both businesses Dell is considered a low-cost commodity hardware provider and not a market or thought leader. The company has not fully integrated all of its acquisitions and is struggling to reach its strategic goal of becoming a one-stop shop. The buyout gives the company time to re-think and execute a long-term strategy, reorganize and change its culture. As CEO Meg Whitman at Hewlett-Packard Co. (HP) can attest, a turnaround is a multi-year effort and doing so in public when quarterly results can be volatile is not fun. Thus, the desire by Michael Dell to go private.

While there are a number of challenges that Dell must address, there are two that will make or break the success of the new corporate strategy. The vendor must either exit the end-user computing market or once again become a market leader. It is lacking products in the key current and future end-user markets and it cannot regain its position with just PC solutions to hawk. Secondly, Dell has not been able to transition from a culture of transaction selling to one of relationship sales. If the vendor is to become one of the top one-stop providers in the commercial space, it will have to invest in customer relationship management. This is a massive cultural change that goes to the core of the company. HP has struggled with the clash of this cultural divide since it acquired Compaq in 2002. IBM Corp. took more than 10 years to change its culture. The underlying question will be whether or not CEO Dell, by trade a transactional salesman, can lead the culture shift to succeed with its new corporate vision.

In addition to the above challenges, there are a number of other key issues to be resolved. IT executive relationships with Dell depend on how these shake out.

Assets.  Dell will need to decide which assets it has today are worth keeping and which are to be shed. In strong customer relationship management organizations, people are a primary asset. Will Dell address this? Additionally, once it has its strategic vision in place, what additional acquisitions are needed to complete the puzzle? Will the new Dell have the funds to acquire the companies it needs or will the buyout end up choking the firm’s ability to compete effectively? Dell recently moved into the equipment leasing space. Will it have the wherewithal to remain?

Business Model. What will Dell’s new business model be? It will have to compete with HP, IBM and Oracle Corp. – all of whom are innovators, bring more than commodity products and services to the table, and want to own the complete business relationship with their customers. Each has a different business model. Where will the new Dell position itself?

Business Partners and Channels. Dell will have to re-evaluate how it works with business partners and uses various sales and distribution channels. Dell does have a cloud presence but can it leverage it the way Apple Inc. or Google Inc. do? Can it be a full service provider and still utilize business partners and channels effectively? Without strong business partners and channels Dell will not be able to compete effectively.

Microsoft. Microsoft did not become an owner but a lender to Dell. This will cost the company more than just money. Will it restrict the vendor from providing certain products or solutions?

Processes. Dell needs to revamp its development, operations, and sales processes to be fully integrated and customer relationship based. The customer must come first; not the products or services. This will be a long-term change, which may be agonizing at times.

Technology. Today Dell assembles some products and has the intellectual property (IP) for those products and services that the company acquired. Can it leverage the IP and become recognized as an innovator or will the IP assets wither and the talent depart? Over the past year Dell has been bringing on board the resources to take advantage of the assets. Will the new Dell continue down the same path? If Dell stays in the end-user computing space, will it be able to figure out how to do mobility and social (key components to staying competitive)? If not, will it bite the bullet and exit the business?

The company was at one time the leader in the PC arena. Then it became one of the top players. Now it wants to be a leader in the full-service enterprise space where it is not a top player and is losing momentum.

RFG POV: Dell has a long, tough transformation ahead. By going private it will no longer have to worry about the stock market price but will still have to answer to investors. RFG does not expect the company to pull out of any markets in the near term – although the printing and peripherals business is exposed – but a number of the executives and employees whose visions are out of sync with new direction will depart. In the full-service enterprise space Dell will have to be more than a low-cost provider. It must become a hardware, software, and services innovator, determine its positioning vis-à-vis competitors, make additional acquisitions to fill in the gaps, and spend time and resources building relationships that may not yield near-term revenues. Whether or not the stakeholders will allow the company to spend enough money and time to make the conversion is an open question. The fallback position may be to go back to being a low-cost or custom commodity provider to the commercial market.  Moreover, Dell will have to invest in a new end-user computing model, watch its market share shrivel, or quit the space. One thing is for sure – it cannot be all things to all players and must pick its choices carefully. Dell must articulate its strategy to business partners, customers, and employees over the next three to six months or loyalty may falter. In any event, IT executives should expect Dell to provide support and a smooth transition for businesses that are divested, restructured, or sold. IT executives desirous of using Dell as a strategic provider should continue to work closely with Dell, keep abreast of its strategy and roadmaps and factor the knowledge into the corporate decision-making process. Additionally, IT executives should not be surprised or concerned to find the company fails to make the short-list of candidates. There are plenty of options these days.

 

More Risk Exposures

Nov 30, 2012   //   by admin   //   Blog  //  No Comments

Lead Analyst: Cal Braunstein

Hackers leaked more than one million user account records from over 100 websites, including those of banks and government agencies. Moreover, critical zero-day flaws were found in recently-patched Java code and a SCADA software vendor was charged with having default insecurity, including a hidden factory account with password. Meanwhile, millions of websites hosted by world’s largest domain registrar, GoDaddy.com LLC, were knocked offline for a day.

Focal Points:

  • The hacker group, Team GhostShell, raided more than 100 websites and leaked a cache of more than one million user account records. Although the numbers claimed have not been verified, security firm Imperva noted that some breached databases contained more than 30,000 records. Victims of the attack included banks, consulting firms, government agencies, and manufacturing firms. Prominent amongst the data stolen from the banks were personal credit histories and current standing. A large portion of the pilfered files comes from content management systems (CMS), which likely indicates that the hackers exploited the same CMS flaw at multiple websites. Also taken were usernames and passwords. Per Imperva “the passwords show the usual “123456” problem.  However, one law firm implemented an interesting password system where the root password, “law321” was pre-pended with your initials.  So if your name is Mickey Mouse, your password is “mmlaw321″.   Worse, the law firm didn’t require users to change the password.  Jeenyus!” The group threatened to carry out further attacks and leak more sensitive data.
  • A critical Java security vulnerability that popped up at the end of August leverages two zero-day flaws. Moreover, the revelation comes with news that Oracle knew about the holes as early as April 2012. Microsoft Corp. Windows, Apple Inc. Mac OS X and Linux desktops running multiple browser platforms are all vulnerable to attacks. The exploit code first uses a vulnerability to gain access to the restricted sun.awt.SunToolkit class before a second bug is used to disable the SecurityManager, and ultimately to break out of the Java sandbox. Those that have left unpatched the vulnerabilities to the so-called Gondvv exploit that was introduced in the July 2011 Java 7.0 release are at risk since all versions of Java 7 are vulnerable. Notably older Java 6 versions appear to be immune. Oracle Corp. has yet to issue an advisory on the problem but is studying it; for now the best protection is to disable or uninstall Java in Web browsers. SafeNet Inc. has tagged a SCADA maker for default insecurity. The firm uncovered a hidden factory account, complete with hard-coded password, in switch management software made by Belden-owned GarrettCom Inc. The Department of Homeland Security’s (DHS) ICS-CERT advisory states the vendor’s Magnum MNS-6K management application allows an attacker to gain administrative privileges over the application and thereby access to the SCADA switches it manages. The DHS advisory also notes a patch was issued in May that would remove the vulnerability; however, the patch notice did not document the change. The vendor claims 75 of the top 100 power companies as customers.
  • GoDaddy has stated the daylong DNS outage that downed many of its customers’ websites was not caused by a hacker (as claimed by the supposed perpetrator), but that the service interruption was not the result of a DDoS attack at all. Instead the provider claims the downtime was caused by “a series of network events that corrupted router tables.” The firm says that it has since corrected the elements that triggered the outage and has implemented measures to prevent a similar event from happening again. Customer websites were inaccessible for six hours. GoDaddy claims to have as many as 52 million websites registered but has not disclosed how many of the sites were affected by the outage.

RFG POV: Risk management must be a mandatory part of the process for Web and operational technology (OT) appliances and portals. User requirements come from more places than the user department that requested the functionality; it also comes from areas such as audit, legal, risk and security. IT should always be ensuring their inputs and requirements are met. Unfortunately this “flaw” has been an IT shortfall for decades and it seems new generations keep perpetuating the shortcomings of the past. As to the SCADA bugs, RFG notes that not all utilities are current with the Federal Energy Regulatory Commission (FERC) cyber security requirements or updates, which is a major U.S. exposure. IT executives should be looking to automate the update process so that utility risk exposures are minimized. The GoDaddy outage is one of those unfortunate human errors that will occur regardless of the quality of the processes in place. But it is a reminder that cloud computing brings with it its own risks, which must be probed and evaluated before making a final decision. Unlike internal outages where IT has control and the ability to fix the problem, users are at the discretion of outsourced sites and the terms and conditions of the contract they signed. In this case GoDaddy not only apologized to its users but offered customers 30 percent across-the-board discounts as part of their apology. Not many providers are so generous. IT executives and procurement staff should look into how vendors responded to their past failures and then ensure the contracts protect them before committing to use such services. 

Unnecessary Catastrophic Risk Events

Aug 24, 2012   //   by admin   //   Blog  //  No Comments

Lead Analyst: Cal Braunstein

Knight Capital Group, a financial services firm engaged in market making and trading, lost $440 million when its systems accidentally bought too much stock that it had to unload at a loss and almost caused the collapse of the firm. The trading software had gone live without adequate testing. In other news, Wired reporter Mat Honan found his entire identity wiped out by hackers who took advantage of security flaws at Amazon.com Inc. and Apple Inc.

Focal Points:

  • Knight Capital – which handled 11 percent of all U. S. stock trading so far this year – lost $440 million when its newly upgraded systems accidentally bought too much stock that it had to unload at a loss. The system went live without adequate testing. Unfortunately, Knight Capital is not alone in the financial services sector with such a problem. NASDAQ was ill-prepared for the Facebook Inc. IPO, causing losses far in excess of $100 millions. UBS alone lost more than $350 million when its systems resent buy orders. In March, BATS, an electronic exchange, pulled its IPO because of problems with its own trading systems.
  • According to a blog post by Mat Honan “in the space of one hour, my entire digital life was destroyed. First my Google account was taken over, then deleted. Next my Twitter account was compromised, and used as a platform to broadcast racist and homophobic messages. And worst of all, my AppleID account was broken into, and my hackers used it to remotely erase all of the data on my iPhone, iPad, and MacBook.” His accounts were daisy-chained together and once they got into his Amazon account, it was easy for them to get into his AppleID account and gain control of his Gmail and Twitter accounts. It turns out that the four digits that Amazon considers unimportant enough to display on the Web are precisely the same four digits that Apple considers secure enough to perform identity verification. The hackers used iCloud’s “Find My” tool to remotely wipe his iPhone, iPad and then his MacBook within a span of six minutes. Then they deleted his Google account. Mat lost pictures and data he cannot replace but fortunately the hackers did not attempt to go into his financial accounts and rob him of funds.
  • All one initially needs to execute this hack is the individual’s email address, billing address and the last four digits of a credit card number to get into an iCloud account. Apple will then supply the individual who calls about losing his password a temporary password to get access into the account. In this case the hacker got the billing address by doing a “whois” search on his personal domain. One can also look up the information on Spokeo, WhitePages, and PeopleSmart. To get the credit card information the hacker first needed to get into the target’s Amazon account. For this he only needed the name on the account, email address, and the billing address. Once in, he added a bogus credit card number that conforms to the industry’s self-check algorithm. On a second call to Amazon the hacker claimed to have lost access to the account and used the bogus information in combination with the name and billing address to add a new email address to the account. This allows the hacker to see all the credit cards on file in the account – but just the last four digits, which is all that is needed to hack into to one’s AppleID account. From there on, the hacker could do whatever he wanted. Wired determined that it was extremely easy to obtain the basic information and hack into accounts. It duplicated the exploit twice in a matter of minutes.

RFG POV: The brokerage firm software failures were preventable but executives chose to assume the high risk exposure in pursuit of rapid revenue and profit gains. Use of code that has not been fully tested is not uncommon in the trading community, whereas it is quite rare in the retail banking environment. Thus, the problem is not software or the inability to validate the quality of the code. It is the management culture, governance and processes that are in place that allows software that is not fully tested to be placed into production. IT executives should recognize the impacts of moving non-vetted code to production and should pursue delivering a high quality of service. Even though the probability of failure may be small, if the risk is high (where you are betting the company or your job), it is time to take steps to reduce the exposure to acceptable levels. In the second case it is worth noting that with more than 94 percent of data in digital form commercial, government, and personal data are greatly exposed to hacking attacks by corporate, criminal, individual, or state players. These players are getting more sophisticated over time while businesses trail in their abilities to shore up exposures. Boards of Directors and executives will have to live with the constant risk of exposure but they can take steps to minimize risks to acceptable levels. Moreover, it is far easier to address the risk and security challenges in-house than it is in the cloud, where the cloud provider has control over the governance, procedures and technologies used to manage risks. IT executives are correct to be concerned about security in cloud computing solutions and it is highly likely that the full risk exposure cannot be known prior to adopting a vendor’s solution. Nonetheless, Boards and executives need to vet these systems as best they can, as the risk fiduciary responsibility remains with the user organization and not the vendor. 

Surprises at IBM, Infosys and Microsoft

Aug 7, 2012   //   by admin   //   Blog  //  No Comments

Lead Analyst: Cal Braunstein

IBM Corp. announced second quarter financial results with lower revenues but improved profits while Infosys Ltd. had weaker than expected first quarter 2013 results. In other financial news, Microsoft Corp. reported mixed fourth quarter and fiscal year 2012 results.

Focal Points:

  • IBM reported second quarter revenues of $25.8 billion, a drop of three percent year-over-year. However, net income on a GAAP basis increased by six percent to $3.9 billion from the previous year’s quarter. Asia Pacific and the BRIC countries showed single digit growth while all other geographies declined. Europe/MidEast/Africa delivered the worst performance with a nine percent decline, although using a constant currency basis the revenues were flat. Similarly, the services sectors (GBS and GTS) were off four and two percent respectively from the same quarter last year. Global Financing and Software were flat while the Systems and Technology Group (STG) experienced a nine percent fall in revenues year-over-year. IBM’s Smarter Planet initiative saw its revenues increase more than 20 percent in the quarter while its Power Systems gained market share through competitive displacements. Year-to-date IBM states its growth market revenues were up nine percent year-over-year while business analytics revenues grew 13 percent and cloud revenues doubled year-over-year. The company also saw its gross profit margins climb by 1.5 percentage points.
  • Infosys had less than stellar results for its first quarter 2013. While revenues grew 4.8 percent to $1.75 billion and IFRS net income climbed eight percent to $416 million year-over-year, on a sequential quarter basis, the company saw revenues drop by one percent and profits slide by more than 10 percent. Repeat business accounted for 99.1 percent of sales; the top 10 clients were responsible for 25.3 percent of the revenues. Utilization levels excluding trainees have been slowly dropping from 77.8 percent over the 12 months ending June 2011 to 71.6 percent in the current quarter. The split between onsite and offshore dropped slightly from 25.5 to 74.5 percent in the year ago quarter to 24.7 to 75.3 percent in the first quarter 2013. Attrition improved slightly to 14.9 percent. All geographic sector revenues declined with the exception of North America, which grew by 1.6 percent sequentially. As expected, Europe was the worst performer with a decline of 8.1 percent sequentially.
  • Microsoft announced fourth quarter 2012 revenues of $18.1 billion, an increase of four percent from the previous year’s quarter. On a GAAP basis the company reported its first net loss of $492 million due to writing off $6.2 billion for its 2007 aQuantive acquisition. For the full fiscal year Microsoft reported revenues of $73.7 billion, a five percent jump from its fiscal year 2011 revenues. On a GAAP basis net income was $17 billion, a 26 percent decrease from the prior year. The Server and Tools business revenue grew 13 percent for the fourth quarter and 12 percent for the full year while the Business Division revenue increased 7 percent for the fourth quarter and full year reflecting continued momentum in Office 2010 sales. The Windows and Windows Live Division revenue declined 13 percent for the fourth quarter and 3 percent for the full year whereas the Online Services Division revenue advanced 8 percent for the fourth quarter and 10 percent for the full year reflecting growth in its search business. The Entertainment and Devices Division revenue jumped 20 percent for the fourth quarter and 8 percent for the full year, mostly due to the addition of Skype.

 

RFG POV: Most vendors note the difficulties that lie ahead over the next few quarters due to Euro zone problems, a slowdown in China, and a weak economy in North America as well as fears over oil prices and Middle East crisis. How well enterprises will do will depend upon the sector(s) they are in, the geographies they serve, and the agility and innovation of the firm. IBM, which has huge backlogs, is able to plow forward through the good times and bad. Its STG products continue to fluctuate depending upon age of the systems but overall IBM is on track to deliver against its five year growth plan. On the other hand, Infosys is failing to keep up with some of its outsourcing competitors and may be running into a management of growth problem. The drop in its utilization levels is a further indication that backlog and revenue management is not mapping to usage at the desired mix. Thus, while this is an overall corporate issue, the company still maintains tremendous customer loyalty and repeat business rate. In that the company is seeing weakness in most of its markets, IT executives should be more aggressive in negotiating blended rates and the overall deal. Microsoft marches on and continues to grow its enterprise businesses. The Windows business is impacted by the decline in PC sales (and growth in the Apple Inc. iPad market). There is the perception that enterprise business will improve when Windows 8 comes out later this year but that is unlikely. While slightly more than 50 percent of enterprises are on Windows 7, the other half are on Vista and XP. It takes years before companies migrate to new releases and the move to Windows 8, in that it is designed more for the personal world and tablets than the business world, most likely will not happen for most companies. RFG expects the majority of firms will wait for Windows 9. However, RFG does expect Skype and Yammer to be leverageable in the enterprise space but it is unclear whether or not Microsoft can leverage these cloud services to get organizations to move to its other cloud offerings. IT executives will continue to have more and more business platform alternatives available to them and therefore should not feel locked into Microsoft. Given that, IT executives should carefully analyze their business software requirements and negotiate for the best deals. Since Microsoft pricing can be complex and expensive, IT executives should consider using outside assistance (from RFG or elsewhere) to simplify the experience and obtain the best contractual prices and terms.

EMC, Intel, SAP, and VMware on the Move

Aug 3, 2012   //   by admin   //   Blog  //  No Comments

Lead Analyst: Cal Braunstein

 

EMC Corp. announced preliminary second quarter financial results along with executive changes at EMC and its subsidiary, VMware Inc. In other financial news, Intel Corp. reported its second quarter results, which saw its earnings drop while SAP AG reported strong second quarter financials.

Focal Points:

  • EMC and VMware made surprise announcements when word leaked out that VMware CEO Paul Maritz was being replaced. Joe Tucci, EMC Chairman and CEO stated the IT industry is in the midst of an extraordinary transformation unlike anything we have seen before – a major shift to Cloud Computing, Big Data applications and delivering IT-as-a-Service.  To capitalize on this shift Pat Gelsinger, EMC President and COO of Information Infrastructure Products, has been appointed CEO of VMware while Paul Maritz is joining EMC as Chief Strategist, reporting to Tucci. Both changes are effective September 1st. David Goulden, Executive Vice President and CFO, will assume the additional roles of President and COO of EMC effective immediately. On the financial front, EMC announced preliminary second-quarter 2012 results with record second quarter consolidated revenues of approximately $5.31 billion, up 10 percent year-over-year. The company also had record second quarter non-GAAP earnings per weighted average diluted share (EPS) of $0.39, up 11 percent over the previous year’s quarter. Meanwhile, VMware is projecting second quarter revenues of $1.123 billion, an increase of 22 percent from second quarter 2011.
  • Intel reported second quarter revenues of $13.5 billion, up 3.6 percent year-over-year. Net income was $2.83 billion, down 4.3 percent from $2.95 billion a year earlier, as operating expenses rose faster than revenues. Consumer demand in North America and Western Europe is not recovering as fast as Intel expected, according to CEO Paul Otellini. He also stated growth in emerging markets such as China and Brazil is also slowing down. For the full fiscal year, Intel now expects sale to grow three to five percent from last year, rather than the “high single digit” level the company predicted earlier. He also noted that Ultrabooks are still relatively expensive but prices are expected to drop to $699 this fall.
  • In the quarter just ending, SAP announced it had total revenues of €3.9 billion, an increase of 18 percent over the €3.3 billion booked in second quarter of 2011. The company booked €1.06 billion in new license sales, up 26 percent compared to the year-ago period when it reported €0.84 billion. Software and support revenues for the quarter came to €3.12 billion, a jump of 21 percent. On an IFRS accounting basis, operating profits only rose by 7 percent in the quarter to €920 million. The company boasted of posting its tenth consecutive quarter of double-digit growth in non-IFRS software and software-related service revenues. The company also claimed it had stellar results in SAP HANA, mobile and cloud computing in all regions.

 

 

 

 

 

 

RFG POV: The management teams at EMC and VMware continue to expand and execute their visions of the future of IT and deliver top-tier products and services in a timely manner. The removal of Paul Maritz at VMware was first thought to be a rare management error but once the total set of announcements was made, the logic was compelling. With Pat Gelsinger at the helm of VMware and Maritz as EMC’s chief strategist, the companies should be able to keep up the double-digit growth momentum that the firms have delivered over the past few years. IT executives with strategic relationships with either or both companies should get a strategic update by yearend so that they can understand the new vision and determine how it fits with the corporation’s strategy and target architecture. Given the slowing demand and the decline of PC sales, it is not surprising that Intel did not perform as well as it has in the past. Until the company gets its Ultrabook and Atom product lines selling well, growth will be diminished or possibly shrinking. Apple Inc. is a formidable competitor and its products are expected to take market share from Intel for the next few years. The company has made some very significant advances in driving data center efficiency internally and if it can get its customers to follow suit, it might be able to get data center product and services sales making up for the slack in PC revenues. IT executives should add Intel to the list of IT firms to talk to about slashing the cost of data center operations.  SAP continues to plow on and remain a thorn in Oracle Corp.‘s side. It has been able to revise its business model so that it can capture the new revenue streams without doing much damage to its traditional revenue routes. The company is well poised to address the new hot areas of cloud, mobile and high performance in-memory computing for business intelligence and analytics. IT executives should keep abreast of Oracle’s and SAP’s strategies and visions and, where appropriate, incorporate relevant components – and possibly products – into their future visions and target architectures. 

On the Mobile Platform Horizon

Jul 11, 2012   //   by admin   //   Blog  //  No Comments

Microsoft Corp. announced it will brand its own Windows 8 tablet designed to compete with Apple Inc.‘s iPad while also offering PC-like flexibly and connectivity. Elsewhere, Apple’s new MacBook Pro sheds weight and gains a high-resolution display. Lastly, Research in Motion, Ltd. and Nokia Corp. have their businesses unravel a bit while they try desperately to reinvent themselves.

Focal Points:

  • In an announcement that came as a surprise to most observers this week, Microsoft showcased its new Surface tablet design in hardware that will be Microsoft branded. Not to be confused with a tabletop touchscreen design of the same name from the company a few years back, the tablet-sized Surface comes in two flavors running different versions of Windows 8. The mainstream Surface runs Windows 8 RT and is powered by ARM-based processors from Nvidia Corp. while the higher-end version will run Windows 8 Pro and uses Intel Corp. Ivy Bridge processors. Both devices will feature 10.6 inch screens, have built-in kickstands, magnetized screen covers that double as keyboards with a touchpad, and USB ports for connecting to peripherals.  The Surface running Windows 8 RT will come in 32 GB and 64 GB storage variants, has dimensions similar to Apple’s iPad at 9.3 millimeters thick, weigh 1.5 pounds, and is priced to compete with similar tablets. The Windows 8 Pro version will weigh more and be priced higher than the Windows 8 RT offering and will offer 64 GB and 128 GB storage sizes. Though a firm launch date was not announced, availability for the ARM-based Surface should coincide with the Windows 8 launch in October and the Pro version should begin within a few months thereafter.
  • Apple updated its MacBook Pro notebook this week by showcasing a slimline 0.71-inch aluminum unibody design more similar to the MacBook Air than the model it replaces. The MacBook Pro’s “showstopper” is the inclusion of a 15.4-inch “retina” high resolution display similar in clarity to those on Apple’s latest iPad and iPhone models. Apple has decided to drop its 17-inch display MacBook Pro and is expected to introduce a 13-inch variant with the retina display late this year. Being in the top position in the MacBook line, new models will feature quad-core Intel i7 Ivy Bridge processors, battery life lasting up to a claimed 7.5 hours, memory  configurations between 8 GB and 16 GB, solid state disk (SSD) storage in three flavors ranging from 256 GB to 768 GB.  As with most Apple hardware designs, the notebooks are not designed to be user-upgradable and require specialized tools to service or upgrade the battery, RAM, and SSD. Pricing starts at $2,199 for the model with a 2.3 gigahertz (GHz) processor, 8 GB RAM, and 256 GB of flash storage.
  • Both RIM and Nokia suffered votes of “no confidence” this week as the companies struggle to survive in evolving smartphone and tablet markets. A Toronto-based equipment supplier for RIM announced that it is discontinuing manufacturing services for BlackBerry devices over the next three to six months and will take a $1 billion charge due to unsold equipment. The smartphone company’s response was somewhat evasive as it noted making “changes to our supply chain as part of wider efforts to improve the efficiency and cost effectiveness.” As RIM continues to prepare for the launch of forthcoming BlackBerry 10-based devices slated for release in October, the company said it will shed around 2,000 jobs – 11 percent of its workforce – to save $1 billion by its 2013 fiscal year. Similarly, Nokia detailed a series of sweeping changes that included shedding 10,000 jobs, reducing research and development efforts, and replacing some senior executives. Moody’s Investors Service, Inc. slashed Nokia’s credit rating to “junk” after the announcement.

 

RFG POV: Microsoft’s new Surface tablet is a Hail Mary to bolster support for the company’s Windows 8 platform across smartphone, tablet, and PC screens. As Windows 8 offers the same Metro UI  interface and compatibility for UI designed apps across platforms, the company hopes that the flagship Surface offering will get users and enterprises excited enough to begin adoption en masse. Surface itself is compelling in both Windows 8 RT and Pro variants; however, it is the Pro version with its notebook-replacement capabilities that are the most compelling for enterprise users. Though Microsoft’s hardware history is littered with failures including the Kin smartphone and Zune music player, the Surface’s design is a compelling one particularly with the inclusion of full-fledged Office apps. The company is way behind competitors Apple and Google, Inc. in developing its app ecosystem and will need to invest heavily in developer subsidies to ensure the mobile devices are a hit. IT executives can hedge their bets by sticking to a pilot of the Pro version only as it supports all mobile and desktop applications and should limit usage of the RT version until use cases prove themselves. Apple’s new MacBook Pro is a genuine thing of beauty with its slim all-aluminum casing, large retina display, and extremely portable 4.5 pound weight. The company’s push forward with design has removed several desirable features including an on-board optical drive, Ethernet adapter, and Firewire port. Those corporations supporting “bring your own device” (BYOD) philosophies will no doubt see new MacBook Pros in the enterprise, but mainstream enterprises will wish to avoid the notebooks for all but a small percentage of staff. While it is attractive and functional, IT executives will find that enterprise Mac acquisition costs are double those of Windows-based products and that support is more costly and complex given the closed design. Lastly, the continued challenges facing RIM and Nokia are likely just at the precipice of what it holds for the firms. Both lost their thought leadership position years ago, and while BlackBerry still retains a small league of supporters in security-minded firms, Nokia’s loyalty is all but gone. Supplier and cash challenges will plague both companies for the foreseeable future and both have their pinned their hopes on glorious rebirths coinciding with the launch of new operating system platforms in the fall. IT executives should recognize that these Phoenixes are highly unlikely to rise from the ashes and while product support and valuable assets including patents and networking technologies may live on, both companies have expiration dates.