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Should Jobs Buy Microsoft? |
OK, maybe not all of Microsoft. Steve should wait until the middle of next year when the bad news will be blanketing Redmond like a nuclear winter and the price of acquisition may be at an all-time low. By then, the Zune player, Microsoft's best-yet stab at the iPod market and Grim Reaper of its hardware partner base, will be out. The world will still be perplexed by the concept of online Microsoft applications. Vista should be available at last, and maybe even Office 12 along with it. And in all cases, I'm wondering: Will anyone still care? Microsoft must be wondering the same thing, too, as it drops the Vista pricing to parity with XP.
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Grim symbolism.
Will Microsoft's Zune player be but a few pixels in the face of Apple's iPod? And will the struggling PlaysForSure platform be but a fading shadow behind Zune? If only Microsoft could apply to Vista the lessons Apple has taught us with its media platforms. |
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Six months ago, I was very zinged about Vista. Vista was the uber-hot girl in that "intimate dating" pop-up. Then there were snags, delays, expenses, and all manner of amour-crushing diversions. Once the initial rush passed, I realized, "Hey, what I've got at home is pretty good. What am I looking at this for?"
Let's run down the list of must-see Windows Vista features for homes: family safety settings, Mail Calendar, Photo Gallery, Media Player, Movie Maker, Media Center, and gaming. Now, there may be some superficial improvements in places, but the fact is that just about every MCE 2005 owner has these things already. (OK, MCE doesn't have metadata tag functionality in its photo management, but there are plenty of cheap and free third-party solutions to fill this hole.)
Improvements for businesses include faxing & scanning, built-in diagnostics, remote access, and security. OK, what scanner doesn't come bundled with a faxing and scanning application? We already have remote access. And security? Seriously? After Vista's last major delay was precisely because of gaping security holes pointed out by Symantec?
Oh, but there's the Aero interface that graphics vendors have been making such a fuss about for the last year. I've got a one-word reply to this: XGL. Go to YouTube and run a search on XGL like this. Plough through five minutes of these videos and then see how (un)excited you are about Aero. XGL is based on OpenGL architecture, much like the Quartz Extreme technology in Mac OS X v10.2 and later. Nifty transparent windows in Vista? Come on, I've got transparent windows already in XP through my ATI and NVIDIA drivers. Compared to XGL and Quartz Extreme, Aero is a theme update to XP.
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The future is unknown.
But that's only because more people haven't discovered the amazing capabilities of XGL technology, many of which are embedded in Apple's latest versions of Mac OS. While we've been hearing for months about the wonders of Aero, even mightier capabilities have been flying just under the PC market's radar. |
Recall how completely underwhelmed the world was in the shift from 2000 to XP. I mean, I still run into a 2000 machine every once in a while, and I don't feel handicapped at all. So far, I haven't heard a compelling bell that makes me salivate for Vista, not even after reading informative fanboy reviews on sites like Paul Thurott's. The most interesting advance I've seen yet is ReadyBoost, which uses a USB flash drive's memory in place of a hard disk-based page file in order to improve system performance. Now, if I were a consumer, the first question I'd ask is: "I just paid for the latest in CPU technology and 2GB of high-speed RAM—more than I could ever imagine using—but I need a USB drive to get the best performance from my operating system?" Enjoy answering that one.
Bottom line: I don't think anyone will call Vista a flop, but I'm having an increasingly hard time seeing it as a blockbuster. And wait, it gets worse.
While this laggardly letdown called Vista has been dragging on, Apple made the transition to Intel innards, advanced Mac OS in ways that must give Steve Ballmer facial spasms, and slowly started growing its market share. In fact, according to IDC numbers, Mac shipments showed second quarter year-over-year growth from 655,000 last year to 760,000 in 2006—a climb from 4.4% U.S. market share to 4.8 percent. Mind you, IDC and Gartner pegged Mac market share in 2005 at 2.2% and 2.3% respectively. Some might pooh-pooh this year's gain as being only a 2% rise. I prefer to say that, since the Intel transition, Mac share has doubled and shows every sign of speeding up. The humdrum Vista story, inevitable shrug over Zune, and ever-mounting success of the iPod/iTunes juggernaut will only serve to make Macs look more appealing heading into 2007.
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Ballmer sweating the competition?
It's bad enough that one can finagle Windows to run on Intel-based Macs. But with all of the scale-backs, delays, and revamps Vista has suffered in its overlong gestation, the market almost seems to be realizing that Microsoft's is not the "best" solution out there. Could it be? |
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So to come full circle, what would it take to turn Microsoft around and have Vista be a hit? Why, you'd probably have to let Steve Jobs own it. And in the end, the real reason why that would make such a difference is that while Microsoft pays lip service to Vista being an "experience," Jobs understands that technology is about lifestyle. Life and style. Unfortunately for the channel, Microsoft has neither. |

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Houston, We Have VBI |
OK, so maybe the appearance of ample Verified By Intel whitebook stock in the channel isn't an event of astronomical proportions, but it's still pretty major for resellers. VBI, of course, is Intel's program to help streamline ODM manufacturing and whitebook support so that channel partners can compete in the mobile space. When VBI debuted earlier this year, there were some rough spots, chief among them a hiccup in the supply chain coming out of Asia. But concurrent with the relocation of Intel's primary notebook hub to a company smack at the middle of U.S. shipping lanes, Intel made other critical changes, as well.
"We need to get the word out that VBI is widely available," says Wes Sieker, Intel's North American channel marketing manager for mobile products. "We've implemented some supply line efficiencies to bring in thousands of notebooks at our distributors and also in a local geo hub to free up supply. We also expanded distribution with the addition of D&H and Tech Data Canada. Also, there are now a lot of vendors on board stepping up and doing promotions, including a $40 instant rebate from Intel. Microsoft and Seagate have some rebates, as well."
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VBI showcasing VBI.
Some people will put anything on their VBI top panels, even a Common Building Blocks reference chart. OK, maybe not. But having such charts handy can greatly help the sales process when designing your VBI configurations. |
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Specifically, Seagate's promotion offers 5% savings on a Seagate Momentus drive when purchased with any VBI notebook shell. Similarly, Microsoft is currently knocking $7 off an OEM copy of XP Professional when bought alongside a VBI unit. Distributors are also getting in on the game. For instance, ASI is throwing in free 2-day air freight on any fully assembled BTO notebook, and D&H is tempting buyers with free VBI notebook configuration. Even Intel is trying to inject a little fun into the process with promos like its Flex Core Rocks Customizable Notebook Contest, which is awarding "big" prizes for the best submitted top panel designs and accompanying stories.
Fun and games aside, Intel has also moved to enhance the long-term value of VBI offerings. You may have known that the Intel-direct support on VBI units was recently upgraded from one to two years, making them more competitive against tier-one options. You may not know that Core 2 Duo patch updates are now available on Intel's Support site. This is a big deal, because we're all used to notebook CPUs being entirely not upgradeable. But since Intel had the foresight to make the packaging pin- and voltage-compatible, software is all that keep existing VBI owners from being compatible with the just-released "Merom" processors. Also note that Intel is adding compatibility guides to its reseller site to help ease the process of finding interchangeable components for the VBI platform.
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Don't judge a CPU by its cover.
While the heat spreader on the Conroe chip to the left may give the illusion of it processor being larger and more powerful, the Merom version on the right is practically the same chip. Now that Core 2 Duo has gone mobile, VBI notebooks have even more value to offer. |
We've said in RAM several times that we believe VBI is a critical move for the industry and one of the few weapons resellers have in fending off tier-one domination of the mobile space. So it's important to emphasize that early impressions resellers may have picked up of VBI being only available in a trickle or not at all are now unfounded. There is plenty of VBI stock available from several distributors, but there is also evidence that the buying patterns from earlier this year still persist. Forget that. You've got 11 VBI SKUs to choose from immediately with more en route for next year.
That all said, keep an eye out for near-VBI SKUs. Some manufacturers, including ASUS, have models that sport adherence with several of the VBI common building blocks but not, say, the CNP (customizable notebook panel). Personally, I'm on the fence about the CNP. For organizations such as schools or government offices, I think it's a great idea. For consumers...well, I'm not sure I've found a CNP that calls to me yet. Still, to get all of the other building block benefits, it's worth a call to your distributor to find out if this or that near-VBI model can actually get other VBI benefits, such as Intel-direct support. |

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Maybe Some Things Are Free |
Apple aside, there isn't much good news waiting for Microsoft in the Linux space, either, although the news is plenty good for system builders. But let's backtrack a step. We all know that Linux is a big deal for servers. Apache remains the leading Web server software in the world. But on the desktop, Windows has remained unshakable, continuing to hold over 90% market share. This isn't for lack of decent Linux desktop OSes. Xandros, Novel SUSE Linux, and Linspire (formerly Lindows), all deliver terrific GUI-based experiences with management tools that banish the traditional headaches of Linux software installation and updating.
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Seeing through the hype.
This is a shot of Mandrake Linux (now Mandriva One) taken in early 2005. Not only was the OS easy to install, it was very user-friendly and Windows-like...except for the superior UI, which included ample transparency capabilities. |
After surveying the various desktop distros, though, I came to the firm belief that Linspire's Five-O was far and away the OS to recommend for everyday consumers seeking a Windows alternative. With another UI crafted in the Windows mold (only better), Linspire's key advantage is the CNR, or "click and run," software warehouse. This is a front-end service that integrates with the Linspire OS to let users browse, install, and uninstall a sweeping selection of over 20,000 applications and updates. I've used CNR and can vouch that it's everything Linspire promises. In fact, after suffering from scores of failed Windows uninstalls and plagued installations over the years, I can say that the CNR service might just make a serious dent in the number of OS-related service calls you receive.
It's worth noting here that the limited software selection and spotty driver support inherent to Linux is now a thing of the past. I've now run distros on three of my PCs and only encountered hardware trouble with one aged integrated audio driver. From office suites to music jukeboxes to photo editing to home finance management, Linspire's CNR serves up everything a consumer could ask on a platter. It's awe-inspiring. You simply browse through the CNR, click the apps you want, and they download and install en masse. Many apps are free, and commercial titles are often priced considerably below their Windows equivalents. Compared to CNR, the usual Windows Add/Remove and third-party installer rigamarole is like trepanning versus popping a couple Advil.
After having become a fan of Linspire, I couldn't understand why the OS didn't grow more popular, particularly in the value segments, and I could only assume that pricing still remained a barrier to entry. Five-O was $50 direct to the consumer and less as a pre-install through the rather convoluted reseller partner program, and the CNR service was only free for 30 days. Now, the big news is that the Five-O operating system has cloned itself into a free version called Freespire.
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Better than a free lunch.
Particularly for resellers trying to compete in the value end of the market, a totally free, friendly OS with a stupid-simple-to-install, free application collection may be just what the doctor ordered. Freespire has a place anywhere from corporate productivity boxes to mid-range secondary consumer PCs. |
Freespire is an entirely community-driven offshoot of Debian. It is very similar to Linspire, but since Freespire works on a shorter development cycle, there may be greater elements of "beta-ness" in it. More importantly, all support for Freespire goes through the community forums. There is no phone number to call. There may also be occasions, such as coming up with a codec for DVD playback, where additional apps and plugins may have to be purchased in order to have end-to-end functionality.
Concurrent with the launch of Freespire, Linspire took its basic CNR service and made it free. So access to all one-click, non-commercial software installs, uninstalls, and updates, plus all OS security updates, are now free. The importance of this shouldn't be understated. Previously, having a simple, GUI-based package/application loader was what let desktop Linux vendors charge for their wares. The loader saved users from having to resort to a command line. But with CNR now being free and integrated with Freespire, all of the rules change. Freespire/CNR is easy, fully featured, compatible with Windows networks, and now entails zero cost. In short, when money is an issue, you'd be crazy not to try it.
Better yet, Linspire's reseller program has been overhauled. Just because the software is free doesn't mean there's no revenue opportunity.
Linspire vice president of worldwide sales and marketing Larry Kettler notes, "We've been monitoring for years how people buy, when they buy, what they buy, and we're confident that our $49.95 Gold service membership, as well as commercial application purchases, are really what's driving our revenue. So we sell those, and the system builder gets a percentage of those sales."
The CNR Gold service differs from the free service in that users get software update notifications, free OS updates, large discounts on commercial titles, and more. In fact, the Gold discounts will likely pay for the year's subscription with only one or two commercial software purchases. Similarly, Linspire Five-O, which still costs $59.95 at retail, has the primary advantage of direct and accessible end-user support. But CNR Gold and purchases made through it are clearly the bread winners.
When a system builder joins the new Linspire program, he gets to download ISO images for creating gold versions of both Linspire and Freespire OS. Linspire plants the reseller's account ID code in each image, and through this Linspire can track each end-user "light-up" and registration (which entails the user supplying an email address). All purchases can be monitored, and the reseller can use Linspire's online tools to monitor his install base's activity. Resellers also get recovery CD images for both Linspire and Freespire that contain the partner ID code.
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Do the math.
Linspire helps reseller partners see how many of their Linspire/Freespire sales are translating into registered owners and what the average revenue share paid back to the reseller is for each user. Betcha can't do that with Windows. |
"There used to be different program levels and dollar requirements set by a certain number of licenses," says Kettler. "Now we have a single program with free sign-up to get access to evaluate the OS. We put Freespire inside the program so all products could participate in revenue sharing. That's pretty significant. It lowers the last of the hurtles to a lot of builders that have been waiting to get into desktop Linux." |

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The Odd Man Out Comes A-Courtin' |
With the ATI/AMD merger now settling down for the long wait until regulatory approval, there's been a lot of speculation about how the industry will change. Some seem to think that in order to counter the new AMD threat, Intel will need to beef up its own internal graphics offerings, which leaves NVIDIA in an ever-eroding add-on board market. Even if this scenario should come to pass, I expect it will be at least 18 to 24 months before we see the first glimmer of it. More likely, I expect a marked tightening of the relationship between NVIDIA and Intel in ways no one in the press has even thought of yet. SLI on the Intel BadAxe 2? How about four SLI slots on Intel server and workstation boards? And maybe SLI-based MXM modules in VBI notebooks? Why not?
But that's all in the future. We just need to get through today and tomorrow and deal with the realities of the present. The fact is that NVIDIA remains the only graphics vendor that is wholly agnostic, giving nearly equal treatment on both sides of the processor platform fence. There may have been some long-term priorities shuffled at NVIDIA's highest levels, but for now, the thing to keep in mind is that, here in the real world, nothing has changed. The nForce chips are equally suited to AMD and Intel. Workstation and notebook adapters are equally bilateral. PureVideo doesn't care what it runs on. The only space for unequal treatment is the NVIDIA Business Platform, which still focuses solely on AMD. Yeah, I wouldn't count on that staying as is for long.
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Two-faced chipset.
Here's NVIDIA's flagship core logic, the nForce 590 SLI. Can you tell if it's for the AMD or Intel platform? Neither can we. And that's just the way we like it. |
"We are still working very closely with AMD," says NVIDIA's Timo Allison, manager of worldwide channel programs. "They've made it very clear to us that they intend to continue doing so. I'm actually working with AMD on a number of programs, including a couple coming out, and the NBP program is definitely one of them. There may be announcements from them in the next few months, but as far as we've been told there are no real changes in what we're doing with them."
One thing that is changing is the company's reseller program. Or rather, it's more growing than changing. At a time when the graphics world seems to be in upheaval, that distinction is important. Previously in this column, we discussed how NVIDIA had overhauled its program with board partners and distributors. Now, it's clear that this was the foundation that had to be laid for the current announcement of PartnerForce, the umbrella program that spans board partners, distributors, and resellers simultaneously.
After so many years in the industry, it takes a lot to get me excited about channel programs. And when NVIDIA's first comment to me was that they'd introduced a new partner portal, I rolled my eyes and sat back for another litany of uninspiring partner program check boxes. But I should have known that NVIDIA rarely follows the official play book for long.
"There are several aspects that are going to make our portal different from other vendors," says Marla Birk, NVIDIA manager of worldwide channel marketing, "but the primary thing is our ability to tailor content to the user. Everybody has a unique view of the portal not just based on what business they're in and what type of partner they are but also their function. Whether you're sales or marketing or technical, your content is tailored to you. We can even tailor down to the specific user within a group."
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Full-throttle marketing.
NVIDIA leverages its new PartnerForce portal capabilities to give resellers a wide array of marketing tools, everything from wallpapers such as this Luna character image to Web site templates to technical briefs. |
The umbrella approach for PartnerForce shines brightest when it comes to things like incentive tracking. When a reseller buys NVIDIA product through an authorized distributor, the sale is tracked from start to finish. So when NVIDIA rolls out an incentive program based on volume or activities or the like, the PartnerForce system can manage those stats and convey the accrued benefits to the reseller via his personalized portal site. This eliminates much of the administrative headache that cuts into back-end reseller margins and keeps system builders out of many programs to begin with. In a time when seemingly every vendor worth buying from has a program, few resellers have the bandwidth to know every program benefit available. With its new portal, NVIDIA spreads these benefits out on the table and makes taking advantage of them far easier.
Naturally, there's more. NVIDIA is working to beef up partner communications with such additions as a new PartnerForce newsletter, the nTrain webinar series on NVIDIA-related technologies, and the NVIDIA Sales Center. The Sales Center program gives resellers a toll-free number to call and get a live NVIDIA sales rep on the line to answer any questions during your sales process.
Through the program, participants also have access to marketing materials, including ad templates, Web banners, downloadable sales modules and kiosks, POS merchandising kits, and more. You get referrals through NVIDIA's Where to Buy tool. There are MDF dollars, PR support, end-user promotions, on and on. For demo gear, NVIDIA is now offering up to 50% off on up to four products each year for in-house use. If you just want to take the new technology for a spin in the back room or at a customer's site, try the new loaner program, which lets you borrow just about anything for a couple of weeks.
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Drool-worthy demo gear.
Quad SLI rigs don't grow on trees, but if you want to try out the latest in desktop graphics performance technology with no risk to your cash flow, get on NVIDIA's loaner program, available to PartnerForce members. |
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Some of these benefits are available to all program members; the more tantalizing ones apply to Premier partners. I was surprised to find that the purchase commitment for Premier, PartnerForce's highest level, is only 200 units per month. That's 200 units of anything, even an nForce chipset or a little 7300 SE card.
In short, just because ATI stands to get a major boost from the merger, don't think that NVIDIA has been left shivering in the cold. PartnerForce has been nearly two years in the making, and you'd be doing your business a disservice to miss this opportunity simply because of market ambiguity or wild speculation. NVIDIA's not going anywhere—except up. Make sure you're along for the ride. |
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