Who’s Really in Charge of Microsoft Corporation? Nadella, Gates, or Ballmer?

By Tim Brugger

For decades, Microsoft (NASDAQ: MSFT  ) was synonymous with Bill Gates. After his childhood friend and Microsoft co-founder Paul Allen retired in 1983 after being diagnosed with Hodgkin's disease, Gates was Microsoft, and vice versa. As former Microsoft CEO Steve Ballmer learned after being named chief executive in 2000, following in the footsteps of a world technology leader isn't an easy proposition. Some would argue Ballmer brought on much of the ill-will from investors and industry pundits alike by holding on to the past much too long, rather than looking to the future.

Based on Microsoft's recent successes in cloud-related solutions and its new emphasis on becoming a significant player in mobile technologies, Ballmer's replacement, Satya Nadella, has been a breath of fresh air. And shareholders have reaped the benefits, enjoying Microsoft's 24% jump in share price so far this year. Turns out, however, there's a bit more to the Nadella-Microsoft turnaround story, and it involves a familiar face.

Heee's, back!An article was published in Vanity Fair recently discussing Microsoft's transition to Nadella, only the third CEO in company history, dating back to its inception nearly 40 years ago. Both Gates and Nadella were included in the discussion, and it became apparent the two are very much on the same page in terms how to ensure Microsoft remains, "relevant."

Nadella said a key objective for Microsoft is to ensure software and services help people accomplish more, in less time. As he put it, the winner's in the tech industry will be those that do, "the best job of building the right software experiences to give both organizations and individuals time back so that they can get more out of their time, that's the core of this company—that's the soul."

Gates was quick to piggy-back Nadella's comments, adding "We're not even a third of the way toward empowering workers even to the dream that goes back to the start of the company." Clearly, the two like-minded tech gurus share a common vision for the future of technology, and Microsoft's place in it. Which is a good thing, since it appears Gates himself is spending a great deal more time helping to define Microsoft's future than most of thought.

As intriguing as the insights the two provided were, what may catch some by surprise was Gates' admission that he now devotes, "30 percent" of his time to Microsoft, a decision he made when Nadella was given the top job in early Feb. It's not shocking that Gates was working with Microsoft; his input is invaluable, but 30%? When a tech giant with the status of Gates come back into the fold, how long will it be before questions arise about who's really running the show at Microsoft?

There's also the question of where Ballmer fits in the Microsoft picture, if at all? It's a valid question because as Microsoft fans may know, by spring of this year , Ballmer became the largest single owner of Microsoft stock, with approximately 4% of its outstanding shares. Of course Ballmer has already resigned from Microsoft's board, and has plenty on his plate already, including becoming the new owner of the NBA's Los Angeles Clippers.

Challenges remain

Developing solutions to free up time, as Nadella suggested, or technologies that are "pervasive," virtually surrounding us, as Gates alluded to, aren't novel ideas: one look at the growth in the Internet of Things makes that clear. And that puts Microsoft in the mix with a cast of familiar foes, including Google (NASDAQ: GOOG  ) (NASDAQ: GOOGL  ) andIBM (NYSE: IBM  ) , among others. IBM's super computer Watson, and its emphasis on cloud big data solutions, dominate CEO Ginni Rometty's focus as she attempts to right the IBM ship. It's been slow going, but IBM is beginning to make some headway.

If there was any doubt that Google saw the future of the industry as "pervasive," ala Gates, its recent $3.2 billion acquisition of "smart" home solution provider Nest Labs answered that. You can add its line-up of wearables, an industry leading mobile OS, and a full suite of cloud solutions to Google's pervasive arsenal. Microsoft certainly has some challenges ahead, with or without Gates.

Final Foolish thoughtsSo, who's running things up in Microsoft's headquarters in Redmond, WA? Gates would be the first to say Nadella's CEO, and the buck stops with him. As for Ballmer, he may own the most stock, but he has no intention of muddying the Microsoft waters, he's got an NBA title to focus on. Which leaves Microsoft in the enviable position of having the best of both worlds: A new leader that has quickly changed Microsoft's culture, for the better, along with access to one of the technology industry's all-time leading innovators.

Is Microsoft Corporation Becoming the Next Google?

By Tim Brugger  

Some folks may still remember when Microsoft (NASDAQ: MSFT  ) founders Bill Gates and Paul Allen were considered the ultimate innovators. Whether you're a fan of Microsoft or not, there's no denying it took a starring role in what would become an exploding PC industry, and Gates' dogged determination to support Internet growth across the globe nearly 20 years ago played an important role in getting the web where it is today.

Somewhere along the line, it could be argued ex-CEO Steve Ballmer was the culprit, Microsoft lost its mojo. Much like the old IBM (NYSE: IBM  ) , Microsoft was perceived by investors and industry pundits as a slow-moving behemoth in a lightning-fast world. With the loss of Microsoft's innovative touch, Google (NASDAQ: GOOG  ) (NASDAQ: GOOGL  ) was more than happy to fill the void. But with a new CEO, a new culture, and several cutting-edge technologies on the horizon, Microsoft may well be on its way to earning back its place as the leader of innovation.

The case for MicrosoftIt's clear CEO Satya Nadella's mobile-first, cloud-first mantra is taking hold. Microsoft's shift in focus to new, cutting-edge markets like cloud computing makes good business sense, and just as importantly, it's also helped change the culture of what had become a stagnant, sleeping giant. It seems investors perceive the change in Microsoft, too. When Nadella took the helm on Feb. 4 of this year, Microsoft's stock was sitting at a ho-hum $36.35 a share. At nearly $46 a share today, longtime shareholders are finally being rewarded, and the sense that Microsoft is entering a new era is partly responsible.

Nadella's "Bold Ambition & Our Core" open letter to Microsoft employees says it all: "The day I took on my new role, I said that our industry does not respect tradition -- it only respects innovation." Nadella wasn't simply spewing the party line regarding innovation, either.

Microsoft recently took the wraps off a new prototype that could knock the virtual reality, or VR, world on its head. Dubbed "RoomAlive," Microsoft's VR innovation, gives its Xbox One users the ability to turn an entire room, every square inch of it, into an immersive virtual world. Just as important as the potential of RoomAlive as a commercial gaming product is, it's also an example of Microsoft thinking outside the box, just like the good ol' days.

Some folks may not see Microsoft's new Surface Pro 3 as innovative, but it is. By introducing an entirely new form factor, Microsoft wants to change the tablet-laptop landscape, and by most accounts, it's working. The Surface Pro 3 has earned solid reviews from industry pundits, and early sales estimates are positive as Microsoft tries to keep up with demand.

Turns out, Microsoft engineers may not be done with the Surface Pro 3, and a new technology would really make it an innovative wonder. Microsoft's working on a "smart" transparent cover that uses piezoelectric sensors that measure external forces like pressure and speed and converts them to an electrical charge. The Pro 3 cover is akin to a transparent piece of paper that allows users to "peel" away layers to view what's underneath, among other innovative functions. Like its RoomAlive VR product, a transparent smart cover is a prototype, but that doesn't detract from the fact that Microsoft is spreading its innovative wings -- again.

The case against Microsoft
Though Google opponents point out there are legitimate questions as to whether its cutting-edge innovations have a legitimate business case, there's no denying it's presently the king of innovation. One look at its Project Loon balloons to beam Internet access to the world's unconnected masses speaks volumes. Will people really sit back and let sensors and computers drive their cars for them? Who knows, but the fact that Google is even exploring a world of driverless cars demonstrates its innovative tendencies.

Like driverless cars, there are questions from both a commercial and regulatory perspective surrounding Google's connected Glass product, but it's a perfect example of pushing the proverbial envelope. Google doesn't shy away from even the craziest-sounding project, which is what innovators do, even if there are failures along the way.

Final Foolish thoughtsMicrosoft's new technologies aren't enough to boot Google off its perch as the leader of innovation. But these latest introductions, even if they're still in prototype stages, prove that Microsoft is ready to go back to the future -- a time when it was at the forefront of new technologies. If Nadella keeps moving Microsoft along its current path, shareholders will once again benefit from owning the world's most innovative company.

Xbox One vs. PS4: Microsoft Corporation Beats Sony In September

By Evan Niu, CFA

Microsoft ran a free game promotion from September 7-13, which worked like a charm. Image source: Microsoft.

It seems that every month you see a headline proclaiming that Sony (NYSE: SNE  ) has sold more PlayStation 4 units than Microsoft's (NASDAQ: MSFT  ) Xbox One. That may be mostly true since both next-generation consoles launched nearly a year ago, but the tables turned in September. The software giant came out ahead this time around.

2 for the price of noneThat's according to Wedbush Morgan analyst Michael Pachter, who estimates that Microsoft sold 325,000 Xbox One units during September. That would be enough to beat Sony's estimated 250,000 PS4 units. That would be the second month that Microsoft has been able to squeeze out a victory.

As Sony has beaten Microsoft in cumulative unit sales thus far, Microsoft has gotten more aggressive with pricing and promotions. The company unbundled the Kinect in order to reduce the Xbox One's price point to $399, matching the PlayStation 4, in June. Unit sales promptly doubled over the prior month.

In September, Microsoft then launched a promotion where buyers would get a free game (up to $60 value). That promotion was timed to coincide with the launch of Activision's (NASDAQ: ATVI  ) Destiny, which was eligible for the promotion, among a slew of other titles. The deal even included Xbox One bundles that already come with free games (Madden NFL 15 or Forza Motorsport 5), so gamers could effectively get two free games.

Microsoft's promotion beat Sony's marketingSony has put a lot of marketing dollars to promote Destiny, even as it is a cross-platform title available on both consoles. In fact, Sony scored an exclusive marketing deal with Activision, whereby Microsoft wasn't allowed to advertise the title and Sony will receive exclusive content for a limited period of time. Instead, Microsoft ran a mock campaign for a fictional "Destiny Fragrance" as an underhanded way to poke fun at its rival.

Well, there was nothing precluding Microsoft from running its free game promotion, which appeals directly to consumer pocketbooks. That approach seems to have been more effective than Sony's massive marketing campaign, particularly when it comes to driving console unit sales. That's even more impressive considering Microsoft likely spent less than Sony on its promotion.

Xbox mattersMicrosoft sold 11.7 million consoles during its just-closed fiscal year, although the company does not regularly disclose product mix. In April, the company said it had reached 5 million in cumulative Xbox One channel shipments, but hasn't said much since. In August, Sony announced that it was up to 10 million PS4 units sold, so it seems that the Japanese company is still winning this race by a healthy margin.

Interestingly enough, former Microsoft president of Interactive Entertainment Business, Don Mattrick (who has since left for Zynga), said back in 2008 that 10 million is the magic number, and the company that hits 10 million in console unit sales first is deemed the winner of that generation's console war. That means that Sony has won by Microsoft's own definition.

Of course, Microsoft isn't throwing in the towel quite yet, as it remains committed to the Xbox business. Xbox platform revenue jumped 34% last fiscal year thanks to the launch of the Xbox One.

Why Didn’t Microsoft Corporation Split?

by Brendan Byrne

Back in 1999 Judge Thomas Penfield Jackson declared Microsoft a monopoly and slammed the company for suffocating its rivals at birth.

In a further judgment in 2000, the judge declared that Microsoft Corporation (NASDAQ:MSFT) should be split into two halves, with the Windows business cut off from the rest of the company. If Judge Jackson declared war on what he saw as a monopoly, why is the company still in one piece today?

Microsoft’s legal wrangling

First came the remarkable twists and turns in the case. Predictably Microsoft Corporation (NASDAQ:MSFT) appealed the decision, and the D.C. Circuit Court of Appeals rejected Jackson’s ideas, as well as accusing him of unethical conduct. It was revealed that the judge had spoken informally with journalists while the trial was still ongoing.

Microsoft and the Department of Justice later settled the case in November 2001, agreeing to allow competitors easier integration with the Windows operating system. Although this was still a bitter blow, it was nowhere near as much of a disaster as a forced breakup of the company.

The situation today

Microsoft’s power has waned with the shift from PC to mobile. Of course Windows is still the dominant force in the PC operating system market, but their decrease in market share has lessened Microsoft’s control over its rivals. The company has found its grip loosening with the arrival of high-speed internet, web-based solutions and cloud computing, which do not require fidelity to one OS.

The increasing popularity of mobile devices has seen a power shift from Microsoft to Apple and Google, who are far more powerful in that sector. It is not just consumer attention that has shifted from Microsoft to its competitors, as Google now finds itself under investigation from regulators in much the same way as Microsoft was back in 2000.

Nowadays regulators are not clamoring for the breakup of Microsoft Corporation (NASDAQ:MSFT), but stockholders and analysts are. A recent spate of corporate spinoffs has increased the pressure on Microsoft to separate its consumer and corporate businesses. So far however, CEO Satya Nadella seems set on maintaining the present structure of the company.

Microsoft Band vs FitBit Charge HR specs comparison

We pit the two latest fitness tracking wearables head to head

By Lee Bell

FOR THOSE LOOKING to keep tabs on their health, there has never been more choice on the market for wearable fitness trackers, and those after the latest gadget to do the job, the Microsoft Band and the FitBit Charge HR, both announced just this week, are perhaps the two devices that have caught the eyes of potential buyers.

We have pitted the two devices head to head on paper, to see which one comes out on top in terms of specifications.

Sensors
Microsoft Band: Optical heart rate sensor, 3-axis accelerometer, gyrometer, ambient light sensor, skin temperature sensor, UV sensor, capacitive sensor, galvanic skin response.
FitBit Charge HR: Accelerometer, gyrometer, always-on heart-rate sensor.

When it comes to integrated sensors, both wearable devices tout the standard activity sensors for keeping track of calories burned while running, walking, climbing, swimming, etc, as well as sleep monitoring and heart rate monitoring.

But while the Charge HR boasts PurePulse, a feature that sees the band continually monitoring heart rate whether you're asleep or awake and funnelling the results into FitBit's app, the Microsoft Band features a UV sensor so it knows when your skin has had too much sun, a nice bonus for those who like to train outdoors and something lacking on the Charge HR.

Communications and features
Microsoft Band: As well as tracking biometrics, Redmond's Band wearable has a built-in timer, alarm clock and provides access to emails and calendar, all hooked up to Microsoft's Cortana voice command system to avoid having to fiddle with settings on the small screen.
FitBit Charge HR: A Caller ID function on the Charge HR helps users stay connected to incoming calls when paired with smartphone and the wristband vibrates and shows the caller's name or number when a smartphone is nearby.

In terms on keeping tabs on your communications, both devices hook up to a smartphone to make you aware of your most recent social notifications. However, the Microsoft Band seems to have an edge over the FitBit, with built in email and colander functions, all activated with optional Cortana voice command.

Display
Microsoft Band: 1.4in TFT full colour display with 320x106 pixels resolution
FitBit Charge HR: Horizontal OLED display; size unknown

It goes without saying that the bigger and more colourful display on Microsoft's Band wearable will appeal to customers in the market for a next-gen wearable.

Compatibility
Microsoft Band: Works with Windows Phone 8.1 update with Bluetooth, iOS 7.1 and later and Android 4.3-4.4 phones, with Bluetooth.
FitBit Charge HR: Claims to work with most recent smartphones models that have Bluetooth compatibility.

Although we haven't yet had official confirmation from FitBit on which devices the Charge HR supports, the firm has said it will work with most, so it's likely that both wearables in our spec comparison will support the same devices.

Battery 
Microsoft Band: Dual 100mAh rechargeable lithium-ion polymer batteries equating to around 48 hours of normal use, although Microsoft says advanced functionality like GPS use will impact battery performance.
FitBit Charge HR: FitBit claims the HR will have a battery life of up to 5 days.

Clearly, FitBit takes the biscuit in terms of battery life, and is definitely aimed at users wanting a wearable for purely fitness tracking as opposed to a variety of other novelty features.

Design
Microsoft Band: Thermal plastic elastomer with adjustable fit clasp, weighs 60g, sweat and splash-resistant
FitBit Charge HR: uses a standard watch-like buckle instead of little snap-on prongs, for a snugger fit on a water-resistant, textured waterproof wristband design.

While the Microsoft Band is available in three different sizes depending on the thickness of users' wrists, FitBit's Charge HR has a standard watch-like buckle design for a snug fit. Both designs are unique in in their own ways, with each appealing to different users depending on their preferences.

Pricing and availability
FitBit's Charge HR will be available "broadly" in early 2015 for £120, while Microsoft hasn't yet announced any UK availability for the Band.

However is available in the US now for £200, which translates to around £125.

Overall
For those after a wearable fitness tracker, the decision between a Microsoft Band or a FitBit Charge HR is a close one to call.

While the Microsoft Band trumps the Charge HR in most categories - including display and features - buyers should also bear in mind that they may be let down in terms of battery life, something that is trumped by the FitBit Charge HR which touts more than double the battery life than the Band.

Android founder Andy Rubin is leaving Google

By Carly Page

Will create an incubator for hardware startups

ANDY RUBIN, co-creator of Google's Android software and more recently head of the company's nascent robotics efforts, is leaving the company.

The Wall Street Journal (paywalled) reported Rubin's departure on Thursday, revealing that he is leaving Google after nine years to create an incubator for hardware startups in the field of robotics.

Google CEO Larry Page confirmed Rubin's exit in a statement, and thanked him for his work at the company.

"I want to wish Andy all the best with what's next. With Android he created something truly remarkable with a billion plus happy users. Thank you," Page said.

Rubin joined Google when the company bought his Android startup in 2005. Since that time, Rubin has seen the software take on the likes of Apple's iOS to become the most widely used mobile operating system in the world.

In 2013, Android fell under the purview of Sundar Pichai, who had formerly managed the company’s work with the Chrome web browser and operating system.

Just last week it was revealed that Page has given Pichai more responsibility by putting him in charge of almost everything. 

Rubin stayed at Google after leaving the Android team to work on robotics, overseeing many acquisitions in the space, including that of Boston Dynamics.

Google research scientist James Kuffner will take Rubin's place to lead the robotics group. 

Rubin also played a major role in Google's legal battle with Oracle over the use of Java code in Android, testifying in court that, while working on Android, he had been under the impression that key Java APIs were copyrighted.

Microsoft's first non-Nokia Lumia device will arrive on 11 November

By Carly Page

Teaser suggests a mid-range smartphone is on the way

MICROSOFT HAS RELEASED some details about its first non-Nokia branded Lumia smartphone, which is scheduled to launch on 11 November.

Microsoft confirmed last month that it intended to ditch the Nokia brand on Windows Phone devices following its acquisition of the company, replacing it with Microsoft Lumia.

"In the coming weeks and months, you’ll start seeing even more brand experience come to life across different channels as we transition from Nokia Lumia to Microsoft Lumia," the firm said.

Microsoft offered a very brief teaser on Friday about the first phone to come with the new branding, which it said will be unveiled on 11 November.

"Microsoft is delivering the power of everyday mobile technology to everyone," the firm said, hinting that it will unveil a mid-range Windows Phone device rather than an expensive high-end model.

The posting also includes an image of a curved orange-coloured device with a focus on the front-facing camera, suggesting that it could be a cheaper version of the Nokia Lumia 735.

Chinese website Sina Weibo claims to have revealed some of the features of the incoming device, which seem to confirm that it will be inexpensive.

If the leak is legit, we can expect Microsoft's first Lumia smartphone - which is tipped to launch as the Lumia 520 or Lumia 525 - to feature a 5in display, a 1.2GHz Qualcomm Snapdragon processor, 1GB RAM and a 5MP rear-facing camera. 

That's all we know for now, so check back on Tuesday for all the latest.