Poor Microsoft...

Have you ever watched your kids, or other kids do their homework on the internet?  My daughter is 11, and she uses Google Docs so she can collaborate with others and work on their projects at the same time.  Amazing.  Microsoft today just announced a massive discount on Office Ultimate for students - a discount of up to 91%.  It works out to around $59.95 in the end for the entire package.

"At Microsoft, we understand the needs of the college and university student population in the U.S., and we want to provide students with the tools they need to succeed in their careers," said Naman Khan, Worldwide Product Manager, Office Ultimate Steal. "The Ultimate Steal Promotion allows students to maximize their productivity and reach their full potential, at a fraction of the price they would otherwise pay at a retail store. These savings are especially important in today's challenging economy."

That quote should probably read something like: "At Microsoft people are freaked out about what Google is doing with their online initiative. Hell our kids use Google Docs and we still can't figure out why, it doesn't even come on a CD. Hopefully by coming out with a cool edgy name like Ultimate Steal we can fool kids into thinking that spending $60 is better than using a free seamless service that just works."

Honestly, I shouldn't be laughing. Microsoft knows that getting in with students is a strategy that goes back to the original Apple days, where if you get the students using your technology they'll go home and ask their parents to buy it for them.  Eventually they'll go out on their own and use the tools they grew up on. The issue is the cloud is getting bigger and more powerful, and it has everyone thinking about what's next. Generally hardware is becoming less relevatent as software continues to drive the markets forward. Thus overall outside of the box thinking is crucial... 

We're certainly being kept on our toes - thank goodness I saw this coming a long time ago.  I am not sitting around waiting to see what happens next that's for sure.

Anyways, just some food for thought.  Is Microsoft's Office as powerful as it once was? I still use it, but admittedly I use Google Docs to collaborate on other projects and it works really well.  Chrome + Gmail + Google Docs + Google Search = Internet Heaven.

How to watch Hulu shows outside of USA

Online video streaming is one of the main traffics on the Internet. With sites like YouTube, Metacafe, Yahoo! Video, MSN Soapbox, Google Video etc, no doubt there are endless sources of online video contents. With the introduction of Hulu, now it is possible to watch your favorite TV shows online where and how you want it. 

It is now possible to watch Hulu shows outside of USA with Hotspot Shield. Download it and go!  Keep in mind, it throws an ad up in your browser, but no big deal - you can always ignore or disable it.

Is $400 the new $900?

I wrote this article for the latest edition of CPU Magazine regarding the sudden increase in volumes on Netbooks, and thus the drop in price on overall systems. I'd like to hear your feedback on this one, thanks for taking the time.

I’d like to take this month to ask CPU readers a question or two. It’s not as simple as a one sentence Q&A; it requires a bit of background. When you are finished reading this article, I’d love if you could email me any comments that you come up with. 

Due to the global economic crisis, companies everywhere are slashing their sales forecasts and many more are closing their doors. The stock market is a mess; companies’ valuations have dropped like bombs; and companies that are highly leveraged are facing a precarious situation, so they’re hacking costs, restructuring, and retrenching. On top of this, we are in the middle of a major real estate crisis, which I believe will lead to a credit card crisis at some point. All of this, and many other factors, have changed consumers’ purchasing behaviors significantly. 

In the last few months, we have witnessed a change in this industry that I’m not sure anyone saw coming—computer companies are seeing their average selling prices fall off a cliff, and most are seeing huge drops in sales volume. In some cases, however, unit sales are through the roof, and there are some manufacturers whose demand has suddenly shifted. 

In many regions, customers seem to be drawn to extremely low-priced technology, such as netbooks and mininotebooks, rather than standard desktops and notebooks. In other words, netbooks and mininotebooks are outpacing everything else. Sales of mininotebooks are skyrocketing and driving overall average selling prices way down. 

Of course, there are exceptions, but overall, if you look at the demand trends from Intel, for example, you’ll see the Atom processor sales are growing faster than any other processor on the chipmaker’s road-map. It’s funny when you put it in real terms, but sales of Atom processors are incredibly successful, much to Intel’s chagrin. Needless to say, the company isn’t completely happy about the sudden success of these processors because it seems as if this trend is eating into their other business, at least for the moment. It’s a bittersweet pill for them because volumes may be high but the average price and margin dollars are very low. All said, you can buy a pretty awesome netbook or mininotebook for under $400, and it does basically everything most people need. 

In a nutshell, then, customers who were once purchasing technology for over $1,000 are now spending less than $400, and instead of supplementing standard PCs with netbooks and mini-notebooks, they are using these devices as their primary devices—or so it seems. I really don’t think cannibalization was part of anyone’s mininotebook business plan. 

I am writing this article on my HP Mini 2140, which is a fantastic little device, but I only use it when I’m moving around often. I can’t see myself replacing my desktop or other notebooks with a mininotebook. I do, however, enjoy carrying this thing around; it’s rugged, simple, and cheap. A great supplement, yes; a replacement, heck no. 

So putting current demands aside, there are economists whose sole job is to determine when things will change so that companies can prepare accordingly. The problem is how does one prepare for the new economy? My question to CPU readers is what do you think will happen when the economy turns around? Do you think we’ll see average selling prices go up again? Do you think the demand for premium PCs will grow and sub-$400 sales will shrink? Do you think those who currently own netbooks and mininotebooks will then turn around and purchase premium systems to supplement their current technology? Do you think that these mini-devices will have enough power in the future to fill a void? 

I suspect that when the economy “turns around” we’re going to be looking at a completely different industry. The question is, what will that industry look like? As more services hit the cloud, does the importance of the client drop? Gaming will still be strong and will still require a fairly robust machine, but with average selling prices of PCs dropping like bombs, I can only imagine this will affect every part of the industry, including gaming. 

Anyway, that’s it for this month—looking forward to your responses!

Rest in Peace old Friend

My old friend Hima Maher passed suddenly this weekend.  It's rough because we hadn't connected in awhile, yet our daughters grew up together - and we pulled our daughter out of school this week so she could spend time with Hima's daughter.  It's a sad time in our family - Hima was a great guy, he has an incredibly strong wife and two beautiful daughters.  He'll be missed, and I'll be back blogging soon.