Microsoft financials: cloud good, Surface down, and “We had no material phone revenue this quarter”

Microsoft has released its financial results for the third quarter of its financial year. Revenue was up 8% year on year, and operating income up 6%. I’m always interested in the segmentation of the figures so here is a quick table:

Quarter ending  March 31st 2017 vs quarter ending March 31st 2016, $millions

Segment Revenue Change Operating income Change
Productivity and Business Processes 7958 +1437 2783 -198
Intelligent Cloud 6763 +667 2181 +5
More Personal Computing 8836 -703 2097 +346
Corporate and Other -1467 +158 -1467 +158

There is a bit more detail in the earnings slide:

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A few points of note:

Cloud growth remains on track. Office 365 business revenue is up 45% year on year, according to Microsoft. Dynamics 365 revenue is up 81%. Azure revenue is up 93%. Of course these figures are offset by static or declining sales of on-premises licenses, though Microsoft does not spell this out precisely.

Windows is not doing too badly, despite continuing weakness in the PC market. OEM revenue up 5%, which the company attributes to “a higher mix of premium SKUs”. Surface is weak. Revenue is down 26%. Microsoft blames “heightened price competition and product end of lifecycle dynamics.” The truth is that the Surface range is not good value versus the competition. There should be a perfect marriage of hardware and software, given that it is all Microsoft, but instead there have been too many little issues. The likes of HP and Dell do a better job at lower price and with easier upgradeability.

“We had no material phone revenue this quarter” says Microsoft. I remain sad about the killing of Windows Phone, and regard it as a mistake, but that is a done deal.

Xbox is doing OK. Xbox live revenue growth has offset declining hardware sales.

Search revenue is up 8%. Nobody pays for search, so this is about advertising. Windows 10 drives users to “Cortana” search, and Edge defaults to Bing. Users can easily find defaults changed inadvertently, which is annoying, but Microsoft has a touch competitor (Google).

 

 

A reminder of Microsoft’s segments:

Productivity and Business Processes: Office, both commercial and consumer, including retail sales, volume licenses, Office 365, Exchange, SharePoint, Skype for Business, Skype consumer, OneDrive, Outlook.com. Microsoft Dynamics including Dynamics CRM, Dynamics ERP, both online and on-premises sales.

Intelligent Cloud: Server products not mentioned above, including Windows server, SQL Server, Visual Studio, System Center, as well as Microsoft Azure.

More Personal Computing: What a daft name, more than what? Still, this includes Windows in all its non-server forms, Windows Phone both hardware and licenses, Surface hardware, gaming including Xbox, Xbox Live, and search advertising.

Microsoft needs to fix its Android emulator

Microsoft wants Windows 10 to be an ideal developer operating system, with its Linux subsystem, and Visual Studio 2017 is notable for its strong cross-platform development tools.

There is an annoyance though. Google’s Android SDK includes an emulator for debugging mobile applications, but it requires hardware acceleration in the form of Intel’s HAXM (Hardware Accelerated Execution Manager). Otherwise you get an error as below:

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Unfortunately this is incompatible with Hyper-V, the hypervisor built into Windows. You cannot fix this by stopping Hyper-V services; it is set when Windows boots.

Hyper-V is increasingly important for general Windows developers. It is not only useful for running up VMs on which to test stuff, but also for the official Docker tools and testing Windows containers.

The solution should be to use the Visual Studio Emulator for Android. This is based on Hyper-V so no problem.

Unfortunately it does not currently work very well. On one of my PCs it starts, but without internet connectivity, rendering it useless for many apps. On another PC it does not start at all.

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I spent a bit of time trying to get it to work. The networking problem seems to be related to conflicts with other applications using Hyper-V. Specifically, the Visual Studio Emulator for Android uses two Hyper-V virtual network adapters, one connected to the Windows Phone Emulator Internal Switch, and the other connected to an external virtual switch. This second adapter gets its network settings using DHCP (there is no way to change this). The emulator app proxies internet connections from the internal to the external network.

The reference to Windows Phone comes about because this is essentially the Windows Phone emulator adapted to run Android.

In my Hyper-V setup I have another internal switch, called DockerNAT, used by the Docker tools, as well as a third internal switch which I’ve used for other things. In the emulator’s network settings I can actually see four Desktop Adapters (in addition to the primary “Emulator adapter”, of which only one has internet connectivity via my business network. I theorised that the emulator is attempting to proxy via the wrong adapter, and disabled the others in Control Panel – Network Connections. However it still does not connect.

Judging by posts like this and this, there may be some cocktail of settings in Hyper-V and in Control Panel that gets this working. Bear in mind though that I want everything else to work too.

I also note that Windows developer evangelist Scott Hanselman suggests setting up a dual boot arrangement so that you can boot with HAXM enabled when you want to develop on Android, and with Hyper-V otherwise – implying that there is no other easy fix.

This works, though it is a dreadful solution. Rebooting is not only time-consuming, but disruptive to the flow of your work, and having to reboot with special settings just to work on Android is painful.

It strikes me that this could be fixed with a bit of effort. If Microsoft is serious about persuading developers to use Windows 10, Visual Studio and Xamarin for cross-platform mobile apps, that would be a good idea.

Email hassles with migration to Windows 10 – if you use Windows Live Mail

Scenario: you are using Windows 7 and for email, Windows Live Mail, Microsoft’s free email application. You PC is getting old though, so you buy a new PC running Windows 10, and want to transfer your email account, contacts and old messages to the new PC.

Operating systems generally come with a built-in mail client, and Windows Live Mail is in effect the official free email client for Windows 7. It was first released in 2007, replacing Windows Mail which was released with Vista in 2006. This replaced Outlook Express, and that evolved from Microsoft Mail and News, which was bundled with Internet Explorer 3 in 1996. Although the underlying code has changed over the years, the user interface of all these products has a family resemblance. It is not perfect, but quite usable.

Windows 8 introduced a new built-in email client called Mail. Unlike Windows Live Mail, this is a “Modern” app with a chunky touch-friendly user interface. Microsoft declared it the successor to Windows Live Mail. However it lacks any import or export facility.

The Mail app in Windows 10 is (by the looks of it) evolved from the Windows 8 app. It is more intuitive for new users because it no longer relies on a “Charms bar” to modify accounts or other settings. It still has no import or export feature.

The Mail app is also not very good. I use it regularly now myself, because there is an account I use which works in Mail but not in Outlook. I don’t like it. It is hard to articulate exactly what is wrong with it, but it is not a pleasure to use. One of the annoyances, for example, is that the folders I want to see are always buried under a More button. More fundamentally, it is a UWP (Universal Windows Platform) app and doesn’t quite integrate with the Windows desktop as it should. For example, pasting text from the clipboard is hilariously slow and flashes up a “Pasting” message in an attempt to disguise this fact. Sometimes it behaves oddly, an open message closes unexpectedly. It is like the UWP Calculator app, another pet hate of mine – I press the Calculator key on my Windows keyboard, up comes the Calculator, then I type a number and it doesn’t work, I have to click on it with the mouse before it accepts input. Just not quite right.

I am getting a little-off topic. Back to my scenario: how are you meant to transition from Windows Live Mail, the official mail client for Windows 7, to the Mail app in Windows 10, if there is no import feature?

In one way I can explain this. First, Microsoft does not really care about the Mail app. Everyone at Microsoft uses Outlook for email, which is a desktop application. This is important, because it means there is no internal pressure to make the Mail app better.

Second, Microsoft figures that most people now have a cloud-centric approach to email. Your email archive is in the cloud, so why worry about old emails in your Mail client?

This isn’t always the case though. A contact of mine has just been through this exact scenario. He has happily used Windows Live Mail (and before that Outlook Express) for many years. He has an archive of old messages which are valuable to him, and they are only in Windows Live Mail.

Unfortunately Microsoft does not currently have any solution for this. The answer used to be that Windows Live Mail actually works fine on Windows 10, so you can just install it. However Microsoft has declared Windows Live Essentials, of which Live Mail is a component, out of support and it is no longer available for download.

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Incidentally I am writing this post in Windows Live Writer, another component of Essentials, but which fortunately has been published as open source.

If you can find the Windows Live installation files though, it still runs fine on Windows 10. You do need the full setup, called wlsetup-all.exe, rather than the web version which downloads components on demand. Here it is, installed and connected on Windows 10:

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This application is no longer being maintained though, and there are some compatibility issues with some email services. This will get worse. The better answer then is to migrate to full Outlook. However, Microsoft makes Outlook expensive for home users, presumably to protect its business sales. Office Home and Student does not include Outlook, and to buy it separately costs more, currently £109 in the UK. Another option is to subscribe to Office 365 and pay a monthly fee.

Even if you intend to migrate to Outlook eventually, it may make sense to use Live Mail for a while on Windows 10. There is an export option to “Exchange” format which means you can migrate messages from Live Mail to Outlook.

This is all more work than it should be, for what must be a common scenario. You would think that migrating from the official mail client for Windows 7, to the official mail client for Windows 10, would not be so difficult.