Microsoft’s woes are too big to ignore.

Problem area number one: The high-profile Surface tablet/notebook device is flopping. While the 64-bit Intel-based Surface Pro hasn’t sold well, the 32-bit ARM-based Surface RT tanked. Big time. Microsoft just slashed its price — maybe that will help. Too little too late?

To quote from Nathan Ingraham’s recent story in The Verve, 

Microsoft just announced earnings for its fiscal Q4 2013, and while the company posted strong results it also revealed some details on how the Surface RT project is costing the business money. Microsoft’s results showed a $900 million loss due to Surface RT “inventory adjustments,” a charge that comes just a few days after the company officially cut Surface RT prices significantly. This $900 million loss comes out of the company’s total Windows revenue, though its worth noting that Windows revenue still increased year-over-year. Unfortunately, Microsoft still doesn’t give specific Windows 8 sales or revenue numbers, but it probably performed well this quarter to make up for the big Surface RT loss.

At the end of the day, though, it looks like Microsoft just made too many Surface RT tablets — we heard late last year that Microsoft was building three to five million Surface RT tablets in the fourth quarter, and we also heard that Microsoft had only sold about one million of those tablets in March. We’ll be listening to Microsoft’s earnings call this afternoon to see if they further address Surface RT sales or future plans.

Microsoft has spent heavily, and invested a lot of its prestige, in the Surface. It needs to fix Windows 8 and make this platform work.

Problem are number two: A dysfunctional structure. A recent story in the New York Times reminded me of this 2011 cartoon describing six tech company’s charts. Look at Microsoft. Yup.

Steve Ballmer, who has been CEO since 2000, is finally trying to do something about the battling business units. The new structure, announced on July 11, is called “One Microsoft,” and in a public memo by Ballmer, the goal is described as:

Going forward, our strategy will focus on creating a family of devices and services for individuals and businesses that empower people around the globe at home, at work and on the go, for the activities they value most. 

Editing and restructuring the info in that memo somewhat, here’s what the six key non-administrative groups will look like:

Operating Systems Engineering Group will span all OS work for console, to mobile device, to PC, to back-end systems. The core cloud services for the operating system will be in this group.

Devices and Studios Engineering Group will have all hardware development and supply chain from the smallest to the largest devices, and studios experiences including all games, music, video and other entertainment.

Applications and Services Engineering Group will have broad applications and services core technologies in productivity, communication, search and other information categories.

Cloud and Enterprise Engineering Group will lead development of back-end technologies like datacenter, database and specific technologies for enterprise IT scenarios and development tools, plus datacenter development, construction and operation.

Advanced Strategy and Research Group will be focused on the intersection of technology and policy, and will drive the cross-company looks at key new technology trends.

Business Development and Evangelism Group will focus on key partnerships especially with innovation partners (OEMs, silicon vendors, key developers, Yahoo, Nokia, etc.) and broad work on evangelism and developer outreach. 

If implemented as described, this new organization should certainly eliminate waste, including redundant research and product developments. It might improve compatibility between different platforms and cut down on mixed messages.

However, it may also constraint the freedom to innovate, and promote the unhealthy “Windows everywhere” philosophy that has hamstrung Microsoft for years. It’s bad to spend time creating multiple operating systems, multiple APIs, multiple dev tool chains, multiple support channels. It’s equally bad to make one operating system, API set, dev tool chain and support channel fit all platforms and markets.

Another concern is the movement of developer outreach into a separate group that’s organizationally distinct from the product groups. Will that distance Microsoft’s product developers from customers and ISVs? Maybe. Will the most lucrative products get better developer support? Maybe.

Microsoft has excelled in developer support, and I’d hate to see that suffer as part of the new strategy. 

Read Steve Ballmer’s memo. What do you think?

Z Trek Copyright (c) Alan Zeichick

Not long ago, if the corporate brass wanted the change major functionality in a big piece of software, the IT delivery time might be six to 12 months, maybe longer. Once upon a time, that was acceptable. Not today.

Thanks to agile, many software changes can be delivered in, say, six to 12 weeks. That’s a huge improvement — but not huge enough. Business imperatives might require that IT deploy new application functionality in six to 12 days.

Sounds impossible, right? Maybe. Maybe not. I had dinner a few days ago with S. “Soma” Somasegar (pictured), the corporate vice president of Microsoft’s Developer Division. He laughed – and nodded – when I mentioned the need for a 30x shift in software delivery from months to days.

After all, as Soma pointed out, Microsoft is deploying new versions of its cloud-based Team Foundation Service every three weeks. The company has also realize that revving Visual Studio itself every two or three years isn’t serving the needs of developers. That’s why his team has begun rolling out regular updates that include not only bug fixes but also new features. The latest is Update 2 to Visual Studio 2012, released in late April, which added in new features for agile planning, quality assurance, line-of-business app developer, and improvements to the developer experience.

I like what I’m hearing from Soma and Microsoft about their developer tools, and about their direction. For example, the company appears sincere in its engagement of the open source community through Microsoft Open Technologies — but I’ll confess to still being a skeptic, based on Microsoft’s historical hostility toward open source.

Soma said that it’s vital not only for Microsoft to contribute to open source, but also to let open source communities engage with Microsoft. It’s about time!

Soma also cited the company’s new-found dedication to DevOps. He said that future versions of both on-premises and cloud-based tools will help tear down the walls between development and deployment. That’s where the 30x velocity improvement might come from.

Another positive shift is that Microsoft appears to truly accept that other platforms are important to developers and customers. He acknowledges that the answer to every problem cannot be to use Microsoft technologies exclusively.

Case in point: Soma said that fully 60% of Microsoft developers are building applications that touch at least three different platforms. He acknowledged that Microsoft still believes that it has the best platforms and tools, but said, “We now know that developers make other choices for valid reasons. We want to meet developers where they are” – that is, engaging with other platforms.

Soma’s words may seem like a modest and obvious statement, but it’s a huge step forward for Microsoft.

Cloud computing is seductive. Incredibly so. Reduced capital costs. No more power and cooling of a server closet or data center. High-speed Internet backbones. Outsourced disaster recovery. Advanced edge caching. Deployments are lightning fast, with capacity ramp-ups only a mouse-click away – making the cloud a panacea for Big Data applications.

Cloud computing is scary. Vendors come and vendors go. Failures happen, and they are out of your control. Software is updated, sometimes with your knowledge, sometimes not. You have to take their word for security. And the costs aren’t always lower.

An interesting new study from KPMG, “The Cloud Takes Shape,” digs into the expectations of cloud deployment – and the realities.

According to the study, cloud migration was generally a success. It showed that 33% of senior executives using the cloud said that the implementation, transition and integration costs were too high; 30% cited challenges with data loss and privacy risks; 30% were worried about the loss of control. Also, 26% were worried about the lack of visibility into future demand and associated costs, 26% fretted about the lack of interoperability standards between cloud providers; and 21% were challenged by the risk of intellectual property theft.

There’s a lot more depth in the study, and I encourage you to download and browse through it. (Given that KPMG is a big financial and tax consulting firm, there’s a lot in the report about the tax challenges and opportunities in cloud computing.)

The study concludes,

Our survey finds that the majority of organizations around the world have already begun to adopt some form of cloud (or ‘as-a-service’) technology within their enterprise, and all signs indicate that this is just the beginning; respondents expect to move more business processes to the cloud in the next 18 months, gain more budget for cloud implementation and spend less time building and defending the cloud business case to their leadership. Clearly, the business is becoming more comfortable with the benefits and associated risks that cloud brings.

With experience comes insight. It is not surprising, therefore, that the top cloud-related challenges facing business and IT leaders has evolved from concerns about security and performance capability to instead focus on some of the ‘nuts and bolts’ of cloud implementation. Tactical challenges such as higher than expected implementation costs, integration challenges and loss of control now loom large on the cloud business agenda, demonstrating that – as organizations expand their usage and gain more experience in the cloud – focus tends to turn towards implementation, operational and governance challenges.

Tomorrow Americans will celebrate Thanksgiving. This is an odd holiday. It’s partly religious, but also partly secular, dating back to the English colonization of eastern North America. A recent tradition is for people to share what they are thankful for. In a lighthearted way, let me share some of my tech-related joys.

• I am thankful for PDF files. Websites that share documents in other formats (such as Microsoft Word) are kludgy, and document never looks quite right.

• I am thankful for native non-PDF files. Extracting content from PDF files to use in other applications is a time-consuming process that often requires significant post-processing.

• I am thankful that Hewlett-Packard is still in business – for now at least. It’s astonishing how HP bungles acquisition after acquisition after acquisition.

• I am thankful for consistent language specifications, such as C++, Java, HTML4 and JavaScript, which give us a fighting chance at cross-platform compatibility. A world with only proprietary languages would be horrible.

• I am thankful for HTML5 and CSS3, which solve many important problems for application development and deployment.

• I am thankful that most modern operating systems and applications can be updated via the Internet. No more floppies, CDs or DVDs.

• I am thankful that floppies are dead, dead, dead, dead, dead.

• I am thankful that Apple and Microsoft don’t force consumers to purchase applications for their latest desktop operating systems from their app stores. It’s my computer, and I should be able to run any bits that I want.

• I am thankful for Hadoop and its companion Apache projects like Avro, Cassandra, HBase and Pig, which in a only a couple of years became the de facto platform for Big Data and a must-know technology for developers.

• I am thankful that Linux exists as a compelling server operating system, as the foundation of Android, and as a driver of innovation.

• I am thankful for RAW photo image files and for Adobe Lightroom to process those RAW files.

• I am thankful for the Microsoft Surface, which is the most exciting new hardware platform since the Apple’s iPad and MacBook Air.

• I am thankful to still get a laugh by making the comment, “There’s an app for that!” in random non-tech-related conversations.

• I am thankful for the agile software movement, which has refocused our attention to efficiently creating excellent software, and which has created a new vocabulary for sharing best practices.

• I am thankful for RFID technology, especially as implemented in the East Coast’s E-Zpass and California’s FasTrak toll readers.

• I am thankful that despite the proliferation of e-book readers, technology books are still published on paper. E-books are great for novels and documents meant to be read linearly, but are not so great for learning a new language or studying a platform.

• I am thankful that nobody has figured out how to remotely hack into my car’s telematics systems yet – as far as I know.

• I am thankful for XKCD.

• I am thankful that Oracle seems to be committed to evolving Java and keeping it open.

• I am thankful for the wonderful work done by open-source communities like Apache, Eclipse and Mozilla.

• I am thankful that my Android phone uses an industry-standard Micro-USB connector.

• I am thankful for readers like you, who have made SD Times the leading news source in the software development community.

Happy Thanksgiving to you and yours.