Imagine Microsoft without Windows or Office

Daily grind

Welcome to Day Two of the new daily Protocol Enterprise newsletter! We’ll be arriving in your inbox each weekday afternoon with a detailed roundup of everything you need to know about the day that was in enterprise tech. Expect to see new, fun sections as well as daily contributions from our growing staff. And if you like what you see, tell a friend.

Spin up

New data from Check Point Software confirms what we already knew about 2021: It was a scary year for cybersecurity professionals. Weekly attacks on individual organizations surged by 50% in 2021 compared to the previous year, with the average organization encountering a staggering 900 attacks per week. Most of those attacks are easily deflected, but the trend is not good.

A MESSAGE FROM LENOVO

When every company is a technology company and technology itself is a competitive differentiator, it’s essential to rethink the way that IT services are delivered and how IT resources are integrated into business units. Lenovo is on this journey together with our customers and our ecosystem of technology partners.

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Exit window?

Microsoft’s decade-long pivot to the cloud will likely be studied in business schools the same way students of a certain age were taught about a similar trick IBM pulled in the mid 1990s under Lou Gerstner; it’s really hard to turn an enterprise battleship around (and, as we’ve learned, even harder to keep it on course). And there’s no way Microsoft would have pulled off that feat without the two enormous cash cows keeping the lights on in Redmond.

But former Microsoft executive Ben Slivka urged the company Tuesday to spin out those two cash cows — Windows and Office — into separate companies, as reported by CNBC. In his view, this would free up Microsoft to focus on Azure as its primary business — at the cost of roughly one-third of its quarterly revenue.

Windows was the focal point for every decision Microsoft made for decades. There’s no question that under CEO Satya Nadella, that focal point has shifted.

• Core Windows development now sits within the Azure organization, for example.
• And inside Azure, more enterprise customers run Linux instances these days than Windows Server, after years of steady growth.
• Microsoft still spends a lot of money on core Windows development and Windows PCs had a bit of a pandemic-fueled renaissance, but its primary enterprise customer grows less and less interested in Windows Server every year.

However, Office is still the crown jewel of Microsoft’s enterprise strategy.

• The company doesn’t like to talk about specific numbers, but a great deal of its recent cloud growth has come from traditional Office desktop software users converting to Office 365 subscriptions.
• Office is also the entry point into the average organization against which Microsoft can sell some of its newer enterprise software products, such as Microsoft Teams and Dynamics 365.
• Office 365 is also an integral component of what the company calls the “Microsoft Cloud,” a financial metric that calls out its cloud-centric enterprise businesses and produced $20.7 billion in revenue during the last quarter, up 34%.

Here’s the real question: How long should Microsoft continue to think of itself as a consumer company?

• Its “More Personal Computing” division is a distant third — in terms of both revenue and growth — behind the other two legs of Microsoft’s stool, Productivity and Business Processes (Office) and Intelligent Cloud (Azure).
• While Microsoft has decades of experience in consumer markets and incredible name recognition, consumers and enterprise customers are two very different beasts growing at very different rates.

It’s not impossible to imagine a Windows-less Microsoft. PC and server operating systems have become much less relevant parts of the computing experience and application development activity with the rise of mobile apps, SaaS applications and cloud infrastructure services.

But an Office-less Microsoft? We’ll pass on that bet, although I guess that’s one way all those people calling for AWS to move up the stack into application software could be satisfied.

— Tom Krazit

Atlas sold

Going direct: It’s not always easy to know exactly which enterprise tech services or software features customers really want, but after database company MongoDB launched its database-as-a-service product Atlas in 2016, it found a lot more clues. Michael Gordon, who serves a dual role as the company’s chief operating officer and chief financial officer, revealed a bit about MongoDB’s sales evolution during a talk Monday at the Needham Growth Conference.

Before making its database technology available as an on-demand cloud service, the company had only a few “pockets of the signals” that had to be pieced together to decipher customers’ needs, said Gordon. “So, we used to only know who downloaded it, and then we’d have to do a lot of exploratory work within the account to understand, ‘Oh, maybe there’s some activity, maybe someone asked for a white paper, maybe someone attended the webinar, and try to figure out and triangulate where the activity is.”

That’s changed because the database-as-a-service platform approach allows the company to see how customers actually interact with the product. “Obviously with the database-as-a-service offering, we have many more in-product signals so we’re getting better about harnessing those,” he said.

There’s also been an evolution in terms of how MongoDB sells Atlas, he said. The majority of [Atlas revenue] started out as self-serve — was self-serve sourced,” said Gordon. “But the majority of the expansion occurred while it was in the sales team’s hands. And so I think we’re increasingly getting better and more effective at how to leverage those two together.”

— Kate Kaye

Tuesday Tech

Carbon-aware data-center software: Computing requires power — a lot of power.

A single server rack requires roughly a half acre of solar panels and batteries to operate, and data centers account for roughly 1% to 2% of aggregate worldwide energy use combined — a number which is only likely to rise as our thirst for computing time continues.

Enter the Treehouse project. Treehouse aims to figure out a method that will allow developers much more visibility into the energy required to run their apps, according to a paper published last week. At the moment, developers have almost no visibility into how their decisions might impact the amount of energy necessary to make an app run. But Treehouse’s goal is to give engineers an understanding of how much energy their apps consume, and where they can find efficiencies.

If the project is successful, developers will be able to treat energy usage the same way they handle other performance factors such as memory, cost and processing muscle. That also means data-center operators could set energy-use limits.

— Max A. Cherney

Around the enterprise

Aptiv is acquiring IoT company Wind River from TPG Capital for $4.3 billion in cash, in a deal expected to close later this year.

Nvidia acquired Bright Computing, a leading cluster management company, to bolster its high-performance computing strategy.

The CISA, FBI and NSA issued a joint advisory about Russian state-sponsored cyber attacks on critical infrastructure.

Cloudflare’s DDoS Attack Trends analysis found that ransom DDoS attacks increased by 29% YoY in Q4 2021.

AWS launched a new instance of EC2 with better price-performance for HPC workloads.

A MESSAGE FROM LENOVO

Companies need to be flexible enough to scale up and down different tech stacks for a hybrid, global workforce, and adapt to new challenges. What works in one geography might not for another.

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