Office on Surface Pro suggests a shift in Microsoft's sales strategy

Surface Pro tablets to be sold in Japan will come with fully-licensed copy of Office Home & Business 2013

Microsoft yesterday announced that Surface Pro tablets it will start selling in Japan on June 7 will come with a fully-functional copy of Office, a bundle one analyst said hints at a change in Microsoft's sales strategy for its homegrown hardware.

Both Japanese configurations of the Surface Pro -- one with 128GB of storage space, another with 256GB -- will include Office Home & Business 2013, Microsoft confirmed Wednesday. The productivity suite will be a fully-licensed version, not a time-limited trial.

According to a press release issued by Microsoft Japan, the 128GB Surface Pro will sell for 99,800 yen, including taxes, or $986 at current exchange rates. The 256GB model will cost 119,800 yen, or approximately $1,184.

The tablets sold in Japan will not be the first from Microsoft to bundle Office: More than a month ago the company launched a special edition Surface Pro in China that included Office Home & Student 2013. But the Japanese configurations will be the first to come with a commercial-use edition of Office -- one that can legally be used for work and in the workplace -- and on a tablet powered by Windows 8 Pro. The special Chinese Surface Pro bundle relied on Windows 8, the consumer-grade OS.

Microsoft has also included Office Home & Student RT with all Windows RT-powered tablets, its own Surface RT among them. Like the Surface Pro in China, however, Office on a Surface RT is not licensed for work, and lacks the Outlook email client. Outlook is included with Home & Business 2013.

Surface Pro tablets now sold in the U.S. come with a one-month trial of Office 365 Home Premium, Microsoft's rent-not-buy subscription service for the suite. That, too, is for personal use only, and not licensed for work.

The addition of Office Home & Business to the Surface Pro in Japan sparked speculation from analysts.

"I think it's possible this means Microsoft will do the same elsewhere to firm up the footprint [of the Surface Pro] in the market," said Ezra Gottheil, of Technology Business Research. "After all, the cost of goods for software is zero."

Wes Miller, of Directions on Microsoft, echoed Gottheil. "Definitely possible," he said of Microsoft tossing Office Home & Business 2013 into all Surface Pro tablets. "This could reflect a different angle on selling the Surface Pro."

Both analysts noted that the move would be in keeping with Microsoft's apparent strategy to use Office as a prime selling point for its Surface line, and Windows 8-powered tablets in general.

By using Office as a carrot for Windows, the theory goes, Microsoft has decided to forego revenue it would generate if it released versions for Android and iOS -- reportedly slating those editions for late-2014 shipping -- instead putting all its horses in Windows' traces.

Adding Office Home & Business 2013 would also reinforce Microsoft's implied contention that the Surface Pro is for work, said Miller. And it would be a concession that the Surface Pro's $899-$999 price can't compete in the consumer space.

The Japanese price for the 128GB Surface Pro is close enough to the U.S. price, said Miller, that if Microsoft does pre-load Office in America, it will probably maintain the current cost. "You'd get Office included for the same price," Miller said.

According to a Microsoft price sheet, the pre-tax price of the 128GB Surface Pro in Japan is 95,048 yen, or about $944, just $45 more than in the U.S.

Gottheil and Miller both said that if Microsoft does pull the trigger on bundling Office Home & Business 2013, it would almost certainly extend a deal of some sort to its OEM (original equipment manufacturer) partners for their Windows 8 tablets.

"They won't do this to hurt OEMs, so maybe Microsoft will define a set of products that compete head-to-head with the Surface Pro, and make those OEMs the same deal, or a price cut on Office," said Gottheil.

"I would expect some kind of similar pricing to OEMs," said Miller, "or Microsoft risks more conflict with OEMs."

Microsoft's relationships with its partners has been rockier in the past year, kick started last June when the Redmond, Wash. developer surprised everyone -- OEMs included -- by unveiling its Surface line, the first-ever computing hardware designed in-house. The lackluster performance of Windows 8 and Windows RT has further strained those relationships, with several long-time partners dissing the latter and Dell, the world's third-largest computer maker, blaming Windows 8 for some of its financial woes.

Japan's Surface Pro configurations -- 128GB and 256GB, with the current 64GB model missing -- may also signal that Microsoft will kill off the 64GB Surface Pro in all markets. That entry-level model has come under fire because the storage space available to users is a relatively meager 28GB.

The Japanese offering, however, may not herald a shift, cautioned Gottheil. "Microsoft may simply be experimenting with ways for a broader distribution of the Surface Pro," he said of the bundling.

And other problems surface -- no pun intended -- with the inclusion of Office Home & Business 2013, Miller added. "If they're branding the Pro as the business [system], what exactly is the Surface RT for?" he asked.

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Microsoft brushes off claim Xbox Live accounts were compromised

The hacker has posted a link on Pastebin to a 6GB file that supposedly contains account credentials

Microsoft brushed off a dubious hacker's claim on Thursday that he stole 47 million account credentials for Microsoft's Xbox Live gaming service.

The hacker, who goes by the Twitter handle "@Reckz0r," wrote on Pastebin that Microsoft stored the login credentials in plain text. The data included email addresses and passwords, he added.

The alleged breach comes just days after Microsoft unveiled the Xbox One, the latest iteration of the gaming system.

"Xbox Live has not been hacked," the company said in a statement. "Microsoft can confirm that there has been no breach to the security of our Xbox Live service."

In a lengthy note on Pastebin, drenched in profanity, Reckz0r wrote "Microsoft is a pest to humanity." He included a link to a 6GB file of the credentials and posted hundreds more in plain text, some of which he wrote dated to around 2009. The newer accounts were contained in the 6GB file, he wrote.

Reckz0r has a track record of posting old data. Last June, he posted a link on Pastebin to a data dump, writing on Twitter that he had "penetrated over 79 large banks" and obtained 50GB of data on MasterCard and Visa cardholders.

A payment card industry source said at the time the data appeared to be old. One person whose data was released told IDG News Service that the information attached to his name was years out of date.

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Windows Blue will be free upgrade for Windows 8 customers

The update will be officially called Windows 8.1, according to Windows division co-chief Tami Reller

Microsoft's Windows 8 update, code-named Windows Blue, will be formally released as Windows 8.1 and will be free for customers who have the new OS installed.

Windows 8.1 will be an "update" for both Windows 8 and for Windows RT, the version of the OS designed for devices that run on ARM chips, said Tami Reller, the chief financial officer and chief marketing officer of the Windows Division, speaking at the JP Morgan Technology, Media & Telecom Conference Tuesday.

As an update, Windows 8.1 will be more substantial than the regular patches Microsoft pushes out for the OS, but will not represent a dramatic leap like the upgrade from Windows 7 to Windows 8, she said.

Moreover, Windows 8.1 will be "really easy" and "straightforward" for customers to install, Reller added.

Microsoft's decision confirms speculation from industry analysts who spoke recently about this topic.

Last week, Reller and the other Windows chief, Julie Larson-Green, a corporate vice president in charge of the OS' development, provided more details about Windows Blue, including that it will be delivered before the end of the year and that a preview will be released at the end of June during Microsoft's Build conference for developers.

Larson-Green didn't say what changes Windows Blue will feature, but conceded that Microsoft has discussed user complaints about the removal of the start menu on Windows 8 and that it might be useful to restore it.

Asked if she could be more specific about the final release of Windows 8.1, Reller on Tuesday declined to provide a more concrete date but acknowledged that Microsoft wants to give OEM partners a chance to load it into computers they release for the holiday season.

She also reiterated that OEM partners are working on smaller Windows 8 and Windows RT tablets with 7-inch and 8-inch screens, and disclosed that there are now more than 70,000 applications for the OS in the Windows Store.

She also said Microsoft is satisfied with the amount and variety of Windows 8 and Windows RT devices, including desktop PCs, low-priced laptops with touch screens, sophisticated convertible laptops with detachable keyboards that double as tablets, all-in-one PCs and other variations.

"We feel very good about the direction we're headed with Windows 8," Reller said.

Windows 8 has a drastically redesigned interface based on tile icons intended to make the OS optimized for touchscreen devices such as tablets. However, it has not been an unqualified success and the lack of uptake by users has been blamed in part for the dismal performance of the PC market overall.

The Windows 8.1 preview version that will be delivered in June will be available for anyone to download and test drive, not just developers.

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The privacy organization has hidden its ties to corporate backers

After being accused of a lack of transparency by an independent watchdog, the European Privacy Association (EPA) has confirmed that Google, Microsoft and Yahoo are backers.

The Corporate Europe Observatory (CEO), which works to expose privileged access in E.U. policy making, said in a complaint Thursday that the European Privacy Association is working to represent industry interests in the debate on data protection in Europe, even though it has not listed any corporate backers on the E.U.'s "Transparency Register."

The register, which is operated by the European Parliament and European Commission, requires all signatories to disclose their interests, objectives or aims and, where applicable, the clients they represent.

The EPA is listed in the category of think tanks, research and academic institutions and claims to have only 10 private (non-corporate) members. However, EPA managing director Pietro Paganini confirmed to the IDG News Service that Google, Yahoo and Microsoft are members.

CEO campaign coordinator Olivier Hoedeman was not surprised. "A look at EPA's activities with regard to the ongoing debate on the overhaul of the European Data Protection rules shows that it favors a lighter regulatory touch and until recently the EPA advertised business membership at a cost of a!10,000 per year on its website," Hoedeman said.

He said that the name of the organization, with its pro-privacy connotations, conflicted with its very pro-industry stance, creating "a confusing, a mismatch." CEO has described the EPA as an "astroturf organization," or front group, defending the interests of large IT corporations.

Paganini refuted these allegations, saying that although the EPA listens to its members ideas and concerns, the reports it produces are independent. He claimed the failure to list the companies on the Transparency Register was an oversight.

Joe McNamee of EDRi (the European digital rights organization) said he had brought the issue to EPA's attention four months ago in January of this year but that nothing had been done. Paganini said that EPA did not know it was supposed to list any corporate members on the transparency register. was unfamiliar with the procedure in Brussels. However, EPA chairwoman Karin Riis Jorgensen is a former elected member of the European Parliament.

CEO says there is also evidence that the EPA has close relationships with two lobbyist consultancy firms, Competere Geopolitical Management and DCI Group, and is working to promote industry-friendly legislation in the new Data Protection Regulation that digital rights organizations say will undermine fundamental civil liberties online.

The CEO has laid out its allegations in a complaint to the secretariat overseeing the transparency register. The secretariat says it will examine the evidence put forward by CEO and by June 7 will announce a decision whether to impose sanctions or require the company to update its entry.

Google had no comment on the issue. Microsoft did not have an immediate comment and Yahoo officials were not available for comment.

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Microsoft responds to Larry Page remarks, but Oracle is quiet

Larry Page criticized both companies in response to questions at Google I/O, just after lamenting negativity in the tech industry

Microsoft has responded to a high-profile put-down by Google CEO Larry Page, but Oracle, at least for now, won't be drawn into a public fight with the executive.

Page criticized Microsoft and Oracle in response to questions after his keynote speech at Google's I/O developer conference in San Francisco Wednesday. Microsoft came under fire about instant messaging interoperability, while Oracle was singled out over Java.

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"We've kind of had an offer forever that we'll interoperate on instant messaging," he said in response to a question. "I think just this week Microsoft took advantage of that by interoperating with us, but not doing the reverse. Which is really sad, right? And that's not the way to make progress. You need to actually have inter operation, not just people milking off one company for their own benefit."

Microsoft fired back Thursday via an emailed statement: "It's ironic that Larry is lending his voice to the discussion of interoperability considering his company's decision -- today -- to file a cease and desist order to remove the YouTube app from Windows Phone, let alone the recent decision to make it more difficult for our customers to connect their Gmail accounts to their Windows experience."

When asked about how Oracle's acquisition of Java might affect Android, he said, "I think we've had a difficult relationship with Oracle. Including having to appear in court as a result of it. So I think, again, we'd like to have a cooperative relationship with them, that hasn't seemed possible."

"And I think, again, money is probably more important to them than having any kind of collaboration or things like that. So I think that's been very difficult," he said.

Oracle declined to comment on the remarks.

CEO's criticizing competitors isn't unusual, but Page's comments came shortly after his speech in which he lamented negativity in the technology sector and said it was an inhibitor to growth.

"You know, every story I read about Google, it's kind of us versus some other company, or some stupid thing. And I just don't find that very interesting. We should be building great things that don't exist. Right? Being negative is not how we make progress," he said in the speech.

Page's comment on negativity got a round of applause from his audience -- around 6,000 of the company's developers -- but the Microsoft and Oracle comments that followed seemed guaranteed to generate just the kind of coverage he finds so uninteresting.

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VMware launches dual persona feature for Verizon smart phones

The feature is currently available on the LG Intuition and Motorola RAZR M smartphones

VMware today announced that its dual persona mobile device software is now available on some Android OS-based mobile devices sold by Verizon.

Dual persona technology creates two OS instances, one for business use and the other for personal use.

VMware's dual persona application, called VMware Horizon Mobile, is available now for the LG Intuition and Motorola RAZR M smartphones. Workers who already own the phones can download the application from VMware's website.

VMware said additional device support is expected throughout the year.

"There's no special hardware requirement to run this. All you need is a single core processor and 1GB of RAM," said Srinivas Krishnamurti, senior director of Mobile Solutions for End-User Computing at VMware. "Our expectation is that by end of year there will be tens of millions of VMware ready devices."

VMware and Red Bend separately announced plans to offer dual persona smartphone technology last year. Red Bend offers the ability to host both a business and personal OS instance on hardware. VMware and other companies offer it through software.

Red Bend's Type 1 hypervisor runs on a new generation of mobile processors, such as the ARM Cortex-A15.

VMware uses a Type 2 hypervisor product that embeds on a smartphone and awaits activation by a corporate IT department.

A Horizon Mobile Manager server on the backend recognizes when an authorized users logs-in, and a pre-configured an Android OS instance (with all the work apps) is pushed to the smartphone. If an employee tries to transfer data or apps between the corporate instance and the private instance, the transfer is automatically blocked.

At the beginning of the year, BlackBerry announced its Balance software, which creates dual personas in the BlackBerry 10 OS that runs the Z10 smartphone.

In March, BlackBerry announced a dual persona technology called Secure Work Space for iOS and Android, which runs as an update to BlackBerry Enterprise Server 10. A closed beta test recently began with enterprise and government customers; the software will be generally available by June 30, BlackBerry said. Pricing has not been announced.

Like other dual persona mobile applications, VMware's new Horizon Mobile creates a separate container for corporate content and helps prevent data leakage and preserve the privacy of any personal information on the same device. IT manages only what it needs to manage, bringing security and compliance to personally owned devices.

Security for Android devices is enforced by isolating personal and corporate assets and encrypting all corporate assets that reside on the device.

Horizon Mobile leverages existing enterprise infrastructure including virtual private network, authentication solutions and full integration with standard enterprise directory services so enterprises can extend their current trusted and compliant security services to smartphones.

VMware Horizon Mobile is available immediately with perpetual licensing starting at $125 per user. The server software can be purchased through local VMware and Verizon Wireless resellers.

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