Tag Archives: operating systems

The latest Windows 10 update makes activation way easier than before

Activating your copy of Windows 10 has gotten far less tedious in Microsoft’s first major update for the operating system. You no longer have to start by upgrading from a previous install of Windows 7 or Windows 8.1 to get Windows 10 properly activated under Microsoft’s free-for-a-year policy. Now, the company will recognize any valid activation key from those prior versions (or Windows 8) and grant you a “digital entitlement” that makes your install of Windows 10 fully legitimate.

Technically, Microsoft says this is meant to work only when Windows has previously been activated on the same device that Windows 10 is being clean installed on. But testing of recent Insider builds has revealed that the company — at least for now — is being pretty generous with the new activation policy. So if you’ve got an unused key for an older Windows release, you might be able to make the jump right to 10 without any annoying upgrades in your way. There are many more improvements and fixes in the latest Windows 10 update, and you can read about them here.

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Windows 10 booms as PC sales collapse

Ever since Windows 95 launched, PC manufacturers have looked to new operating systems from Microsoft as a way to boost sales. Microsoft’s OS launches often have a push/pull effect on the market; the company’s decision to phase out Windows XP support resulted in a sales bump for the struggling PC market last year, as businesses finally bought new hardware and phased out the ancient operating system. Analysts have been predicting for months that Windows 10’s free upgrade policy could actually drag the PC market lower as consumers opt for in-place upgrades over new OS installations. These predictions are bearing fruit. Windows 10 may be surging, but PC sales have cratered.

According to the analyst firm IDC, worldwide PC sales are now expected to drop by up to 8.7% with a 1.1% drop in 2016 and a possible mild recovery in 2017. The consumer market, however, is expected to be even worse; IDC has no idea when or if PC sales in the consumer space will recover but projects declines through 2019.

The PC perfect storm

PC sales began to dip when tablets exploded, led by Apple and the original iPad. For several years, conventional thinking has been that PC sales were falling because tablets and smartphones were surging. Instead of upgrading older systems, consumers were opting for different devices altogether. This explanation no longer fits as well, given that IDC also expects tablet sales to fall 8%. What’s happening to the market as a whole?

PC market predictions (IDC)

There are multiple factors at work here. Recent currency fluctuations in China and the beating the stock market has taken over the past week are partly to blame for IDC’s worsening projections. The other problem, however, is the rise of so-called “good enough” computing. For decades, the PC market roared ahead thanks to rapid improvements to single-threaded performance from companies like Intel and AMD. The so-called multi-core swerve gave the industry a further boost for several years, since consumers could easily see the advantage of a dual-core or quad-core system over older single-core hardware.

Both of these trends have now run their course. The last Intel CPU to deliver significant, across-the-board improvements over its predecessor was Sandy Bridge, which launched in 2011. Intel has held its core counts steady for the past six years, which means programmers have had little reason to optimize consumer products for more than four cores. AMD’s CPUs may offer more threads, but AMD doesn’t command enough market share to move the dial as far as CPU development trends are concerned.

This trend isn’t unique to the PC space. Year-on-year improvements in tablets and smartphones haven’t stopped, but power consumption and thermal limits often prevent modern hardware from running at full power for more than a handful of seconds. Vendors have eagerly soaked up every improvement in battery life and efficiency by offering chips with higher burst modes and screens that draw more power and generate more heat. The result of these trends is that a smartphone from 2012 is much more useful in 2015 than a 2009 device was in 2012.

PC vendors like HP and Dell love to crow about their latest ultrabook or 2-in-1 designs, but these systems typically sell for over $1000 and account for a distinct minority of total PC sales. Average laptop selling prices are typically between $400 – $500, and if you examine the hardware in that category, it’s hard to get too excited. The systems themselves still typically weigh in at 5-6 lbs, screen resolutions are low, and 5400 RPM HDDs are common. Discrete GPUs and SSD options (even for small drives) don’t exist in this category. At $400, that’s understandable, but a great many $500 – $700 systems have similar restrictions. If you’re an average shopper, in other words, the PC on the shelf doesn’t look dramatically better than the PC at home.

That’s not necessarily fair to vendors like AMD and Intel, who have made tremendous improvements in CPU and SoC power consumption since 2011, but the benefits of ultrabooks — high resolution screens, SSDs, and hybrid 2-in-1 architectures haven’t made it to the mainstream market. It’s little wonder that folks see small reason to upgrade.

It’s not clear how this will resolve. One option is that OEMs may embrace a hardware-as-a-service model, in which consumers rent PCs for monthly payments rather than purchasing them outright. Alternately, OEMs could turn to software sales and licensing to improve their own profit margins, though this would require them to first develop products and services that anyone wanted to pay for. With no sales recovery in sight, the PC market is primed for consolidations and mergers as vendors compete for pieces of an ever-shrinking pie.

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Android security patch ‘flawed’

Android mascot behind a curtain
The flaw is known as the Stagefright bug

An Android update designed to fix a security hole in the operating system is itself flawed, it has emerged.

In July, a vulnerability that affected up to a billion Android phones was made public by software researchers.

Google made a patch available, but security company Exodus Intelligence said it had been able to bypass the fix.

Exodus Intelligence said the update could give people a “false sense of security”.

Google told the BBC that most Android users were protected by a security feature called address space layout randomisation (ASLR).

“Currently over 90% of Android devices have ASLR enabled, which protects users from this issue,” it said.

ASLR makes it difficult for an attacker to plot an attack, and introduces more guesswork to the process, which is more likely to crash a smartphone than compromise it.

‘Vulnerability remains’

In April, another security company, Zimperium, found a bug in Android that could let hackers access data and apps on a victim’s phone, just by sending a video message.

The company disclosed the issue to Google and provided its own patch for the software, which Google made available to phone manufacturers.

Details of the flaw were made public in July, after Google had integrated the patch into the latest version of Android.

At the time, Google pointed out that there had been no reported cases of anybody exploiting the bug.

On Thursday, Exodus Intelligence said its researcher Jordan Gruskovnjak had easily bypassed the patch and the vulnerability remained.

“The public at large believes the current patch protects them when it in fact does not,” the company said on its blog.

‘Bigger challenge’

Android phone
Millions of devices still run old versions of Android

“Stagefright is the early warning alert to a much bigger challenge,” said David Baker, security officer for computing firm Okta.

“There isn’t a comprehensive update solution for Android, since there are so many device makers modifying the software.”

Android is an open source operating system and phone-makers can modify it to use on their handsets.

Phone manufacturers are responsible for updating their own devices with the latest software. But many do not, while some companies use customised versions of Android which take time to rebuild when security changes are made.

For these reasons, only 2.6% of Android phones are running the latest version of the operating system.

Android OS distribution: around 18% of users have the latest operating system
iOS distribution: 85% of users have iOS 8 according to Apple

“Other manufacturers like Apple and BlackBerry control both the hardware and software. That means they can patch flaws much more quickly,” said Mr Baker.

Exodus Intelligence said Google had known about the flaw for more than 120 days and still not fixed it.

“The patch is 4 lines of code and was (presumably) reviewed by Google engineers prior to shipping,” said Exodus Intelligence on its blog.

“If Google cannot demonstrate the ability to successfully remedy a disclosed vulnerability affecting their own customers then what hope do the rest of us have?”

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Windows 10 FUD Fades Fast

Complaints about Windows 10 keep rolling in, but so far none appears to have stuck.

The latest brouhaha is over certain privacy settings. Windows 10 gives users many options to disable certain data-gathering and reporting features, but it appears that some communications to Microsoft servers still slip through.

So far, there doesn’t seem to be anything shifty or harmful about those interactions — but to some users, they’re unsettling. Why is Microsoft doing that?

Wi-Fi Sense and Sensibility

Another thing that just didn’t seem to make sense to some early adopters was Windows 10’s Wi-Fi Sense feature. The controversy over it already seems to have died down, but just a few weeks ago it was the subject of a raging debate.

Wi-Fi Sense automatically connects users to open WiFi networks and can grant their friends access to their own password-protected networks.

Users who want to provide friends access to their password-protected WiFi networks send their passwords through an encrypted link to a Microsoft server, which stores it in encrypted form before sharing it with those friends.

Concerns were raised that hackers might be able to find and extract the passwords, or that someone could “friend” potential victims to get access to their networks.

Another scenario envisioned users being stalked by contacts who’d been given their passwords.

Wi-Fi Sense requires that users give access to all of their contacts or none of them. It doesn’t allow them to be selective about who gets access.

Another fear was that people given access to users’ WiFi networks might be able to hack into other devices connected to those networks in order to steal data and personal information.

“You’re providing access to your network and getting access to networks you may not be sure are secure,” observed Rob Enderle, principal analyst at theEnderle Group.

“It’s a neat feature, but it could be used against you if you aren’t careful,” he told TechNewsWorld. “You want to be sure you’re giving access to, and getting access from, people you trust.”

Who Do You Love?

Like many, Enderle distinguishes between his social media contacts and personal friends, and “features like Wi-Fi Sense, if we use them, are going to force us to curate our friends and contacts more aggressively.”

The inclusion of social network contacts makes this feature “ripe for abuse,” noted Tim Erlin, director of IT security and risk strategy at Tripwire.

Con artists, criminals, and other dishonest actors exploit social networks, the FBI has warned.

Further, hackers reportedly have begun targeting the social media accounts of military personnel and their families.

“If an attacker can become a Skype contact of a target who’s using Wi-Fi Sense, then they can gain access to their home wireless network, providing a foothold from which further attacks can be launched,” Erlin told TechNewsWorld.

Keeping Users Protected

Users have to opt in to connect automatically to WiFi hotspots, and they have to decide to share their password-protected WiFi networks with their Facebook friends, Outlook.com contacts or Skype contacts, according to Microsoft’s FAQ about Wi-Fi Sense.

Some WiFi hotspots require additional information, but users can determine which information does or doesn’t get provided. They can change their settings at any time.

Further, users can decide which password-protected networks they want to share with others, and they can stop sharing to a WiFi network at any time, although the process does take a few days to complete.

Upgrading to Windows 10 doesn’t mean users’ existing WiFi connections are shared by default; they must enable sharing on a per-connection basis.

Wi-Fi Sense does not work with networks secured using 802.1X, a standard often used in enterprise settings.

It’s All Safe, Folks!

“Wi-Fi Sense is not the security hazard some people are making it out to be,” declared Richard Blech, CEO of Secure Channels. “If you do not enable the feature to automatically connect you, it will not.”

Further, WiFi Sense “does not share your hotspot with Facebook friends and contacts,” he told TechNewsWorld. Instead, it informs each party what WiFi hotspots the other is using. That’s “akin to Spotify letting your friends know the music to which you are listening, and informing you of the music to which they’re listening.”

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Where can Microsoft’s Windows Phone go from here?

With its biggest hardware gamble a failure and Windows 10 about to arrive, the software maker is pressed to prove what it can achieve in the phone business.

Taking a look at Microsoft’s mobile device strategy, it’s a wonder the company hasn’t just given up.

The Redmond, Washington-based tech giant was a pioneer of the smartphone industry, creating software that powered phones years before Apple’s iOS or Google’s Android. Microsoft has recast its plans numerous times, including with the release of Windows Phone in 2010, a highly regarded software that powered phones few people actually bought.

Then, in early 2014, the company bought the handset business of Nokia, its largest partner and at one time the largest phone maker in the world. If Microsoft couldn’t get users to flock to Windows Phone on their own, the company hoped buying its biggest device partner might do the trick and help establish its place in the pantheon of phone makers. But in the end, it seems Microsoft has plowed billions of dollars into a business that just hasn’t succeeded.

The list of failures is long: Microsoft’s software is used by less than 3 percent of smartphone owners. The world’s largest app developers continue to focus their efforts on iPhones and Android devices. Microsoft’s Nokia assets have been written off to the tune of $8.4 billion, driving Microsoft’s largest quarterly loss in its history last Tuesday. The company has also laid off a majority of the 25,000 employees that came from Nokia.

So why isn’t Microsoft throwing in the towel? Even industry experts don’t know.

“They’ve fallen flat on their faces with this thing,” said Roger Kay, an analyst at Endpoint Technologies Associates. “If they make more mistakes and do it badly, there’s no reason to believe they could recover from here.”

A Microsoft spokesperson was not available for comment over the weekend.

Plugging away

Microsoft CEO Satya Nadella says the company has not given up on the phone business.

“I am committed to our first-party devices, including phones,” Nadella said in a statement earlier this month. The company has plans to continue making low-cost handsets, phones for business users and so-called flagship devices — gadgets that can go head to head with Apple’s iPhone or Samsung’s Galaxy phones — under its Lumia line, the well-known brand name that Microsoft picked up from Nokia.

What Nadella really meant, though, is that the phone business is a critical part of Windows 10, its upcoming software for PCs, tablets, video game consoles and, yes, smartphones. Microsoft will release Windows 10 on July 29 and later this year will roll out mobile overhaul of Windows Phone, officially called Windows 10 Mobile.

“We are moving from a strategy to grow a standalone phone business to a strategy to grow and create a vibrant Windows ecosystem that includes our first-party device family,” he said. In that sense, phones for Microsoft are less a tool for competing against phone makers and more a necessary appendage, even if it keeps costing the company money.

That’s because Windows 10 — scheduled for launch on Wednesday — will be the star across all Microsoft businesses from PCs to Xbox One to, yes, mobile devices. The company has put a lot of effort into making Windows 10 attractive for users and software developers. One of its key features is that it looks similar, no matter what device you use. For software developers, it’s easy to write an app once, and it will work on anything that runs Windows with just a few tweaks.

This approach is practical, said Gartner analyst Steve Kleynhans, and allows Microsoft to focus on the “areas where it is successful, and where it does have a footprint.”

Apps won’t simply look the same. Microsoft wants customers to feel like apps are capable of running on any device. That means if you plug your smartphone into a PC monitor, for example, it could be used as a desktop computer — with apps that recognize the larger screen. The feature, called Continuum, is one of the few key areas that sets Windows 10 Mobile apart from competitors’ offerings.

“If I really could have a phone that talks and becomes a full-blown PC with all the capabilities, that has an appeal to a certain class of users,” Kleynhans said. This scenario offers a glimpse into how Microsoft could position its phone platform: as the powerhouse piece of software for handling tasks that competitors’ products just cannot.

“Maybe there’s something they can do with a phone to appeal to a certain type of user, rather than heading out into the broad market and getting crushed,” Kleynhans said. “If they’re going to see any success, they have to come up with similar unique capabilities.”

Rethinking the approach

If phones are a sinking ship, Microsoft does have a few lifeboats.

Under Nadella, Microsoft has begun relying on alternative strategies to gain a foothold in mobile. Since introducing Office for iPad in February 2014, Microsoft has moved away from selling software with a price tag, to a point — and is now initially giving its products away for free.

Microsoft offers Word, PowerPoint and Excel free for devices running Apple’s iOS and Google’s Android software. There’s a method to Microsoft’s madness.

If you’re already using Word on your iPhone, the thinking goes, you’re more likely to pay for Office 365, the company’s subscription service that offers access to the desktop versions of the full Office suite. In effect, the approach is an extension of the “freemium” model, where software makers offer users a taste of what their products can do, in the hope that consumers will pay for more features later.

“Windows and Windows devices are an on-ramp to those Microsoft services,” said Kleynhans. “But it’s not the only way to get there. They’ll make it available on the other platforms as well — a Web browser, iOS, Android, even a Mac.”

Microsoft last week said consumers last quarter signed up for 3 million new Office 365 subscriptions — for a total of 15.2 million.

Should I stay or should I go?

But the question remains: Why would Microsoft stay in the phone business after such a costly blunder?

“What was the definition of insanity?” Kay asked. As the saying goes: It’s doing the same thing over and over and expecting different results. Yet Kay said this is what Microsoft’s phone group is doing: “Why keep beating a dead horse?”

One reason might be the fact that the hardware business isn’t dead yet. Microsoft sold 8.4 million Lumia phones in its last quarter, and tens of millions of non-Lumia phones in the low-end device market. That means there are a not insignificant number of Windows Phone users out there who expect some kind of support from Microsoft.

The company has tried to keep up appearances by continuing to shine the spotlight on its mobile efforts at high-profile tech conferences like its Build developers confab. At the most recent Build in April, Microsoft promised developers the opportunity to move iOS and Android apps over to Windows Phone with easy-to-use software.

The hope is that the next wave of must-have apps that follow in the footsteps of messaging service Snapchat, which is still not available on Windows Phone, and ride-hailing software maker Uber don’t skip over Microsoft’s platform when they hit the scene.

That kind of inertia is exactly what has kept Microsoft in the phone market, despite a long string of failures. If there’s just one or two valid reasons to stay at it, said Kay, then that’s enough for Microsoft executives.

“If you don’t have a phone, you’re behind the times,” he said. “All the growth is in the phone.”

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Windows 10 Build 10240 is the RTM version, but Microsoft wishes you’d stop calling it that

As the Windows 10 ship draws close to port, we’ve seen confirmation from multiple sources that yes, Windows 10 Build 10240 is the RTM version that was sent out to OEMs for installation. The problem with this classification, however, is that Microsoft now refuses to use it. When Mark Hachman of PCWorld reached out to the company for confirmation, he was met with the following: “This build is the latest Windows 10 build, and we’ll continue to update Windows 10 code as we head toward launch and beyond,” a Microsoft spokeswoman said in a statement. “We are embracing a new way to deliver Windows.”

Far be it for me to contradict Microsoft, but that doesn’t seem to be what’s actually happening. Apple and Google both distribute OS updates over-the-air (well, carriers do). They still launch cohesive branded products around particular codenames. Microsoft is embracing the concept of Windows-as-a-service, but not because other companies that distribute similar products have done so. Instead, this push seems to be more about driving consumers to accept the idea of an ever-evolving, auto-updating software package.

Microsoft has no plans to charge for Windows 10 as a subscription service, but it’s hard to see the company not going down that path at some point. It continues to gain subscribers for its Office 365 system, despite the fact that Office 365 is a terrible value for any single user, costing you as much in one year as the Home version of office typically costs, period (and Office can easily be used on a 5-7 year cycle). The company wouldn’t even need to charge much — $5 per month would likely beat the revenue it got per-user over the long term, especially when combined with OEM sales for new notebook installations.

Windows 10

With Windows licensing revenue falling steadily (OEM licensing was down 22% this quarter while overall revenue in the segment fell by 4%), Microsoft is going to be under pressure to create new methods of extracting value from that market. The company has already said that Windows 10 will be free for its lifetime, and I’m not suggesting anything different, but going forward, I doubt MS simply gives up on Windows revenue. One potential replacement would be revenue from the Windows Store, but that’s dependent on the Windows Store actually offering software that anyone would want to buy.

Returning to the Windows 10 RTM issue, I’d be surprised if the industry stopped using the term. RTM is an understood point at which a product is shipped for installation on a system. Like “gone gold,” it captures a particular moment and is useful for denoting that yes, the OS has been deemed ready and shipped out. Just as motherboard companies still make reference to the BIOS as opposed to the UEFI, it’s not because the term remains accurate — it’s because the term is known and understood by the target audience.

One potential reason for why Microsoft wants to move away from single-number versioning is that it now updates applications separately from the core OS. You might download a new version of Mail or Photos, thereby changing your experience with the device, but still be on the same version number. In the past, Microsoft rarely did this — you had whichever features were installed on your Service Pack or original installation, and the company only occasionally released updates for application-level functionality.

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Microsoft’s Nadella is on a mission to make Windows matter again

The CEO of the world’s largest software maker, who celebrates one year on the job today, is changing Microsoft from the inside out — because he has to.

If former Microsft CEO Steve Ballmer saw Windows as a cash cow that just needed to be milked, Satya Nadella seems to view the software as a workhorse straining to pull the company out of its rut.

Nadella, who celebrates his one-year anniversary Wednesday as Microsoft’s third-ever chief executive, has been working quietly and steadily to convince developers and consumers that the world’s biggest software company — and its Windows operating system for computers, tablets and smartphones — is once again relevant.

He’s got a tough sell.

Sure, almost 90 percent of all personal computers run some version of Windows. But by 2016, over 2 billion people — or more than a quarter of the world’s population — will have a smartphone, according to eMarketer. And where does Microsoft stand in one of the fast-growing technology arenas in the world? In the shadows, with its Windows software for mobile devices holding a paltry 2.7 percent share of the market, well behind Google’s Android and Apple’s iOS offerings.

Nadella, who’s spent the last 23 years at Microsoft, knows that the company’s days as master of the tech industry are long gone. Now he’s trying to make it relevant by pushing Microsoft into the age of mobile computing. For Nadella, it’s a question of “renew” or die.

“You renew yourself every day. Sometimes you’re successful, sometimes you’re not. But it’s the average that counts,” Nadella said at the LeWeb conference in Paris, one month before being named CEO. “If you deal with scale where you stop innovating, then that’s death …. We’ve had great successes with Windows, we’ve had great successes with Office. But it’s just a question of what we do next.”

What Microsoft did next was take a page out of Apple’s and Google’s playbooks — emphasizing apps, not operating systems. But while those companies focus on making it easy for users to share information across devices, Apple and Google still force app developers to write one set of code for computers and another for mobile devices.

With Windows 10, the next version of Microsoft’s operating system, due this year, developers are being promised the ability to write to a single code base. That could be the lure Microsoft needs to convince developers who want to write just once and create the apps that look and feel the same across computers, tablets and smartphones, regardless of what software powers the device.

“The best possible repeat of history for [Microsoft] would…be a place developers go to,” said Gartner analyst Merv Adrian. Microsoft also needs to be “a company whose developer tools are perceived as being useful to everyone, not just on their own platforms.”

The workhorse is plodding steadily forward.

To see the plan in action, just look at the pricing shakeups since Nadella took over. Microsoft last month announced that Windows 10, due later this year, will be a free upgrade for a majority of PC users. And Microsoft made its flagship Office software available at no cost to every iOS and Android user while also extending free licensing of its Windows Phone software to any manufacturer of Android devices with a screen smaller than nine inches.

If you don’t want to use OneDrive, Microsoft’s cloud storage service, you can use rival storage service Dropbox. Just last week, Microsoft made its Outlook email application available — again, for free — on iOS.

It sounds like craziness has taken hold in Redmond, Wash. But there’s a method to the madness of offering all that free stuff. Microsoft hopes people will pay the annual subscription fee for Office 365 so they can use the cloud versions of Outlook, Word and PowerPoint on their Macs or PCs. That’s become especially attractive as employees shift their activity between corporate and personal devices.

“The one attribute that characterizes Nadella’s first year on the job is a steady hand,” said Roger Kay, an analyst at and founder of market intelligence firm Endpoint Technologies Associates. Kay believes Nadella has exhibited an ability to strongly communicate Microsoft’s roadmap.

That includes his take on the video game business. Instead of jettisoning the Xbox business as some investors have demanded for years, Nadella put more weight behind it.

One of Nadella’s first organization shakeups last year was to make Phil Spencer, former head of Microsoft’s game development arm, in charge of the entire Xbox unit. The result has been a huge boon to Xbox sales as Spencer steered the division toward more serious gamers and away from mass-market consumers in what was a botched attempt to take over the living room. Last fall, Microsoft extended its gaming commitment by buying Mojang, maker of the popular Minecraft game, for $2.5 billion.

Mobile hardware also is key to Microsoft’s turnaround. After acquiring Nokia’s handset division in April 2014 for $7.2 billion, Microsoft now takes in around $2 billion in revenue each quarter from sales of Lumia smartphones. Last quarter, Microsoft shipped more than 10 million units. And while that’s paltry compared to the 74.5 million iPhones Apple shipped in the holiday quarter, the relatively stable business does more good than harm for the company as a whole, analysts say.

“Microsoft is going to stay in the phone business as long they’re not cratering,” Gartner’s Adrian said. “Not because they want to get to No. 1 or No. 2 in the phone business, but because as a market participant they learn a lot that extends to the rest of the company.” Microsoft, for instance, can apply what it learns in the consumer market to the enterprise space — and vice versa.

A Microsoft comeback is not a given. Such turnarounds are rare in the tech industry. “Change won’t happen overnight” has become a common refrain among both Microsoft fans and skeptics. That’s because the company’s business has long relied on a small set of core sales drivers — namely, the software and services it sells to businesses. That enterprise focus earned Microsoft more than half of the company’s $86 billion in sales last year. Now it’s the buffer Nadella needs for his turnaround efforts.

“Microsoft has a little bit of time. Yahoo had Alibaba financing all of [CEO Marissa] Mayer’s experimentation while she figured out what she wanted to do with the company,” Kay said. “Microsoft has their own built-in Alibaba, which is the commercial side.”

But time is running out. Microsoft stock has dropped 15 percent since the company’s not-so-stellar earnings report last week, erasing almost $40 billion in shareholder value. Longtime Microsoft analyst Rick Sherlund, of Nomura Securities, downgraded the company’s stock, forecasting tougher times ahead for the company.

“We reduced estimates to reflect a significantly more challenging transition ahead, with difficult comparisons ahead for traditional Office and Windows,” Sherlund told investors on January 27. “Our bigger concern is that with more difficult year-to-year comparison still ahead over the next two to three quarters and the stock near its high, there is little room in the shares for disappointment.”

Disappointment could become the norm if Nadella can’t change a company known for its inability to capitalize on industry-defining trends. Just look at smartphones, tablets, subscription music and TV services, social networking, mobile messaging … the list goes on.

“Ballmer didn’t have a sense of where Microsoft should go,” said Kay. Nadella, with his steadier hand than the famously bombastic Ballmer, might have a better chance of changing the software behemoth’s course.

Nadella knows the outcome for Microsoft if he can’t renew the business.

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