Microsoft uncovers mole who leaked Windows secrets, but Wzor lives on

Microsoft has charged an ex-employee who leaked Windows 8 builds -- but it's unlikely that Wzor, the current reigning champ of Windows leaks, will be affected

Yesterday Levi Pulkkinen at the Seattle Post Intelligencer broke the story that an ex-Microsoft employee was charged with passing trade secrets to a journalist. Several people came to the immediate conclusion that Wzor's source had been blown -- Wzor being the Russian-language leaker and driving force behind Wzor.net, who's figured prominently in Windows leaks for several years. It's now apparent that the busted former employee, Alex Kibkalo, was leaking the information to a different blogger entirely. 

The Seattle PI article includes a few awkward statements, e.g., "[Kibkalo was] alleged to have stolen Microsoft's 'Activation Server Software Development Kit,' a propriety system used to prevent the unauthorized copying of Microsoft programs... a Microsoft manager said the software development kit 'could help a hacker trying to reverse engineer the code' used to protect against software piracy, according to charging papers."

In fact, having a working Activation Server was a key component of getting some leaked builds of Windows 7 and Windows 8 to work. As for the rest of it... yes, the SDK could help crack Activation Server, I suppose, but several crackers found ways to bypass Activation Server entirely.

Kibkalo told the blogger on August 2, 2012 that he "would leak Enterprise today probably."

According to the article, the loop was closed on September 3, 2012, when Kibkalo sent a copy of the SDK to the un-named blogger. Then, for reasons unknown, the blogger used Hotmail to send an entire copy of the SDK to a Microsoft employee for verification that it was valid. Not a hash code, mind you, but the whole thing. According to Pulkkinen, the Microsoft employee recipient took it to a Microsoft executive.

The SDK proved valid, so Microsoft investigators went through the blogger's Hotmail account and found an email from Kibkalo to the blogger that included links to Windows 8 "hot fixes" for a pre-release version of Win8. Bingo.

According to the PI, Kibklao was outed in September 2012:

Corporate investigators confronted Kibkalo in September 2012 during an interview in which he's alleged to have admitted to sharing the software. Kibkalo is alleged to have admitted to sharing unreleased Windows programs as well as company memos and documents; Microsoft investigators claim he was angry after a poor performance review.

May Jo Foley at ZDNet added several interesting points: Kibkalo "uploaded proprietary software including pre-release software updates for WIndows 8 RT and ARM devices" by transferring the software to a computer in Redmond, and subsequently uploading the software to his personal Windows Live SkyDrive account. That's known inside Microsoft as a Severe Career Limiting Move.

(SkyDrive and Hotmail? For sending confidential Microsoft material? Puh-lease.)

The dates and nature of the leaks make me think that Kibkalo was feeding Canouna, the enigmatic head of the WinUnleaked -- originally WinUnleaked.tk, then WinUnleaked.info. For example, when Windows 8 Enterprise leaked on August 3, Canouna publicly vouched for its authenticity.

As I said on Feb. 26, 2013 in "Windows 'Blue' rumors fly fast and furious":

Realize that during the Windows 8 beta process -- likely the most locked-down beta in Microsoft history -- there were only two sites that consistently came up with almost always accurate insider information: Win8China and Winunleaked. Unfortunately, Winunleaked and its enigmatic leader "Canouna" have disappeared off the face of the earth. The old Winunleaked site now redirects to the Microsoft main page, and Canouna's Twitter account has turned tweets up.

In fact, Canouna redirected his website to point to microsoft.com (!) in late January.

Those of you concerned that Wzor might have lost his (her? their?) primary source can sleep a little better tonight. While past experience is no guarantee of future performance, it's unlikely that Wzor's prime source just got nicked.

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Microsoft and Google don't like Android-Windows hybrids

The companies are OK with dual-OS mobile devices, but they aren't happy with the idea of sharing space on a PC

Microsoft may be comfortable with Windows Phone and Android splitting time on a single phone, but when it comes to PCs, fuhgeddaboutit. Google also isn't too thrilled with the idea of Frankenstein Android-Windows computers, and at least one PC maker may have to dump the hybrid devices from their lineup as a result.

Asus, makers of the Transformer AiO P1801 and P1802, is reportedly being forced to put the kibosh on its year-old all-in-one-slash-tablet PCs. What's more, the anticipated Transformer Book Duet TD300 shown off at CES in January is also headed for the scrap heap, according toThe Wall Street Journal.

These devices run Windows when they're in PC mode. Slide out the AIO's screen or flip the laptop into a tablet, however, and boom! You've got an Android slate. The concept is theoretically appealing to users since you get the best of both worlds in one device, but Microsoft and Google apparently weren't pleased.

It's easy to understand why Microsoft wouldn't want devices like this to catch on. The company is struggling to get users to adopt Windows 8.1, an OS designed with two interfaces: One for the traditional desktop and one for touchscreen devices. A convertible PC that switches from Windows 8.1 to Android instead of from the Windows desktop to the modern UI Windows Start screen would undermine the entire Windows 8 concept.

Google grimaces
Google's opposition is a little more curious. The Journal's report suggests Google simply didn't want Android sharing space with another OS.

But as far as we know, Google never objected to Canonical's concept for a hybrid Android-Ubuntu phone, and Huawei plans on bringing an Android-Windows Phone hybrid device to the U.S. in the coming months.

PCs are different, however, and perhaps Google simply didn't like the idea of Android playing a complementary role to Windows on a PC.

Google can't stop a company from using the open source version of Android in its devices. But the search giant can clamp down on any company that wants to access Google's online services on Android. Those apps and services -- such as Gmail, Maps, and Google Play itself -- aren't part of the open source version of Android and require striking a business deal with Google before they're pre-loaded on a device.

The reported objections from Google and Microsoft are a little late to the game. The Asus P1801 and P1802 were introduced more than a year ago, and Samsung announced another Android-Windows PC, the Ativ Q, in 2013 (though it has yet to ship).

However, chipmakers AMD and Intel are both backing the dual-OS concept as a way to get their processors into more and more devices, and hybrid devices were a noticeable trend at this year's CES and Mobile World Conference shows.

The devil's in the details
Even with all the attention, a truly compelling Windows-Android hybrid has yet to appear.

Asus' dual OS all-in-ones weren't entirely practical. In tablet mode the device's 5.73-pound, 18-inch screen meant it wasn't a tablet you'd want to throw in your backpack. The plus $1,000 starting price tag didn't help much either.

The Asus Transformer Book Trio, another Android-Windows hybrid introduced in 2013, was a low-powered Atom device that would only appeal to a select group of users.

The lightweight Duet TD300, however, would have had much broader appeal thanks to its Intel Core processor, 4GB RAM, and up to 1TB of onboard storage--but according to the Journal we'll never find out just how appealing the TD300 would have been. 

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Microsoft hints at iPad version of Office 365 with new Personal edition

It'll cost $69.99 per year and allow buyers to install the suite on two devices -- either a MacOS or Windows computer and a table

Microsoft will ship a new edition of Office 365 in the spring called Personal, with the announcement phrased in a way that seems to tease the arrival of native editions of Word, Excel, and PowerPoint for iPads and Android tablets.

Office 365 Personal is designed for individual consumers, who will be able to install local versions of the suite applications on one Windows or Mac OS computer and on one "tablet," the company said in a blog post Thursday, without specifying what type of tablet.

[ InfoWorld pits Microsoft Office 365 against Google Apps and reveals the best office apps for your iPad. | Stay up on key Microsoft technologies in our Technology: Microsoft newsletter. ]

In the past, Microsoft has been specific in announcements about Office 365 that the suite applications can be installed locally on Windows tablets, but the company is now apparently being purposefully vague, likely to leave the door open for the possibility to install the apps on iPads and Android tablets as well.

Of course, that would imply that by the time this version off Office 365 is ready, Microsoft will have finished working on versions of Word, Excel and PowerPoint for iPads and Android tablets.

Asked for comment, a Microsoft spokeswoman said via email: "I can share that the subscription is available on one Windows tablet, but beyond that, I don't have any other information to share."

Microsoft executives have for months been talking about the company's work on a "touch first" version of Office for Windows tablets, Android tablets and iPads, but they have been unclear about the timetable for the suite. Critics have said that a version of Office specifically for touchscreens is way overdue. It's possible to use Office on Windows tablets, but the suite hasn't been optimized for touch devices.

There is already an Office version for iPhones that requires an Office 365 subscription and there are iOS versions of some Office applications, like OneNote.

Customers who buy Office 365 Personal also receive 20GB of OneDrive online storage and 60 minutes of Skype calling per month to more than 60 countries. The suite will cost $69.99 per year or $6.99 per month.

When it ships, the existing Office 365 Home Premium will be renamed Office 365 Home. That edition, aimed at households, costs $99.99 and lets buyers install the suite applications on up to five different devices, including Windows PCs, MacOS computers and Windows tablets. It also comes with OneDrive storage and Skype voice minutes.

With Office 365 Personal, Microsoft will add another product to the Office 365 family, which critics complain is sold in too many different bundles with a head-spinning array of options and variations.

For example, Office 365 Personal and Office 365 Home Premium are not to be confused with the Office 365 suites that are sold to businesses and that have online versions of servers like Exchange, Lync and SharePoint.

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Windows Phone is free in India -- and worth every penny for Microsoft

Microsoft is giving Windows Phone software to two India-based Android phone makers for free. It's a smart play in light of the Nokia acquisition

The Times of India reports that Microsoft is giving away Windows Phone to two Indian phone manufacturers. Their report starts by saying, "Desperate times call for desperate measures," and that's precisely the case. Apparently the deal was sealed prior to the Mobile World Congress last month in Barcelona, where Microsoft announced that Indian phone manufacturers XOLO, Lava, and Karbonn were adding Windows Phone to their arsenals. XOLO, it turns out, is a division of Lava.

Don't scoff at the Indian market. Some estimates put it at number 3 in the world. Last month,Gartner reported, "With a 166.8 percent increase in the fourth quarter of 2013, India exhibited the highest smartphone sales growth among the countries tracked by Gartner." Historically themarket's been driven by low-cost Android phones, although the XOLO brand reaches higher. Now it seems Microsoft wants to muck about in the low end.

According to ChannelTimes, Samsung accounted for about 40 percent of India's smartphone market share in 2013, with Micromax at 16 percent, Karbonn at 10 percent, and Lava at 5 percent. They're all Android, all of the time. Last week, Karbonn announced that it was going to ship a dual-boot Android and Windows Phone device in June. Now we know why. Or, at least, how.

According to several industry experts, Windows Phone now sets back manufacturers about $5 to $10 per handset sold. In late November, market analyst AdDuplex estimated that Nokia accounted for 90 percent of all Windows Phone 8 sales. With Nokia's devices business about to merge balance sheets with the Redmond behemoth, that 90 percent in (imaginary) dollars is about to disappear entirely. However you slice it, report it, or disguise it, Windows Phone revenue is about to hit zero anyway. Why not make some phone manufacturers happy -- and entice them to build Windows phones -- along the way?

No word yet on how much Microsoft will charge HTC for its new Windows Phone models. Last October, Bloomberg reported that "Microsoft is talking to HTC about adding its Windows operating system to HTC's Android-based smartphones at little or no cost." The folks privvy to the negotiations aren't talking.

Perhaps this is a new direction for the Devices and Services company in general. Giving away the razor is a time-honored marketing ploy, particularly when competitors' razors cost nothing. Zero-cost Windows Phone might even apply some downward price pressure on Windows itself.

One can only hope.

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Microsoft Patch Tuesday rounds up IE flaws

In these bug fixes, Microsoft issues its penultimate round of patches for Windows XP

For this month's "Patch Tuesday" round of bug fixes, Microsoft has focused on correcting multiple vulnerabilities in Internet Explorer (IE), including one that is already being used in targeted attacks.

Overall, Microsoft issued five bulletins, covering 23 vulnerabilities. Two of the bulletins, covering IE and Windows, are marked critical, which means administrators should test and apply them as soon as possible. The remaining bulletins, marked important, cover Windows and the Silverlight multimedia plug-in.

Administrators should look first at MS-1402, covering 18 patches for IE, including one patch for a publicly disclosed zero-day vulnerability.

The public vulnerability first surfaced during last month's Patch Tuesday, noted Wolfgang Kandek, CTO of IT security firm Qualys.

The public exploit that used this vulnerability worked in conjunction with a flaw in Adobe Flash. "Most of the time a single vulnerability will not get you that far," Kandek said, of today's approaches to compromising systems by chaining together multiple vulnerabilities. A browser vulnerability can get you into a computer, but you'd need another object to give you a specific memory location -- in this case Flash.

The patches in MS-1402 cover all versions of IE, though the zero-day vulnerability affected versions 9 and 10, and the known attacks using this vulnerability appeared only for IE 10.

Another interesting aspect of this zero-day exploitation is that it first appeared on the website for the Veterans of Foreign Wars (VFW), leading some to suspect it was part of an attack from another nation, rather than just from profit-minded cybercriminals who tend to target sites with more traffic.

"In the past, this was called a waterhole attack. You infect a website that you think your targets will go to," Kandek said. Since most of the users of the Veterans Affairs site are military or ex-military personnel, security experts suspect this group was targeted deliberately.

Microsoft is also urging administrators to take a close look at the other critical bulletin, MS-1403. Applying these patches can have "a long-term impact in improving your systems' security," advised Dustin Childs, Microsoft Trustworthy Computing group manager, in a statement.

Microsoft stated that while this vulnerability is just as severe as the ones for IE, it would take a malicious user more time to understand it and write code that would exploit its weakness. "Nevertheless, you should fix it, though the urgency would be lower than the browser fix," Kandek advised.

All of this month's bulletins affect Windows XP, for which Microsoft will be ending support next month. Microsoft, along with most security organizations, has been urging XP users to upgrade,with somewhat limited results. After April, Microsoft will no longer fix newly discovered XP security holes.

As a result, Windows XP will become much less secure in the coming months, Kandek warned. Given the size of the Windows code base, many of the patches that Microsoft issues each month cover vulnerabilities found in all versions of Windows, at least back to XP. After April, attackers can examine these patches to pinpoint where vulnerabilities may be, and seek them in the no-longer-supported Windows XP.

"Half of the work has already been done for them," Kandek said.

Qualys tracks the percentage of its enterprise users that still deploy XP. In February that number has shrunk to about 14 percent, two percentage points lower than the month prior.

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Only Microsoft knows the true Windows XP numbers -- but isn't telling

There's a lot of angst about the 30 percent of Windows users who haven't switched, but how many PCs does that actually mean?

The simple fact is that we don't know -- don't even have a clue -- about the number of Windows XP machines still out in the wild. Back-of-the-envelope estimates put the figure at about half a billion machines, but that calculation ignores a host of crucial factors. Foremost among them: How many "real" copies of Windows XP will be thrown to the dogs next month when Microsoft cuts off support? There's only one company that has an inkling of the "real" number, and that company isn't talking.

A couple of days ago, Gregg Keizer at Computerworld put the numbers through the wringer as part of his impassioned call for Microsoft to extend XP support. The calculation looks like this: Net Applications says that 29.5 percent of the world's PCs ran XP in February. If there are about 1.65 billion PCs running around (including, presumably, 1.4 billion Windows PCs, using Microsoft's latest figure), that comes to about 488 million XP PCs now in operation.

StatCounter, on the other hand, says about 19 percent of the Web hits it tracks come from XP machines. You can do the math.

I don't trust either source, for reasons I described a couple of years ago, but for better or worse, they're the two main sources of "XP usage" numbers. In both cases, the reporting organization tracks hits on Web pages that they monitor. StatCounter reports the hits raw; Net Applications massages them significantly. Neither has good reporting in China or Asia -- which now account for about half of all installed PCs. But they're all we have.

The 300 or 400 or 500 million XP PC numbers sound impressive, but they miss the point.

Here's what I want to know: When Microsoft rolls out its final set of XP patches next month, how many "real" bought-and-paid-for copies of Windows XP will be updated?

If we're looking at 500 million PCs headed to the rubbish heap of patching history, then there's no question Microsoft has a huge problem on its hands. Keizer's options for Microsoft redeeming its security reputation should be mandatory.

But what if we're only looking at 10 million? Or even 5?

Yes, it's possible that the estimates of exposed, upgradeable "genuine" PCs is off by an order of magnitude -- or two.

First, the volume of pirated XP machines boggles even my imagination. Estimates put the number of XP machines in China alone at 300 million. I hate to sound cynical, but in my experience, maybe 1 percent of those machines have "genuine" bought-and-paid-for versions of XP.

People in the West tend to think that if an XP PC is downloading updates -- Keizer quotes Microsoft as saying roughly 70 percent of the XP machines are regularly updated -- that the machine must be "genuine." I can assure you that there are dozens of popular pirate versions of XP that install patches with no problems at all. Just because an XP machine gets automatic updates doesn't mean it's genuine. In some parts of Asia, real copies of XP are as rare as panda bears wearing sunglasses and dancing the macarena.

Microsoft's under no obligation to patch pirate copies, of course, and it's a two-edged sword. I've encountered dozens of XP machines that were bricked when a Black Tuesday patch conflicted with a pirated copy of Windows. If Microsoft extends XP support for another year or two or 10, what happens when a pirate copy of Windows goes kablooey?

Pirate copies of XP account for, what, maybe 300 million of Net Marketshare's total? 200? 400? There's no way for Net Marketshare or StatCounter to know when it's been pinged by a pirate. But the numbers are undoubtedly huge.

Second, plenty of XP machines that hit the Web regularly rarely get updated. Those are machines that might be counted by the Net Marketshare or StatCounter algorithms, but that would never benefit from Microsoft extending patches beyond April 8. In many cases, they're probably pwned already.

So we're seeing a lot of moral outrage -- well-placed outrage, in my opinion -- about a problem that may be one or two orders of magnitude smaller than I, for one, originally thought. In the end, the undeniable fact is that we don't know how many PCs are going to get slammed when Microsoft shuts down its XP patches. Not even close.

How about it, Microsoft? Can you tell us how many XP machines got patched with the March Black Tuesday round? Of that number, can you say how many were, uh, genuine?

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Steve Ballmer shouted at board members and threatened to resign over Nokia deal

Most of Microsoft's board members including Bill Gates, Satya Nadella, and Tony Bates, initially opposed Steve Ballmer’s proposal to acquire Nokia, according to a Bloomberg report. While current CEO Satya Nadella later changed his mind, former Skype CEO Tony Bates, who is no longer onboard, remained adamant.

Last year, Ballmer proposed the acquisition of Nokia's Devices and Services unit. The board was not only reluctant to move into hardware, they also found the deal quite expensive. Despite of the opposition from many top executives, he wanted to have his way, and tried hard for it. At a board meeting held in June, he even shouted and threatened to resign. He was so loud that his shouts could be heard outside the conference room.

Later, he got most of what he wanted, when the board agreed to a $7.2 billion purchase of Nokia’s mobile phone business. Although he was deeply hurt that Gates didn't back him. Bloomberg's sources claim the directors were frustrated by Ballmer's tendency to talk more than listen, and his reaction to the pushback on Nokia was for some the last straw.

Ballmer had also appointed Penn and Tami Reller as joint in charge of marketing aspects, a move that didn't go down well with Reller, who later asked Ballmer to choose between them. Reller is now leaving Microsoft, and will be replaced by Chris Capossela.

On August 22, just before announcing his retirement, Ballmer talked to Nokia Chairman Risto Siilasmaa and CEO Stephen Elop separately to reassure that the company remained committed to the deal. He wouldn't have resigned "unless he’d lost Gates’s backing", said Yale University business professor Jeffrey Sonnenfeld. It was Gates who convinced him to drop out of business school to join Microsoft in 1980.

The report also touches basis on Allan Mullaly, who was a top contender for Microsoft's top job, stating that he was very arrogant with Microsoft's board, and he even refused to give a formal interview.

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Satya Nadella: Right man, right place, wrong time?

Satya Nadella, 46, the newly anointed CEO of the $78-billion Microsoft faces a daunting task of fitting into oversized shoes of the two previous chiefs, Steve Ballmer and founder Bill Gates, and steer a ship that's past its prime. After all, Microsoft dominates a market in decline.

While Windows is the preferred operating system for traditional personal computers (PCs), it runs less than 15% of new devices , including new PCs, smartphones and tablets, according to research and analyst firm Gartner. 

Yet, Nadella has proven himself before in multiple divisions of Microsoft and that's what makes him cut out for the challenging job. He has overseen some of Microsoft's fastest-growing and most profitable businesses , including its Office, server and tools arms. In three years as server and tools president, he helped grow that business into one with $20 billion in annual revenue — about a quarter of Microsoft's total revenue in the most recent fiscal year. In the past one year, Nadella was the executive vice-president who led Microsoft's cloud computing offerings. Under Nadella, cloud enterprise group more than doubled customers in the latest quarter, although it remains a small part of Microsoft's current business. 
"Going forward, it's a mobile-first , cloud-first world," Nadella said on Tuesday in a video accompanying the announcement. Now with Bill Gates as technology adviser, can Nadella take on new and old challengers, including Google, Amazon, Salesforce, Apple, IBM, HP, Oracle? For instance, Salesforce. com has taken a bold step with its new platform launched in November 2013, Salesforce1 to merge business applications and social collaboration in a mobile environment. Microsoft needs to answer with the entirety of its offering (Dynamics CRM software ) across all devices. 

An Insider Helps 

Says Staten James, analyst at Forrester Research: "Being an insider, Nadella understands the culture. He has proven success — both in online and cloud and enterprise groups he has delivered on his strategy and business goals." Nadella's elevation also boosts employee morale. "There's lot of benefit to the employee base when they see that one of them can rise to the top," adds James. While the 100,000-odd Microsofties may feel happy, the company that Nadella inherits is vastly different from what Ballmer ran, when he took over back in 2000. At that time, iPod wasn't launched, Facebook had not started, YouTube didn't exist, Google was just a search engine figuring out how to make money and Amazon was only selling books. Today, the company that Nadella inherits has all these as challengers. Microsoft , once the most influential technology company , let them literally run away with one new business after another. So how relevant is Nadella , the insider? 
Says Mary Jo Foley, editor of ZDNet's All about Microsoft blog and who has tracked Microsoft for the past 25 years: "Nadella was the strongest internal candidate in terms of his multi-divisional experience and technical chops. Nadella has made it clear that they need to be both in consumer and enterprise, hardware and software. I think he will rely on other executive vice-presidents for consumer expertise."

Foley is also author of Microsoft 2.0: How Microsoft Plans to Stay Relevant in the Post-Gates Era.
Adds Merv Adrian, research vicepresident , Gartner: "Nadella knows the engineering and technical issues and will lead the charge into mobile, device-driven and cloudenabled businesses. In the past Nadella has shaken up models within Microsoft, including changing software release frequency and supporting non-Microsoft technologies to help customers." 

Tech Leads from Gates 

Can Nadella's magic work as CEO as well? With Bill Gates, 58, as technology adviser, will there be room for Nadella to take independent decisions ? Back in 2000, when Ballmer took over as CEO, Gates was pretty much there and remained a chief software architect till 2008. That period saw Ballmer miss one wave after another and he could not remould Microsoft into a company that would sell both devices and services that powered them. For instance Windows Phone, Surface Tablet, launched ahead of competitors, failed to fire the markets. The past decade has seen the Redmond giant's power diminish as its core strength in desktops was overtaken by a world shifting to mobile platforms. By end-2013 global PC shipments totalled 82.6 million units, a 6.9% decline from the fourth quarter of 2012. This is the seventh consecutive quarter of shipment decline, Gartner said in a January statement. 
So, will Gates' presence make it tougher? Says Foley: "It's more of a PR thing than something that will have a massive impact on Microsoft. I believe Gates was given this role to compensate for his no longer being chairman of the board." Adds James: "Gates is a technologist at heart and will serve as a tech strategy sounding board for Nadella." 
Gates also has his foundation — Bill & Melinda Gates Foundation — to run and won't be preoccupied with Microsoft . Says Foley: "I will be surprised if Gates actually takes the entire one-third of his time he supposedly has freed up to help guide Microsoft. I also wonder for how long he will be in this role." 

Will Two be Better than One? 

While some of the initial comments, like a focus on mobile and cloud, from Nadella point to a turn for the better for Microsoft, it might become difficult to span the gamut of enterprise to consumer technologies under one umbrella. Could Nadella do something as radical as split the two businesses? 
Says Adrian: "Users in enterprises are consumers too. Their experience, preferences skills should be met in both spheres." Adds James: "A breakup would eliminate synergistic opportunities across business units. Unification is the direction and should be pursued. Sadly Microsoft has a very siloed culture, which does not easily help to reposition it as a leader." 
While Microsoft can look at building synergies in both consumer and enterprise businesses, today it competes with giants like Google, Apple, Amazon in the consumer space and also old warhorses like HP, IBM and Oracle in the enterprise space. 
Google has run away with the mobile internet operating system market , Android being the dominant OS for smartphones and tablets alike. Apple and Samsung dominate the high-end phone and tablet market, an area where Microsoft is looking to build inroads with its Nokiabuyout in September 2013. On cloud services, Microsoft Azure is up against newbies like Amazon Web Services and VMware. 
Says Ravi Venkatesan, former chairman of Microsoft India: "The complexity of Microsoft in itself is challenging. Microsoft can't be a leader in everything and faces problems due to its siloed culture and lack of risk-taking ability. It has to build a consumer business around the phone to remain relevant in the current era." To Microsoft's credit trends like bring your own device and consumerization of IT are bringing together home and office. 
Says Foley: "Microsoft management has said that they see lines blurring between home and business use of technology and the two are inseparable. Microsoft is crafting strategies around this position." If the lines do blur under Nadella, Microsoft rivals from Amazon to Oracle will look more siloed and niche, and the Redmond giant could rise once again. 

Nadella and Nokia 

Akey to Microsoft's consumer push is its $7.3-billion buyout of Nokia in September 2013. In addition to growing the business, one of Satya Nadella's first tasks as CEO would be to complete Microsoft's Nokia purchase and patent rights. Microsoft also has an unsettled tax bill of $500 million for Nokia's manufacturing plant in Chennai that employs 7,000 people. 
The Nokia buyout is part of an effort by Microsoft to boost Windows Phone software in a market dominated by iPhones and Android devices.
Now with mobile hardware and software Microsoft can accelerate efforts to dent the consumer market. Among the four largest enterprise software vendors — IBM, Microsoft, Oracle and SAP — Microsoft is the only one with consumer business products, which include Xbox, Skype, search engine Bing and its latest acquisition Nokia. 
However, Microsoft faces a daunting task of turning around Nokia, a leader in the featurephone era but a laggard in the current smartphone era. At the top end Apple with its iPhones and Samsung with its range of Notes and Galaxys are firmly entrenched. In the low to mid-segment the number of competitors multiply , from global players such as Lenovo and Samsung to local players like Micromax, Lava and Karbonn in markets like India. 
Says Staten James, analyst at Forrester Research : "The acquisition of Nokia is not about their products today but about their expertise in hardware, which was missing in Microsoft. Nokia will be tightly interwoven with Microsoft so they deliver a superior integrated solution." Nadella needs to deliver that solution fast. 

Microsoft's Competitors 

The New... 

Google: Much like Microsoft dominated PCs, Google's Android is the dominant smartphone operating system. Windows Mobile is nowhere in the race. And in search engines Google is way ahead of Bing 

Apple: 

Microsoft bought Nokia last September; can the Microsoft-Nokia combine dent the high-end smartphone market, where Apple reigns supreme 

Amazon Web Services: 

The cloud offering from Amazon leads, and Windows Azure is playing catch-up in the cloud game

...and the Old 

Oracle: 

Its database scores over Microsoft SQL Server 

IBM: 

Big Blue got out of PCs long before they became a commodity. Microsoft supplies software to this market that is in terminal decline. Last month IBM sold parts of it server division to Lenovo. Microsoft needs to shed old baggage

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