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I want to talk about VDI licensing that is going to affect Apple. This is a big thing. If someone wants to use an Apple iPad in a Microsoft environment they are going to have pay a license for it. Talk about how big a competitive weapon that is going to be in this age of consumerization of IT in the battle against Apple. Now you are going head to head.
We are in a battle. I don’t particularly want to get into sort of the pricing distinctions. Our partners will figure that out and they will find the best value for the customer. I think that between the hardware we provide, the software solutions we provide and the kind of way things work together, let alone what ever people see in terms of advantages and value, we have got a pretty compelling story for people with the consumerization of IT whether it is with the Surface or with some of the other form factors like the Lenovo Yoga and some of the new Samsung devices, the new Asus device that people are bringing to market.
But this ability to use licensing (as a weapon). Leveraging your licensing is that going to help you?
I think we will put things together in a more comfortable package than competition because it is where our bread is buttered. Obviously if you don’t own a Microsoft device but if you want to buy a Windows license for it we are always glad to sell you one. And we do have customers who will buy Windows licenses effectively whether it is through VDI or people who just install Windows on a Mac. There are people who want Windows. And I think there are going to be more people who want new Windows. So we’ll see where it goes.
You mentioned Windows 8 as an epic opportunity. Talk about what you are doing to get the partners ramped up. We did a survey that asked these guys about the Windows 8 desktop Product opportunity and the Services Opportunity. To tell you the truth the results weren’t as good as I thought they would be. I think it is this whole issue of how tough it is for these guys to get their hands on doing the upgrades and selling the desktop. So 75 percent of the partners rated the Windows 8 desktop product opportunity as low margin or average margin, 68 percent rated ithe Windows 8 Services opportunity as low margin or average margin. What are you guys doing to make sure these guys are moving their customers lock stock and barrel with financial incentives to Windows 8?
What I would say is the way you ask the question you get a certain answer. You sort of pointed to margin. Look if you wanted to do something high margin do custom app development for a low volume operating system. I am not being perjorative, but that is the highest margin thing you can do. The truth of the matter is we have a lot of great partners and they compete pretty hard with one another which is really the nature. I think what we give our partners with Windows 8- and you saw that here at the partner conference - is their ability to help their customers do things that they couldn’t do before. Whether the margin is X percent or Y percent the real opportunity is to sell X or 2X or 3X or 5X, the ability to galvanize the customer base on new scenarios, new opportunities and really drive overall volume. Yeah, margin will come with it. But I think it is pretty powerful.
You know the Windows PC market may grow a little bit, a lot. It is hard to predict how Windows 8 will affect it. But the opportunity for our partners is going to grow a ton. Just think of the new scenarios for people.
You saw the PPI board. When we get the price of that down to something semi –reasonable, just installing those, putting those into conferences (rooms), setting up the conference software, getting it all (done). Just that one scenario is huge. Getting people on to a next generation machine with digital reading and digital ink.
I don’t carry paper. I look at you. You bring in four recorders, a phone I don’t like, paper. I have got it all right here babe. My recorder is here. My ink is here. My phone is here. It is all here. It is all right here. Surface is the issue .My whole life. I can find anything in my life right here.
Which one is that (tablet)?
This is the Samsung 7 Series from last year running Windows 8. I probably shouldn’t be showing this because it is also running the new version of Office. But it is my life. Everything I need is right here. It is unbelievable. I am not attached to the network here unfortunately. But you know the way search works. The way you find things. The way you access information. The way BI works. It is just different. It is just different. And all of that is Windows 8 enabled opportunities for our partners.
Apps in the App Store. You could say hey, a lot of what our partners have done is to provide deployment services. Well if deployment gets a little simpler but App Development gets to be a much easier and bigger business. I just think it is tremendous.
Stan Shih, the Acer founder, came out and basically called the Surface almost a publicity stunt and that he was hoping you guys would pull back on that. What is your response to that?
Well it is not a publicity stunt. When we have got a lot of work to do to finish Surface 8 and Surface RT.We are working ahead.
But It is not a publicity stunt. I mean it is a real piece of hardware that real blood, sweat and tears (went into) and engineering excellence and innovation and creativity and capital. We are in. We are also in with our partners. But we are in!
How big an investment was this Surface thing?
You can ask. I won’t tell you . Nice try though.
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