While Microsoft Windows 8 tablets have generally been sized at 10.1-inches or larger, the company is rumored to be working on a smaller Surface tablet. That would mean it relaxed the hardware requirements an allow for a device such as the W3, which will offer an optional keyboard to help with text input. Will the market support these smaller slates?

I’m not sold on the full Windows 8 Pro experience on such a small device. Yes, the formerly-known-as-Metro touch interface should be fine — quite good, in fact — on the Iconia W3; after all, the same design is great on smaller screens using Windows Phone 8. The bigger challenge is the Windows desktop and legacy app support, which is one of the three major points Acer calls attention to: “The Iconia W3 comes with Microsoft Office so you can edit Word, Excel and PowerPoint docs on the go,” for example.

With the 1280 x 768 resolution, running Office and other apps designed for Windows will present a challenge to most. The smaller screen and relatively lower resolution means smaller touch points, for starters. For maximum productivity in the desktop environment, a mouse will be the better option because the Windows 8 Desktop environment is similar to the Windows desktops of yesterday. Simply put, while Metro has evolved for touch and smaller screens, the Windows desktop hasn’t.

I could be wrong about this, but I do have a few years of experience that tells me it’s not likely. I used 7-inch touchscreen tablets running Windows XP and 7 on several UMPCs, often as a full-time computing device.

It took a ton of patience to make the systems work because apps weren’t designed to fit and run on them. These were the precursors to netbooks, and to a degree that’s what the Iconia W3 reminds me of: A cross between a modern UMPC and a netbook. Like those devices, Acer is using an Intel Atom to power the W3.

I’m sure to hear contrary opinions on this, but what would make the W3 more appealing would be for the tablet to run only the Metro interface and apps. (Ironically, none of the W3 product images even show the desktop, which I think is telling.) Of course, Microsoft doesn’t offer a Windows 8 license with just that part of the platform. I wish it did and did so at a reduced price since one would give up access to legacy Windows apps. In that case, and at the right price, I’d be far more interested in the W3.

Sure, one could buy the device and simply ignore the desktop completely. But you’re paying for it in the product price, which includes the cost of a Windows 8 Pro license. If Microsoft wants to allow partners to make small tablets, a better strategy would be to go Metro only at a lower license cost and truly embrace the touchscreen tablet market.

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“Every story I read about Google is us versus some other company or some stupid thing. Being negative is not how we make progress. The most important things are not zero sum.” Page said Google struggles “with people like Microsoft,” he said. As for Oracle, which is suing Google over Android’s use of Java, Google has “a difficult relationship with Oracle, including having to appear in court … Money is obviously more important to them than any collaboration.”

In comments emailed to CIO.com, Microsoft responded:

“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.”

Page’s words came a few days after Microsoft announced interoperability between its Outlook.com email service and Gmail and just after word came out that Google demanded that Microsoft rip its home-built YouTube app from the Windows store (and remove the app off the Windows Phones that were already running it.) So, who’s the winner in this melee? Neither vendor comes out looking good. For Microsoft to complain about Google’s business practices is laughable given its own track record. But for Google to claim it’s not evil while restricting consumer choice is also awful. Consumers might just say a pox on both their houses.

IBM spreads Watson around …

Watson, the natural-language-understanding software that played (and won) at Jeopardy, will be made more broadly available to third-party software makers, IBM CEO Ginny Rometty said last week. Thus Watson technology could be used perhaps even by IBM competitors, to build self-teaching computer systems, according to Bloomberg News. IBM has made the most possible PR use of Watson capabilities, working to embed that intelligence in medical and other applications. Last week, IBM took its show on the road to Washington D.C. last week to show Congress the progress Watson has made in healthcare applications.

… as SAP doubles down on HANA

German enterprise software giant SAP, in a move you could see coming miles away, said this week that HANA, it’s in-memory analytical database, will be the brains of its ERP software going forward, according to InformationWeek and other  outlets. Running do-or-die ERP and CRM applications on HANA is a big step up from data warehouses because ERP and CRM cannot go down for hours or a day without severe blowback. And yet at the annual SAPPHIRE conference last week SAP announced general availability of its core Business Suite applications on HANA. Or, as CRN put it, it “bet the farm” on HANA.

From around the interwebs:

Top 5 data center stories of the week, from Data Center Knowledge.

AWS is the McDonalds of cloud, who’s the Burger King? from GigaOM.

Tableau, Marketo software IPOs soar to cloud from Business Recorder.

Windows 8 is an enterprise non-starter because IT sees no value in changes from ComputerWorld.

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The Microsoft that produced the Windows-Office monopoly let its products get fat, dumb and happy. The Microsoft that must contend with the Oracle database juggernaut puts out a pretty good database. That’s why the sudden influx of new public cloud riches exemplified by this week’s official launch of the Google Compute Engine, coming a few weeks after Microsoft launched its Windows Azure IaaS options, may be tough on the competitors but could be very good for smart IT consumers.

Look for price cuts to continue, along with a flow of new services, and better APIs to access those services.

While I haven’t parsed the instance-by-instance price comparison between GCE and AWS, Google’s decision to sell compute instances in sub-hour increments could lead to cost savings vs. Amazon, which prices by the full hour. Don’t be surprised if Amazon responds, however.

We’ve already seen several price skirmishes in cloud including five or six price cuts in cloud storage in the span of a few weeks late last year between Google, AWS and Microsoft. Heck, even Rackspace, which touts its fanatical support rather than low prices, got into the act a little bit later.

Look for this sort of one-upsmanship (one-downsmanship?) to continue as these extremely well-funded and highly motivated competitors angle to get your workloads on their respective clouds. For the discerning IT buyer, whether she’s at a startup or a Fortune 100 company, that is only good news.

Photo courtesy of  Flickr user Official U.S. Navy Imagery

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The theory behind tools like these is basically this: sure, public cloud computing is billed as cheap, but too often it turns into a wasteland of dormant instances and other fallow resources. So as inexpensive as it can be, it’s not necessarily efficient or as cheap as it could be. Companies like Newvem, Cloudability, Cloudyn, CloudVertical et al say they can help you optimize all that and save more.

Newvem for Windows Azure covers many of the same core usage and cost metrics as the AWS version. A “heat map” helps users visualize their workloads as they move from on-premise implementations to the cloud, according to Newvem VP of marketing Cameron Peron. The free beta is available now to all Azure users. Newvem’s AWS version started out free as well, and a base level of capabilities remain free, but as of late last year, the company started charging for higher-level services.

Newvem said it sees Azure — which launched its AWS-like Infrastructure-as-a-Service  capabilities last month — gaining traction.

“The size of the Azure installed base is probably one of [Microsoft's] best-kept secrets,” Peron noted. Well, not that secret since Microsoft recently said Azure is a $1 billion-a-year business – a claim that some find difficult to swallow. Newvem would not comment when asked if Microsoft helped fund its Azure tool, but given that Microsoft wants to build the Azure ecosystem and compete better with AWS (as well as the spanking new Google Compute Engine), I’d say it’s a safe bet.

It’s also true that companies like Newvem, which built services around AWS, have been perplexed to see AWS adding richer and deeper monitoring and management services like Trusted Advisor. Given that, it makes sense that these companies offer multi-cloud capabilities.

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Tami Reller, Microsoft CMO.

Reller did not provide much more detail around when customers can get the OS upgrade, but said Microsoft is “very aware” of the holidays and would like to have the OS preloaded on hardware for that selling season. But that desire notwithstanding, buyers can get any Windows 8 device and be assured that 8.1 will be an easy update from the start button  screen, Reller told attendees of the JP Morgan Technology, Media & Telecom Conference.

She also characterized 8.1 as an update, more than the usual product tweaks deliverable online, but less than a full new release.

Earlier remarks by Reller in the Financial Times seemed to indicate that Microsoft was rethinking Windows 8 broadly, in response to user feedback, but today 8.1 was positioned as an easy, seamless update. No new interface perks were mentioned.

Windows 8 and RT, which Microsoft launched last fall to put Windows on new form-factor and touch devices, have met mixed reviews. But Reller said it’s met its objectives — running lots of innovative devices including “detachables” where the keyboard can be snapped off to leave a touch-device; convertibles which can shape-shift from laptop to touch device; and plain old traditional laptops and PCs.

Reller also said that Microsoft’s ability to sell into enterprise accounts remains strong and is actually getting stronger. And, for all the angst around Windows 8, the company on its last earnings call said it expects to reap nearly $4 billion in Windows-related licensing revenue this fiscal year. That’s a big number even Windows bashers would have to respect.

This story was updated at 8:31 a.m. PDT with more information about Microsoft enterprise sales and again at 11:34 a.m. PDT to correct the record — Reller talked about updates being easy from the Windows start screen, not the start button.

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Here in Europe, people don’t like their phones too thick and plasticky, and that’s been a consistent criticism levelled at the Lumia 920, Nokia’s previous flagship, and for that matter the very similar-looking 928. The 925 makes things sleek and metallic (I like metal; I used to be a proud owner of the Nokia E71) and is, at 139g, significantly lighter than the 920 (185g) and 928 (163g).

The 8.7-megapixel camera has 6 elements, rather than the 5 found in the 920 and 928, and wireless charging comes courtesy of a snap-on cover rather than being built in, but otherwise it’s really, really similar to the 928: 1GB RAM; 1,280 x 768-pixel, 4.5-inch OLED screen; dual-core 1.5GHz Qualcomm processor; and so on.

Here’s how IHS Screen Digest mobile chief Ian Fogg reacted as the unveiling happened:

Strong hardware similarities of #Lumia 925 to 7 month old 920 shows how much #Nokia is held back by Windows Phone’s sparse hardware support—
Ian Fogg (@ianfogg42) May 14, 2013

And there’s the thing. You can tell Nokia didn’t have that much to shout about in hardware terms, because its main message around the 925 is the around the photo-centric apps it’s pre-installing, namely Hipstamatic’s Oggl and Nokia’s own Smart Camera software, which clearly seeks to rival Samsung’s recent efforts in the Galaxy S4. This is all good and fine, but exciting? Not so much.

Look lower

But even if the limitations of the Windows Phone platform don’t allow Nokia to truly exercise its innovation muscles, that doesn’t mean the Finnish handset maker is taking it easy. Just look at what it’s doing at the low end of its range, once we’re out of Microsoft territory.

As I pointed out a few weeks ago, the QWERTY-enabled Asha 210 offers an incredible amount of social functionality for its $72 price tag (the Lumia 925 costs just north of $600). And just last Thursday, Nokia revealed the Asha 501, a touchscreen device that runs the new version of Nokia’s S40-derived operating system and also comes in at under $100.

The new version of Asha comes with features such as Fastlane, a second homescreen option that provides direct access to recently accessed contacts and apps, rather than showing a conventional grid of apps. This is all a result of Nokia’s purchase in early 2012 of Smarterphone, a Norwegian company that tries to make so-called featurephones seem, well, smarter.

Nokia has come in for a lot of flak for calling its all-touch Ashas “smartphones”, with many seeing this as a trick to inflate its real smartphone shipment figures. That may be one motivation, but I honestly think Nokia has every right to call these devices smart. When the 501 came out, Nokia also made a major push for developers to address the revamped Asha platform, releasing a new SDK and new in-app payment tools. Apps that are already on or in development for the platform include Facebook, Foursquare, LinkedIn and Twitter, and also games from the likes of EA and Gameloft.

Sure, heavier apps are lacking, but frankly the kinds of apps we’re talking about there might be better executed on a tablet than a smartphone anyway – particularly given the excellent battery life promised by Asha phones, Asha-plus-tablet is starting to look like a pretty tempting combo.

Who’s smart now?

Of course, the big promise with Windows Phone these days is that it will hit lower and lower price points, perhaps becoming a viable rival to low-mid-range Android devices at some stage (right now Nokia has only managed to cross the $200 threshold with Windows Phone products, namely the Lumia 520). These Ashas are already targeting the same rivals, though, and they are more optimized for the price point than efforts based on Google’s OS.

Nokia is clearly putting a large amount of effort into industrial design and user experience for both the Windows Phone and Asha ranges. However, it has way more freedom to tinker with its own platform. There’s also the small matter of price — the Lumia 925 costs 6 times as much as the Asha 501 so, if customers respond well to the new version of the Asha platform, the potential impact of the 501 will be greater than that of the Lumia 925. (That is admittedly a big “if”, though, as last quarter’s results showed roughly even sales for Lumia and full-touch Asha phones, with Lumia heading up and Asha down.)

The Lumia 925 sure does look fine, and if I was in the market for a high-end smartphone I’d give it strong consideration. However, in terms of making a real splash, the innovations Nokia is making at the low end come through more starkly than the tweaks made to its Lumia range.

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Just in time for Google I/O, Google will support the Debian Linux distribution in its Google Compute Engine, which is still in preview mode. From now on, Debian will be the “default image mode” for GCE, according to the Google AppEngine Blog. Google cited Debian’s improved handling of 32/64 bit compatibility as one reason for the move

According to the Thursday blog post:

“Today we’re adding Debian images for Google Compute Engine.  Debian, in collaboration with us, is providing images for both Debian 7.0 “wheezy” and the previous stable release, Debian 6.0 “squeeze.”   This support will make it easy for anyone using Debian today to migrate their workloads onto Compute Engine.”

A Google spokesperson told eWeek  that “customers will get a great experience having a Linux distribution that is maintained by the Debian community. Debian and derivatives thereof (such as Mint and Ubuntu) are among the most popular on the Internet, and Google itself is a heavy contributor to the Debian code base. We will also continue to offer CentOS, and are actively exploring other operating system options based on feedback from our customers.”

Google has a complicated relationship with the open source world. Most of its underpinnings are built on open source software and it does contribute a lot of technology to the community. But its own infrastructure is seen as a black box to many in that community. It’s interesting that there were a grand total of two comments as of Sunday on this blog post — one was removed and the other offered good wishes but added “the thing I’d like to see in future is how community members could be part of this project.”

While Google isn’t saying, folks expect the company will announce general availability of Google Compute Engine, which will compete with Amazon Web Services this week at the big show. GCE was announced last June and the preview was expanded to anyone paying for Gold support last month. Many cloud watchers say GCE, once fully available, will be the second-largest IaaS in terms of capacity after Amazon Web Services or AWS. Microsoft launched its Windows Azure IaaS capabilities in April.

In other words, buckle up, the cloud wars we’ve seen so far, are going to get rougher.

New tool allows AWS management from Microsoft consoles

Speaking of AWS and Microsoft, the new AWS Management Pack for Microsoft System Center means that a Windows admin at a company — at least one running System Center 2012 — can now use one console to monitor on-premises Windows resources as well as EC2 Linux or Windows instances, Elastic Load Balancing, CloudFormation and Elastic Beanstalk running on AWS.

As GigaOM PRO analyst Janakiram MSV pointed out in his report Thursday, this move is just one more example of Amazon’s push into the enterprise where  Windows reigns.  He points out that Tom Rizzo, a Microsoft vet, headed up this project at Amazon. Janakiram wrote:

“In 2010, Microsoft launched the Management Pack for Windows Azure deployments making it easier to manage on-premise and cloud infrastructure. Customers running Windows-based workloads on Amazon EC2 had to use a different set of tools based on Amazon CloudWatch, Nagios, OpsView, Nimsoft or other third-party software to monitor their deployments.  Through the AWS Management Pack, Amazon made it easy for enterprise IT teams to manage the servers running within on-premise, Windows Azure and AWS. Microsoft enterprise customers will welcome this.”

Interestingly Rizzo’s AWS blog post does not mention that the console was part of a joint effort with Microsoft, something that Microsoft rectified in it’s post about the news a day later.

Adobe tests the market for all-cloud delivery

Well, my  post on Adobe’s plan to move all updates of Creative Suite to a subscription service characterized it as a low-risk gamble. For Adobe anyway. Well, gauging by reader response,I should have talked to more graphic designers and artists who are fighting mad. Many vowed to stick with their old version as long as possible and then seek other non-Adobe options. Their beef? That even $50 per month per user will end up costing them way more than the current pay-once-use-forever model.

A Change.org petition asking Adobe to rethink its plan had more than 8,500 signatories as of Sunday morning

At any rate, Microsoft ,which has more at stake here than anyone with its zillions of Office users, was quick to weigh in. In short, it says subscription SaaS is the way of the future because it ensures users are always on the latest-and-greatest versions and can use their subscriptions across devices.  But:

” … unlike Adobe, we think people’s shift from packaged software to subscription services will take time. Within a decade, we think everyone will choose to subscribe because the benefits are undeniable. In the meantime, we are committed to offering choice–premier software sold as a package and powerful services sold as a subscription.”

News from around the web:

From Data Center Knowledge: Equinix unveils new crown jewel Ashburn Campus

From GigaOM: Box acquires Crocadoc to make document previews richer

From CITEworld: Office web apps: Not bad for free, but on demand is way better

From TechCrunch:  Microsoft to fold Yammer sales team into Office 365, identity surfaces as a core focus

From GigaOM:  Laggard Rackspace growth sparks concerns: is there enough cloud growth to go around?

From Fox Business News; U.S. judge orders Hewlett-Packard to face shareholder lawsuit

From InformationWeek: Google I/O preview

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But there is nagging worry, sparked anew by Rackspace’s laggard Q1 cloud growth, that the appetite for cloud services may not be unlimited after all. For its first quarter ending March 31, Rackspacelogged $91 million in public cloud revenue, up 4 percent sequentially and 40 percent year over year. It is the quarter-over-quarter number that has people spooked; given that Rackspace has been touting its new OpenStack public cloud, folks expected much better numbers.

To be fair there are nuances about the Rackspace quarter to be examined. First, it blamed some of the inertia on price cuts on some services during the quarter. And the newer OpenStack-based public cloud business was up 75 percent sequentially, CEO Lanham Napier told analysts on the company earnings call Thursday night. The problem is demand for the older Slicehost-based cloud technology evaporated and bookings for the new cloud haven’t taken up the slack. New customers are being directed to the OpenStack option.

RAX data by YCharts

There are Rackspace-specific issues but there are more macro concerns, which I’ll get to in a minute.

Bryan McGrath, Rackspace’s director of finance, acknowledged that there may be vendor consolidation, just as there has been in other areas when technology matures.

“There are lots of versions of Linux out there but only a few are widely adopted,” he noted. But his point is that even with consolidation, Rackspace is well positioned to prevail. After all, he noted, he company was able to build a $300 million business on its older cloud technology, which was admittedly less scalable and capable than giant Amazon Web Services.

“People bought that because of our support and service. Now we have a new, much better cloud based on OpenStack with new features and functions,” he said. “We’ll marry that with our dedicated business to offer customers what they need.”

Now for the macro cloud problem

Of perhaps greater concern is that so many vendors are jumping into the cloud services game that there may not be enough customers to support them all. IBM will doubtless sell its OpenStack options as they come online to its typical Fortune 500 accounts, the biggest of the big companies. That leaves other smaller — yet still big companies — with OpenStack options from Hewlett-Packard, Red Hat, Rackspace and perhaps Dell, Cloudscaling, Nebula and other players going forward. Or they’ll go with CloudStack or Eucalyptus or OpenNebula clouds.

Telcos, carriers and hosting companies are gearing up their own cloud services based on their own or partnering with aforementioned OpenStack or Joyent. Microsoft just last month came online with its Azure IaaS option, which will probably get traction among the zillions of Windows shops. While Google Compute Engine, which will probably become generally available next week at Google I/O, is not really seen as a business class public cloud, you’d be foolish to rule it out completely. And then there is the big, bad incumbent, AWS, which continues to churn out new services, price cuts and service options by the week.

No matter what we make of Rackspace’s quarter, if you thought the cloud wars were hot before, you better gear up for the next round. The big question is whether there really is enough cloud work to support all these players going forward.

My best bet? Nope.

Amazon.com CTO Werner Vogels, Rackspace President Lew Moorman and other cloud luminaries will no doubt map out this competitive landscape at GigaOM’s Structure event next month.

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Publishers Lunch points out that much of the financial analysis in the report of the proposed buyout is inaccurate: Among other things, while the report says a $1 billion purchase price is “well below the price it had originally bought in at,” Publishers Lunch notes that because of the way the original investment was structured, this price would actually represent a small premium. Nonetheless, if the documents are legit (the NYT says they are, but appear to be a few weeks old), it’s worth thinking about what Microsoft wants with the Nook business. Barnes & Noble shares were up 23 percent in pre-market trading this morning.

A reading ecosystem for Windows 8

It’s not surprising that Microsoft reportedly has no interest in Barnes & Noble’s tablets, which have never taken off. In fact, as of last week, the Nook HD and HD+ incorporate a full host of Google services, including Google Play, Gmail and the Chrome browser. While B&N has claimed it is committed to the Android platform and to the tablet business overall, Microsoft obviously has no incentive to keep a line of poorly performing Android tablets up and running.

What Microsoft does need is a reading ecosystem for its Surface tablets and other Windows 8 devices. That’s why the company bought a stake in Nook in the first place, but so far it hasn’t resulted in much more than a Nook app for Windows 8 (released after Amazon launched its own Kindle for Windows 8 app). With full control over the Nook ecosystem, Microsoft can take advantage of some of the technology — including book discovery and “scrapbooking” features — that Barnes & Noble has built for these devices without being dragged down by the devices themselves. It would also presumably get access to Nook’s ebook publisher relationships, which lie with Nook Media, not with Barnes & Noble.

A pre-existing customer base to compete against Amazon and Apple

The buyout could also help Microsoft compete against Amazon and Apple. Kindle is still the leading e-reading platform, and Apple’s share of the e-reading market is small, but growing, especially when it comes to heavily illustrated and interactive titles. While there is no guarantee that Microsoft can become a leader in e-reading, it has a better chance of doing so if it harnesses an existing platform and customer base and then extends it to Windows users worldwide, rather than attempting to build a system from scratch.

A caveat is that Nook hasn’t managed to grow its market share against Kindle. It’s been stuck around 25 percent since 2011. But that’s better than the zero that Microsoft has now. “They can afford it as a bet, even if it is a long shot,” Peter McCarthy, the founder of book publishing consultancy McCarthy Digital, told me. “Microsoft is awful with content and know it. They’re  always looking for another Xbox, though.”

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HTC’s prior tablets and the market for Windows RT

HTC did create a 7-inch Intel Atom-powered tablet in 2007 called the HTC Shift. It had a hardware keyboard and ran Windows, but like many other UMPC models from that time, it was never a hit. The company doesn’t have expertise with Intel chips and the full version of Windows, however. A few Android tablets from HTC — the Flyer and the Jetstream — came and went without fanfare as well. Given HTC’s experience with ARM-powered chips in smartphones, it would likely build new tablets with similar silicon. That would mean both would run Windows RT and not the full Windows 8 software.

Unfortunately, I’m not yet convinced there’s a market for Windows RT devices. I fully understand that some readers may have purchased one and are quite happy with it. However, there’s no data to support that Windows RT is a success by any measure: Microsoft hasn’t yet broken out Windows RT license sales from Windows 8 sales.

And after spending time with Surface RT and other Windows RT slates, I haven’t been able to recommend them to anyone. It’s not because they’re bad products; I actually like the user interface and the hardware of the various models. But at a similar price point, it may make more sense to buy an Intel Atom slate that provides similar battery life and performance to RT tablets but also adds support for legacy Windows software.

HTC’s current issues stem from several problems

I can understand why HTC might want to expand its product line to include Windows tablets: The company’s smartphone sales have been falling and so too are HTC’s revenues and profits. Instead of leading the pack with Android phones like it used to, HTC is losing out to Samsung. So too are other companies that used be smartphone stars; HTC isn’t unique. As a result, HTC reported just $2.88 million profit on $1.45 billion in revenues last quarter and unless it can quickly reverse its fortunes with the new HTC One, it could see profits dip into losses.

We’ve previously discussed why HTC is in its current predicament. Stronger competition is one part of it. The relative lack of brand awareness and marketing is another big reason. And a lack of focus — too many different permutations and combinations of similar products — haven’t helped either. And therein lies the rub: all three of these issues would only be magnified in the market for Windows tablets.

Losing focus isn’t a winning strategy

A better idea for HTC might be to get its smartphone house in order. It’s definitely on the right path with the HTC One; it’s a top-notch Android smartphone. If the phone is successful, I supposed the company could re-invest profits into designing a Windows tablet or two, but it might be better to continue improving the smartphone line first.

Tablet sales are growing, even as PC sales are slowing, but the market for smartphones is still bigger than both. I’d hate to see HTC lose focus by entering an already crowded market for products that haven’t yet proven successful. It just seems like a big risk that HTC isn’t in a position to take right now.

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