Category: News

For the past year, massive open online course (MOOC) providers, like Coursera, edX and Udacity, have been riding high. Indeed, as of Coursera’s first birthday, which is today, the startup says more than 3 million students have enrolled in a course and 62 top universities from around the world have signed on as partners. The MIT and Harvard-backed edX and Udacity have also been growing steadily, announcing high-profile new partnerships and expanded programs for for-credit online classes.

But this week, elite liberal arts college Amherst snubbed edX after months of courtship, highlighting concerns about how MOOCs could change higher education over the long term. The faculty wasn’t opposed to online education in general but approved a proposal for plotting its own path as opposed to joining edX, according to Inside Higher Ed.

A few of the faculty’s concerns were Amherst-specific, the news outlet said. For example, some wondered if MOOCs, which by nature include tens of thousands of students, are inherently at odds with the college’s mission of encouraging education through small residential communities.  And others wondered how edX certificates bearing Amherst’s name would ultimately affect the school’s brand.

But others had larger doubts about the future impact of MOOCs on higher education.  Citing an internal report on edX, Inside Higher Ed said the school worried MOOCs could:

• Perpetuate an “information dispensing” model of teaching, which preferences lectures and exams over seminars and teacher-graded papers
• Take tuition dollars from middle-tier and lower-tier schools
• Lead to the centralization of higher education in the U.S.
• Exacerbate the star faculty system

Amherst’s decision follows a survey last month showing that while a majority of professors view the MOOC format favorably, less than a third of them believe students should be able to receive formal credit from their schools for successfully completing a MOOC. An earlier survey of university chief academic officers revealed a less glowing view of MOOCs – just a third of the respondents said they believe that their faculty accepts the value of online learning.

While professors and institutions are beginning to realize the benefits of experimenting with digital content and online learning formats, Amherst’s move shows that they want flexibility in determining how to do it and that institutions are willing to consider different models. That’s good news for other startups and companies in the space. The three big MOOC providers have received considerable attention recently, but colleges have plenty of options for bringing learning online, including 2U, Instructure’s Canvas Network and startup NovoEd.

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Akamai Technologies (AKAM) announced that in collaboration with Daon, a leader in identity authentication technology and services, the two companies will offer Mobile Authentication as a Service (MAaaS). The solution is designed to provide cloud-based multi-factor authentication to increasingly mobile federal employees.

The authentication service can be used across a variety of mobile devices, and will be delivered as a cloud-based application in conjunction with CGI Group Inc., the first large IT services provider to receive FedRAMP authorization. By allowing federal agencies to maintain security control at the application level even if they do not manage the actual device, MAaaS can be used in conjunction with increasingly popular “Bring Your Own Device” (BYOD) programs.

“Public sector computing is happening on a wide variety of mobile devices, many of which are privately owned by federal employees,” explained Tom Ruff, vice president, Public Sector, Akamai Technologies. “As such, Federal agencies are looking for more effective ways to manage devices, applications and data in smart, secure and affordable ways, while at the same time adhering to programs such as Cloud First.”

The MAaaS solution can allow authentication parameters to be customized based on application and associated risk policy. This multi-factored, layered approach can help ensure the right level of protection is applied to protect information and privacy. Unlike mobile authentication solutions that employ single or 2-factor authentication, the MAaaS solution can incorporate as many as seven factors of authentication provided by Daon.

“As part of the Daon pilot for the National Strategic Trusted Identities in Cyberspace (NSTIC) initiative, we have been able to provide our members a secure and easy way to authenticate themselves to the restricted areas of our website,” said Carter Morris, senior vice president, Transportation Security Policy at the American Association of Airport Executives (AAAE).

The new solution is also designed to allow government agencies to incorporate existing Common Access Card (CAC) or Personal Identity Verification (PIV) card implementations into their mobile authentication strategies. This should allow agencies to take full advantage of the government’s current investments in efforts such as X.509 compliance technology, while allowing greater flexibility and security to their workforce.

It seems that the planet’s recent surge of large earthquakes isn’t quite over. The U.S. Geological Survey has recorded a 7.2-magnitude earthquake that shook the islands North of Japan on Friday morning.

The quake was centered around 250 km (155 miles) Northeast of the town of Kuril’sk, Russia and 521 km (324 miles) Northeast of Nemuro, Japan. Kuril’sk is located on the string of islands located Northeast of Japan, and Nemuro is one of the Easternmost cities on the Japanese mainland. No damage has been reported as a result of the quake.

The National Weather Service’s Pacific Tsunami Warning Center has not issued a warning as a result of the earthquake, and neither has the Alaska Tsunami Warning Center.

Earlier this week, over two consecutive days, earthquakes hit Iran and Papua New Guinea. The earthquake that hit Iran was measured at a 7.8 magnitude on the Richter scale and caused multiple fatalities in a rural area of Pakistan. The 6.6-magnitude earthquake in Papua New Guinea caused no reported injuries.

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An Anaheim high school teacher is set to be arraigned on 60 felony counts stemming from charges that he used Facebook to obtain sexually explicit photos from over 100 underage boys over the past 3 years.

30-year-old Zachary Joshua Reader, a former high school teacher and baseball coach at schools in both Anaheim and Irvine, California, is accused of encouraging sex acts and possessing nude photographs of boys aged 13-17.

According to police, Reeder used Facebook to commit his crimes. Between June of 2010 and January of 2013, he allegedly created a fake Facebook account posing as a female student. Through this account, Reeder befriended many underage boys, most of which he knew through his teaching jobs.

He reportedly got at least 106 victims to send him sexually explicit photos and videos.

Here’s the full list of counts that Reeder faces:

22 felony counts of using a minor for sex acts, 15 felony counts of distributing pornography to a minor, 13 felony counts of contacting a child with the intent to commit a lewd act, six felony counts of lewd acts upon a child, two felony counts of lewd acts upon a child under 14, one felony count of possession and control of child pornography, and one felony count of distribution of child pornography.

These counts carry a total maximum sentence of 44 years in prison.

This definitely isn’t the first time that we’ve seen Facebook used in elaborate fake profile sex scams. Last year, a Pennsylvania man was charged with 68 felony counts after he went to painstaking lengths to manipulate underage girls through a series of fake Facebook accounts.

We all know what it feels like to stand in a place that overwhelms our eyes with splendor, to hear a piece of music that seems to pluck the strings of our heart, to behold a face whose shape is pleasing. Beauty: it’s a thing we all know and are drawn to. And yet what is it that makes something beautiful?

Today’s TED Radio Hour asks this deceptively simple question. It begins with violinst Robert Gupta, reflecting on the instinct musicians have to know when something is simply lovely. Next, we hear from Denis Dutton, who looks at the universality of beauty as a gift from our ancient ancestors and the emotions they attached to the things that helped them survive. After, psychologist Nancy Etcoff explains why those we love are so beautiful to us.

In the second half of the show, model Cameron Russell talks about the decisions she made in her talk which went viral earlier this year, all about why she’s a model. Her explanation: “Because I won a genetic lottery.” Civic leader Bill Strickland describes how the magic of the potters’ wheel changed his life, and how he seeks to do the same for the youth of Pittsburgh through his arts education center. And designer Richard Seymour shares why beauty is not so much a thing in and of itself, but a feeling.

It’s an inspiring hour of great moments from TED Talks, embedded in a soundscape of music and fresh interviews. As Strickland says in the show, “When I think of beauty, I think of life and hope and all of its enormous possibilities. “

Check out your local NPR schedule to find out when the show airs today, or listen to it via NPR’s website »

Or head to iTunes, where the podcast is available now »

Iron Man 3 premiers in theaters on May 3. Before the theatrical release, Gameloft will be giving mobile gamers a taste of the action with its latest mobile game tie-in.

Iron Man 3 – The Official Game – is a freemium title for iOS and Android that gives players the chance to use 18 of Iron Man’s most iconic suits as Tony Stark battles across various missions.

Some players expressed concern in the YouTube comments that Iron Man 3 will devolve into a shallow cash cow as the game encourages players to spend real money to unlock new weapons and armors. Gameloft says that’s not the case as every armor and weapon can be unlocked through normal gameplay. Of course, the developer doesn’t say just how long players will have to play before unlocking the advance armors, but at least it’s possible.

Iron Man 3 – The Official Game – will be out on iPhone, iPad and Android devices on April 25.

Here’s a roundup of some of this week’s headlines from the network sector:

Mellanox Launches ConnectX03Pro interconnect. Mellanox (MLNX) announced ConnectX-3 Pro, a network adapter IC and card with hardware offload engines that support virtualized overlay networks commonly used in cloud infrastructures. Networking overlay technologies were developed to enable application and tenant scalability and resource tunneling across the cloud, however this has been limited due to the high CPU overhead imposed on cloud resources. The ConnectX-3 Pro implements these overlay technologies within the interconnect hardware itself, allowing clouds to take advantage of virtually unlimited scalability and resource mobility without the CPU overhead. “To meet the growing demand of cloud computing services, cloud providers must be able to take full advantage of new software techniques to scale-up their cloud networks without reducing performance or efficiency of the infrastructure,” said Gilad Shainer, vice president of marketing at Mellanox Technologies. “With ConnectX-3 Pro, cloud providers will be able to easily scale and grow their business and provide new value-add services while reducing the cost of their cloud infrastructure; ushering in the age of Cloud 2.0.”

Level 3 names new CEO, selected by Voice America.  Level 3 Communications (LVLT) announced that Jeff K. Storey has been appointed by the Board of Directors to be the company’s president and chief executive officer, effective immediately. Storey was also nominated for election to the Board of Directors at the company’s Annual Meeting of Stockholders to be held on May 23. Storey joined Level 3 in 2008 as the company’s president and chief operating officer. “We are extremely pleased to name Jeff as our new CEO and look forward to him joining our Board of Directors,” said Walter Scott, Jr., chairman of the Board of Directors of Level 3. “Jeff was the clear and unanimous choice of the Board. With 30 years of industry experience and his intimate knowledge of Level 3′s customers, employees and operating environment, Jeff is the right executive to lead Level 3 into the future.” Level 3 also announced it is providing content delivery network (CDN) services for VoiceAmerica, a producer of more than 300 original live Internet talk radio programs delivered on a weekly basis. Level 3′s CDN services will help enable VoiceAmerica to deliver its online content to a more global audience. “VoiceAmerica’s popularity is rising across the globe, and in order to continue providing a superior streaming experience to a growing audience, we must have a CDN that can handle high demand and scale to meet our expansion needs,” said Jeff Spenard, President of VoiceAmerica. “Level 3′s suite of media delivery services and its extensive IP backbone allows us to seamlessly deliver our content to more browsers, mobile devices and listeners around the globe.”

Avaya innovates fabric-enabled networking. Avaya unveiled new solutions demonstrating the company’s continual innovation in network fabric technologies, including the industry’s first fabric-enabled multi-service edge device and a new model for IP Multicast that significantly improves efficiency, reliability and scalability over traditional approaches. Based on an open, standards-based implementation of Shortest Path Bridging, Avaya VENA Fabric Connect delivers an array of network services, including Layer 2 and Layer 3 virtualization with optimized routing and now, fully integrated support for IP Multicast. The VSP 4000 fabric-enabled multi-service / multi-tenant edge device further extends the Avaya VENA Fabric Connect across the entire network to the campus, metro or WAN edge. ”Avaya is fundamentally changing the way that networks are designed, built and operated with our Fabric Connect technology,” said Marc Randall, Senior Vice President and General Manager, Avaya Networking.” With this announcement, we are delivering all the services capabilities with far greater simplicity, agility and availability than the wide majority of current rigid, complex and error-prone networks supporting enterprises today.”

Up front I should confess that I love Amazon Prime. The service is a bit cheaper than Netflix for streaming movies and TV shows but brings along other perks such as free second-day shipping and a lending library for Kindle users. The retailer continues to add features and work with studios in an effort to provide more content to viewers.

Today Amazon releases pilot episodes for 14 new, original shows. We have known these were coming for some time, but the service waited until all pilots were ready and pushes them now as one giant release.

Among the pilots are six childrens’ shows and eight original comedies, including the much anticipated Zombieland, which is based on the 2009 cult classic movie.

Now the ball is in your court. Not all of these shows will make it, the company wants feedback to make that determination. Amazon solicits reviews and provides ability to take a survey. Customers will determine which pilots get the green light to begin production as complete series.

Songs from the shows are also available for free download from AmazonMP3, and other information on each show is available from IMDb. Now you have a plan for your weekend and, if you are like me, then it involves zombies.

Photo Credit: FotoYakov/Shutterstock

It appears that Samsung is certainly on the way to ensuring the Galaxy S 4 smartphone makes an epic splash upon its arrival in a matter of time from now. As you already know, Samsung will unleash two different versions of the Galaxy S 4: one in a Snapdragon variant and another in a Exynos variant— all in the hopes of reaching as many worldwide markets as possible. Because of this notion, DigiTimes reports that Samsung wants to ship 10 million Galaxy S 4 units in the last week of April, while also expecting to sell 30 million Galaxy S 4 units in the first 3 months.

Ladies and gents, if you think the Galaxy S III sales were a success, get ready for a bigger bang with the Galaxy S 4.

source: DigiTimes

Come comment on this article: Samsung to ship as many as 10 million Galaxy S 4 units during the initial launch, 30 million units within the first 3 months

Rumors suggesting that celebrities may be gay have been used to malign stars in the pages of tabloids for years. Now, though, the tipping point in the U.S. gay rights debate seems to have been reached. Countless politicians have come out in favor of gay marriage in recent months, and even NFL players may soon be coming out of the closet. In this context, it’s not hard to see that ‘gay rumors’ may become blasé at some point in the near future.

That point seems to have already been reached for Joel McHale, who this week told The Advocate that he appreciates gay fans of the network TV show Community, on which he stars. McHale stated that gay rumors, which he sees daily on Twitter, often stem from his being well-dressed.

“It’s flattering,” McHale told The Advocate. “I always find it really weird when guys flip out over someone thinking they might be gay. If a guy gets offended by that, there’s something’s wrong with him. I take it as a compliment.”

In addition to starring in Community and hosting the E! network clip show The Soup, McHale starred in last year’s movie Ted and is set to star with Robin Williams in a 2013 movie titled A Friggin’ Christmas Miracle.

(Image courtesy Gage Skidmore/Wikimedia Commons)

Wireless carrier contracts are just a way of life. Well, they used to be until T-Mobile rebranded itself as the unCarrier by getting rid of two-year contracts entirely. This led to some consumers demanding that Verizon do the same, and those consumers now number in the thousands.

A petition on Change.org asking Verizon to drop contracts has reached over 94,000 signatures. Its next milestone will be to reach 150,000 signatures, but just reaching 100,000 signatures should send a strong signal to the higher ups at Verizon that its consumer base wants a system where they’re not tied down to expensive contracts for two years, but are rather allowed to come and go as they please.

The movement definitely has support, but the hard part is convincing Verizon to do away with its expensive, and highly lucrative, contracts. Thankfully, the company at least seems willing to do so as its CEO, Lowell McAdam, said earlier this month that he would be ok with following T-Mobile’s lead into canceling contracts if there was enough consumer demand.

If Verizon did follow T-Mobile’s lead, it’s not like contracts would just magically disappear. They would replaced with what T-Mobile calls the “Simple Choice” plan which essentially replaces the contract with small monthly payments. The smartphone is still subsidized and you will still pay the same for data as you did before. The only difference is that you can leave the carrier at any time. Granted, you will have to pay the balance left on the phone if it’s not completely paid off.

Still, supporters say Verizon adopting a T-Mobile-like contract-less plan would be good for consumers on all carriers, not just Verizon and T-Mobile. With the backing of a major carrier like Verizon, other carriers like AT&T and Sprint would have no choice but to adopt a no contract policy as well. It could also possibly lead to all the wireless carriers agreeing on phone unlocking, an issue that the government hasn’t had much luck in regulating.

[h/t: Wireless Week]

Google announced that it has added support for the Khmer language to Google Translate. This is the 66th supported language.

The launch comes with the ability to use a virtual keyboard and the ability to read Khmer text phonetically, for users who don’t read the Khmer alphabet.

“Khmer is a challenging language for translation systems for two reasons,” says Google software engineer Arne Mauser. “There isn’t a lot of Khmer data on the web and words are not usually separated by spaces; so in addition to teaching our translation system a new language, it also has to learn how to separate words (what we call segmentation).”

“Over time, we will improve the system and make our Khmer translations better,” Mauser adds. “We constantly improve our algorithm when we find new translations and learn from your alternative translations.”

Google says the language now meets its standards to be launched in Alpha status. It also says that if it doesn’t already support your language, that you can rest assured, they’re working on it.

Today, Netflix debuted all 13 episodes of their new original series, Hemlock Grove. Based on Brian McGreevy’s book of the same name, the horror series deals with the brutal murder of a teenage girl and eventually, werewolves. The series is produced by Eli Roth of Cabin Fever and Hostel fame.

And the early reviews are in, and they aren’t looking good for Netflix’s third major original series. Here are some blips from some of them:

The L.A. Times: “Let me be clear: As a for-profit visual arts experience, ‘Hemlock Grove’ is terrible in ways that mock the meaning of the word ‘terrible,’ with clunky acting, tra-la-la transitions and at least one monster that walks like a bad Frankenstein and appears to be wearing the very same wig/hat we used.”

The Telegraph: “So is Hemlock Grove another triumph for the TV and film streaming site? The short answer is no. Quite the reverse in fact. Hoping to be a cross between Twin Peaks and True Blood, with a hint of E4′s soapy thriller Revenge thrown in for good measure, this sexed-up 13-part series, I’m afraid, is Netflix’s first dud. Where it tries so desperately to be eerie and esoteric, it winds up as derivative as anything the basic TV channels churn out on a regular basis: hammy, hackneyed and disjointed.”

Variety: “If the underlying formula is as old as ‘Dark Shadows,’ there’s still a need for more narrative momentum than the 13-episode series initially delivers. So while one can understand why Netflix would augment its original slate with this mix of talent, ‘Hemlock Grove’ remains a mere niche confection, one likely to play best among those genre fans who can’t see the forest for the trees.”

HitFix: “But it’s also a mess: a horror series with a weirdly slow build (you don’t even see the lead werewolf character transform until the end of the second episode), a mix of campy performances and competent ones, and just enough intriguing ideas to make me wish the entire thing was a lot better than it is.”

There is a glimmer or hope, as Entertainment Weekly gave it a B+, saying, “When all the blood is mopped up, Hemlock, like so many horror flicks before it, is about the ­monster inside all of us and the human bonds that prevent us from becoming our beastliest selves.”

Of course, reviews aren’t everything – just one person’s opinion. But it definitely appears that Hemlock Grove isn’t going to benefit from the widespread, nearly-universal acclaim handed out to Netflix’s last original series – the superb political thriller House of Cards.

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Many comedians use Saturday Night Live as a jumping off point for a long and successful movie or TV career, but the transition between the two can often be awkward. This week, Kristen Wiig encapsulated that awkwardness, saying she “floundered a bit” after leaving the show.

The comedian told Access Hollywood that she “felt a little lost” after her seven-year stint on the show was over. She related that the demanding six-day work week and the fact that cast members “live and breathe the show” made it difficult to adjust to a new life.

Now, however, Wiig has found her footing. The star is currently set to star in movies such as Anchorman: The Legend Continues and The Skeleton Twins. She will also be providing voice work for the animated films Despicable Me 2 and How to Train Your Dragon 2.

Wiig first appeared on Saturday Night Live in 2005. During her time with the show, she was nominated for four Primetime Emmy Awards for Outstanding Supporting Actress in a Comedy Series. Her final episode of SNL ended with host Mick Jagger kicking off a rendition of the Rolling Stones song “Ruby Tuesday,” which plays while current and former cast members dance with Wiig in turn.

(Image courtesy Jiro Schneider/Wikimedia Commons)

The Google data center campus in Lenoir, North Carolina at night. Google is investing an additional $600 million to expand the campus. (Photo: Connie Zhou for Google)

Google today announced a major expansion of its data center campus in Lenoir, North Carolina, saying it will spend $600 million to build new server farms and populate them with  IT equipment. The search giant also said it will use its purchasing power to jump-start a renewable energy program for Duke Energy, the utility that provides electricity to the Lenoir facility.

The announcement brings Google’s investment in Lenoir to $1.2 billion. The small town in western North Carolina, where the economy was once driven by the furniture industry, is now a major conduit for Internet traffic for Google search, Gmail and YouTube videos.

“When Google builds a data center, it chooses a site large enough to accommodate growth and a site where we want to establish a long-term commitment to the local community,” said Data Center Operations Manager Enoch Moeller. “We are proud to be a part of the City of Lenoir and Caldwell County community where our employees live, work and play. North Carolina and the Lenoir community are great places in which to work and grow.”

Google also said that it will be the pilot customer in a new program from Duke Energy, which create a new service tier to deliver entirely renewable energy to large customers. Duke will file the plan with regulators within 90 days, according to Gary DeMasi, Director of Global Infrastructure for Google.

Prompting Utilities to be Greener

Google’s approach is significant for several reasons: it meets Google’s goal of using programs that create new generation of renewable energy, and prompts utilities to boost their focus on clean energy sources. This has been a major focus in North Carolina, where Greenpeace has pressured Apple over the energy sourcing for its huge data center in Maiden, which is about 30 miles south of Google’s Lenoir facility. Apple has made a huge commitment to on-site renewable generation in Maiden, building a huge solar power array and a fuel cell farm power by gases from nearby landfills.

Google is taking a different approach, tracking a model championed by Greenpeace, in which the data center industry uses its purchasing power to encourage utilities to offer more renewable options. In North Carolina, Duke is pledging to create a new rate plan (or “tariff”) for customers that want energy sourced solely from renewable sources.

“The concept of a ‘renewable energy tariff’ is simple,” Google explained in a white paper. “Utilities would offer companies like Google the choice to buy renewable energy through a new class of service. The service would be voluntary, provided only to those companies that request it but open to all customers that want it and meet basic criteria. A key aspect of the tariff is that the costs of procuring the renewable power would be passed on to the customer that has elected this option, so the goal would be to avoid impact on other ratepayers.”

Data Centers Greening the Grid

Google has been considering this type of approach for some time. In March 2012, Google data center executive Joe Kava said the data center industry could use its leverage to prompt greener practices from major utilities.

“I’d like to challenge the industry to pool its resources,” Kava said at an industry conference. “Why can’t we, as an industry, form a consortium to buy renewable power and push it to the grid. That way we can green the power we are all using … “To us, it’s about increasing the content and percentage of renewables on the grid. If we can increase the green content on that grid, we’ll also green our data center.”

When asked whether Google had contemplated such an approach in North Carolina, Kava said there had been no active effort to organize other players. But if Duke succeeds in creating an all-green service tier, other data center companies could participate, further boosting demand for renewable generation.

“Offering companies like Google a renewable energy option has many advantages,” DeMasi wrote in a post on the Google blog. “Because the service is made available to a wide range of customers, companies that don’t have the ability or resources to pursue alternative approaches can participate. And by tapping utilities’ strengths in power generation and delivery, it makes it easier for companies to buy renewable energy on a larger scale.”

Google’s move was hailed by Greenpeace.

“Google’s announcement shows what forward-thinking companies can accomplish when they are serious about powering their operations with clean energy,” said Greenpeace International Senior IT Analyst Gary Cook. “Before today, even large energy users in North Carolina were only offered dirty energy by Duke Energy: coal, nuclear and gas. In living up to its commitment of powering 100% of its operations with renewable energy, Google has given Duke Energy the push it needed to offer a Renewable Tariff which could finally mean access to clean energy for Duke Energy’s customers in North Carolina.”

Will Google Pay a Green Premium?

The approach is not without its challenges. Utilities will need to work out the details of the service with state regulators, and find cost-effective renewable projects.

But the major issue for data center providers will be cost, as renewable energy sources are currently more expensive than the current industrial rates from Duke Energy of about 4.5 cents per kilowatt hour, which is primarily sourced from coal and nuclear power. Google is aware of this discrepancy.

“We might take a loss (at first),” said Kava in his presentation last year. “But over a 20-year period, I’m betting the price of power will go up.”

By committing to be the pilot customer for Duke, Google appears to be ready to pay a premium for renewable energy, at least in North Carolina. Even a “green tariff” would likely include some non-renewable energy, since solar power is only available during the day and wind power can be intermittent.

“If needed, a supplemental ‘shaping’ service from other (likely non-renewable) generation would fill in the gaps of variable renewable resources and ensure
that customers receive continuous and reliable service,” Google said in its white paper. “Thus,the tariff will eliminate many of the complexities of intermittent renewable energy production for customers.”

The “Microsoft’s dead” meme is one of the most popular among tech bloggers and arm-chair pundit commenters. Posts are everywhere the last 30 days or so, fed this month by reports of record-weak PC shipments. After market close yesterday, with fiscal Q3 results, Microsoft proved critics wrong and showed just how much strength remains in the Windows franchise. More significantly, a dramatic change is underway, regarding which buyers generate more revenues.

IDC says that PC shipments fell 13.9 percent during calendar first quarter (Microsoft’s fiscal third), and there was reasonable expectation Windows license sales would see similar fall off. Instead, when removing a one-time $1.085 billion deferral, Windows & Windows Live division revenue was flat ($4.62 billion) year over year. Given the sorry state of the PC market, flat isn’t just good but great.

Typically, license sales to PC manufacturers account for 75 percent to 80 percent of Windows revenue. During fiscal third quarter there was dramatic shift, with non-OEM sales, largely from commercial licenses and Surface tablets, representing 40 percent of revenue. If this turns into a trend, within a year Windows & Windows Live could look more like Business and Server & Tools divisions, where, respectively, 60 percent and 50 percent of revenues come from multi-year license sales to businesses.

The dynamic smooths out revenue for the other divisions and insulates them from economic downturns or changes in PC sales. The Windows group moves in the same direction. The reason, however, will surprise many.

Two-thirds of enterprises now use Windows 7, according to Microsoft, and three-quarters of Enterprise Agreements include Windows licenses. Meanwhile, overall volume-licensing revenue grows in the double-digits. However, in my experience talking to IT managers, large businesses often buy licenses to exercise downgrade rights rather than to upgrade — that’s to standardize on one platform. There still is in process a massive move away from XP, which by analyst estimates accounts for 40 percent of the Windows install base.

The rise in uptake could easily reflect resistance to Windows 8 rather than demand for it — large businesses choosing annuity contracts so they can downgrade rights and install Windows 7. That said, once businesses move to annuity contracts, they are more likely to stick with them, based on historical Microsoft corporate customer buying trends. Additionally, the business downgrading today can upgrade in the future.

Microsoft offers many multi-year license plans. Enterprise Agreement, generally the most flexible, is the more popular among larger businesses. To the other plans, buyers can attach — and Microsoft encourages them to do so — Software Assurance, which provides lower-cost upgrades. Businesses make annual payments for EA or SA, the latter 29 percent per year of desktop software’s price. That’s where Microsoft gets assured revenue, regardless of economic downturns or declines in PC sales.

So there are two lessons coming from fiscal Q3 results: Windows license sales are surprisingly healthy, particularly considering PC market ills. Windows revenue shifts from PC OEMs to other segments, particularly multi-year license sales to businesses. There remains Windows success, or failure, on future computing devices — a topic I tackle in my next post.

Photo Credit: abeadev/Shutterstock