Microsoft’s Office, Surface, And Cloud Businesses Lead Q2 Results

Microsoft posted the second quarter of its 2020 financial results today, reporting revenue of $36.9 billion and net income of $11.6 billion. Surface and Office are both up, and revenue from Windows licenses has also increased just as Windows 7 support comes to an end. Gaming revenue is down a massive 21 percent, and Microsoft is blaming some of that on a strong quarter of a third-party game last year.

Microsoft’s Surface revenue jumped massively during the same quarter a year ago, on the back of a Surface Pro 6, Surface Laptop 2, Surface Studio 2, and Surface Headphones launch. It pushed Surface closer to a $2 billion business. This year, Surface revenue has also increased by 6 percent to $1.9 billion.

Microsoft launched its new Surface Pro X device with an ARM-based Qualcomm SQ1 processor inside, and also refreshed its typical Surface lineup. The Surface Pro 7 got the latest Intel processors and USB-C, while the Surface Laptop 3 got a new 15-inch model (with AMD processors), USB-C, and options for metal or fabric finishes.

Microsoft is planning to launch its new Surface Earbuds in the spring, and the company will likely unveil new Surface Book and Surface Go models this year, alongside its plans to launch the new dual-screen Surface Neo and Surface Duo devices.

In an earnings call with investors, Microsoft CFO Amy Hood revealed Microsoft expects Surface “revenue growth in the low single digits as we work through the execution challenges in the consumer segment.”

Over on the gaming side, Microsoft also has a big year ahead for its Xbox business. While we wait for the new Xbox Series X console to launch later this year, overall gaming revenue has decreased 21 percent for the recent quarter. Microsoft notes that Xbox content and services revenue also decreased by 11 percent, primarily due to a “third-party title” (likely Fortnite or Red Dead Redemption 2) performing better last year. Subscription growth has partially offset this decrease, but clearly the third-party game boosted Xbox content revenue last year.

Microsoft’s CFO Amy Hood also revealed gaming revenue will decline next quarter in the “low double digit range” due to console sales and “lower transaction volume on a third-party title.”

While revenue has decreased in gaming, it’s no surprise as Microsoft prepares to launch a new Xbox console and is investing in efforts like Xbox Game Pass for its gaming business over the long term. Some of these bets simply won’t pay off immediately in quarterly revenue.

Microsoft is also planning to launch its xCloud game streaming service this year, and it looks like it will likely be bundled into some type of subscription with Xbox Game Pass. Public trials are underway, and Microsoft has steadily been adding plenty of new titles for beta testers to try out. Windows 10 support and PS4 controller support are both coming this year, too. Microsoft CEO Satya Nadella revealed on an earnings call today that “hundreds of thousands of people [are] participating in initial trials.”

Nadella also revealed that “Xbox Game Pass subscribers more than doubled this quarter,” but Microsoft has still not revealed an exact number for its subscription service. Microsoft also hasn’t revealed Xbox Live active users this quarter, but Nadella says “we set a new record for Xbox Live monthly active users again this quarter, led by the strength of console.” This time last year Microsoft was at 64 million active Xbox Live users per month.

It was also an interesting quarter for Windows. Microsoft ended support for Windows 7 earlier this month, and it has helped push the PC market to its first year of growth since 2011 as businesses and consumers upgrade. Both Windows OEM Pro and non-Pro was up in the recent quarter, with Pro revenue jumping by a massive 26 percent that’s to what Microsoft calls “healthy Windows 10 demand” for Windows 7 upgrades. Microsoft 365 agreements with businesses also pushed commercial products and cloud revenue up by 25 percent this recent quarter.

The real story of Microsoft’s earnings, as always, is in the company’s Office and cloud businesses. Office Commercial products and cloud services revenue increased 16 percent in the recent quarter, and even Office consumer revenue is up 19 percent with Office 365 consumer subscriptions growing to 37.2 million.

Overall revenue in what Microsoft calls “Intelligent Cloud” was $11.9 billion, an increase of 27 percent year-over-year. Azure itself grew 62 percent, and server products and cloud services revenue is up 30 percent.

Microsoft’s three main business areas are as follows:

•     Office, LinkedIn, Dynamics (Productivity and Business Processes) - $11.8 billion, an increase of 17 percent
•     Azure, server products, enterprise services (Intelligent Cloud) - $11.9 billion, an increase of 27 percent
•     Windows, Surface, Xbox and gaming, Bing ads (More Personal Computing) - $13.2 billion, an increase of 2 percent

It’s clear that most of Microsoft’s growth is coming from Office, Azure, and commercial cloud services. While “More Personal Computing” has the most overall revenue, its growth is far lower due to its established businesses like Windows and Xbox. Once again, Microsoft’s revenue is spread across a variety of big businesses, and the company isn’t fully reliant on any individual business for a majority of its revenue.

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Microsoft switches from hardware to Bitlocker software encryption by default for SSDs

Last year Microsoft issued a security advisory regarding a new vulnerability that affects hardware-based encryption on SSDs. The vulnerability was first discovered by Dutch security researchers Carlo Meijer and Bernard von Gastel from Radboud University who published a paper titled “weaknesses in the encryption of solid state drives”.

It turned out Microsoft was trusting SSDs who claimed that they self-encrypted to be secure, but that many of these drives were vulnerable to hardware hacks which exposed the content of the drives to determined hackers.

Microsoft suggested Windows 10 Admins switch to software encryption for affected drives, and now, with KB4516071 Microsoft switched to software encryption by default, even when the SSD claims to offer hardware encryption.

Microsoft notes:

    “Changes the default setting for BitLocker when encrypting a self-encrypting hard drive. Now, the default is to use software encryption for newly encrypted drives. For existing drives, the type of encryption will not change.”

Software encryption is of course slower and more processor intensive, and users can still switch to hardware encryption if they trust the drive, but the default should now be more secure for everyone concerned.

Microsoft Refuses to Answer Key Questions About Child Porn in Bing's Search Results

Microsoft CEO Satya Nadella, the second on the left, answers a question from shareholders. President and Chief Legal Officer Brad Brad, Executive Vice President and Chief Financial Officer Amy Hood and Chairman John Thompson listen at Microsoft's annual meeting of Shareholders at the Meydenbauer Center November 28, 2018 in Bellevue Washington.

Microsoft's Bing search engine is facing heat as it includes images of child pornography in its search results. The publication was described Thursday by TechCrunch, which commissioned a study on Bing images from AntiToxin Technologies, an Israeli online security company, in response to an anonymous suggestion.

Images of child pornography, the definition of which does not require a minor to participate in a sexual act, are considered illegal contraband under US federal law. UU And they are considered illegal in at least 93 other countries. Any attempt to duplicate the results of the AntiToxin study or to access child pornography online may lead to your arrest. You were warned.

According to the report, searches for pedophile terms in Bing generate a wide range of illicit content describing child abuse. Even worse, an algorithm used by the site to recommend similar search terms has generally worked in response to these searches, helping researchers locate additional images of child pornography.

The study showed that researchers were looking for a popular discussion forum among teenagers with the word "children". It seems that Bing has suggested other related research, including research on 13-year-old girls. This term apparently appeared "widespread child pornography when a search took place".

Gizmodo did not independently verify the results of the AntiToxin investigation, allegedly conducted jointly with the police. Microsoft has confirmed that there is a problem, but declined to answer Gizmodo's questions and provided only a brief statement, the veracity of which seems debatable.

From the TechCrunch report:

• The evidence shows that Microsoft failed to properly control its Bing search engine and to prevent searches and suggested images from assisting pedophiles. Similar searches on Google did not produce images as clearly illegal or content-related as Bing. Internet companies such as Microsoft Bing must invest more in the fight against this type of abuse through scalable technology solutions and human moderators. There is no excuse for a company like Microsoft, which made $ 8.8 billion in profits in the last quarter, well below security measures.

TechCrunch reporter Josh Constine, who previously covered the children's exploitation on WhatsApp, said Microsoft responded to the questions by saying that a team of engineers was working on solving the problem. While some of the search terms used by AntiToxin appear to be outlawed now, he wrote, "others are still surfacing with illegal content".

Microsoft seemed to pretend otherwise. A public relations firm sent Gizmodo the following statement, attributed to Microsoft Vice President Jordi Ribas:

"Obviously, these results were unacceptable according to our rules and policies, and we appreciate that TechCrunch has informed us, we are acting immediately to eliminate them, but we also want to avoid any other similar violations in the future. required".

When Gizmodo asked Microsoft to confirm that he had really blocked all search terms that returned images of sexually explicit children, because TechCrunch was obviously not doing so, the company's public relations manager responded: more to share. "

Given the severity of your dilemma, you expect Microsoft to try to be as transparent as possible about what is being done to fix the problem. This does not seem to be the case. Apparently, the company first took a more defensive stance in response to the report, comparing it to Google, never miss an opportunity! And to say nonsense, "we do the best job possible".

The best of Microsoft is apparently insufficient. Constine adds to the initial response of the company:

• The spokesman for Microsoft refused to reveal the number of human moderators working at Bing or whether he was considering increasing his staff to strengthen his defenses. But then they tried to oppose this line of reasoning by saying, "I have the feeling that you say that we are totally wrong and that we have always been bad, and that is not the case in the historical context." The truth is that it has made a complete mistake, and being a pioneer of the PhotoDNA illegal image detection technology used by other technology companies does not change that.

Broadcast images of abused children are a plague on many platforms. This has been a problem for Facebook, a problem in Vine and, apparently, still a problem for WhatsApp. Microsoft's response to this short and long-term report is crucial. And simply blocking the obvious list of search terms that the AntiToxin team might conjure up is not enough. In fact, this can only bury the problem.

Microsoft Patches Three Actively Exploited Bugs as Part of Patch Tuesday

The Microsoft version of the September patch attacks three vulnerabilities that are actively exploited in nature.

Microsoft has patched a privilege elevation vulnerability that they say is being actively exploited by hackers. The solution was part of the release of the September patch scheduled for Microsoft. The error (CVE-2018-8440) is considered important and can be used by an attacker to execute arbitrary code on a vulnerable local PC.

In addition to the actively exploited error, Microsoft patched two critical vulnerabilities (CVE-2018-8475 and CVE-2018-8457) in the update that said they were publicly known but not exploited. A fourth major error of denial of service (CVE-2018-8409) was also publicly known before being patched, but not exploited.

In total, the release of Microsoft's September patch included 61 fixes that included 17 critical failures, 43 major and one moderate. The 17 critical vulnerabilities are Remote Code Execution (RCE) errors. The 61 patched vulnerabilities affected a range of products including Internet Explorer, Edge, Hyper-V, Windows components, Office and the Microsoft JavaScript engine, ChakraCore.

Most notable of the defects revealed on Tuesday are two Windows privilege elevation vulnerabilities (rated as important). Both viruses were reported on August 27 through Twitter by the researcher @SandboxEscaper. Errors (CVE-2018-0868 and CVE-2018-8339) could allow a local adversary to take advantage of a weakness in the Windows Task Scheduler API and execute arbitrary code on a specific system.

Microsoft did not indicate that the errors were actively exploited. However, researchers at Recorded Future and elsewhere said both errors were used in active campaigns and urged system administrators to update the systems as soon as possible.

"[We are] seeing these vulnerabilities being exploited in nature ... so these should be the first priority when it comes to patches," wrote Allan Liska, threat intelligence analyst at Recorded Future, in detail of the patch release. of Microsoft. Both vulnerabilities affect Windows 7 through Windows 10 and include Windows Server 2008 through Windows Server 2016.

In addition to these flaws, Microsoft also addressed a couple of critical Windows Remote Hyper-V code execution vulnerabilities. "These are two different CVEs, but I grouped them because they have the same scenario of exploitation and impact," wrote Dustin Childs of the Zero Day Initiative in his Patch Tuesday analysis. "In both cases, a user in a guest virtual machine could execute code in the operating system of the underlying hypervisor, the main cause of these two errors going back to failure when correctly validating user input."

A total of 19 of Microsoft's patches are linked to their Edge or Internet Explorer browsers. One of them was a patch for a memory corruption vulnerability in the Microsoft JavaScript engine, ChakraCore. "This mainly affects Microsoft Edge, but allows an attacker to gain remote access to a system by using a script to damage memory, and then have the attacker run the loader that calls his command and control the infrastructure Because this vulnerability allows an attacker to gain remote access, it must also be prioritized for patching, "said Liska.

Two other serious RCE vulnerabilities addressed this month are a Win32k graphics vulnerability (CVE-2018-8332), which could be exploited by convincing a user to navigate to a website or open a document containing a malicious embedded source, said Greg Wiseman, senior security researcher, at Rapid7 in his analysis of Microsoft's Patch Tuesday release.

He also warned about vulnerability (CVE-2018-8430), a Word PDF RCE vulnerability.

"There is a remote code execution vulnerability in Microsoft Word if a user opens a specially crafted PDF file," Microsoft said in the error. "An attacker who successfully exploited the vulnerability could trigger the execution of arbitrary code in the context of the current user." To exploit the vulnerability, an attacker must entice the user to open a specially crafted PDF file.

The Microsoft and Qualcomm Always Connected PC Connects At MWC

Microsoft and Qualcomm advance on the Always Connected PC platform with a series of new announcements at the Mobile World Congress (MWC). Before and during CES, Microsoft and Qualcomm announced a series of mobile PCs running Windows processors on Snapdragon 835 (SD835). Disappeared from those ads were the distribution channel and a complete list of cellular operators (mobile operators).

Microsoft and Qualcomm announced three OEM partners, each with an initial PC model always connected: the ASUS NovaGo (convertible 2 in 1), the detachable HP ENVY x2 and the Lenovo Miix 630 (removable 2 in 1).

All three models will be available online at Amazon and at Microsoft Stores in the US. UU Next month. In the United Kingdom, the models will be seen in Asus stores, BT Shop, John Lewis, Microsoft Stores and PC World. In China, JD.com is the announced etailer. Unieuro will offer PCs in Italy; Boulanger and Fnac in France.

A requirement for the always connected PC will be the affordable data plans of mobile operators around the world.

While we now know the key operators that support the Always Connected PC, although a good model could be Apple iPads with modems, we do not have a history of the data usage habits of PC users Always Connected.

Why use a Qualcomm chip?

The SD835 is the system on chip (SoC) used in the main Android smartphones. Running Windows on Arm-based SoCs can reduce power and reduce system costs, allowing thinner laptops to have longer battery life. In addition, the SD835 has a built-in cellular modem that allows these laptops to connect to cellular services in addition to WiFi and Bluetooth. As seen in the artist's rendering of a PC always connected, the SD835 mounts behind the screen (like a smartphone) to keep the chip close to the antenna. The highly integrated chip leaves more space for the battery and reduces the power requirements. This level of integration is not possible with AMD or Intel chips. They also do not have integrated wireless modems.

Microsoft also used Qualcomm chips for Windows Mobile phones. Microsoft previously used Arm processors in an earlier version of Surface tablets (SurfaceRT and Surface 2 used NVIDIA Tegra processors), but these tablets lacked compatibility with legacy desktop applications; it only supported Microsoft Office applications and portable UWP applications from the universal Windows platform. . I owned and used both SurfaceRT and Surface 2 and found the performance acceptable for an ultraportable tablet with excellent battery life. The problem for me, and many others, was the inability to install the normal desktop applications I use, such as iTunes, Audacity, Chrome browser, etc.

With the Always Connected PC, Microsoft and Qualcomm found a way to run traditional Windows desktop applications by using software that emulates x86 processors (AMD and Intel) in the Arm instruction set used by the SoC mobile phone. Intel was worried enough to make threatening comments in a blog post about emulating x86 instructions.

Who will be the PC buyer always connected?

Prospective prospective buyers will be people who value battery life throughout the day, ubiquitous connectivity and light weight. These are the best types of road warriors. Most of these people will be experienced PC buyers who will value a PC that has the connectivity features of a smartphone. These people will also appreciate the ability to access the Windows ecosystem, including desktop programs. While this first wave of designs will not yet attract everyone, all three models have a moderate price of less than $ 1,000, but they are not Netbook replacements. They are more competition for the Apple iPad Pro line.

For people who want to get a "one-on-one" time with a unit, before committing, all three models will be in Microsoft stores in the US. UU., The United Kingdom and Australia. It is likely that Amazon has it in the company's "Treasure Truck". The other place to watch the Always Connected PC models before purchase will be at PC World in the UK.

TIRIAS Research is eager to see how well the Always Connected PC performs and is adopted. Microsoft and Qualcomm are committed to bringing new levels of connectivity to the PC and creating an even better platform for productivity wherever people want to go. In the long term, this new category will offer a new opportunity in emerging markets, where computers are being replaced by smartphones at a faster rate than in the rest of the world. Emerging markets do not have a robust WiFi ecosystem and cellular connectivity can solve many problems. However, Microsoft, Qualcomm and its OEM partners must find the right price point and service plans to address the emerging market opportunity.

The author and staff members of TIRIAS Research do not have equity positions in any of the companies mentioned. TIRIAS Research tracks and advises companies throughout the electronic ecosystem, from semiconductors to systems and sensors to the cloud.

What’s the Difference Between Microsoft Office’s Desktop, Web, and Mobile Apps?

Microsoft offers several different ways to run different Office programs, such as desktop applications, mobile applications for Android or iPhone / iPad, and online in a web browser. As you can imagine, the versions of the online and mobile application are not as robust as the desktop version, but they might still be useful. And for some of you, they may be all they need. Here is the breakdown.

The different versions of Microsoft Office

Microsoft offers can sometimes be a bit, shall we say, disconcerting. Office is not an exception. You can buy or subscribe to the full desktop version. The subscription option also offers access to your mobile applications for iPhone, iPad, Android and (in turn) Chromebooks. And you can use a free online version in your browser.

Office 365 Desktop (or Office 2016)

The desktop version of Office is the full version you've probably been familiar with for years. These are the complete desktop applications that you install on your Windows PC or Mac. You can buy this version in one of two ways:

•      Office 2016: this is the traditional standalone application. You pay the initial cost, get a license and install it on your computer.
•      Office 365: This is the newest subscription model. You pay a monthly (or annual) subscription fee. While you keep your subscription active, you will always have the latest version of Office, including major new updates. The subscription also comes with some additional benefits, such as a large amount of OneDrive storage, a monthly allowance of Skype minutes, and access to mobile application versions of Office applications.

We've already covered the difference between Office 365 and Office 2016 in detail, so if you want more information on which version may be best for you, we suggest you read that guide.

Office 365 mobile applications (for iPhone, Android and Chromebooks)

 Office 365 mobile applications include versions of Word, Excel, PowerPoint, OneNote, and Outlook for the iOS and Android platforms. You can also use most Office Mobile for Android applications on a Chromebook, assuming you have a Chromebook compatible with Android applications (although some are not compatible with PowerPoint).

To use mobile applications, you must have a paid Office 365 subscription. That subscription gives you access to both the desktop and mobile applications; you do not need a separate subscription.

Mobile apps offer a more limited set of features than their full desktop counterparts (more on that in a moment), but the appearance is pretty much the same. Mobile apps also offer offline access, which means you can view and edit documents even when you're not connected to the Internet.

Office 365 Online

 

Office 365 Online allows you to view and edit Office documents for free in your web browser (such as Google Docs, but from Microsoft). All the same applications: Word, Excel, PowerPoint and OneNote are available. You do not need a subscription to use the online applications, although you must log in with a free Microsoft account.

Office 365's online applications offer virtually the same set of features you would find in mobile applications. The big difference (apart from being free) is that Office 365 Online does not offer offline access; You must be connected to the Internet to view and edit documents.

All three versions (desktop, mobile and online) offer seamless integration with OneDrive, so keeping track of documents is easy when moving between platforms.

Are the Non-Desktop Versions Good Enough?

Let's be clear at the beginning: the non-desktop versions of Office do not replace the full desktop version. Office 365 Online and Office 365 Mobile Apps offer a set of features similar to those found in their Google Docs counterparts. They are excellent if you only need the basic functions, or if you occasionally need to see or make minor editions in the documents (without the compatibility problems you would encounter when using Google Docs, LibreOffice or another set of programs).

For example, some of the main features that are missing in online and mobile applications include:

•     Word: You can not create legends, citations, bibliographies, tables of contents. You can not create or apply styles. And you will not have access to some of the most advanced tools for review, revision or page layout.
•     Excel: You can not create dynamic tables, apply conditional formatting, create connections or external data references, or access many of the advanced formulas.
•     OneNote: You can not edit embedded files, use optical character recognition (OCR) to translate handwriting into text, use Outlook task integration or take advantage of template support.
•     PowerPoint: You can not create custom animations, use headers and footers, or integrate Excel graphics. Neither can you take advantage of advanced design or revision tools.

And there are many more features, somewhat smaller, that you will not be able to take advantage of in the online or mobile Office versions of the application. For a complete list, see the Description of the Office Online Service on Microsoft TechNet. While that list speaks specifically about the Office 365 online experience, most of the same exclusions also apply to mobile applications.

NOTE: Some of these features that we mentioned can be seen in the versions of mobile and online applications of Office; you just can not create them there. For example, you can not create a table of contents form in the online or mobile application versions, but you can see one that was created in the desktop version.

Which Version of Office Should You Use?

Which version of Office is best for you depends on your needs. If you need the full desktop version, decide if you want to go with Office 2016 independently or with Office 365 based on subscriptions. Keep in mind that if you also want to use mobile applications, you will need that Office 365 subscription, anyway.

When it comes to using Office 365 online or the Office 365 mobile apps, we realize that they really are good enough if you only need to access the basic functions or if you need to see (and perhaps make small edits) documents created with the full desktop version.

If you already have an Office 365 subscription, we recommend using mobile applications mainly because they offer the possibility of working offline. You can use them very well on Android, iPhone or iPad, or even on the Chromebook.

If you still do not have a subscription to Office 365 and really do not care about offline access, we recommend that you keep the free online application: it will allow you to at least do the basics, free of charge, with nothing more than a web browser . .

Microsoft Wants To Use AI And Machine Learning To Discover A Cure For Cancer

Microsoft wants to improve medical care through machine learning and AI. As part of this initiative, Microsoft is developing cancer research and treatment and addressing cancer cells as if it were a technical problem in a computer system.

Microsoft is facing cancer

Earlier this year, Microsoft launched Healthcare NExT, a new initiative that brings together artificial intelligence, health research and the experience of industry partners to empower people to live healthier and heal diseases. threatening. In a blog post that details the initiative, Microsoft pointed out that other industries have problems as complex as medical care, although the company believes it can move forward by incorporating new and innovative technologies.

"It's a big challenge," said Peter Lee, vice president of Microsoft Research NExT. "But we believe that technology, especially the cloud, artificial intelligence, and collaboration and business optimization tools, will be fundamental to healthcare transformation."

As reported by Digital Journal, Microsoft is extending Healthcare NExT to cancer research with the goal of continuing to work to find an effective cure or cure for the disease. However, it is getting closer to cancer research as a technological society rather than a medical one: it considers living cells like computers, with diseases like cancer, similar to system failures. Extrapolated to this abstract point, it means that Microsoft also sees cancer cells as something that can be reprogrammed instead of being destroyed; deleted instead of deleted.

Using machine learning to improve treatment

Microsoft's cancer research is taking place in one of its biological informatics labs in Cambridge, UK. Last year, a group of researchers revealed that they were continuing to develop a computer system that could live inside human cells and restart the system if cancer cells were detected, thus cleaning the affected cells. Other projects included using machine learning to improve tumor exploration, better organize patient data, and discover better treatments.

"If you look at the combination of things that Microsoft is doing really well, then it makes sense for Microsoft to be in this industry," said Andrew Phillips, head of the bioinformatics research group at Microsoft's Cambridge Lab, in Microsoft Story Labs. . submit. "We can use the methods we have developed to program computers to program biology, then unlock even more applications and even better treatments."

Pharmaphorum has compared Microsoft's efforts with IBM's use of Watson to fight cancer. Watson, who also uses machine learning and AI, showed that he recommends the same treatments as doctors, and is being used in the initiative of former vice president Joe Biden to fight cancer. As we know, machine learning can be invaluable when it comes to classifying tons of data. Cancer research is no different, as we have seen, it is used to identify breast lesions that can turn into cancer.

Ambitious goals for healing

Discovering a cure for cancer is an ambitious goal to be taken on, and it remains to be seen how cancer research will improve with the participation of Microsoft. That said, Microsoft has expressed its desire to "empower each person and organization to achieve more." If you can maintain that momentum and concentration, who knows what the company will develop.

"We are incredibly excited about the opportunities to make a difference in healthcare," said Microsoft. "We have been listening carefully to our customers and partners within the healthcare sector, and we have heard their message: let's work together, innovate together and create solutions that empower people to lead healthier lives."