Windows Weekly 866 Transcript

Please be advised this transcript is AI-generated and may not be word for word. Time codes refer to the approximate times in the ad-supported version of the show. Also, names of speakers may be incorrect at times.

00:00 - Leo Laporte (Host)
It's time for Windows Weekly. Paul Thorotz here, richard Campbell's here actually Richard's in London, but that's okay, he's still with us. They're gonna talk about the earnings learnings, microsoft's quarterly earnings, lots of Windows news, ai news, even gaming news. It's a big jam-packed, fun filled episode of Windows Weekly. Coming up next Podcasts you love from people you trust.

00:37
This is Windows Weekly with Paul Thorot and Richard Campbell, episode 866, recorded Wednesday, january 31st 2024. Squish Malos with guns. Windows Weekly is brought to you by our friends at IT Pro TV, now called ACI learning. I know you already know the name IT Pro TV from many, many years on our network. Well, now they're part of ACI learning, which means IT Pro has expanded its capabilities, providing more support for IT teams.

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02:00
That's that's, that's pretty amazing. Visit goacei learning comm slash twit. For teams that fill out ACI's form, you can get a free trial and up to 65% off an IT Pro Enterprise solution plan. Go dot ACI learning. Comm slash twits. Hello Windows and Dozers. Winners and Dozers, it's time for Windows Weekly's. Whatever you know who you are, that's because this is the show. We cover the latest news from Microsoft and you're dying to learn those learning earnings All to yourself. Paul Ferrata's here. He's gonna take the role of Mary Jo Foley, I guess today, with the earnings learnings from throughout comm, this used to be Mary Jo's job. Now you got to do it. Sorry. Rich Campbell's also here was not here. He's there. He's over the over the pond in sunny old England. How sunny is sunny old England, mr? Not a sunny at all.

03:02 - Richard Campbell (Host)
Yeah, and you were crying out loud. It's great grim. I mean it to the whiskey exchange today. So I have something to show. Not so bad, no. No, it'll be a little show and tell later on tonight.

03:15 - Leo Laporte (Host)
But first I guess earnings yeah.

03:18 - Paul Thurrott (Host)
Yeah, we're in earning season again, my least favorite time of the quarter. How I forget. This is part of how I cope with things. I just forget. And then I sit down and I look at my feed. I'm like, oh god, microsoft, google, intel, and what's going on is a bunch of stuff. So Obviously we'll start Microsoft. They're doing okay.

03:41 - Leo Laporte (Host)
The little startup that could from Albuquerque is it's fun either a lot of people who don't know that Microsoft's first Corporate headquarters was in.

03:54 - Paul Thurrott (Host)
Albuquerque. I wish they were still there, that building is as labeled.

03:58 - Richard Campbell (Host)
Right. It's got a big plaque on the side of it.

04:01 - Paul Thurrott (Host)
Oh yeah. So when you're washing your laundry next door and buying a crack on the other side of it, you have a Place you can put it down, yeah it's a. It's a nice central lab. It's nice.

04:11 - Leo Laporte (Host)
They ran there cuz it was there right, and they wanted to do the Altair basic. That's right. Well, I did do.

04:19 - Paul Thurrott (Host)
Yeah, for me. I used to live in Albuquerque, so it was a big deal, you know, I had to run down there one day to find out. You know, to look at this place, I was like really, this is it. Huh, it's too bad, it's.

04:29 - Richard Campbell (Host)
It's probably a little nicer now, but last time I was there not so I remember one of the MVP summits when Bill was there, somebody had found had had an original manual For the Altair basic. I think it was the second version, the 16k version, and the back page of it Literally said if you need support for this, call Bill Gates and a phone number right like Seven digits at not any.

04:55 - Paul Thurrott (Host)
So you know, he certainly was not the area.

04:57 - Richard Campbell (Host)
Let him come up on the stage and he looked at it and signed it for him and he was moved like he was emotional about it. It's super cool. Bill was the other guy, bill the kid, no certain.

05:07 - Paul Thurrott (Host)
I would have been like soak. I can call you now right.

05:09 - Leo Laporte (Host)
Yeah, probably said. By the way, my Altair is running right now. It's solving the advent of code problems. Nice, some year it'll be done. No, it's sure it's playing a little game with itself.

05:27 - Paul Thurrott (Host)
We're gonna give it the quantum competing upgrade.

05:33 - Richard Campbell (Host)
Wouldn't it be fun, a large language model inside that out there you can ask a question.

05:39 - Leo Laporte (Host)
All right, so Microsoft's earnings came out. What give us the yesterday? Give us the top line.

05:44 - Paul Thurrott (Host)
Rod stroke. They're doing okay. Like I said, 20 basically almost 22 billion dollars in profits on 62 billion in revenues. Those figures are both up double digits. Revenues are up 18% year over year. They're doing great. Hey.

06:02
No, no big changes with. The top three business units are the only three I say I should say Intelligent Cloud, still number one 26 billion in revenue, basically up 20% year over year. This is Azure, right Productivity and business processes. Microsoft 365, essentially, is almost 20 billion in revenues, up 13%. And Then more personal computing close the gap a bit because of Activision Blizzard, which we're gonna get to 16.9 billion in revenues, up 19%. If you pulled Activision Blizzard out of that business we would oh how we'd laugh the rest of that, but they're looking pretty good. So, yeah, I, you know this, all these kind of I have some bullet points here, but I the more interesting stuff to me is going back and rereading the Transcription of the call they have with analysts after, after the announcement, and Obviously everyone's asking questions about AI how are you gonna pay for this? How's this working? What are you gonna be profiting? What's houses all working out? So there's a bunch of interesting stuff in there.

07:09 - Richard Campbell (Host)
Answer any of those questions.

07:11 - Paul Thurrott (Host)
No, well, no they do.

07:12
I mean no, it's actually I. This is the second time in the past year where I felt like their answers were actually Pretty clear and you know, and not you know office getting anything in any major way. So I mean I will also say whatever it's worth, you know such a nadella. I think he's a little bit wooden, but man, that guy can speak quite eloquently about AI. He loves it and I think that says a lot about Him as a person, but also why the company is so serious about this.

07:49 - Richard Campbell (Host)
It's very clear he understood this is the bet is made, right like, yeah, yeah.

07:56 - Paul Thurrott (Host)
But let's, if you don't mind, let's start with Activision Blizzard, because I found this to be kind of interesting. Last summer I ran some numbers on what Microsoft would look like if Activision Blizzard had been part of the company already. Right, and now that they are, I'm delighted to report that I think I wrote last July it was really accurate, like it's within like a half a percentage point, you know, and the broad strokes on that is that the impact on more personal computing is huge. The impact on Microsoft as a company not so huge, right, because Microsoft is humongous. Right, we said we saw 62 billion, right? So I don't remember the exact numbers, but in that year I looked at, revenues from Activision Blizzard were in the two baby 2.4 billion range. You know Microsoft, we're talking 60 billion, so you can see it's a kind of a smaller deal.

08:49 - Richard Campbell (Host)
But this yeah, billion here, a billion there. You might actually show up on the balance sheet right Like it's yeah a lot to make it Well yeah, so more personal computing had really almost 20% growth this quarter.

09:04 - Paul Thurrott (Host)
Microsoft game Yep, huge right, and it's all because of this right and so this this is the deal Microsoft also speaking of clarity, explaining great detail how they are paying for the costs associated with this acquisition. I don't mean the 69 billion dollars exactly. I'm talking more about the 10,000 people that came into the company when they bought this other company, all the redundancies, the layoffs and All the you know, the reorgs and all that stuff, and so they. There's actually kind of a neat little bit in there where they kind of talk about all that and that the deal is within this Physical year. Those costs are all gonna even out that. The. The big takeaway for me going forward is that this business that within a business, microsoft gaming Right now is operating at about 38% Higher costs than they were, like a year ago and it's because the layoffs of like 2000 from Activision already yeah yeah, and then from other parts, yeah, right.

10:04
So you know, this is a typical Situation where you kind of bring this company in in house. In this case, right, it's not a separate organization. Yeah, so you have all these redundancies all over that part of the company.

10:14 - Richard Campbell (Host)
So the whole marketing engine is going to change, the HR group changing.

10:19 - Paul Thurrott (Host)
Yeah, so hopefully they picked the best from the best and kind of go forward in that fashion. And you know, unfortunately there will be layoffs, probably more in the future as well. But yeah the goal is within the next what did I say? Five months for this, to kind of iron out, and then this thing will be like A net win going forward. I guess you know?

10:35 - Richard Campbell (Host)
it's a question is like are they gonna leave the game teams intact? Because it doesn't. It doesn't seem like they've been really great with game development teams.

10:43 - Paul Thurrott (Host)
So without, yeah, right, so without knowing explicitly, I don't, and again I don't remember the exact number, but Activision Blizzard, of course, their 10,000 employees had several dozens whenever the number was of their own studios, right, right. And Microsoft also has many, many studios of their own and some of them might be some facilities consolidation too. Yeah, and I think they'll. It's possible that the big studios that worked under Activision Blizzard you know the studios responsible for Call of Duty, etc. We'll probably be the same. You know that for the most part.

11:21 - Richard Campbell (Host)
Well, in their cash, I mean I would. I mean, call of duty is a cash cow but you have to ship a product to make that money on it. World of Warcraft and Diablo now that's some serious cash cow which they get monthly returns and you have to produce a certain amount of content. So I mean, if I was Sachas Reporting to Sacha about how this thing is going, it's like, is that team intact? Are they in track to keep folks engaged? I mean, world of Warcraft's got a lot of pressure from the, the Sony Final Fantasy Online product, so they're. They've got every need to be more efficient and to keep growing the pattern. It's hard to be a new user to World of Warcraft. It's about keeping an existing market.

12:03 - Paul Thurrott (Host)
I Mean I, depending on the studio, depending on the product, mm-hmm, they're probably gonna want to keep it. You know where they are geographically? Yeah, and roughly the same. You know situation. They were before right to keep.

12:17 - Richard Campbell (Host)
And you would think that a company like Microsoft knows a lot about software developers. No, you disrupt that team. It's years to get back to the same product and you may never actually get back. Yeah, this is, I mean, might break the product.

12:29 - Paul Thurrott (Host)
There's also a fear with call of duty it's already been broken and that you know we're just gonna lose it.

12:33 - Richard Campbell (Host)
Broke it before they got their hands on it, so now they need a reboot.

12:37 - Paul Thurrott (Host)
Yeah, maybe. I mean, yeah, we'll see. I the room. I mean they've needed a reboot since they've wrapped up I don't know the initial set of black ops games Maybe. So, whatever, that was 10 years ago.

12:48 - Richard Campbell (Host)
It's been a while, but but this is what happened to Halo, right, like, oh yeah, yeah, there is a, there is a case story for you lose a team and at least you lose the heart of the team and now you know what's the state of those products. But that's fine. If you're just releasing titles. It's another thing when you've got a monthly and you're gonna watch your mistakes bleed you month over month.

13:11 - Paul Thurrott (Host)
That's, that's really dark.

13:16 - Richard Campbell (Host)
This the thing is. Imagine it you've bought a goose. It lays golden eggs. Yeah, don't screw it up.

13:23 - Paul Thurrott (Host)
Yeah, now it's just bleeding, yes, so yes, I mean we'll see. I mean this is I'm like, I'm a simple person. I just want to see Activision games on Xbox game pass.

13:36 - Richard Campbell (Host)
Yeah, and that's certainly part of the cross marketing and so forth, but you know Someone who's done a bit of M&A and been on the how do we preserve the culture side of the problem. It's like these are the things I would worry about is how do I keep these key teams in place? How do we, how do we know there's gonna be a new Call of Duty in 24?

13:54 - Paul Thurrott (Host)
Yeah, one of the ways would be how about some Microsoft stock options? That stuff's going through the roof right now. So just you know that would be one idea. I don't know. It is interesting, though Microsoft actually spelled out how much Activision contributed to the growth in the various parts of the business, and if this thing wasn't happening, we would be having a very different discussion about the future of They'd be acquired something else, so they'd be going in that they would tell the story differently.

14:26 - Richard Campbell (Host)
Paul, like they know how to keep their Well, I mean right, but it's it's.

14:33 - Paul Thurrott (Host)
We're close enough to when they finally finalized this deal that if it hadn't gone through, they wouldn't have had a chance to do anything by now, like we would have been witnessing what like an ugly holiday quarter looks like For a business that's based around gaming, which should be doing gangbusters, you know, or at least as partially, through the game anyway, I thought there I sort of appreciated the clarity on that, although you know it's Microsoft, right, so we like. One of the things they reported was that they now have over 200 million monthly active users on Xbox, pc and mobile and they mobile for the first time, right 200 million, that's like huge number.

15:09
It's a huge number. But, of course, my next question, my first question was okay, but what compared to what? Like? What was it before? And the only thing I could find because they do this a lot, they don't do this quarter over quarter but back in the July quarter they mentioned that there were 150 million active users. At that time they were just talking across the Xbox ecosystem and so I guess it went up by 50, but they also talked about how Activision Blizzard brings hundreds of millions of users to Xbox. So it's like, if anything, you would almost think it should be higher. You know, but it is a big number, right? Yeah, so you know, activision Blizzard has a pretty big reach.

15:51 - Richard Campbell (Host)
Sure for a relatively small number of people when you think about it. Yeah, yeah yeah, all in all it was a good buy for Microsoft, but I don't know, they don't have a great track record with game studios, except the ones they leave alone, right, I mean, and they're absolutely not doing that in this case. I think I was.

16:08 - Paul Thurrott (Host)
I think that was part of the marketing of this purchase, though, that they were gonna fix the culture.

16:13 - Richard Campbell (Host)
You know our hand well, because there was something to fix. Yeah, I think that purely cultural right.

16:18 - Paul Thurrott (Host)
I think that might explain it.

16:19 - Richard Campbell (Host)
Yeah, but yeah, and it's not like Bethesda is knocking out the part with every game they make either. Looking at you fallout 76, but that was a Microsoft's fault, like, right. I would hope there's some folks from coming in on this NMS level and saying, guys, have we doing? Are we doing the right thing? Are we building the right product? Like, are we making people happy Because they've got some great labels to that would be well worth to. Yeah, follow it, the follow. It is an amazing story that could be tapped a lot of different ways, should be a Series of Netflix.

16:52 - Paul Thurrott (Host)
I don't understand why it isn't, and maybe it will be someday. Yeah, I mean, half-life is the same thing. Why isn't? I mean, why is that not happened?

17:00 - Richard Campbell (Host)
Hmm, well, because, because everybody that works for Valve is extraordinarily wealthy.

17:05 - Paul Thurrott (Host)
Oh yeah, that's right, that's right. Yeah, content middle-aged white guys yeah that's so you know.

17:10 - Richard Campbell (Host)
The upside to activation blizzard and Microsoft too Is there's a routine set of hungry hires Looking to get more of their Stock units allocated, and you can get them to do stuff Right. But the collective that is valve. Everybody's very well paid. Yeah, it's just we nobody needs another Tesla.

17:27 - Paul Thurrott (Host)
Yeah, they're doing okay. Yeah, well, um, I think I think that's mostly it. On the gaming part of it, I kind of I work when I go through the yardings, I go kind of back to front because I focus mostly on the consumer stuff. Right, and it's a small part of Microsoft in some ways, but it's getting more interesting thanks to Activision Blizzard and AI.

17:51 - Richard Campbell (Host)
Yeah, I think this will be this time next year. The conversation about Activision Blizzard will be very interesting. Yeah Well, ai too, under Microsoft's control, getting through. Christmas season. That's going to be a big deal. I'm going to be excited to see what Paul will do. I don't know if it'll be good or it'll be bad. I hope it's great.

18:08 - Paul Thurrott (Host)
I'm looking for it just being the same, which would be fine.

18:13 - Richard Campbell (Host)
But if every one of their major label ships a product in October next this year, they'll have killed it. That's a win.

18:20 - Paul Thurrott (Host)
You have described something that Microsoft has never done with their gaming business. But, yeah, I hope that happens too. I mean, unfortunately, yeah, we'll see. I don't want to get ahead of ourselves here, but yes, I hope you're right. Yeah.

18:31 - Richard Campbell (Host)
I hate to say this, but it's like this is very Sinovsky-esque. Sinovsky was the trains run on time kind of guy. You want someone. It's like you will make the October deliverals for Christmas, or you will be.

18:45 - Paul Thurrott (Host)
Yeah, but that can't. It does not work in games no no, but it is how games work.

18:51 - Richard Campbell (Host)
without a doubt, you have to write to the deadline, which is why you tend to ship Lousy Software, because you write to the deadline and we'll fix it in the DLC.

18:58 - Paul Thurrott (Host)
Okay, well, anyway, I don't want to beat gaming to death too much upfront, because we're going to return to this in a moment, and well, at the end of the show actually. But just to round out the rest of more personal computing, there's a little business called Windows that is also part of that. Never heard of it. Well, it's kind of an operating system for these big devices that you can't pay any pocket. Yeah, it's like smartphones, but dumber, so they Will it run AutoCAD.

19:25 - Richard Campbell (Host)
Oh wait, it's the only thing that runs AutoCAD.

19:28 - Paul Thurrott (Host)
They've had a couple of bad years post COVID and, as we're seeing with the chipset makers, both on PC side and on mobile, it looks like things are starting to finally kind of come back to normal. Intel saw some growth on this side of the business, AMD did again both companies after months and months of orders and quarters of shortfalls and Microsoft's revenues from PC makers actually grew, and grew by double digits right. So last quarter was 4%, this year this quarter was 11. And the previous two before those two were 12 and 28% declines. So you can kind of see how that curve is going. No turn in the corner Yep, they keep using this phrase. Things are continuing at pre-pandemic levels, which is a bit of a stretch if you know anything about pre-pandemic levels, but certainly I don't think we're predicting they've demise the PC pre-pandemic too Well the question.

20:26
Yeah, the question that was whether it would ever bottom out, and then the pandemic kind of knocked things around in the opposite direction. But, yeah, it looks like we're. Yeah, so we're in the right trajectory. Certainly, commercial was also up.

20:39
Commercial Windows revenues, I should say those are kind of tougher to predict because these are just based on purchase cycles that we know nothing about, right, these are things that companies keep internal and are basically secret.

20:50
But 9% growth is great and this is a business that has seen growth in all four of the previous quarters. So they're doing good and that's basically all we learned about Windows, although I'm just going to throw this out because I thought this was an odd thing. Microsoft, like all other companies, makes these kind of milestone statements. They have a quarter, something happens, we've made money, and then they talk about some of the things that they shipped or achieved in the quarter and they don't always tie in fact, they often don't tie directly to any revenues of any kind. So, for example, in Microsoft's case, the one that stuck out for me was co-pilot in Windows is available on more than 75 million PCs. This is across Windows 10 and Windows 11. 75 million. Here's the thing. Co-pilot in Windows is a free upgrade that everyone gets automatically, and once you put it on Windows 10, I mean, wouldn't it be on hundreds of millions of PCs, wouldn't it?

21:44
be billion, Like I'm saying a potential audience of a billion, right I mean. So I don't know what to make of that. That's a shockingly small.

21:54 - Richard Campbell (Host)
Any other statement. 75 billion is huge number. This is not one of those. This is a tiny number. Yeah, it's very strange 2%, 3%, like what the hell.

22:04 - Paul Thurrott (Host)
Well, if you just base it on a billion, make the math simple it's three quarters of 1% 7% or 7.5%, 7.5%, I guess it's small.

22:16 - Richard Campbell (Host)
So a billion to me seems low. There's more than a billion Windows 10 devices out there.

22:20 - Paul Thurrott (Host)
Yeah, I mean, but Windows 10, we'll guess, is somewhere around a billion, and then Windows 11 is the rest. Whatever, that is a couple hundred million maybe, but still this just seems odd to me. I feel like everyone kind of gets this and I don't quite get that one. So maybe they're measuring actual usage somehow, or maybe.

22:37 - Richard Campbell (Host)
I'm saying yeah as a monthly active user kind of mindset.

22:40 - Paul Thurrott (Host)
Yeah, impossible to know. But you also get little floating factoids like Windows 11 commercial deployments were up 2x year over year 2x. From what Was it zero last year? We don't. Even that doesn't mean anything. And again, these things are fairly random. No big companies are going to ever publicly discuss their strategy for rolling out a version of Windows internally. Nobody cares. And I will also point out this doesn't impact revenues at all, because Microsoft doesn't care which version you use either, to get paid the same regardless. So, no matter what, I don't know what you call this kind of a data. It has nothing to do with the bottom line.

23:20 - Richard Campbell (Host)
They're happy noises.

23:22 - Paul Thurrott (Host)
Yeah, yeah, just a little thing. Yeah, you can feel them kind of cherry picking from around all the data they have.

23:29 - Richard Campbell (Host)
I've done enough investor relations to know with my wealthy investors I need to give them a sentence they can say to their friends in the clubhouse Okay, it doesn't matter that it's meaningful or it actually quantifies anything, but it's a sentence they can say to their fellow wealthy people.

23:44 - Paul Thurrott (Host)
Okay, well, that's definitely. I didn't publish this article yet, but I coined the term non-mot as opposed to bon-mot. Right, a non-mot, it's a non-mot.

23:58 - Richard Campbell (Host)
I love it. They are happy noises. Yeah, they have lines of definition Solution.

24:06 - Paul Thurrott (Host)
Surface is a circle in the drain, frankly and I got to say this is a revenue client was only 9% in the quarter. I say only because this was far better than they expected. Previous four quarters were 22, 20, 30 and 39% shortfalls. It's been a brutal couple of years for this business and unfortunately, the water that is starting to lift windows does not appear to be working for surface. I think I have a leader. Well, he's fighting for them, right. He's so faceless I can't remember you know what. That's not fair to him. I'm sorry that's on me. He's a nice guy. The replacement for Panos Well, the surface part of Panos Right, they introduced him at that October events. I'm sorry, I apologize. You were there, I was there. I don't know, but that business is now focusing on higher margin premium products, which I take to be the last step. It's kind of like when Lumia kind of focused a little bit and then went away.

25:07 - Richard Campbell (Host)
And here I am with the Surface Studio too, like I'm literally exactly in the market, I bought the most expensive thing they made.

25:14 - Paul Thurrott (Host)
Yeah, and you didn't help them at all, richard, I got to tell you they're not doing great. It's too bad.

25:21 - Richard Campbell (Host)
I like some part of that 9%. Man, at least I did something. That's right. Yeah, it would have been time for you. It's use of Meti. Use of Meti.

25:29 - Paul Thurrott (Host)
Oh no, Well, no use of. Meti has since moved on, because now he's running some of the co-pilot stuff. Oh wow yeah, he was kind of in there for like two seconds and now he's, he moved right along.

25:39 - Richard Campbell (Host)
Holy man. That was the October gig where they announced that use of was taking over for any.

25:46 - Paul Thurrott (Host)
Well, but this the person I'm thinking of is directly Surface and use of, is not in charge of all the stuff. Right, different people now. And then the other big one I wanted to kind of talk about was just AI, because obviously Microsoft is spending between 10 and 15 billion, or at least that's what they said one or two quarters ago. I think it's actually higher now and there's a couple of interesting points in there about AI, and I'm going to read a quote from you I, I, I quote to you and tell me if you come away with the same takeaway I did. But obviously everyone asked about AI and the cost of AI, and you know when you start becoming profitable from AI, and there's a lot of happy noises there too.

26:27
But buried in more personal computing is a business I don't discuss too much over time because it has never been particularly interesting, which is search and advertising, and this is, like you know, bing, msn start and Microsoft advertising. Right, the past year there's been a lot of noise and news about Bing, the biggest being that they went to market with the AI stuff, starting with Bing, and then quickly backed off from that and as we hit the end of the year, the brand was now co-pilot and we're not talking about Bing anymore, and Microsoft made sure that this capability was available in multiple places, not just on Bing. And you know the market share, usage share of Bing didn't move the needle at all. Right, some issues there, so that business actually grew by 8%. This is the search news and advertising thing, and it said it would have been better except the combination of higher search volume and a continued unfavorable impact from a third party partnership. What do you think that?

27:32
was yeah, I think it had to be open AI. Can you really?

27:40 - Richard Campbell (Host)
say that you can't say that he did. They're making money.

27:46 - Paul Thurrott (Host)
They make money off open AI, but it's not, oh yeah yeah, no, they do, but that's over in a different part of the company Right, the part that is holds Bing. They're just paying for it. So what they've done is they've driven traffic, they've not monetized it effectively and they're not paying the bills. So that maybe explains, or helps explain, why they went to market so quick with Copilot Pro right. Get people paying for it. That will help them now?

28:13 - Richard Campbell (Host)
Is it part of that revenue? Part of that revenue can go back to the Bing team.

28:16 - Paul Thurrott (Host)
Yes, and they can also detune the free stuff a bit. You know you'll have more of those error messages. We're sorry, we can't do that right now, or you know that kind of thing. Yeah, you can't get your request on that?

28:26 - Richard Campbell (Host)
Yeah, all of these things.

28:28 - Paul Thurrott (Host)
If they know you bought Pro, this wouldn't happen to you. That's what I'm thinking, yeah, and then, of course, the other bit is how AI impacts the other parts of the company and for the short term, and possibly the long term as well, the big benefits to Microsoft are going to come in the Azure side, which is intelligent computing, and also to Microsoft 365, right, and they confirmed this. It's not, it wasn't like a genius idea I had, but they basically came to the conclusion that Copilot Pro and Copilot for Microsoft 365 were Microsoft establishing higher end SKUs of Microsoft 365, essentially SKUs that were much more lucrative. And this is the you know, the multi SKU strategy that Microsoft Office started back in I don't know 2000, 2003,. The latest has always paid off for them big time.

29:15
Microsoft tried it with Windows, remember, with Vistin 7 had, you know, several different product versions. They kind of scaled that back and now we have two, but it's always worked out great for Office. One thing that they've seen on the Microsoft 365 side is they add these more lucrative SKUs or higher end SKUs. They become very lucrative like businesses. You know everyone also that same, yeah, that upgrade thing. You walk in to buy the cheap, you know, stripped down car and you walk out with the Ferrari or whatever.

29:42 - Richard Campbell (Host)
And it's always the thing is you go in thinking you're going to buy the lowest SKU and then there's enough things higher up that are add ons that when you do the math it's like just by the higher SKU.

29:50 - Paul Thurrott (Host)
I literally just did this myself. You know I'm paying for co-pilot, bro. I walked in like they could, yeah, right, and I'm like, oh nope, 20 bucks a month, nailed it. So yeah, and they. You know, this is this. I'm contorting this a bit. I want to be super clear about this. Someone asked Sacha Nadella about GitHub co-pilot specifically because he talks so excitedly about it and he was talking about how this thing was so crucial for that audience. And he's right, of course he is. He made some illusions to productivity and I want to be clear. He's what he's really talking about his co-pilot. You know GitHub co-pilot.

30:26
But I think this applies to data, but I think this also applies to Microsoft 365. So what he says is he's talking about the economic benefit, of the productivity benefits, and he says it's like if you took away spell check from word, I would become unemployable. Similarly, it'd be like if I, you know, github co-pilot becomes core to anyone who's doing software development, you, if you take it away, they become unemployable. Yeah, microsoft's goal clearly is to make co-pilot for Microsoft 365, slash co-pilot pro have the same value essentials for the information worker.

30:59
It's so essential that paying that much money becomes a no-brainer right. Right, that's that, that's the goal and that's you know they. They obviously have different ways. They're monetizing AI through Azure and API's and all that kind of stuff and they're you know they're they're their own platform and they have customers that are using that. But as far as selling directly, well, I guess those are our customers as well. But selling directly to Businesses using, like, end user productivity software, I think the goal is, you know, let's, let's drive it there as well. Yeah, and I think they're, I think they're gonna be successful.

31:33 - Richard Campbell (Host)
Just based on my very limited Well, and plus, we need to talk about M365. They've been trying to find ways to surface the graft of solo hey businesses Since the, since M365 started and this is the current generation idea and I think it's a pretty good one. Like it's yeah, now that, now that you're describing the goal and it's leveraging the graph to get you to your goal, who can be mad about that?

31:54 - Paul Thurrott (Host)
Yes, now what you know, the fear that I raised I don't, I guess, back in December or whatever that was, I'll know, I guess it was in early January when they announced these products like Olsen hey, we're out, you know is the same pair have now, which is that there is that there's a problem where the same wave that lifted you during the cloud competing wave that's starting to lift you now during the AI wave could Come back and you know, tsunami, you yeah, and that's when you under deliver right or Two quarters. Now Microsoft has to finally admit that actually only some tiny 0.4% of whatever our commercial customers have even looked at this and you know.

32:34 - Richard Campbell (Host)
Well, this gets back to your 75 million users of co-pilot. Right, Right, right. That's that. What you're afraid of is that they don't adopt it. That doesn't seem to be happening in M365, like Well yes, here's the loudest noises. I heard was what? 300 seat minimum come on.

32:50 - Paul Thurrott (Host)
This is the tier strategy. So years ago this was a conversation I actually had with Chris Cappicella. When, you know, microsoft office was this business that they sold software directly to people. Basically, I mean, really most people got it with a new computer or whatever, so they assumed it was part of Windows. They didn't realize they were paying extra for it, whatever. But people acquired office in a certain way, very successful. They at one point claimed 1.5 billion users, right.

33:15
And then office 365 came along and Microsoft 365, and those numbers are relatively smaller. Actually today they're not so horrible. On the commercial side it's somewhere in the three to four hundred million range. I can't, I didn't see it in this Quarter. On the consumer side, it's, it's under a hundred million, it's something like 78 million, something like that doesn't sound like a big number right To anybody else it would. Yeah, and and back when I had this conversation with Chris he you know these numbers were much smaller and he said, and you know, kind of seeing this, the future that now exists today, that you know, the thing you have to understand is that some number of users doesn't help us if they never buy it again. Right, so right, we didn't get 1.5 billion sales one year, we got it over, you know ten years or whatever the time frame was. And then when you look at, you know we don't go from 1.5 billion to 1.6 to 1.7. We go from 1.5 to 1.5 to 1.5. So we have this, we've reached this, that we've done it like. This is as far as it's ever going. And the thing we you know they look at as a company is like how do we induce people to upgrade and how do we raise those numbers every year? Right, it's hard.

34:18
And then the subscription service thing came around and changed the game completely. The people who pay Microsoft every month, whether their businesses or consumers, are much more lucrative. I mean, this is obvious. But you get into a situation I see on my own site I'm sure Leo and Twitsies on their service, spotify reports this very explicitly every quarter when you have some tiny segment of the population paying you and some giant segment just getting ads, and that tiny segment is worth Dramatically more money per person than the ad support of people. Right, and that's true for Microsoft, with these tiers and the reason why you know E3 is so much more lucrative to them than E3 is.

34:59
Sit down to whatever else they might have, and this is where co-pilot has the real chance to change the game for them, because it just dramatically Raises the average. Nice. So we, even a smaller, like a you know, a subset of a subset that pays for this additional thing, is Going to be a big deal. I think it's gonna. It's no, I don't think I know it's gonna be a big deal in ways. Things like what's the paid version of Microsoft Teams? Call Microsoft Teams Pro or something, or whatever that is Once there's.

35:31 - Richard Campbell (Host)
Then there's teams for home and school. Yeah, but parentheses free.

35:37 - Paul Thurrott (Host)
Right, right, I mean, you can see the scale, you know. But but co-pilot is so valuable that I to users, you know, I this, I think this is, I think it's gonna work. You know, and where I was sort of I didn't understand it, back when I talked to Chris, the numbers were so small I just couldn't understand how this could ever make sense. But now that they're bigger, you can see how it makes sense. So you can see the growth that Microsoft 365, as you know, a quarter of a quarter year of year or whatever, for many years. I think this is gonna jumpstart another Periodic growth for these businesses.

36:11 - Richard Campbell (Host)
I hope you're right, right, I mean I'm hoping that and and this is where I thought they minimum 300 seat thing was smart, because it means the graph has a certain richness in it. You want to surface new knowledge about the organization to their workers without them being Miners of that. Then it just sort of appears that's the part of the folks who get out of the smaller sets are just not gonna get good results and make no sense You're not gonna get the same results for sure.

36:37 - Paul Thurrott (Host)
I that that I don't know anything about. I don't have a business. I could even I couldn't pay more and see that because I don't have that kind of a business, I am very curious and I want to index all the content on thorough and see you know what the machine learning model had to say about that.

36:52 - Richard Campbell (Host)
We certainly answer the question have I already written about. This is useful, but then it's just a search engine.

36:57 - Paul Thurrott (Host)
Right. There are a lot of people who are more technical than I am, who write, you know, for publications online, who have done things like that, and that's very interesting. People are building. You know one thing as a writer that you see in other writing and can't stand and Try not to do as a writer is use the same term Repeatedly in the same sentence or paragraph. And when you're writing about a company like, say, microsoft, you say, well, microsoft did this, and blah, blah, blah. And then the software giant did that, and then the firm something, something, and then the company you try Not to Microsoft Microsoft, microsoft, microsoft, right, and someone built a little, a little that is spurt, right, I guess, an SL. I'm really right. That's designed to help them overcome that.

37:39 - Leo Laporte (Host)
I don't think she even Do. You know, are you? So you saw this too. Yeah, yeah, I don't think she trained it. I think just ask chat you be tea or co-pilot?

37:46
Okay, and and it's a good use it's another way of saying Microsoft or the company you know, yeah, it's a great yeah, yeah, if, if you really on your content. I think somebody the information was doing that train it on your content. Then you could you know, maybe say how I phrase this in past quarterly reports or I have done as recently as this past week.

38:06 - Paul Thurrott (Host)
I've written thousands of words on a topic and Then I reference something, some things I had written earlier, and then I realized I've repeated myself a bunch of times, not and I don't mean in language, I mean in literal. Just I'm having a discussion about a certain topic and I'm like I've written about this. You know, it's hard when you write as much as I do to it's in your brain. It's like when you talk to somebody like I've. I've told people something's happened Happening. Are you one of those people? I don't remember? You know that. You know we must answer what I want.

38:36 - Leo Laporte (Host)
Yeah, that's totally what I want. You're repeating yourself, leo. Oh, thank you. Yeah, well times thank you.

38:46 - Paul Thurrott (Host)
Repeating is fine, skipping is the problem. You don't want to be the broken record, did you you?

38:50 - Leo Laporte (Host)
haven't mentioned yet Microsoft saying that they're gonna put co-pilot on vision pro. I didn't new Microsoft, I mean Apple nerd helmet.

38:59 - Paul Thurrott (Host)
Yeah, well, good for them, They'll be fun.

39:02 - Richard Campbell (Host)
That's one app for the they're gonna do teams.

39:05 - Leo Laporte (Host)
I don't mean to be, I do. They're gonna do teams, or?

39:08 - Paul Thurrott (Host)
no bunch of stuff. I very specifically have tried no outlook PowerPoint, minded about this Apple thing, oh. But now that it's I get up into the marketplace, I just can't generate any enthusiasm for it. I and I'm trying really hard not to be like that, but I just don't care good, it makes me feel like a jerk because, if this thing Takes off, I'm gonna look like a jerk, and nobody wants to take a jerk, but it ain't good.

39:33 - Leo Laporte (Host)
I just don't want to. I don't want to, I just don't see it. P&a base Cheerios, I'm gonna let them enjoy there a cardboard, actually, I think you could, because they can't see you, leo, just walk right up and let her rip.

39:46 - Paul Thurrott (Host)
You know what's yeah. What's the difference? Yeah.

39:49 - Leo Laporte (Host)
I can't imagine just doing Guys in the dark. Did you was Holo lens. I mean, they wanted to do productivity in Holo lens too, did that?

39:58 - Paul Thurrott (Host)
Holo lens was well. So here's that. The two phases I remember for Holo lens were the initial announcements, where they had no idea what anyone was gonna use this for, if you go back and look At that very first one from January 2015. They showed off a video game right at the second one.

40:14
They had a 3d version of Minecraft right, which wasn't the full game, it was just an experience, and we stood in the room and you could see Minecraft and there was a Like a castle on a table and it was a hole in the wall and yeah, yeah, I remember that, yeah, it was really cool, but what the wait for it.

40:29
But what's the product like? What's the? You're talking about a device that's gonna sell in the hundreds of thousands and who's gonna develop no such a thing. So anyway, the second phase was we have threw it out there. We've seen what's come back and we've what we've seen is some Some reasonable. I keep on niche markets. It's not their vertical markets, right? I always cite the car makers, the law. Instead of walking around a model made of clay, you can walk around a model that was made in a space or whatever loading model, but I was always big on the verticals.

41:03 - Richard Campbell (Host)
Like he didn't want to just fire it out the ecosystem, see what happens.

41:05 - Paul Thurrott (Host)
He pursued the oh, I just credit instruction, vertical and things like that, maybe one of the few things you ever got right. I mean, I, I always thought that the demo where you're working with wiring and the little guys in the yeah, and he says, not the blue wire, the yellow wire, you know, I, that to me always, you know, like, yeah, I, that would be useful, I could use that. Would I pay $3,500 for that helmet so I could use it for 10 minutes with the one day a year? I need it?

41:32 - Richard Campbell (Host)
no, and that's no, but it made sense. You know for the folks working on jet turbines and you know we're pairing every put man like anything where the cost of the equipment was so much higher that they it's not just a 35, 100 bucks the thousand in Azure you need a month to run that thing. I think it was it's expensive infrastructure.

41:52 - Paul Thurrott (Host)
Yeah, if Microsoft, I don't know. I don't know how it happened. If Microsoft approached the army or the army came to them, I don't know, I don't really care, I don't think it matters. But if that hadn't happened, if they hadn't found the one entity in the world that is known for spending $12,000 on a hammer right, or $20,000 in a toilet seat, but it's also all consuming, so they ended up doing nothing else.

42:14
Well, you know I honestly for that business I mean looking at survival I think it made sense because I don't think the rest of it was gonna promote anything.

42:22 - Richard Campbell (Host)
I think some other verticals could have been out there. But I mean also, tech giants don't like Small markets, like it has to be a multi-billion dollar business and for it to make sense. So yeah, I don't know the Microsoft would have stayed in. Where, you know, the, the army dangled a gigantic carrot that nobody got.

42:41 - Paul Thurrott (Host)
So they, I. I think Hollens would have disappeared years ago if that hadn't happened. I just think it wasn't gonna make I and I don't look the. The technology was fascinating from the get-go. It got way better with the second generation for sure. Remember they, we used to have that kind of field of view problem.

42:56 - Richard Campbell (Host)
Yeah, the field of view was a bit bigger in the two, but it still wasn't good enough.

42:59 - Paul Thurrott (Host)
So it wasn't perfect, yeah, but it was. It was demonstrably better and you know they're feeling at the time was like they'll keep doing. You know every genover jam will keep seeing in and it's that we had never got past to actually we're still on to.

43:10 - Richard Campbell (Host)
So I mean I've talked to folks there like they're waiting on hardware. When the right hardware comes down the line, they'll make another one.

43:17 - Paul Thurrott (Host)
Okay, well, I, I would. Okay, well, I, yeah, we'll say I guess we'll I. I've heard that too, but it's been.

43:22 - Richard Campbell (Host)
It's been a while since I heard it, but yeah yeah, um, it's been a while, but I mean I heard it recently as last year. Okay, they're still a team. They are kind of in stasis. They're kind of hung on the army thing, which isn't quite dead yet. They're taking care to have a mit full of verticals that do use it and everybody wants new hardware. But until they have a compelling story for the new hardware, they're not gonna pull a trigger.

43:45 - Paul Thurrott (Host)
Yeah, okay, I. I mean, I wonder what kind of a human being would sit still a part of the business like that, waiting for something to happen.

43:54 - Richard Campbell (Host)
But you know, I think you know by the way, is the human and also guy who's got enough money that it doesn't. You know, I mean Microsoft guys. Jobs are on the line, right.

44:04 - Paul Thurrott (Host)
Yeah, but a lot of those guys, the experts who were working on that stuff, went to meta. You know a?

44:09 - Richard Campbell (Host)
bunch of them did, without a doubt. And now I've gone elsewhere, right, right, because you know I talked to one of them and said dude, I'm getting a sinus bonus that I can sign a house with. All I have to stick around for a year. Yeah, and then, one way the other, I'm going to walk out of there with more knowledge about Contemporary VR than anybody else. Tell me the downside.

44:27 - Leo Laporte (Host)
To me, yeah, but you know who gets big bucks is the AI researchers, and that is, that is a competitive field right now. Oh yeah, well, a million dollar, million dollar, you know, signing.

44:38 - Paul Thurrott (Host)
This is going to be the side hustle of 2024 how to correctly prompt a gpt to get something you want.

44:44 - Richard Campbell (Host)
You know well, no, I think, where the money is. The tech giants that aren't leading, that are trying to catch up. Yeah, like you, who's spending a lot of money right now. Apple and facebook, yeah, right, that's right, right, I don't know that amazon's taking it seriously still, and microsoft and google are in the race.

45:03 - Paul Thurrott (Host)
It was. It's funny. You could point to any of these companies and say, like, how are they? Like microsoft, you know, and google obviously strong parallels but amazon, honestly and I think god it could, partially because so many x microsoft executives went through there Is their first stop outside of the company. But there is a real microsoft kind of a vibe to amazon sometimes, isn't there kind of?

45:23 - Richard Campbell (Host)
a small.

45:23 - Paul Thurrott (Host)
Microsoft but yeah you know like it's. It's interesting, so I I don't know, I can't. I can't understand what amazon's doing. This is a company that has a giant consumer e-commerce business and a giant cloud computing business, and this thing lands right in the middle of exactly everything that matters to you the most and I don't like doing exactly.

45:45 - Leo Laporte (Host)
You know it's a worse, it's a big curse for a company is to be successful. I think it's really.

45:50 - Richard Campbell (Host)
It makes it hard. Leading sucks right. Chasing is something you know how to do yeah.

45:56 - Leo Laporte (Host)
Let's pause briefly. I know you have more earnings, learnings and, man, we have learned so much, but my brain is feeling heavy, my heart is being sad. No, no, it's not, it's happy. It's happy, it's a happy time. I did not buy a vision pro, but mica, and we got one for mica.

46:13 - Paul Thurrott (Host)
Did you talk to elmo online this week? Is that what this is? Yeah, elmo.

46:18 - Leo Laporte (Host)
No, uh, no, I did not talk to elmo.

46:21 - Paul Thurrott (Host)
Did you hear about elmo? He Went online this find out how people were doing, and what he got back was the saddest story of all time from everyone who is Circling the drain emotionally doing well right now, which is a weird.

46:35 - Leo Laporte (Host)
Don't ask that question. It's a weird thing.

46:37 - Paul Thurrott (Host)
People ask you how you're doing. They're just being polite. They don't really. They're not looking for a dissertation on your divorce and everything that's wrong in your life, you know.

46:43 - Richard Campbell (Host)
Yeah, finally we've got keep walking. Suddenly it's cutter elmo Just trying to feel something.

46:48 - Paul Thurrott (Host)
Yeah, exactly, all right on, we go.

46:53 - Leo Laporte (Host)
What other learnings have we got for these earnings? I just wanted.

46:56 - Paul Thurrott (Host)
Uh, elmo break a couple of companies, I, there'll be more next week, right so?

47:01 - Richard Campbell (Host)
I would make the point. You know, microsoft kept warning us and warning us that they were going to have a tough year in 23. That's why they were laying off and that's why they're doing the cutbacks, and all they've had is record year over year.

47:12 - Leo Laporte (Host)
Well, that's everybody in the tech industry, and they've already, oh boy, in this month alone, 25 000 tech jobs up in smoke.

47:20 - Paul Thurrott (Host)
That's just I love two minds here, so I, I there. There there are people who would hear what you just said, said see, they could have afforded to keep paying these people. They should never have laid those guys off and Yikes, hold on a second. To me, the real crime here was that they hired too many people During an upswing that everyone knew was temporary.

47:41 - Richard Campbell (Host)
But the way they did those layoffs didn't call the deadwood either. There's there's no one called the most expensive people.

47:48 - Paul Thurrott (Host)
Yeah, I know.

47:49 - Richard Campbell (Host)
I think they got lost.

47:51 - Paul Thurrott (Host)
Yep, yep, yeah. But you know what this, all this proves to me at, look, you know, I, this is something that would never have occurred to 30 year old paul, but you know, 20 something years later, I this just shows me, the big tech, these companies, these companies that we think we know so well Microsoft, google, whatever are just like any other big company, just big corporation. Just that stupid.

48:11 - Richard Campbell (Host)
you remind they, just that, yep, they're just that terrible, and I'm also reminded of the handsomen line. We are not organized enough to be as evil as you think we are.

48:18 - Paul Thurrott (Host)
Yes, that was always my. My thing about Microsoft was you know, back when they were, the evil empire is like guys you don't understand how disorganized this company's.

48:25 - Richard Campbell (Host)
There's no concern not that way here.

48:27 - Paul Thurrott (Host)
This is? It's a bunch of little feathoms of angry people. It's not, you know, it's not a giant concerted effort to cross the varying degrees of enthusiasm for the next promotion. Yeah, Um so, speaking of other companies that are as terrible as Microsoft, uh, uh, our alphabet slash google net income of 20.7 billion. Revenues of 86.3 billion. Uh, what's the number? I always put this in here somewhere. But yeah, 76 of their revenues came from what? Google clock? No, I'm just getting advertising. They're terrible.

49:00 - Richard Campbell (Host)
So although never gonna get past that.

49:04 - Paul Thurrott (Host)
Well, you know, google, alphabet, whatever. Like apple, right. Like microsoft back in the day when it was just windows, are trying to diversify and they do have two businesses that are going pretty strongly. Uh, they're still small compared to advertising, but um, subscriptions, platforms and devices, right. So pixel and whatever associate things 18.5 growth, 10.8 billion in the quarter and google rocks and the like it goes under that. Yep, and then google cloud, which is kind of their you know their cloud, I guess. Uh 20, that stuff's been going pretty well, honestly, night two billion.

49:38 - Richard Campbell (Host)
So Um, I just know I hope they're building in enough infrastructure because they still seem very valley centered.

49:44 - Paul Thurrott (Host)
Yeah, well, so we're talking about 20 billion dollars. I mean just to kind of put those together right, those two things I mean more personal computing was only 16.9, that microsoft, uh, microsoft 365, productivity and business processes 19.2. So that's, that's not horrible. I'm just saying it's not horrible. I compared to the advertising stuff small, um yeah, because wall street, uh, these results were not meant favorably. This guy's made To want to be clear about this 65.5 billion dollars in revenue from ads and wall street said not enough.

50:20 - Leo Laporte (Host)
Come on, 66 billion. They blew it, are you?

50:23 - Paul Thurrott (Host)
kidding me. I know this, this this world is screwed and well, that is just so mental those perverse incentives that keep this whole thing churning.

50:32 - Leo Laporte (Host)
That's why they lay off people. I mean, it's just really, it isn't something I stuff blows my mind yeah, nuts, um.

50:41 - Paul Thurrott (Host)
And then we might. I think we we might have talked about intel last week, but I'll just mention it quick because in fact is into amd this week, which is that intel. Let's see, last week was it was? This is for quarter and net income of 2.7 billion on revenues of 15.4 Um, and that was, that was a gain of 10 percent, was the first time all year that intel's revenues actually went up year of year. And Remember at the time they were saying, among other things, like we're starting to see that pc rebound. So this week we got amd telling a similar story, smaller numbers. I think you know, I think a lot of people you would think when intel is the wounded lion stumbling across the savannah that this younger, faster moving is going to overtake, it's not even close like oh, amd for all of us that's puts a paw, knocks them on their butts.

51:30 - Richard Campbell (Host)
Yeah, as much as I love amd.

51:32 - Paul Thurrott (Host)
Yeah, we're talking. This is 667 million in profits. Yeah, on revenues of 16 to 6.2 billion. So a vastly diminished Intel is still almost three times the size of amd, like it's and uh, and you know, they're starting to turn things around.

51:47 - Richard Campbell (Host)
So I mean, is the number, other number you want here, the tmsc numbers?

51:52 - Paul Thurrott (Host)
Yeah, right, though. So I don't have, I don't know that we'll ever see those actually. Well, that's not true. We get those. I don't have those. But yeah, these are, these are companies that are, you know, come from that traditional pc market and they're expanding into the data center.

52:06
I would, I begin, I bet intel has a much. I can just look it up. Uh, let's see. So I can. Now I got, now I want to find it.

52:13
So amd's data center number was 2.3 billion in the quarter was up 38. They're doing great, right. So intel, which I didn't put into my, you know, I said it was uh, 4 billion. So 4 billion for intel versus 2.3 for amd, there you go. So basically twice as big. But amd grew 38 and data center for intel, done, done, down 10. So there you go. I. Data center is the one area where amd Maybe has a chance, right, and that's kind of the. That's the bigger business I mean ultimately. So, um, the.

52:48
The threat to these companies is not just nvidia, right, or um, any other chip, actual chip maker, it's these companies like open, ai, microsoft, apple, whatever, a, google, all. They're all trying to do their. They're trying to kind of rest control away from these companies and uh, create their own chips. And of course now they're you know this, they're partnering for now, of course, but I think the goal is to Uh Use the fab you know the fab uh owners to make their own chips and kind of bypass these companies. So we'll see. I it's going to be a much more diverse market for microprocessors and other chips.

53:26 - Richard Campbell (Host)
Um, then we've had, you know, for 20 years really, I mean it's yeah, well, and and and governments are pouring a lot of money into bringing chip manufacturing home because of the threats Going on yes, yeah, that's right, we're just going to diversify it more and and distort profitability. Right, there's going to be a lot of. You know, the whole motion to get that stuff happening in north america again is they're heavily state sponsored subsidies.

53:55 - Paul Thurrott (Host)
Yes, is that an accurate term?

53:56 - Richard Campbell (Host)
Well, at the same time, you know I think there's a recognition that you make your own chips in your own country, the same reason that you make food for your people and vaccines Like it is an essential service. It is Um strategically important, and so it doesn't have to be efficient.

54:13 - Paul Thurrott (Host)
I just want to be able to treat an employee event all the way I would treat like a police officer or a mayor and say I pay your salary.

54:22 - Richard Campbell (Host)
But, looking at TSMC numbers, like they're in the 20 billion quarterly revenue range. Like they're they're the same size.

54:29 - Paul Thurrott (Host)
This is, they just don't own any of their chip designs right. I was gonna say it's it's. It's a different kind of business, really right, because before this was like all integrated into one company. That's the intel model. They're still trying to do it.

54:40 - Richard Campbell (Host)
Yeah, but I would argue more profitable, because they are only making chips that people pay for.

54:46 - Paul Thurrott (Host)
Yeah, right, as opposed to until it's running those fabs experimenting with chip designs right, yeah, they they're, uh yeah, they're eliminating the biggest cost and the biggest risk, sure.

55:01 - Richard Campbell (Host)
It's the foundry model. At the same time, it's like innovate. This is not where innovation is going to come from. It's about reducing cost rather than innovation making something new. Not that either AMD nor intel has made anything profound recently.

55:17 - Paul Thurrott (Host)
Well, you don't think that the core altered chips are profound? Uh, so he says leadingly um, so I'm sure if that's a word. But uh, yeah, I mean, obviously these days it's about efficiency. So, for um, the, the fab guys, you're looking at smaller and smaller processes, and intel, you know intel's. I don't know enough about hardware design to know if this is truly innovative, but these kind of 3d designs that they're working on and so forth, um yeah.

55:45 - Richard Campbell (Host)
I mean, I would argue the biggest thing, that the most important thing that tsmc owns is a set of skilled engineers and making very small, you know five nanometer chips, and I live in a walled community that has our guards, you know. But you know they're. I know they're building fabs in north america. The question is are they training those engineers Right? Are they going to have people who know how to run those machines well enough to get the yields of the people want? Anyways, it's a fascinating story.

56:14 - Paul Thurrott (Host)
I have my worries about the domestic stuff, but we'll see.

56:20 - Richard Campbell (Host)
Well, I'm only pointing out because the earnings numbers are going to get harder to read over the next few years as this market fragment is further and runs under substantial subsidy.

56:28 - Paul Thurrott (Host)
For the Microsoft guys in the audience. So we just say Microsoft used to be the biggest company, the only company in personal technology. Now they're an also in, but they're the biggest company in the world.

56:41
So, there's a bigger pool to play with. So I think for these companies that make, like Intel, for example, dominating their world, struggling now, but they could emerge as a you know, not the dominant chip maker anymore right, there'll be one of whatever number, but there's a profitable future where maybe, potentially I'm not saying it's going to happen, but I'm sure they're looking at Microsoft and saying, yeah, we want that. So I also wouldn't mind some regulatory ignorance. You know. Just you know, stop thinking about us, because we're not number one anymore.

57:16 - Richard Campbell (Host)
You know, or yeah, well, that's definitely played that card a few times. Yep, it's like, don't look at us with a little guy.

57:23 - Paul Thurrott (Host)
Yeah, exactly A little poor, little Intel.

57:27 - Richard Campbell (Host)
We're not controlling the market share. I don't know what you're worried about.

57:30 - Paul Thurrott (Host)
We'll see. Anyway, like you know, we know we were.

57:33 - Richard Campbell (Host)
Let us kill this competitor by golly.

57:36 - Paul Thurrott (Host)
I think the constant state of change is what keeps things interesting, and for people with a ADD like me, it's it makes it hard. So you know we'll find balance in here somewhere, all right, and that's that's it for now. I guarantee you, next week we're going to have I don't know, three or three or five more and we can hear from Dell and HP so exciting.

57:56 - Leo Laporte (Host)
Yes. What about Nvidia? Have we already heard from Nvidia? Because they're the ones who are.

58:00 - Paul Thurrott (Host)
I don't think we have this quarter.

58:02 - Leo Laporte (Host)
They're stock. Last year went up 700%, I think something like that. Yeah, so my trillionaire.

58:08 - Paul Thurrott (Host)
Yeah, by market cap they were the biggest, or by no, I'm sorry, it was revenues. By some measure they were the biggest hardwood maker in the world last year. They're not really right Not by, not objectively, but they don't even make hardwood. Do they? Yeah, they make video cards. What do you mean, do they?

58:25 - Leo Laporte (Host)
Or do they just do reference designs that other people make? Oh yeah, I think they sell their own data center.

58:31 - Paul Thurrott (Host)
I'm pretty sure. Yeah, I believe so.

58:33 - Richard Campbell (Host)
Yeah, nvidia quarter. They're not expected till mid-February, so yeah, well, that'll be the fun one.

58:39 - Paul Thurrott (Host)
I'll be excited. I like the stragglers. You think you're over it and then you're like, oh, finally.

58:42 - Richard Campbell (Host)
And then they come in and you're like, oh, come on, I can't get it, come on.

58:46 - Paul Thurrott (Host)
Like. Our quarter ran from April 17th until like what.

58:51 - Leo Laporte (Host)
It's like why it's like the NBA season it just keeps getting longer and longer a few more games.

58:58 - Paul Thurrott (Host)
There'll be one team starting up for next season and still playing the championship from last year, exactly Formula ones like that too.

59:07 - Leo Laporte (Host)
They keep adding races. Oh my God, right, all right. What else? What else do you get? You got windows, you got any windows.

59:16 - Paul Thurrott (Host)
We do. We got some windows. Can I just put it in the name of the show.

59:19 - Leo Laporte (Host)
It is Windows Weekly, so yeah, let's do it Right, let's do it.

59:23 - Paul Thurrott (Host)
That's why not, I'll just say it really at this point it seems like windows, windows windows.

59:30 - Leo Laporte (Host)
That was so much fun. Now we're all using spatial computing with nerd helmets yes, yeah.

59:37 - Paul Thurrott (Host)
Right, this is more like Windows comma weekly. So, um, last last couple of weeks now we've been getting these insider builds like after the show. I'm sure that's not on purpose, but uh, thursday, friday, whatever it was, are you sure?

59:53
No, I'm not. I've got Canary Dev and beta stuff going on. So the Canary Children Channel one was to me the most interesting and I've been kind of waiting for it to be interesting. Um, they were talking about this uh, um, a Windows Studio effect feature called voice clarity which, uh, apparently I didn't know this, but apparently it was a surface only and he had a very specific surface right One with an MPU, um, which they're going to bring to more computers now, basically all the computers with MPU's, I would imagine. Actually, no, I'm sorry, I think it's. They're going to bring it to all computers. I think it doesn't require, um, uh, doesn't require an MPU. They're going to do it without an MPU. So that's kind of fun.

01:00:30
But the big one to me was that they're redesigning, uh, the first phase of the Windows setup process. Right, so if you know about Windows setup, I I call the first part of it, which dates back literally to Windows Vista in some ways, but honestly beyond that, because that's it's. It's really based on the NT uh, setup from the 90s, uh, I will call that the first run experience, because I don't really have a name for it. Most people are familiar with the out of box experience, which is that graphical thing that everybody sees right. So if you buy a new computer, you fire it up, windows logo pops in. That's the, that's the out of box experience. So that that changed with the beginning of uh at the beginning of Windows 11, and it's been updated a few times since then. But the visual change, the big one, came with Windows 11. So with this big version of Windows coming this year, whatever it's called uh, they're going to change that.

01:01:17
The first phase of setup. And I, I, actually I ran, I threw it in a VM just to kind of check it out and I was, like you know, this looks awfully familiar and the reason it looks familiar is because it's actually like 10 year old code. It's the same design that they use in the Windows 11 installation assistant, which is something you can download from that. You know, when you Google download Windows 10, it's the first choice at the top. Um, it doesn't look like the stuff that's been in Windows since uh.

01:01:46
Well, windows eight really Windows Vista and Windows seven showed something that looked like an arrow window over a colorful backdrop. They styled it differently between the two systems, but that thing was actually a bitmap. It wasn't a real window there. It was a single image and my belief is that because they need this thing, or needed at the time this thing to fit on a DVD, um, they had to strip up the bitmaps and they made it kind of really plain. So, starting with Windows eight, it's just plain purple, but it's an actual window and, um, it's drawn in the least expensive way possible. If that makes sense, it's probably literally Charles Petzold C code, with every window attribute stripped out of it so that it's the most basic window imaginable. It has, you know, minimize, restore the close buttons, and it has the window button on the left and that's it. There's nothing else going on there and I think, literally it was done for, you know, like I said, for disk space purposes.

01:02:41
Um, I, I, one of my big tips for Windows is that this Process, you know, this Windows installation media that you create, can also be used to repair windows. So instead of creating like a recovery drive, you should just create this installation disk and this put it somewhere. So if you ever can't put your computer and can't get into the recovery environment, you can use this thing to boot the computer and it, you know it works great, but it's it's when the way it looked before, it wasn't obvious. The little, there's a little text thing, it's like one point big in the bottom it says hey, you could, you know, repair your computer too. Now they, now it's a top level option and, um, I think what's going to happen, I think, basically, I think they went back to this older style and and they'll update the language over time, because it there's some weird reversions in here, like they actually talk about DVDs.

01:03:28
They're like if you, you know, your product key will be found inside the box where your DVD was. It's like what are you talking about? Yeah, it's like, well, it's crazy, right, but um, it's kind of interesting. And I think I don't know if they still have that same arbitrary size limit, whatever. A DVD was 4.7 gigabytes, I think. Um, if that's a thing. But I know that the actual size of the, the windows set up, uh well, it varies by version. But you, I think you need like a it's an eight or 16 gig USB drive to make this thing. So I I don't know what they're doing exactly, but I'm just fascinated. I document this for the book, obviously. I've run through this all the time. I see this stuff Not every day, but every week, for sure, and the fact that they're actually touching something this low level in windows right now is uh, is very interesting to me. Yeah, so that's canary.

01:04:22
And then I, yeah, the dev stuff just might have been fixed. A bug fixes nothing really worth talking about there. But beta channel there's some big news, right. So same thing with the windows studio effect coming there. They're, they're doing snap layout suggestions. So, uh, they'll look at the windows that are on you. I'm sure it's a power, it has to be right. Um, look at the windows on screen and, like, suggest layouts that make sense for those applications which you know. We'll see how good that is.

01:04:48
But the hardest news addresses a long time complaint in the windows insider program and I'm hoping and assuming it's going to come to all the channels which is that they will let you unenroll a PC from the beta channel on the fly. You don't have to wait for some future milestone, like, you can just check a box, it will reboot, um, it will install the stable version of windows. You will lose, obviously, features that are not there, because you know it, it's stable, doesn't have all the features, but you can actually just go back, you don't have to wipe out the machine. So I think that's smart, I think that's the way it should have always been. Uh, by the way, that's the way Android works.

01:05:24
If you test Android betas. You could just, you know, I mean, I think iOS probably does the same thing. It's, you know, there's a nice separation there. It doesn't always work, I guess, but I mean the ability to separate your data and apps and whatever from the system and just kind of revert to a stable version of the operating system to me just makes sense. So, yeah, yeah, hopefully this is a good sign.

01:05:47 - Richard Campbell (Host)
Well, and it just be. I mean, when I'm getting from that, it's like maybe you were right. Canary will be 12, like more than ever.

01:05:55 - Paul Thurrott (Host)
It's like I'm I really uh, I hope so.

01:05:57 - Richard Campbell (Host)
Um, but also the, the, the, the, the rollback for beta sort of speaks to 11 is coming to an end, and so they're now. They're making changes in a way that are easy to recover.

01:06:08 - Paul Thurrott (Host)
Right, I'd like to the wrong article for this next thing, but I will correct that. Um, arm thing. Yeah, so there have. There are a few, uh, uh, I'm sorry, a few web browsers that run natively on Windows and arm. I think Firefox is one and I feel like some of the chromium browsers, including edge, obviously uh, are native but Chrome to date has remained, you know, x86.

01:06:31
And so back when windows and arm first came out, you would run. You would you'd have to go manually, go find the 32 bit version, right, right, um, because that was a the only one that was compatible. And then for a while, when you could do either, it was actually the more efficient version. But I think in windows, on arm today, I believe, if you just go get it, you get the 64 bit version. We have that emulation and we don't run 32 bit code anymore. So that's the one you're going to run. That's what you get, um. But they just released to their canary channel the first build of Chrome for uh for windows and arm. So I downloaded and checked it as nothing traumatic going on there. It's not like you, all of a sudden everything works faster and better and whatever, but it is a native version. That is important. I don't know why they're doing it now, but maybe this is one of them. You know many indications that, uh, this will be the year I guess we'll see.

01:07:20 - Richard Campbell (Host)
Yeah, and it's just wonderful because Microsoft they didn't want Microsoft to just take that market. Yeah, we've got to go build and it's not that hard to make it.

01:07:29 - Paul Thurrott (Host)
It can't be Microsoft's doing it. No, I'm sorry, I, I other people are doing it. I mean so you know, if if people, if companies building uh Chromium based web browsers can do it across Google, Right? So yeah.

01:07:42 - Richard Campbell (Host)
So that's good. Um, put an intern on it. You got to build out.

01:07:46 - Paul Thurrott (Host)
Exactly, right. So if you get this to compile, we'll put it in. We'll call it good. Um, microsoft edge is. I'm a clicking, I'm using this, the wrong links and everything. Yeah, no, you're doing a great job, I'm doing good. So, you know, I spend that kind of a week. Um, so this week, uh, this has been going on for a long time. I don't know why this isn't the news right now, but, um, there's a very good chance that what people don't understand is that something's happening behind the scenes that they agree to. Because what one of the things?

01:08:17
When I started writing the windows uh 11 field guide, I got to the edge chapters and I realized there's a lot of chicanery going on here, right? So when you're drawing up edge, you go through these three screens where you're like you want to all your stuff on all your computers, like yep, they're like, do you want to import your stuff from crumb? Like yes or no? You know that's up to you, but to me that's like a one time deal. Uh, you do it once and then you use the new browser. Right, that's that, to me, is the point of that. And then the third screen is like, hey, you want to make your, your web experience better and like, if you actually look at the fine print, what you're actually agreeing to is a lot more tracking, and I think um, I think what Microsoft is doing here is commingling this notion of we're always.

01:08:57
You said yes to importing stuff from Chrome. You also said yes to always keeping your thing up to date, so we noticed that you have Chrome on your computer. We're going to make sure you're always up to date, and they're starting to do it in new ways to some people on some computers. This is actually, like I said, it's gone on for a little while, but the idea is that you, uh, you're using edge and then you can access tabs that you would only open in Chrome week for right in your history, and it's like wait, what? So the issue here, as it is so often the case with edge, is that people are like I didn't. I didn't agree to this.

01:09:32 - Richard Campbell (Host)
Yeah and uh. Oh, yeah, you did. You just didn't know what you were agreeing to. Yeah.

01:09:38 - Paul Thurrott (Host)
Uh, the the Verne says that this started after installing, like some new update for Windows 11, but this is you can look, you can look this on up, and people have complained about this for a little while. So I'm not really sure what to say to this Um, other than that you shouldn't use either one of these browsers. You idiots, and, uh, you know, think about it what were you thinking what are you doing?

01:09:58
Um, so I don't know what's happening there, but anyway, I have not experienced this and uh, cause I don't you know, I would never speaking of which? Uh, there's a new version of Microsoft Edge. Last week, um, we talked about various web browsers. Uh, they're all in the same schedule now. Right, basically, um, this one is only interesting because Microsoft Edge is going to be using these managed environments.

01:10:18
We have a business and one of the promises I think it dates back to 20, when they were talking about what you know, 23h2 or whatever was that? Um, they, they have kind of a new work experience, right, that's, uh, it's really just profiles with a different name, but they were promising that they were going to let businesses using enter ID brand the browser so you can have like a logo up in the corner. So it's like you work for Threatcom, so you get a little T logo up there or whatever. Um, right, that is finally available. So, um, they have links to the uh, microsoft Learn website where you can, as a business, you can learn what policies you have to implement and what assets you need so that these things are delivered down to your users, and, uh, that happens and then for for normal human beings? Um, they're changing the way the browser alerts users about updates, like browser updates, because now these things are updated every 10 seconds. It seems like it's, I think it's every four weeks technically now, but, um, before, if you want it, if you wanted to manually find a browser update, you would go into settings app, like the about interface essentially, and it was oh, there's a new version. It just starts downloading it and I suppose, if you waited long enough, it must do something. It must put something up at the corner where it says hey, you're out of date.

01:11:31
Um, microsoft Edge has this unique little interface called browser essentials, which hasn't been too essential to date, honestly, but it's getting kind of interesting and if you ever look at that, in fact, let me just bring it up now so I can see what's in there exactly. This is where you access things like um, the uh, it's called the uh, the VPN uh service that they have is one of the things that's in there. Um, there's some power and efficiency stuff in there, some safety stuff, which is nonsense. They don't do anything for your safety. Yeah, edge secure network is the end of the VPN, so you can do that kind of stuff. Um, I actually saw for the first time in my life because I don't use Edge a lot, I use it mostly just when I'm writing the book or whatever but um, it actually complained that some of my tabs were taking up too much memory.

01:12:14
Wow, I was like oh look at you, um, and so it made some recommend and I I don't use sleeping tabs and that might have been part of the problem, you know whatever, but they're going to start promoting uh edge software updates in this.

01:12:26 - Richard Campbell (Host)
It should really be telling you how long you've had that tab open to right. Yeah, yeah.

01:12:30 - Paul Thurrott (Host)
Exactly Things like we just talked about arc. Right, it could just be like you know what. We're just turning it off, yeah. You know you're not using this thing right Um yeah.

01:12:41 - Richard Campbell (Host)
I know folks who leave browsers open, browser sessions over for days and they and they leak memory like they just get worse and worse and worse and worse. Right, right, yeah. So I mean memory leak is even when you close the old pages, the memory doesn't get better. It's until you close all of them that finally that whole thing gets junked in. When you reload you come in much lower footprint.

01:13:00 - Paul Thurrott (Host)
There's always a double edge sort of with edge, because you look at a feature like this and you think, yeah, I mean, this is logical, it makes sense, it's helpful, you know, whatever. But it's also one of like a thousand of these features and that's the problem with edges. There's too much of this stuff. You know, just, I probably never going to write this article, but if you just look at like screenshots of edge, you'll notice like the UI is always in different places, like what's going on. It's because you can configure it over the hell you want. Not only do they move it around, but you could go up to the corner and say, like I want my profile button up there, no, I want it down here. I want the workspaces like on there. No, no, I don't want it there. Like you, it's, it's different all the time and it. You know that's the new Microsoft way. Yeah, and then I have not seen this myself, but apparently today they've started rolling out a redesigned version of OneDrive for the web for consumers, right?

01:13:46
So OneDrivecom, you see this, and this is in some ways it's kind of similar to what actually you see in OneDrive for business. You get this kind of like I think they call it for you section up in the top. So I'm trying to anticipate what it is you're looking for and it's. I kind of wish they wouldn't. Honestly, when I go to a site like this, if I go to OneDrivecom, it's very specific. I just want to get into the file system, find a specific thing and get the hell out of there. And they're looking at it more of a destination. So it kind of joins like start menu and Windows 11, the Microsoft 365 app and Windows 11, you know Officecom and it's. You know what is it? What are you doing here, like what's your point?

01:14:31 - Richard Campbell (Host)
And it's like it's trying to do the Facebook. Hey, here's a picture from last year. Aren't you excited? Haven't I helped you? It's like interrupt me again. Get it out of the way.

01:14:39 - Paul Thurrott (Host)
Yeah, exactly Right. I didn't come here for, yeah, for helpful suggestions. I came here to get something done. I had some stuff to do and you're interrupting me and then I just threw this on the Microsoft 365. And we don't have any other stuff. But I think it was Friday, Friday, the team's outage Teams went out.

01:14:58 - Leo Laporte (Host)
Oh yeah, like eight hours right.

01:15:01 - Paul Thurrott (Host)
Yeah, and it was like a conga line online of people who were like oh my God, this is so nice.

01:15:07 - Leo Laporte (Host)
Yeah, Like nobody can bother me now you know, Don't call me anymore.

01:15:11 - Paul Thurrott (Host)
Yeah, but much like that Microsoft hack from a week or so ago. I'm curious about what happened here. Right, it's most likely a human cause. Configuration era Microsoft called it a networking issue at one point. They never really they never really explained what happened. They explained it and they also. When I went I think it was Saturday morning or even as late as Saturday afternoon when I looked at the admin center, it still told me they were looking into several of these issues, but Microsoft was publicly reporting. They solved the problem and everything was fine. So it's kind of hard to say, but this cascaded across the entire planet and they, I guess they fixed it. It seems to work.

01:15:56
You know, work Monday, so it's early, I don't know, but I'm confused about what happened there and I think I'm going to continue to be confused because I don't see them ever come and clean about this. They didn't say anything about nation states or anything like that. It was just like yeah, you know, sometimes, Sometimes good software goes bad, did you?

01:16:18 - Leo Laporte (Host)
I don't know if you listened or saw Steve Gibson's piece yesterday. He was quoting Alex Stamos on the Microsoft break. Alex wrote a piece on it.

01:16:28 - Paul Thurrott (Host)
Not John Stamos from the.

01:16:30 - Leo Laporte (Host)
Not not John Stamos, Alex Stamos, who Bull House?

01:16:34
Yeah, no, alex is very well known security researchers. Now it's not on one, but before that he was Stanford's Internet Observatory and you remember that Zoom brought him in when they had some embarrassments in security. Anyway, Stamos really reamed Microsoft on this email thing. He said this is not an issue of, as we might have thought, the bad actors getting an email account. This is far worse. Furthermore, I pointed out that at least 10 other companies seem to report this, that this OAuth failure, yeah, so breached them as well.

01:17:10 - Paul Thurrott (Host)
Right, yeah, there was a. Actually, since we talked, there was a second and then a third update to this story from Microsoft. In the second update, microsoft said that they discovered there were 10 other companies that had been hacked using the same technique and they alerted them. That was the same day that HPE came out and said hey, by the way, this happened to us as well. And the third one, I think the one where they basically said, yeah, we didn't configure 2FA on this account. Basically, it was like that's stupid and it's like, guys, come on.

01:17:44 - Richard Campbell (Host)
And my suggestion was it was an internal, only accounts, that didn't bother. And then somebody made it public some way and it hadn't been locked down properly.

01:17:53 - Paul Thurrott (Host)
You said something that I think is exactly what happened, which was, you know, in a company the size of Microsoft, you know, you have a guy, he shows up, opens a test account, he's got to do a test VM, whatever it is, and I have to do something with it, whatever it might be.

01:18:06
And then, hey, bob, do you want to go to lunch? Yep, and then they take off and then he goes to a different company or different part of the company and it's just one of many kind of ghost VMs or accounts or whatever they are out in the world and I don't, you know, there's, there's a version of this where you could kind of make the argument that Microsoft has these built in tools for assessing things and they maybe the fact that this is going to be an unpopular position I'm not saying it's mine, but maybe they found it quicker than basically any other company would have. I mean, given the complexity of their environments and all the machines and users and whatever I mean. And you know people like us will be like how could this happen to a couple of Microsoft? We trust them for our security, you know, but but you know it's easy to get really.

01:18:47 - Richard Campbell (Host)
You know I raise so everything these days, but and, generally speaking, their customer facing stuff is pretty damn good. That's not what this is.

01:18:55 - Paul Thurrott (Host)
That's right, that's exactly right, yeah, yeah. So I think the one thing we've said all along we said this last week, I'm saying it right now and we'll say it again in the future is like I don't, I think there's more to this story, and maybe Alex Stamos has some information about that. You know, maybe there's more to come, I don't know. I, I it feels a little. I think the thing that bugs the one thing I in the back of my brain not being a security expert, but the thing that bugs me is that they were, they were in there for so long.

01:19:24 - Richard Campbell (Host)
Yeah, it took as long to detect it as it did. Yep, our company sells products for rapid detection of breaches. That's a little alarming.

01:19:32 - Paul Thurrott (Host)
Yeah, now we are in the cusp of this AI era and Microsoft is about to tout someday in the near future.

01:19:38 - Richard Campbell (Host)
You're using AI, you're supposed to detect these guys without a machine learning block? I know, I know, right, that's the reality. Somebody from Russia lost an internal test account. That should be a flag.

01:19:50 - Leo Laporte (Host)
Stamos was on CNBC on Friday night. He says that he believes it was flaws in Entra active directories. Wow, okay. And Microsoft 365, quoting Alex Stamos Microsoft's language here plays this up as a big favor. They're doing the ecosystem by sharing their extensive knowledge of midnight blizzard when, in fact, what they're announcing is that this breach has affected multiple tenants of their cloud products.

01:20:23 - Richard Campbell (Host)
I mean, that's not what they said.

01:20:25 - Leo Laporte (Host)
Well, joseph Menon. The Washington Post has several sources indicating at least 10 companies were breached through Entra.

01:20:32 - Paul Thurrott (Host)
Oh, you think? Oh, that's interesting. Okay, so in other words, it's not that this hacker group used the same technique to attack all the other guys. It's that they were able to do it within Microsoft's infrastructure. That's Stamos.

01:20:44 - Leo Laporte (Host)
Oh, that's interesting. Okay, he says. Calling this a legacy tenant is a dodge. The system was clearly configured to allow for production access as of a couple of weeks ago. Microsoft has an obligation to secure their legacy products and tenants just as well as one's provision. Today, it's not clear why they made my legacy. Microsoft does, however, offer us some solutions. They upsell us. He calls it the cybersecurity chutzpah hall of fame. Microsoft recommends potential victims of this attack against their cloud hosted infrastructure by Entra ID protection or Microsoft purview audit or Microsoft password protection for active directory.

01:21:24 - Paul Thurrott (Host)
Yeah, this is the school hard. You're a bully tactic. This is what Microsoft you know. Remember when Microsoft used to sell antivirus? Let me get straight you built an operating system that has vulnerabilities and to fix those, what you're going to do is charge me to buy other software that fixes this the vulnerability they also turned around and did give it away in the end. But it's a lot of pushback.

01:21:46 - Richard Campbell (Host)
I've had the argument with Microsoft on run as about the why do you charge for additional security? And they said listen, the line gets crossed when we're paying people to watch out for your stuff, that's what you have to pay for. Yeah, okay, you know software. You get all the software stuff that's included with every account, but when it's actually active monitoring, that's people that cost money and you pay monthly for that.

01:22:12 - Paul Thurrott (Host)
Microsoft should pay for that service itself then, because maybe those guys would have found this.

01:22:17 - Richard Campbell (Host)
You know that stuff's expensive. Why would they Right? Yeah, I mean, I'm with you. I'm not going to disagree with them that there's more to this than meets the eye. There's no evidence that there's an exploit here.

01:22:32 - Paul Thurrott (Host)
I thought I was cynical. I got to tell you that stuff you just read. I was like yikes. Oh, it gets worse. It's brutal.

01:22:39 - Leo Laporte (Host)
He says 21 years after the trustworthy computing memo, it's once again time for some soul searching in Redmond. Oh God, what the fuck Get off of this? So much? I should also point out, alex now works for a company that sells its own security products. Sentinel one, that's it.

01:22:53 - Richard Campbell (Host)
So they just seem to be 20 years after the trust cut what Like dude geez.

01:23:01 - Paul Thurrott (Host)
I mean, there is an argument for it.

01:23:02 - Richard Campbell (Host)
You know, it's like dude, you know you're not going to be able to get a drink and relax, you know.

01:23:10 - Leo Laporte (Host)
There's also a glass houses thing here, where right.

01:23:12 - Paul Thurrott (Host)
Careful what you be, careful what you? Well, I will say the notion that you know. Microsoft did say we found other companies that were being hacked same way. I mean how would they have known that? How would they have done that? What do they know? So that is interesting. I didn't make that leap myself. I will say that, so that's kind of interesting. Yeah, we're all hosting on the same infrastructure. There's a bug in that infrastructure that allows this, he says.

01:23:36 - Leo Laporte (Host)
Azure AD is overly complex Laksa UX that allows for administrators to easily understand the web of security relationships and dependencies that attackers are becoming accustomed to exploiting, and in many organizations I don't think anyone would argue with that. Yeah, that's true. In many organizations, Azure AD is deployed in hybrid mode, which combines the vulnerability of cloud and on-prem.

01:23:59 - Paul Thurrott (Host)
I just want to be clear that is not how Microsoft markets that product Anyway it's worth a read.

01:24:08 - Leo Laporte (Host)
Take it with a grain of salt, he certainly. It's a little alarmist.

01:24:12 - Paul Thurrott (Host)
Yeah, it is a little extreme but still, but that's an interesting point.

01:24:20 - Leo Laporte (Host)
We'll get to the Taylor Swift deepfakes that you've been waiting for. In just a moment, paul, yeah.

01:24:25 - Paul Thurrott (Host)
I'm going to post actually three or five of my favorite ones. Hold on a second.

01:24:29 - Leo Laporte (Host)
You know they as purely as research. I did it. You can literally search Google and we will deliver them to you. What would see Twitter's like? Well, we're going to take them down. We're going to hide the searches.

01:24:43 - Paul Thurrott (Host)
This is like we call this the Pete Townsend defense.

01:24:46 - Leo Laporte (Host)
Yeah, which is it was research.

01:24:50 - Paul Thurrott (Host)
Yeah, it was just research, your honor.

01:24:52 - Leo Laporte (Host)
Well, no, I was just curious if Twitter taking it down had any impact, and obviously it does not.

01:24:58 - Paul Thurrott (Host)
Well, first of all, it only took it down for like 24 hours.

01:25:00 - Richard Campbell (Host)
Well, and the Elster didn't take it down. What they did was just block any searches for Taylor Swift.

01:25:04 - Paul Thurrott (Host)
Yeah and all the Well, they don't have a department that could take it down. That's the problem.

01:25:08 - Leo Laporte (Host)
This isn't a very sophisticated kind of a thing. Anyway, they just put her head on somebody else's body. It's not Sure, it's not anyway. So we don't have to talk about that. But we will talk about deepfakes when we come back. But first oh, do you have? Do you have somebody bringing you some whiskey, Richard?

01:25:26 - Richard Campbell (Host)
No, no, I don't have the whiskey's right here. I'm good, okay.

01:25:31 - Leo Laporte (Host)
I can divert attention from you for a moment as I tell everybody about Club Twit. We're very proud of Club Twit. We started this two years ago and I would say right now the most involved, most discerning, most active members of our community have become members More than 10,000 strong and we're really thrilled about that. And it's come just in the nick of time. I don't know if you've heard, but many podcast networks are out of business now. Many podcasts have shuttered their doors because ad revenue has declined so dramatically. It's all going to Google, it's all going to YouTube, it's all going to Facebook, it's all going to influencers. But we think we still have a job to do. I think we have a very important job to do and maybe it was a mistake way back when I said you know, we should let the advertisers support this. I liked it because it made it free and we were kind of committed to continue to make our content free. But we would like to do it with your help. I really want our listeners and viewers to support us by joining the club. Would you consider it? Seven bucks a month, so, and you can give more. You can even do less. If you just want this show ad free. That's $2.99 a month so you can get individual shows if you want. The $7 gets you free of everything, gets your shows. We don't. We actually do have behind the paywall in the club iOS today. Hands on windows with Paul. Hands on Matt, which is, by the way, great, Paul, you're doing a great job with that, I love it. Hands on it's kind of like the premium content on the rodcom. It's like it goes a little deeper, a little extra. Same thing with Micah Sargent's hands on windows, the.

01:27:04
Inside the ultimate. What is it? Untitled Linux show, the. We can't afford a title. You know, that's the problem. We also have home theater geeks. Those are all club exclusives. There's other stuff on the twit plus feed. You get the video before and after every show. Anyway, we try to give you some benefits, but the real benefit is you're helping this network continue because we think the job we're doing is important. If you would like to help, I would just want to invite you all. We'd love to have you in the club. Twittv slash club twit Enough said. Not going to, not going to belabor the point. Rich's got his whiskey, I don't know what Paul's got Nice, tall, cool glass of milk Need to go whiskey, let's talk deep fakes.

01:27:54 - Paul Thurrott (Host)
Just briefly, because I'm curious what people's reactions are when they hear something like in this case. Microsoft because of all the stuff that's been going on lately says you know, we're going to add deep fake guardrails to our designer AI. This is the thing that used to be image creator from Bing, right, because we're not using the big name anyway, so people can't use it to make porn. What's the first takeaway from that statement? You mean you could, right? I mean I could have been using it for this. All. You allowed people to make porn with this before, and now you're like you know what? You're kidding me. That's crazy.

01:28:34
So, for whatever it's worth, microsoft designer couldn't care less. This is kind of like their canva thing. But what they're really talking about here is that image creator thing, right? So it's built into Microsoft Paint, it's built into Bing, it's from Copilot, it's from Dolly, right, from OpenAI. It's gotten really good. If you pay for Copilot Pro, like I do, it's a little faster, I guess, in certain times of the day or something like that, but the results are fantastic. I didn't know I could be using this to make high quality porn, but now I guess I can't, so I got you.

01:29:04 - Richard Campbell (Host)
I was too late to the game. Now, what do you use it for?

01:29:09 - Paul Thurrott (Host)
Mostly for promo graphics for my articles. I had a great one where I was like I asked it to put the Microsoft campus in the middle of a scene from the Lord of the Rings, which is beautiful. It's like a little Gandalf standing around. It was beautiful. You know, stuff like that, Useful things, Things that will make the world better, Anyway, so there was a story one of those sources say type stories a couple weeks ago that the DOJ and the FTC were kind of fighting or debating which one of them would get to investigate the Microsoft OpenAI partnership.

01:29:44
We now know that the FTC won that battle and it turns out the reason is they're actually investigating a lot of, well, several big tech, big tech slash AI partnerships to understand the business model, the goal, what they're doing, you know, Microsoft's, I think, is the most troubling, because there's this notion that it's sort of acquisition not acquisition and they're, you know, skirting around some legal requirements and, of course, some regulatory action that would have happened if they ever tried to do that. But they're also looking at Amazon and Alphabet, both of whom have certain relationships with Anthropic, which is probably, I guess, OpenAI's biggest competitor, I suppose. So, yeah, they're just and you know the EU is doing the same. I think the UK CMA is also doing the same.

01:30:33
Looking at these companies and like, okay, so what? Tell us a little about yourselves.

01:30:38 - Richard Campbell (Host)
I don't understand why there were DOJs was ever involved, like you don't. Doj only says if there's a criminal complaint.

01:30:44 - Paul Thurrott (Host)
Yeah, and maybe that was the argument. Like knowing the DOJ that we have today, they probably were like you know. Yeah, let's just bring them to court. I'm sure that was the.

01:30:55 - Richard Campbell (Host)
It seems like they got a lot going on right now anyway.

01:30:58 - Paul Thurrott (Host)
And never has an entity been so wrong about so many things that it would ever prevent them from trying and trying again. So I don't know. You know whatever, god love them, I guess.

01:31:09 - Richard Campbell (Host)
I look, I thought the OpenAI Microsoft relationship deserved scrutiny. Yes, it doesn't mean there's criminality there, doesn't even mean it's non competitiveness, but it's an unusual relationship and it deserves scrutiny. And the upside being, if they find nothing wrong with that, that's a serious indicator too. It says, okay, well, these models then seem to be acceptable, but they did build a unique model in that relationship and it should be scrutinized. Yep 100%.

01:31:38 - Paul Thurrott (Host)
Yeah, A dolly, a midnight journey, whatever all these image creation, sir, what I said, midnight, what I said mid-journey, mid-night journey, it's just a different kind of thing. I think that was a TV show in the 70s, yeah.

01:31:54 - Richard Campbell (Host)
I got a Taco Bell reference in there somewhere. We'll let it go.

01:31:56 - Paul Thurrott (Host)
Yeah, something. Drugs were definitely involved. It is all happening now. It's all you know. That's all kind of amazing. Obviously, video is the final frontier here and we're starting to see some interesting stuff there. Like Google showed off a little, a very short clips of some of the kind of AI video stuff that they're doing, we know there are services that are going to upscale video games right to 4K from you know, sd quality and some of that looks fantastic. And now NVIDIA has a service that can convert SDR videos into HDR right using AI and their special chipset.

01:32:33 - Richard Campbell (Host)
So this is A couple steps past the speckling.

01:32:36 - Paul Thurrott (Host)
Yeah, we live in interesting times. I mean, there's no doubt about it, definitely what is real. Yeah, that's happening and actually that's it. So then, okay, so then we can return once again to Xbox, because that now is all we ever talk about. So we haven't talked about Apple's non-compliance compliance with the EU DMA.

01:32:59
This is a very controversial and big topic out in the broader tech world today. A lot of people complaining about that stuff. But right in the middle of all this, apple, like other companies you know, allows the list of things they're going to change in the EU, but less well documented. They're actually kind of changing a few things, just worldwide, right, and one of those things is they're going to allow that thing they wouldn't let Microsoft do I think it was two or three years ago now and bring Xbox Cloud Gaming or a game streaming app to the store. Microsoft tried to do that back when it was still called Project X, project X Is that the name? That sounds wrong, though that I said it Project X. I think it was Project X. Whatever it was called, they're actually going to allow this now. So Nvidia has GeForce now. Microsoft obviously has the thing. The stadium was still a thing, this would have been included, but they've done a complete about face on this and I don't think it's like out of the goodness of their heart, right? I think this is to lighten the regulatory scrutiny that they're getting right now, because there is no version of this blocking of this type. Project X Cloud excuse me, I know I got that right. There's no version of the story where Apple comes out looking good here, like it seems so arbitrary. No one is buying a game on the service, right? They're paying a subscription fee and just streaming the content, just like Netflix does, or music streaming services like Apple music do. So you know their attempt of their literal blocking of that always seemed. I'm surprised that didn't get more regular or any regulatory pushback.

01:34:40
Microsoft certainly is very vocal about it at the time, so they can do it. Microsoft has not said anything publicly about that yet. Semi-related Epic has claimed that Fortnite is somehow coming back to the iPhone in the EU, despite their ban of that game, and I suppose that's you know. We'll see what happens there, but right now I think if you want to play Fortnite on an iPhone, I believe what you can do is use Xbox Cloud Gaming through the browser, right? Which is how Microsoft did the work around there and then, because I mentioned the Apple EU DMA stuff, microsoft's Xbox Presidents are a bond came out against this very vaguely I mean well, not vaguely, very concisely, you know she didn't say too too much about it, but and she was very polite People who have not been polite Tim Sweeney, you know he's been kind of outspoken about it.

01:35:35
And then in the middle I would say and actually this is probably the best written explanation I've seen of why this is bad which is the founder and CEO of Spotify, daniel Eck, who of course, jumpstarted I believe he is. I believe his original complaint is what led to the DMA right, this notion that Apple was abusing their market power and harming smaller companies In this case one from Europe, interestingly but you know he basically wrote this really long-winded tweet, tweet storm we used to call it right and so he kind of explained all of the tactics Apple is using and all the double speak and you know whatever. So it's worth reading, but I just wanted to point out that Microsoft is supporting. You know, this is not one of those things where someone from Microsoft says these opinions are not those of my employer. It's like no, no, this is the president of Xbox.

01:36:26 - Richard Campbell (Host)
This is the employer, but also this is how regulations are supposed to work, and that's why we want everyone to comply to them, because it does make things harder, but as long as it makes it harder for everyone equally, that's fine. And so when someone's circumventing it, you point at them and go hey, you're making me comply with this. Why aren't they complying? Yeah, yeah.

01:36:44
So that's interesting, my favorite version of that is still the poison squad, where the invention of the FDA, where it was like, hey, you know what? All the companies are putting formaldehyde in the milk because then you don't have to refrigerate it, you can sell it for your milk because it was so much cheaper that way. As long as you didn't feed it to your children, it was fine, it was fine. Well, you didn't feed it to anybody, yeah? And so you know, it took regulation to say you can't put formaldehyde in milk.

01:37:13 - Leo Laporte (Host)
Consider how much you save in embalming costs. You start early. Right.

01:37:21 - Richard Campbell (Host)
Nice.

01:37:25 - Paul Thurrott (Host)
This just came out in an insider build on the Xbox. But if you have a series S console which is what I use three days a year when I actually use it now you can actually configure this thing to have a resolution of 1080p, 1440 or 4K and if you took screenshots, you would get screenshots in those resolutions. Obviously, when you're playing games, those things are scaled and a lot of games on the series S and particularly, do not play in 4K, but it's not going to support even screenshots at that resolution. So game or wherever you take a screenshot, it's going to be 1080p going forward. Now this hasn't hit stable yet, so this is probably a month or two down the road, but that's coming. I think the I would imagine.

01:38:07 - Richard Campbell (Host)
Why are they taking features away Like what's the thing?

01:38:10 - Paul Thurrott (Host)
Well. So in this case it might just be well be related to disk storage. Honestly, now that you can semi seamlessly save everything to OneDrive from Xbox, maybe these things take up too much space. There's no reason. If you're scaling it, you said look, I'm 4K, right, but the game is only really running at whatever 1080p we'll call it. I mean, why capture that in 4K? I mean, it's just a waste of space. Anyway, that's fine. Charging for the space yeah, maybe they got complaints, but we're never going to find out. You know, like they're never going to say it's interesting. And then, related to the topic from yeah, actually we've come full circle.

01:38:52 - Richard Campbell (Host)
Yeah, that's what we started with.

01:38:54 - Paul Thurrott (Host)
Yep. So Microsoft announced this past week their leg off 1900 plays across Xbox, Activision, Blizzard, Zenimax, whatever game studio. So since this is about I think this, you, I think you, tech it was over the weekend, maybe.

01:39:08
Or we you were texting me about this. You were doing the math and you were right. You were dead on there. By the way, yeah, it's tricky to find out how many employees Microsoft actually has, right, yes, but we know Phil Spencer. Yeah, right, yeah, exactly, we were 10,000 people that came from Activision Blizzard. The total number was around 22,000 in Microsoft gaming, which is part of that, across all the units. Yeah, yeah, it's not everything, but it's part of it, so it's about 8% of that number.

01:39:36
You know Mike Ybarra, who was the president of Blizzard and was at Microsoft before that and left and now came back as left. You know he's. I don't know that those things are in any way any way related. I was, he was a cool guy actually. I didn't know him personally, but I he was a guy kind of over, actually, whatever, but I was kind of happy he was coming back to Microsoft, but that lasted about 13 seconds, so that's the end of that. Yeah, so it's. You know, just, unfortunately, this kind of thing I feel like was inevitable, right? I mean this is too much overlap.

01:40:15 - Richard Campbell (Host)
Yeah, it's interesting. You would think that the Xbox Group would be leaner and Xenomax it's been what four years. I expected this to mostly be out to vision blizzard and it is, but it's like, oh hey, while we're taking out the trash, let's go cut that way.

01:40:31 - Leo Laporte (Host)
I don't know why would you need.

01:40:33 - Richard Campbell (Host)
Bobby Kotick right, yeah, the trash. We're going to need a better trash bag. That layoff costs more than all the other is combined. That's one golden parachute.

01:40:43 - Paul Thurrott (Host)
The thing is you know I, as far as these things being small or leaner or whatever. Honestly, you back when Microsoft was a simpler company, what used to be called at one point, msn right was in this part, like a separate part of the campus, geographically called Red West. Like the Xbox stuff used to be something called the Millennium Millennium campus, yep. And then when they were doing zoom, that was actually right in the middle of the campus but it was like an aircraft sized building with, I mean, what looked like thousands and thousands of people just doing graphic designs that you could etch into the back of a like a zoom known was ever going to buy anyway.

01:41:22 - Richard Campbell (Host)
These things always thought it was great, but they didn't get the etching yeah you're right, I mean.

01:41:26 - Paul Thurrott (Host)
So I at these things always felt bigger than they needed to be to me, and I would imagine today it's exponentially worse. So yeah, that's a great question.

01:41:38 - Richard Campbell (Host)
There's nobody's on campus anymore, Right? So it's like oh yeah, we got all these people that just don't know where they are.

01:41:44 - Paul Thurrott (Host)
Yeah Right, I wanted to write. That makes it even harder.

01:41:48 - Leo Laporte (Host)
All right. So that's a wonderful job. Summing up, how long before we see you testifying in front of Congress on the dangers and evils of video games? Is that just around the corner?

01:42:02 - Paul Thurrott (Host)
No, I actually I think video. So here, video games are interactive, that you're not just sitting there like a potato. I think they help with mental and physical dexterity. I think the trick is they can be addictive and you need to find a balance, and that balance is different for everybody and it's like you know, some people can have a drink and not be an alcoholic, but some people who have become alcoholics can never have another drink, and I think video games are just like that.

01:42:27 - Leo Laporte (Host)
So in which it's really personal. Have you really given them up?

01:42:30 - Paul Thurrott (Host)
right. No, no, no, not entirely. So I've been playing. I played that resident I did play through. I played it enough to realize this isn't my kind of game, but I played the resident evil game yeah, the recent, I think it was Resident Evil 2, the remake on the Xbox. Actually I did that. But I know I've been playing through Black Mesa, which is the remade version of Half-Life, the original Half-Life. There is a very real possibility that gaming for me, going forward, might literally just be revisiting games from the past that are starting to get remade and upscaled and, you know, just doing I and Hams to it all the time.

01:43:08
Yeah, I mean because honestly, I'm not saying there are no good games now. Of course there are good games, but a lot of the I mean there was some classic. There was a period like explosive period where it was like bang, bang. They were just coming out all the time and like I think going back and revisiting some of that stuff in a kind of a calmer way right now is not not such a bad idea.

01:43:29 - Leo Laporte (Host)
I wanted you to play PAL world.

01:43:32 - Paul Thurrott (Host)
I have done everything I can block. I can do the block pal word from showing up in any of my feeds.

01:43:38 - Leo Laporte (Host)
I really want to play it.

01:43:39 - Paul Thurrott (Host)
I didn't put it in the news. I will point out it is the third fastest growing launch, or third fastest launch in Xbox ever. It's Pokemon with guns and yeah, which I got the attention of the people that own Pokemon. Sure did.

01:43:54 - Richard Campbell (Host)
So Nintendo is well known for vociferously protecting their brands. I don't think they have a case, not?

01:44:00 - Paul Thurrott (Host)
because it really I mean a great question. I don't look at this and think Pokemon, if that helps.

01:44:05 - Richard Campbell (Host)
I mean I you know I, but the bottom line is you're capturing critters into eggs and I'm pretty sure, that's the one way, daughter.

01:44:12 - Paul Thurrott (Host)
My daughter heard a thing called a squish mallow. Are you familiar?

01:44:16 - Leo Laporte (Host)
with that hot right now, the squish mallows.

01:44:18 - Paul Thurrott (Host)
Yeah, so what this thing looks like to me are squish mallows guns which would be better. I think the squish mallow guy should be upset.

01:44:29 - Richard Campbell (Host)
I would not want to be going up against Nintendo for this. They do not have a sense of humor in this area whatsoever.

01:44:36 - Paul Thurrott (Host)
They're going to they'll.

01:44:37 - Richard Campbell (Host)
they'll drag this out as long, forever, It'll be the best and, more importantly, it's a Japanese company. Yeah, they don't even get to Japanese companies, so they it's not going to make international news. Nobody's coming to their defense. They're going to. It's going to be done very Japanese. So I'm pretty sure somebody commits sepacube before this is over.

01:44:57 - Leo Laporte (Host)
Rob bot in our discord is pointing out that Nintendo has not yet sued, so maybe they're just rattling their ruffling.

01:45:04 - Richard Campbell (Host)
They're fighting their time, Ready to pounce.

01:45:08 - Leo Laporte (Host)
Oh boy, yeah, all right, coming up back the book time. I know you look forward to that, including a lovely new brown looker pick of the week I'm in the UK.

01:45:20 - Richard Campbell (Host)
What did you think I did?

01:45:21 - Leo Laporte (Host)
today. Yeah, you're listening and watching, I hope, windows weekly with Paul Theron and Richard Campbell. Let's kick off the back of the book with your tip of the week, paul. Don't say another browser, if you will please, I beg of you. I just getting set with arc. I'm just getting used to arc.

01:45:43 - Paul Thurrott (Host)
I love arc. Fortunately there is another browser in here, but you know I think you're going to be okay with it. Okay, so, man, none of these are directly related to Microsoft or Windows per se, although one of them is sort of, but I think these are all kind of important and they're all related to things we've discussed recently. So the tip is if you have a, does note, that's not it. The tip is we've been talking about past keys, and past keys are fantastic, but they're also very hard to use.

01:46:07
Google has been very aggressive pushing these, and they've added on pixel first, but it's coming to every supported platform for this, to their Google password manager. Well, now, in the same way that they scan your accounts to see if any are showing up on the dark web or whatever, they're scanning your accounts to see if any of them are for past keys that you're not using and if they if they they're they actually put links in there and you click on it and it goes to the webpage for the, the exact webpage for that service, where you can add the past key to your computer or the phone or whatever. In this case it's phone. So for the first set, it's just pixel devices, all supported pixel devices, you have to be using the Google password manager, obviously not a third party. It's not a bad service, it's a good idea.

01:46:50
I was looking at it, say, on my pixel very interesting. It kind of takes the some of the difficult stuff away, I think you know. So that's, that's neat. It's going to come to more devices, meaning Chromebooks or PCs with Chrome, et cetera. So if you are in that sphere where you're using the Google password manager, I think this is I'm not saying this is going to put past keys over the top, but I think this is a good step to kind of help them become more more common. I guess for people and they're also working with big brands to make sure everyone's doing past keys. So you know good for them for doing that work I've started. I mean, they're evil in every other way.

01:47:31 - Leo Laporte (Host)
But I have started using past keys with your favorite browser, arc and Bitward yeah, and you know I use a bitward in past keys and it's been working great. I'm really starting to like it. It's two factor for most of my accounts, so I still log in with a password and then it'll say okay, what's your past key? Github does it that way and I feel like this is a. This is a nice, I think.

01:47:54 - Paul Thurrott (Host)
By the way, whatever it's worth, I think GitHub actually has the best past key implementation I've ever seen. Yeah, I mean for consumers. Honestly, the way Chrome does it is really good. And Chrome also does the thing automatically now in Windows, where it says hey, do you want to use Windows Hello to authenticate everything? You're like yep, and then it becomes totally same. It's really nice. So that works, yeah, so that's interesting. I think the no, I don't think. I know that.

01:48:17
The advantage of putting a past key in a password manager is that it makes them portable. Technically, you're supposed to have a different past key on every single device, right? But because the password manager is, in effect, your device and it has its own encrypted storage, et cetera, et cetera, you can make one past key for one online account and then use it everywhere, just by signing into the password manager. So that's, you know that? That too, I think, helps to make this stuff easier. I was talking to someone from a company, I can't say yet, but I was, you know, we were kind of. I was saying you know, what's needed here is this there's no standard for this, so we need a standard for past key portability. And he was like wink, wink, yep, we know.

01:48:58 - Richard Campbell (Host)
So one would speculate that it would be everyone's best interest to work on such a thing Exactly.

01:49:03 - Paul Thurrott (Host)
And if only there was like an industry organizer oh there is, so yeah, so there, anyway, people are working on it, good people, et cetera. So, anyway, just know that that's happening, so that's good, and then a couple of app picks in a way. One is one of the problems when you go from like Windows or the Mac to a like, say, linux or Chromebook is that you lose your ability to do that seamless sync of like OneDrive or Google Drive or whatever you're using. Well, google Drive works on Chromebook, but the ability to kind of do that. I want to sync this folder and have it offline and have it sync automatically when I change things, yada, yada, yada.

01:49:37
And there's always been 30 third party services that do this, and I actually I haven't looked at this a long time, but last week I looked at in sync, not the band to me, yeah, because a it works cross platform, but it also supports multiple accounts. So for some reason you had, you know, you have like a Microsoft 365 family account and you have multiple accounts, but usually like one account to store this and one account to store this, because they all get a tariff by the storage. This is a way to put all those accounts on the same PC at the same time and do that kind of sync features. That's kind of cool. The one major missing feature is they don't have the files on demand functionality right. You have to sync a folder or not. You can't just arbitrarily browse your entire cloud storage and then selectively sync stuff from there. You have to choose ahead of time which folder or folders are syncing. So for most people that's not a big issue and, honestly, the performance and reliability is really really good. It's cool, yeah, and I just not ironically but coincidentally, because we just talked about ARC.

01:50:40
Arc used to have a mobile app on iPhone only it was like kind of a companion app, kind of a goofy. No one really knew what it was. That's been recast as ARC search, although in the future it's just going to become ARC mobile, right, and it will be on Android as well, but for now it's just iPhone and it's their take on search and it's basically just a. It's vaguely open AI slash, anthropic based AI that does you know browser things like you could type in an address and it will go to that address. But if you type in a question like who's going to win the Super Bowl or you know whatever the question might be, it will use AI and do that summary thing and, as is the case with ARC proper, which, again, this will soon be part of, there are certain people will look at this and speak confused because it is confusing. And it doesn't work.

01:51:30
Yeah, Well, it doesn't. First of all, it doesn't work properly, unless you make it the default browser which is really weird, Because it's really it feels more like a chat GBT client really. If you, yeah, if you, well, you can, okay, but you can do things like, like I said, you can, just you can. Windows podcast, right? Well, it's. That was probably. That's probably going to summer. Now it's this browser for me.

01:51:53 - Leo Laporte (Host)
And so it's reading six web pages, including all of the ones. So here's the details. Look is a nice picture, host, schedule, listening options. So it doesn't bring up a web page, it brings up a summer. You have to type, you have to type in a URL. Now I can go down and say see the results, the search. So it's really, it's the. It's what Google's doing in space with the knowledge graph right when, when you do a Google search for shoes, you get a lot of information.

01:52:24 - Paul Thurrott (Host)
But it's just like you see, like I'm looking for product reviews, that says customers say dot dot, dot.

01:52:30 - Leo Laporte (Host)
You know I really I have to say. I am with you, though, and here's all the links. I'm really I'm with you on the fact that these the browser company of New York which is, I know, I don't even think they're in New York, but anyway they are really interesting.

01:52:47 - Paul Thurrott (Host)
They watch the video from them, where they literally traveled to New York, to, to we're visiting. I'm like wait, I thought you were from New York, no.

01:52:54 - Leo Laporte (Host)
I think they're from England. Anyway, right, they're probably from all over. I think it's very interesting, and even the search thing is kind of interesting. I agree with you.

01:53:03 - Richard Campbell (Host)
I'll look at it with you with the data Well here's here's what's happening. More importantly I wonder how they're going to make money, because they are not charging a thing for this stuff.

01:53:15 - Paul Thurrott (Host)
So far, yeah, not yet. I mean they probably will. Right, I'd pay for it.

01:53:19 - Leo Laporte (Host)
I stuff with this, honestly, this browser is far superior when you look at.

01:53:24 - Paul Thurrott (Host)
You look at a company like Google and say you know, we got to break this monopoly. They dominate search, they've got all this ad and tracking stuff going on. Like how do we do that, you know? And then you look at the competition that has shown up and it's Microsoft with Edge doing exactly the same thing. Or like a company like Brave is the browser is exactly the same, but they're more private, more secure, but they have their own little goofy business model. But it's not going to change the world, you know. And you're like, well, nothing changes, right. And then you look at ARC and you're like, okay, I'm not saying they're going to succeed, I'm literally not saying that. But you know what? This is different. And if this does succeed, the web as we know it becomes a different thing.

01:54:02 - Leo Laporte (Host)
Look, at this. This is an example that's exciting. Here's our discord chat and somebody put a link in there because ARC is my default browser. When I click it, it doesn't open the browser, it opens this mini ARC window, without leaving discord, which I can use to surf, and then when I close it, I'm back. I just little things like that, really.

01:54:22 - Paul Thurrott (Host)
I know, I, I know, I'm just fascinated by it. I wish my problem is I don't use a Mac and an iPhone. It's better on the Mac, I don't know, you know I yep and I it's by the way it's, it's actually it is pretty full feature to win, as I'm not, but I don't really and even the iPhone app is not there really, right.

01:54:42 - Leo Laporte (Host)
And it's never going to be Linux Cause, as you said, it was written in Swift and that's not a practical there's no way to bring it to well, there's, there's ways, but I wouldn't Um, you know that's a lot of resources and the windows is goofy.

01:54:55 - Paul Thurrott (Host)
I mean that's still. It's still a little go, but it does sink the account.

01:54:59 - Leo Laporte (Host)
So when I set it up I love that. That was a big feature for me of Chrome and Firefox is that's account sinking, and I need cross platform you know so. I feel like it's fascinating. I appreciate you turning me onto this, and I'm starting to use it on the on the iPhone, as the default browser.

01:55:14 - Paul Thurrott (Host)
These things usually go poorly for me, so I'm super happy to hear that Um well, I'll yell at you later when I uh, yep, You're like I use this.

01:55:24 - Leo Laporte (Host)
I can read all my dirt.

01:55:27 - Paul Thurrott (Host)
I'm just, I'm just asking questions. I think it's what we say.

01:55:31 - Leo Laporte (Host)
Uh, people, people tell me that arcs a great browser. I've heard one of the things I like about um. People say the idea I know what they're doing on on on the iPhone makes sense, cause Safari and all the other browsers are just like little browsers on your phone. But really, when you open a browser on a phone, it isn't so much that you want to go to a webpage, usually you know you want, you want to get some information, and so I think this kind of makes sense.

01:55:59
Yep, I agree, and you can still go to a webpage. It's not, it's the, the the.

01:56:03 - Paul Thurrott (Host)
The hurdle they have aside from the fact that they're a small company no one's ever heard of, is that we are. We are now so many years. I mean the web is almost 30 years old. The, the iPhone, is what. 16 was that? Whatever that number is, 17 years old is here. We have memory, we have we do things a certain way and that doesn't mean it's the best way, it doesn't mean anything. We, we're very much used to the status quo, you know. Yeah, so they got to overcome that.

01:56:29 - Richard Campbell (Host)
Well, the bigger problem here is they're making a product that every other company gives away for free.

01:56:34 - Leo Laporte (Host)
Yes, Well, maybe that's their strategy. Well, they, but they do it in a different way. Let's make you want it, and then you'll pay for it. Yes.

01:56:42 - Paul Thurrott (Host)
And then it gets insured and fired. And here we go again.

01:56:45 - Leo Laporte (Host)
Let me just try it. What's the weather in Petaluma? And then you have some choices, but I'm going to hit browse for me.

01:56:54 - Paul Thurrott (Host)
Yes, I think I. That's the name of the feature right Brows for me.

01:56:58 - Leo Laporte (Host)
Yeah, it's reading six, six web weather pages to give me the answer, right, and a weather map. You just still get the links if you want. It's got today's forecast. Yeah, tomorrow.

01:57:09 - Richard Campbell (Host)
It's definitely stripped all the fluff off.

01:57:11 - Leo Laporte (Host)
It's made a weather app out of this.

01:57:13 - Richard Campbell (Host)
Yeah.

01:57:13 - Paul Thurrott (Host)
Yeah, right, there you go.

01:57:15 - Richard Campbell (Host)
Moon face, sunrise, sunset, that's a beautiful.

01:57:17 - Paul Thurrott (Host)
that's a beautiful way to put it this is incredible. They've created a weather app on the fly. Yeah, they've created an app on the fly. That is very specific to what you just wanted right now.

01:57:25 - Richard Campbell (Host)
Yep, you know Hopefully information from those terrible weather sites. Whether Nazis over at weathercom never start coming but first watch this video of a flood Believe that it is snowing in Petaluma, but let me tell you something.

01:57:43 - Leo Laporte (Host)
We are getting an atmospheric river right now, so it's dumping out, yeah, yeah. So anyway, thank you, paul, I won't, I won't yell at you, for I'm so nervous about this, I'm actually really grateful Cause I had tried arc. I got the invitation very early, like May of last year, tried it and went well okay but why should I switch?

01:58:05 - Paul Thurrott (Host)
That's the hurdle I think most people try to like. You have to. You spend a little time and it's like okay, hold on a second.

01:58:11 - Leo Laporte (Host)
It's revolutionized my use of browsers. I mean it's incredible, that's fascinating yeah.

01:58:16 - Richard Campbell (Host)
Good, I'm sure you need to grab, do you like that? That's really cool.

01:58:19 - Leo Laporte (Host)
Yeah, yeah, richard Campbell, I think it's time for you to Hello. Hello, you're going to tell us about Ron as radio.

01:58:29 - Richard Campbell (Host)
Well, I had a great guest on this week. Maybe you heard of her Mary Jo Faux. Oh yay, who yeah?

01:58:37
You can't get her to come on this show, but I'm glad she, yeah. Yeah, I had her at a great time and in fact we were. This show was already in the can when she came on around over the holidays there. Nice Cause.

01:58:47
I really wanted to dig into what she's working on these days over directions on Microsoft, and the whole licensing conversation was a fascinating one. A big piece of directions on Microsoft's business is helping companies negotiate better license agreements for themselves, and so, like, buying stuff from Microsoft is not a trivial problem and really well as much as they're interested in you buying services from them. Just this basic concept of do you know what licenses you have Now, do you know what licenses you use and what areas of growth are you going to have, and just sort of build out the landscape of your license utilization, because it gives you room to negotiate. You know you may have bought a committed to a set of licenses for a particular product that did a rollout that didn't go anywhere, and now you know you can almost claw that money back. So there's a way to maneuver here that you don't pay after a certain size. You just don't pay a rack rate for stuff, and so it's well worth spending several days and you know, I have talked to folks that are involved in the licensing for their company and it's like it's a week of getting information together to really be able to sit down and negotiate with the licensors and say, okay, we, this is what we did last year, here's how it actually went, here's what we're looking at next year.

02:00:07
Here's how I want to move things around. Like let's get to a fair number and it was fun to not hide from licensing. Like the most common conversation on run is radio is like listen, I'm no licensing expert, but this was a case where it's like well, let's, let's talk about how you really take licensing on and ahead, because it's the bottom line piece. This is the probably the largest single line item in a sysadmins budget is the software licenses for the company, even more than the hardware. So it was great to just nail that down and pound on it for a while. It's been a good half hour.

02:00:42 - Leo Laporte (Host)
Nice, yeah, really good. All right, what's your drinking?

02:00:47 - Richard Campbell (Host)
What am I drinking? So I mean, I'm in London, yeah. So I had to drop by the Whiskey Exchange, which is a lovely place just up in Coving Garden. I walked up there and I thought you know, I'm going to go get a whiskey that you probably can only find in the UK and the Florin Fonda bottles are great for that and this particular one is Daluin. Now there's a lot more letters in the name than what you actually pronounce. The I disappears Like Whister Massachusetts. Now you in the Daluin 16. Now this is a whiskey you've never heard of because it has no marketed brand.

02:01:24
But it's a very old distillery. It was built in the 1850s. William McKenzie stood it up in the space side, abelur. This went back then. It was a single set of stills and so forth. Today it's only up to three wash and three spirit. Although they're big no Pete in there, they're probably all their space side. They do most of their aging in sherry casks and those early days in the 1800s.

02:01:49
They were built right on the train line and they're kind of famous for all of their supply came and went by train. They had a major fire in 1950 that totally burned them down. And then a group of famous distillers Buchanan, walker, dewar's all came together to rebuild it because it was actually kind of an important distillery, and in fact those are the folks that merged into a company eventually known as the Distillers Company, with a bunch of others in 1925. The Distillers Company was running it and that of course became United Distillers, which eventually becomes the Azure. We've heard this story before and the Walker in that joint operation that took them over in 1915 is John Walker, as in Johnny Walker.

02:02:35 - Paul Thurrott (Host)
A little Johnny Walker.

02:02:36 - Richard Campbell (Host)
A little Johnny Walker, right, and that's where most of their whiskey goes. This is a place that makes five million liters of whiskey a year and you don't know who they are. They've never been a marketed product in the 170 years that they've operated and they've always operated. Even when they burned down they did their processing elsewhere until they had operations back up and running again. So I mean, johnny Walker was a man. He's from the 1800s we talked about this in the Mortlock show too, right. He initially was blending whiskey from distilleries and over time he bought up all the distilleries and he got control of the Dalhuan, along with the others in 1915. At that time he also owned Clienish, cardew, colburn, talisker and Mortlock. And this is what he was making Johnny Walker from back in the day. And then when the United Distillers and ultimately Diageo forms up in 1997, they haven't even larger package. But even before that happened, when it was United Distillers in 91, they put out I mean, knowing that almost all of their whiskey was going into Johnny Walker but they had barrelmen who were saying like there's some really good barrels here, we should bottle them. And so in 91, united Distillers produced a line of whiskeys all in the same style bottles. This is a conventional whiskey bottle with a little swole neck but otherwise a standard shaped bottle and a yellow label, and they made 26 of them in their first edition in 1991, of which this is one of them. This is actually a 91 edition of the Dalhuan 16.

02:04:13
Some of these became wildly famous and are impossible to find. The Rosebanks hard to come by. The Mortlock if you can find one, is $800. These all initially came out at 30 pounds. This one today was 55 pounds, so it's gone up a bit, but not terribly. They didn't call it Florin Fano. It was actually a whiskey writer named Michael Jackson, no relation, who wrote that day. He called it Florin Fano, but it's one of those things where the name just stuck and so they've done additional releases since then. It was a 91, it was a 97, it was 2001. And it's very apparently hip in the whiskey business if the whiskey collector business to try and have one of every one of the Florin Fano's. It wasn't a big deal back in the 90s, but the day to find them all is pretty tough and the price range is, like I said, dramatic.

02:05:08
I am not a whiskey collector, I am a whiskey drinker and this drinks brilliantly. It is a classic sherry space side. Little hints of citrus up front, little bit of shock on the tongue but goes very buttery. Just a glass of caramel that warms you up as it goes down and you'll notice. I got this bottle this afternoon. I had a couple of friends visiting. I was writing it up it's almost done and enough that they said you know, we're going to go to the whiskey exchange and bring a different one back for tomorrow. As you fed us, this is hard to come by outside of the UK. It does not have an export stamp on it. This is for the UK stamp, this is not an export stamp and that's how the Florin Fano really originally intended. That being said, if you go to a specialist whiskey place and I can think of a couple in San Francisco I have frequented over the years you will occasionally find these Florin bottle flora bottlings for entirely too much and you don't know who they're made. You don't know them, they're not a well-known brand, but some of them and this is one of them is outstanding.

02:06:26
I've talked about unicorn whiskies. That whiskey you taste once and you'll never taste it again. My very first unicorn, the one that I realized the concept of a unicorn was a Dalian. It was in 1972. It was 30 years old. It was put in the bottle. I found it in a little whiskey shop. I found it in a bar in Edinburgh where they were selling McKellen 12 for four pounds and here was one that was listed for like 25. And I'm like what the hell do you pay for 25 pounds for? And I had a taste of it and it changed my life. And then when I researched it further, I realized there were only 250 of those bottles ever made. You would taste it, something you will never taste again. Never taste again. That's pretty cool. And so, besides the flora and fauna bottling, there are several other custom ball o'ings of Dalian. They have Gordon and McPhail those kinds of bottlers. Every so often they'll score a barrel, but if you really want to taste this whiskey, most of the time you'll taste it in Johnny Walker Blue.

02:07:32 - Leo Laporte (Host)
The Dalian, which means the green veil, and it's beautiful.

02:07:36 - Richard Campbell (Host)
Yeah, I want to live there. It's beautiful. It's a proper space side, in some ways more honest than most right. It really was made for the Scottish market. Most of these you mostly see these whiskeys drank beside a pint of beer in a nice Scottish pub.

02:07:56 - Leo Laporte (Host)
It might be worth a trip to Scotland just for that.

02:07:59 - Richard Campbell (Host)
Yeah, Well, you know you usually do those cruise things, but I know we could actually have a whiskey tour.

02:08:04 - Leo Laporte (Host)
You know I have Scottish heritage. I should really spend a little time. I've been there years ago as a kid but I'm one of those Campbell's. My grandfather was a Dunlop, gordon Dunlop. My middle name is Gordon from him, so I have every right to go there and wear it.

02:08:23 - Richard Campbell (Host)
Where to dress. Well, I would. I'd recommend we get some rooms at the Kregolachi. We spent some time in the quay.

02:08:30 - Leo Laporte (Host)
Oh, it'd be so much fun.

02:08:31 - Richard Campbell (Host)
We'd taste a few unusuals, and then we'd go see where they're made.

02:08:34 - Leo Laporte (Host)
Paul, you want to. Are you in? I've been wanting to do this trip for years. Sounds wonderful. Sounds wonderful. Richard, you probably could make some money if you put together a package tour for brought a dozen of us yeah Down a few.

02:08:49 - Richard Campbell (Host)
Oh you have done it. Oh, all right, All right, yeah, yeah, I've been buying whiskey for unusual people over the years. Some names you may know, but I prefer not to be named, Mostly because I take the time to go get the specials. You know, go visit the distillery and talk to the distillery and be able to pull up cool bottles out. But if we, the quay is one of those very dangerous places. It's wooden floor, wall ceilings, potbelly, stove on the side, one side big heavy drapes overlooking the Spay River, big overstuffed chairs. The owners, the spaniels, are there for some scritches oh how fun. And every single whiskey you've ever heard of and many you haven't heard of on the walls ready to go. And I think I got to wrap up there.

02:09:38 - Leo Laporte (Host)
They're in the room now here comes another bottle, bring in the dally rain. Mr Richard Campbell is at runasradiorunasradiocomnetrox and he's in the UK, back in BC next week, or you've got a. I'll be in New Zealand next week.

02:09:55 - Richard Campbell (Host)
Oh my goodness, the tour begins.

02:09:57 - Leo Laporte (Host)
You know how you do, yeah, have a wonderful trip, incredible. Mr Paul Therat will be in. You'll be in Mexico City next week, I think.

02:10:04 - Paul Thurrott (Host)
And yes.

02:10:05 - Leo Laporte (Host)
I will, yeah, so we go international next week. Paul Therat, of course, is always available everywhere in the world at theratcom, t-h-u-r-r-o-t-tcom, and become a premier member, and that way you'll get all sorts of good stuff. He also has his books at leanpubcom, including Windows Everywhere and the Field Guide to Windows 11. And together they are the Windows Weekly Team. Every Wednesday, 11 am Pacific, 2 pm Eastern, 1900 UTC, we gather together to talk about Windows and Microsoft and AI and Brown liquor and all of that. I hope you will join us. You can watch live. I mean, it's not the best way to watch because you have to be here at that time, but if you are, we stream it on YouTube. Youtubecom, slash twit. You can, of course, if you're a club twit member, you can live in the discord and you can watch the streams as they continue all day long. In fact, if you're not a club twit member, please consider joining twittv slash club twit. I think today's the last day for our twit survey If you haven't done it yet. We want to get everybody who is, you know, listens to all the different shows or any individual show. We want to make sure you're all well represented. So we need all the Windows Weekly cohort to go to twittv slash survey 24 to take that survey. You can get the show on the website while you're there. Twittv slash ww.

02:11:27
There's a Windows Weekly YouTube channel dedicated to Windows Weekly. Great way to share clips. But of course the easiest way would be to subscribe in your favorite podcast client. That way you'll get it automatically as soon as we wrap up and put it out the window. Thank you, paul, thank you Richard. Have a wonderful week. Safe travels to both of you. We'll see you next time on Windows Weekly.