Kurt's Thoughts

I thought this was a fascinating bubble chart done by the New York Times that really shows where our revenue is broken out and what direction it’s headed it. 

I think it’s most interesting that while Windows & Office (the bulk of our revenue) have continued to climb, their share of our overall revenue has fallen not because Windows & Office "haven’t kept up" but more because of the incredible growth of Server and Xbox revenue.

A couple interesting things are still on the horizon:

• Xbox 360 going to .65 nanometer processor masking in April
  This will drastically reduce the cost of the processor, the most expensive component of the Xbox 360.  Essentially processors are created on massive plates of silicon and going to a smaller trace size makes the processor smaller, allowing for more processors to be created per silicon plate, creating greater yields of processors for the same cost of production.  Additionally, the reduction in size reduces the heat dissipation from the processor itself making the consoles run cooler, and potentially reducing the cost of the cooling fan of the unit.
• Xbox 360 CPU/GPU convergence
  This merges the tri-core PowerPC processor with the ATI graphics processor cutting the cost of the processing units conceivably in half.  This is the trick that Sony used to drive costs of production down on the PS2, and the reason why PS2s are so cheap while still making money for Sony.  Taking a play from their playbook, we’re doing the same thing with this generation of consoles.
  Note:  This was something we COULDN’T DO with the original Xbox because we used an Intel Pentium processor and an nVidia graphics processor – neither of which, their licensors (Intel & nVidia) would provide the designs for to enable us to pursue such a CPU/GPU convergence strategy.
• Windows Vista Adoption, Office 2007 Adoption
  Obviously, neither product has been widely deployed however, unlike past revisions, these products serve at least 2 key needs that businesses really need to fill:
  – DESKTOP/LAPTOP SECURITY:
  Companies need to encrypt data, not just to protect their users & customers, but to COMPLY with goverment regulations like Gramm Leach Bliley, Sarbanes Oxley, and HIPAA.  In other words, business don’t have a choice:  In order to remain in business, they must comply with privacy and protection laws and the easiest and most readiliy available way to adhere to many of these provisions is to adopt Windows Vista for it’s drive encryption technology, aka BitLocker, its intrusion detection technology and managable audit facilities, etc.
  – AUTOMATED DOCUMENT GENERATION:
  A major trend in the computing industry is the autogeneration of documents.  This has been possible in Office before but it was fairly difficult (and proprietary) to accomplish, using Visual Basic for Applications, a rudimentary subset of Visual Basic.  With Office 2007, the new OfficeXML document format makes it much much easier to create, parse, and filter upon document content and because Office is now automated programmatically by the Visual Studio Tools for Office, which leverages the actual Visual Studio development suite, any professional developer can leverage Office to automate document creation through the very development practices that they use for standard Windows applications.