My Dinner With Microsoft Exec Jim Allchin

Jim Allchin
Microsoft co-president of Platforms, Products and Services Division, Jim Allchin

Last Night Jim Allchin, co-president of Microsoft’s Platforms, Products and Services Division met with a small group of bloggers and technologists here in San Francisco for dinner. The purpose of the dinner was to have an open and broad general discussion about Microsoft, their products and strategies, and general issues in software and technology today. Jim had met with a few of us back in April of last year for a similar meeting while down in San Francisco. Robert Scoble arranged the dinner along with Microsoft’s PR Firm Waggener Edstrom. In addition to Allchin, in attendance at last night’s dinner were: Neil Charney, Microsoft’s Senior Director of Windows Client Communications, Jim’s new Technical Assistant Jason Garms along with Linda O’Neill from Waggener Edstrom. Guests of the dinner in addition to myself were: John Tokash from Homestead Technologies, Beth Goza from Second Life, Tony Gentile from Healthline.com, Tara Hunt from Riya, Chris Messina from Flock, Phillip Torrone from MakeZine and Mena Trott from Six Apart.

First off, I have to say again, like the dinner last April, it is very cool that Microsoft is willing to open up senior management to bloggers. Whether because of Scoble or Waggener Edstrom or whatever, Microsoft gets blogging — really like no other big company out there. Not only does Microsoft have more employee bloggers than any other company, but I have found the employees at Microsoft and their PR firm Waggener Edstrom very accessible. Whether having lunch with Sean Alexander of Microsoft’s Windows Digital Media Division at CES, or trading emails with Charlie Owen and Matt Goyer on the Media Center Team (as well as “awesome guys” GM of IT Strategy Bill Koefoed and GM and head of business development in IW Sam Kamel) or chatting with Robert Scoble at one of his many geek dinners, there is a receptiveness and willingness to embrace bloggers outside their company that you just really don’t see from most big public technology companies. Jim had spent the earlier part of his day meeting with mainstream press and it was great that he was able to find the time in his schedule to meet with us over dinner as well.

Although I get that this dinner was set up for a reason (certainly Microsoft hopes to benefit from all of us writing about their products, etc.), this is smart strategy on their part. Similar to April’s meeting Jim was surprisingly candid in talking with us.

So what did we talk about? Most of my questions as you’d expect revolved around Media Center and Microsoft’s plans and strategies for digital media.

I asked Jim about the recent CableLabs certification of the Vista platform. Opening up Media Center to premium HDTV content through CableCARD technology and DirecTV is very exciting — and critical, in my opinion, to Media Center’s success in 2006-2007. HDTV was far and above the major overriding theme at CES this year. HDTVs are hot and it is important that Microsoft’s Media Center PCs be able to support this growing demand. Although as a platform Vista has been approved by CableLabs at this point, an important step that will still be necessary for the PC/CableCARD reality is CableLab’s approval for finshed individual OEM PCs as well. Although Vista has been approved, OEMs will in fact still need to get their individual machines certified by CableLabs as well. Central to this certification according to Jim is the idea of a “protective path.”

Getting something approved through CableLabs is no easy task and this will very much favor the larger OEMs who have the funds, resources and clout to get this done. Jim said to expect to see the CableLabs approved PCs out from the big guys first but reiterated his commitment to smaller OEMs in fighting for them to also get their machines CableLabs approved as well. Jim said that Microsoft would fight clawing and scratching for these smaller OEMs. It will be interesting to see between now and Fall what that will mean. What it means for you as a consumer though is definitely do *not* think that you can just buy any old Media Center PC today and then upgrade it for CableCARD support in the Fall when Vista ships. The entire PC will need to be certified and this is what I’m waiting for before I buy mine. I’ll probably buy a high powered Dell when they have one out and would expect as a large OEM that they would have one of the first CableLabs approved PCs to market.

Tara Hunt
Riya’s Tara Hunt

I also talked with Jim about Windows Media Player. Last April I complained to Jim at our meeting about how slow Media Center handled large digital media libraries. This of course has more to do with Windows Media Player than anything. As I’ve reported previously, Jim also confirmed that we should expect to see dramatic performance improvements for large digital libraries in Vista and Windows Media Player 11 (can I get a “hot donkey” please!).

I also asked Jim if Microsoft would be releasing a standalone version of Windows Media Player 11 for people with XP and he said that they would. Although it may not have all of the features as the player shipped with Vista and although Vista is the priority right now, Jim said that we could expect an XP version of the popular player down the road as well.

Phillip Torrone
MakeZine’s Phillip Torrone

Another question that I had for Jim had to do with business strategy as it relates to the XBox 360. It has been rumored that Microsoft loses money on the hardware side of the equation with XBox because they sell the boxes for less than it costs them to make them. The idea has been that they then make up the difference by selling game titles. Jim said that although this may have been the case in the past that this will not be the case with XBox 360. Jim explained that when looking at XBox 360 you have to keep in mind that Microso
ft does not look at the cost to build the machine at today’s price only but over the life of the machine the costs to build it will drop considerably. In other words, to oversimplify, Microsoft makes the least money on their first XBox sold and the most money on their last XBox sold. Over the life of the product XBox 360 will in fact be profitable on a standalone hardware basis Allchin confirmed. Of course Microsoft still will make money on the games and Microsoft live type add on things that we will buy, but they will also make money on Xbox 360 units that are not used as gaming machines but solely by non-gamers as Media Center extender units.

I asked Jim about whether or not I will be able to copy new high def shows that I record on my Media Center PC over to my laptop or not. At present I copy a lot of the shows that Media Center records for me over to my laptop (which is my portable media device) for remote viewing. I have been concerned that with the DRM coming up in Vista that I would lose the ability to transfer some of my shows over to my laptop. Jim did in fact confirm that I might not be able to transfer shows to my laptop and said that with regards to the DRM associated with Vista that Microsoft would in fact honor whatever restrictions that the content holders decided to put on this content. This is disappointing to me of course as it means that I will probably lose my ability to transfer my shows for my on the road viewing. I would hope that in the future Microsoft could get a laptop to a point where it could be secure enough as an approved device to transfer copy restricted content over to it.

This brought up a whole larger conversation with the group about DRM, which all of us seemed to dislike, although some of us saw as a necessary evil. Tara Hunt expressed that she thought Microsoft should be doing more with respect to DRM in fighting Hollywood — that this should be their fight. Most all of us expressed frustration over problems and inabilities to transfer our media between devices, lost media due to proprietary formats, etc. While Jim sympathized (he does own an iPod by the way) he did point a lot of the blame of the interoperability issues at Apple Computer and Steve Jobs. While this is what you’d expect a Microsoft executive to say, in this case I happen to strongly agree with him. I have never purchased a single iTune and I will never purchase a single iTune as long as Apple keeps their format proprietary.

It frustrates me to no end that more people are not upset with Apple’s behavior. While I can certainly see where they have a right to make a profit, they have sold *so* many iPods at this point and made *so* much money, it does seem to me that opening up their format to other players would be the right thing to do. I still purchase all of my CDs directly and then rip the music at home so that I can have high bit rate, crystal clear, DRM free mp3 tracks. At present I don’t have a single song with toxic DRM polluting my digital library. I don’t own any iTunes and I think I was the only one of all of the guests last night who did not own an iPod.

We talked a bit about Vista’s features for your pictures. Vista will ship with a whole suite of super cool new features for all of us photobugs. In addition to some slick new slide shows that Microsoft demoed, you will be able to do much of the basic photo editing directly from the OS. This to me would seem well positioned to take a bite out of Adobe’s business as well as compete with free editing software similar to Google’s Picasa. One of the feature advantages that Microsoft will have with Vista though will be that even as you edit your photos (which you can see take place live right in the Windows Explorer folder) a preserved backup original copy of the image will be kept on your PC. This way if you edit a photo and then decide later that you want that photo back you can go back and get it. This will happen automatically and is a great feature for them to build into the OS.

You will of course also be able to tag photos quickly and easily in Vista. Jim said that this information will sit in the EXIF data field on the photo. This will be helpful and I hope that Flickr and others put a feature in place to automatically read the EXIF tag data that people enter in with Vista so that when you upload your photos to Flickr they are automaticly tagged. I asked Jim about whether Microsoft planned to do anything grand in the photo sharing space like Flickr and he said that they had some features in MSN Spaces and Messenger but that they did not have any plans right now to do anything in a larger context like Flickr. It would be nice of course to see a Media Center plug in for Flickr and I do suspect that we see something like that at some point.

Jim also demoed a lot of the new security features associated with Vista. While my interests are squarely in the eye candy digital media type stuff, Microsoft is probably focused most of all on this area of computing. As Neil Charney reminded us, “the happy internet playground is no longer so happy.”

Neil Charney
Microsoft’s Neil Charney

Tara Hunt said that every time she visits her dad she has to uninstall IE and reinstall Firefox to keep his machine clean. I do the same thing for my parents. Maybe this coming Christmas though I’ll be uninstalling Firefox and reinstalling IE back on. In addition to all the fancy stuff coming in IE (tabbed browsing, etc.), Microsoft showed us a new feature service part of IE where Microsoft will begin analyzing internet sites. In Vista a user will be able to opt in to turn on an anti-phishing feature and they will be warned if they try to go to a phishing site (as determined by Microsoft) on a full page browser display. Users will have the ability to both report phishing sites as well as report false positives from this screen. Microsoft then has committed to hiring a staff of Microsoft employed analysts who will review the sites submitted to determine if they are phishing sites or not to keep these sites updated. This is an expensive, time consuming and burdensome process, but a super important one and it points to the fact that Microsoft is taking safety and security very, very seriously.

Microsoft also showed us some of their new parental controls in Vista. They are pretty advanced and include more advanced features than just what sites kids can go to — they also include what rating of games your kids can play, what hours they can be on the PC, etc. They also have a monitor your child type feature (remember trust, but verify) which will let you keep track of what your child is doing on the PC. Although this was one of the most comprehensive parental control packages I’ve seen (and with four young kids I like this), I do think that the monitor feature still needs improvement and should include a feature that takes a screen shot of your child’s computer ever 5 seconds or so to allow you to actually go back later and see what was on their screen. There is simple keystroke capture software that does this today and I would not think this would be a very difficult feature for Microsoft to build in to their monitoring package.

All in all we got a lot of good information from Jim again and I have to say thanks to Robert Scoble and Waggener Edstrom for putting this dinner together. It is great to stay on top of what Microsoft is doing and to be able to meet with Senior Management who can perhaps best clarify some of the most important issues around their business today.

Chris Messina
>Flock’s Chris Messina

After dinner I went out for drinks with Tara Hunt and Chris Messina and we talked a lot about Riya, Flock and what they are up to as well. Riya is still in alpha and they have currently taken it offline while they do some significant performance improvements. It should be back up soon and I’m looking forward to testing it. Flock seems to be one of the more interesting things going on in the browser space today. According to Chris they’ve had about 350,000 downloads of the browser software so far. I did try Flock a while back, but as I tend to get frustrated super quickly I abandoned it soon after receiving a few errors. The software is in beta of course, so these errors are understandable. I plan to reinstall Flock shortly and will to write up something more comprehensive on it.

Update: For more on the dinner be sure and check out John Tokash’s take, Chris Messina’s part one article, and Tara Hunt’s post on the evening.

Also, Microsoft’s Sean Alexander clarifies a bit on the CableCARD PC vs. the DirecTV HDTV option. It sounds like although you will not be able to upgrade your existing or home built Media Center PCs to CableCARD HDTV machines, you may in fact be able to do this with DirecTV.

From Sean: “Jim confirmed that in order to get HDTV over digital cable in a Windows Vista PC, you’ll have to buy a PC system that has been “certified” by CableLabs. Unfortunately there’s nothing Microsoft could do here – they must honor the wishes of CableLabs. I’ve been fortunate to be one of those who has been testing the technology and I have to say it’s fantastic. I’ve done A/B switching tests vs. my Comcast set-top DVR and see no difference in image quality, despite the fact that the tuner is a simple USB-based box (RNDIS) that you just plug your cable (and cable card) into and go. No news on whether free and clear QAM services will require a CableLabs certified system but I will check. I suspect local channels in HD may still be an often from after-market or home grown builders. In order to get your premium channels DVR’d you’ll need that CableCard-qualified system and CableCard installed by your local cable operator.

Also news at CES was the DirecTV Media Center announcement. In the future (timing wasn’t discussed), you’ll be able to have an installer come out and install a DirecTV tuner into your Media Center PC and get your local channels complete with DVR. As many know, DirecTV uses their own protection scheme with a “conditional access card” not unlike a cablecard. The big difference here is that they recognize the value in offering an after-market system installed by their own installers. In the past, it was DirecTV that was considered “evil” for their use of DRM and protecting their assets too stringently vs. Cable. Could the shoe be on the other foot? Only time will tell.”

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17 Comments

  1. Bryan "accident" Socha says:

    I may comment again when I have more time to read the enire post but I see the interesting you need to buy a new vista media center for cablecard. I will NOT support any cable company in my area and wasn’t even slightly excited about cablecard support.

    Now with that said, directv is not cable and not cablecard support. was the directv question just not answered or did everyone get shocked that cablecard needs a new computer also and everyon forgot cablelabs has nothing to do with directv?

    If possible to email over a followup, I would love to know if a non-cable directv customer, do I need to buy a new overpriced pc just because its cablelabs approved?

  2. Bryan "accident" Socha says:

    I may comment again when I have more time to read the enire post but I see the interesting you need to buy a new vista media center for cablecard. I will NOT support any cable company in my area and wasn’t even slightly excited about cablecard support.

    Now with that said, directv is not cable and not cablecard support. was the directv question just not answered or did everyone get shocked that cablecard needs a new computer also and everyon forgot cablelabs has nothing to do with directv?

    If possible to email over a followup, I would love to know if a non-cable directv customer, do I need to buy a new overpriced pc just because its cablelabs approved?

  3. TD says:

    Thomas – Being this is Allchin’s last year, I wonder how much of the feedback he was given will actually make it back to Redmond and have anything happen or if this was more like a diplomatic mission and as you wrote a PR thing. Did anybody pose that question?

  4. Jay Ethridge says:

    I just had to respond to the comment about Apple’s DRM strategy. The idea the Apple has made enough money and should open it’s format is kind of funny. I think Microsoft has made plenty of money with Windows and I don’t see them “opening” up their communications protocols.

    They can’t seem to do it even after being successfully sued on two continents. As a person who would like free and open file sharing on a LAN I find that argument a little lame.

  5. TD: there were two other very powerful Microsoft people there at the dinner. So, don’t underestimate the feedback loop.

    Also, I interviewed the DRM team and they are very educated on the issues. Every single one of them has heard Cory Doctorow’s speech.

  6. Greg H says:

    Adding slideshows and photo editing features to the OS should be illegal. In fact, it probably is, as it is a monopolistic practice. MS is using their monopoly share to “take a bite out of Adobe” AND compete with FREE software like Picasa. We should be able to install these apps separately, but to make them part of the OS is just trying to put companies out of business. Plus, these features should not be part of the OS, they should be separate apps. The OS is not the place for such things.

    I see that you were pushing for even more features so they could get rid of Flickr as well. That’s nice.

    Also, photo editing inside windows explorer? I’m surprised by that, I just want explorer to manage my files. I can install or use a separate app for editing photos, this is just a silly, unnecessary “feature”.

    I also find your comments on parental controls interesting. They “should include a feature that takes a screen shot of your child’s computer ever 5 seconds or so”. Geesh! Are your children convicted criminals or something? Do they continually get abducted and tortured by internet predators, so you feel you just MUST do something to prevent this from occurring over and over? I would think that most people could raise their children well enough that such invasive monitoring was not necessary.

    And finally, what is the point of DRM on cable TV? I can record a tv show but not move it to my laptop? Why not? I just don’t see any reason for that.

  7. Hubert Kay says:

    Thomas – great work, really enjoyed reading this entry. Just one comment on a sentence you attributed to Tara:

    Tara Hunt expressed that she thought Microsoft should be doing more with respect to DRM in fighting Hollywood — that this should be their fight.

    I recall Economy 101: in a perfectly competitive marketplace, the suppliers will do their utmost to serve the every whim of their customers. That changes dramatically in a monopoly situation: a monopolist will do his utmost to serve the every whims of … other monopolists. That’s what you’re seeing here – both CableLabs and Microsoft are monopolies. They get along great, and Microsoft really does not see this as their fight. It’s just Economy 101 after all :-)

    Hubert

  8. Anonymous says:

    This is very lame. The very people who truly love MCE are going to be punished. These are the people who enjoy building their own HTPCs. This is not going to go over well on the avsforum for HTPCs.

  9. Anonymous says:

    Once again i find myself responding to absurd claims about Apple’s iTunes music files. First of all, they are NOT in a proprietary format as you claim. They are MP4 files, an INTERNATIONAL standard format which is playable on cell phones, the Sony PSP, iPods, computers. What is proprietaty is Apple’s DRM system. But guess what, Microsoft’s DRM is too.

    This may all seem like semantics, but they are important semantics. The difference between Apple and Microsoft is an issue of licensing. Microsoft will license their DRM, Apple will not.

    The ironic part of your argument is that both Microsoft’s encoding format and the DRM protecting it are proprietary. Thus Microsoft’s solution is LESS open and flexible than Apple’s.

    As another user pointed out, your logic is flawed when it comes to “opening up” Apple’s DRM. The mere fact that Apple is successful does not morally or legally obligate them to license their DRM to anyone.

    In fact, I am sure you are aware of the rumors that Microsoft is contemplating an entrance to the hardware side of portable music players. This is an acknowledgement of what Apple has long known. True customer loyalty and satisfaction comes from a complete end-to-end solution.

    In the Microsoft world now, you buy a player from one company, plug it into a computer made by another, purchase music from yet another company and download it to the device using software from yet another. This sort of flexibility undoubtedly has its appeals—to some. However, it is far too complicated of a chain with too many points of weakness to work for the mass market consumer.

    This is not a point that can be debated. If the WMA-based players were really better, cheaper and easier to use, why is the iPod so popular?

    Therein lies the fundamental flaw in your logic, you claim that Apple has been too successful, thus they are “obligated” in some way to leave their successful business strategy and instead adopt open that neither the consumer or board of directors would like. Yet at the same time Microsoft may leave the strategy you tout and adopt Apple’s.

    In the end I think all this debate stems from a bunch of Microsofties standing around scratching their head and wondering how the “little” and “unsuccessful” Apple and Google managed to make inroads on the Microsoft “monopoly.”

  10. Jman95 says:

    Not another Microsft rant from the apple fans? Apple makes you buy their hardware to use OSx and I hear no complaints, I don’t see apple opening the ipods to other file types either.

    Apple makes very little money on itunes at this point, but by making itunes only compatible with the ipod, their making a lot of money.

    Sorry, but when it comes to content, the media companies are the ones in charge, so Microsot and apple have to go along if they want to have content to sell.

  11. Anonymous says:

    Why are your pictures still so white-balance challenged? Maybe it’s somehow symbolic of the rose colored glasses you use to view the big evil corporation that builds software that doesn’t trust its users.

  12. wearedoomed says:

    Nice a**-sucking report – sounds like they sat around and had a nice circle jerk about how great copy protection (I refuse to use the words “DRM”) is. Does Hawk ever think critically about anything that is said to him or does he just accept everything at face value. Oh, and Scoble, the fact that the “DRM team” has “heard” Doctorow’s speech means nothing – actions not words, brother, actions not words.

  13. Thomas Hawk says:

    Hey, I’m no fan of DRM. Every song I own is DRM free mp3. But I don’t think you get premium HDTV without it. The content owners aren’t going to let it out without DRM and Microsoft is at the mercy of CableLabs and the satellite providers if they don’t provide DRM. So would I rather have only OTA HDTV without DRM (which is still an option by the way, nobody is forcing a Vista upgrade) or would I rather have premium HDTV with DRM, I’ll take premium HDTV with DRM.

    Now could Microsoft fight Hollywood and make a box that records pirated cable TV or something, maybe, but they’d probably lose in court. And of course I’m not oblivious to the fact that Microsoft makes money selling DRM to Hollywood and that it might not be in their economic interst to oppose it.

    I don’t like the DRM any more than you do but if you want the Sopranos and Six Feet Under in high def I’m afraid it’s not going to happen without it.

  14. wearedoomed says:

    Hawk;

    What makes you think that the consumer will never get “premium HD” without copy protection? The only people pushing that line are the people who, of course, have a vested interest in ensuring that it happens (i.e. Hollywood). But until the day that the legal copy protection mandate gets handed down from the USG, then the Hollywood hacks are simply bluffing their way into getting what they want. Your simple parroting of their party line merely makes it seem like you’ve already drank the Kool-Aid.

    This was the point I tried to make in my first post; MS is perhaps the only commercial entity that could actually battle Hollywood to a standstill over this issue. You had the opportunity to engage with relatively senior MS personnel about their actions re: copy protection, and you chose not to do so. Why not? I can only assume that, despite your protestations to the contrary, you must not be particularly bothered by copy protection technologies. If that’s your position, then fine – we’ll just agree to disagree on that particular point. But at least have the intellectual honesty to tell your readers that the Allchin post/interview is a PR fluff job arranged by Scoble (who is, by definition, merely a PR/marketing mouthpiece).

    And finally, please, please, please, stop it with the “poor old Microsoft is a just a pawn in this game” thing. That’s just downright offensive. In case you hadn’t realized it yet, MS is “…at the mercy of…” exactly nobody in this world, inlcuding the respective governments of the US and the EU.

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  16. Anonymous says:

    Well I work for a cable company. I wont say who but theres only a few so take your pick.

    I am a tech who fixes and installs services, There is no doubt that this technology will fall sqarely in my lap once released.

    With all of the quirkyness of digital cable I will have to make this work in many houses that are incorrectly wired cause the *TECHIES* out there *THINK* they know how a house should be wired for Video data and voice.
    I for one want strict standards on PCs using the cablecard 2.0 spec.

    I want the same software and same configurations to be employed to cut down on training costs alone. After all cable tech are not payed what computer techs are and never will be..

    UNLESS YOU WANT ALL YOUR CABLE BILLS TO GO UP TO PAY FOR THE INCREASED HOURLY RATES TECHS WILL DEMAND TO SUPPORT THIS.

    Before you spout BIG BAD CABLELABS.
    Put yourself in the shoes of the tech who has to come out to your house to fix your D.I.Y. HTPC.

    Ide rather have a boilerplate PC that can be networked or have additional HDs added to it to have unlimited storage for premium HD content.

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