234: Microsoft Q4 Thoughts, Apple vs Square, Facebook & Google Crypto, 2021 US Retail, Global Coal, 101 Wireless, and Let's Make a Bowl
"I need fewer shallow-cynics"
The more disciplined your environment is, the less disciplined you need to be. Don't swim upstream.
🗣 I had a 1.5-hour long call with friend-of-the-show Cedric Chin (🇸🇬) yesterday.
It was great, we covered so many things, I almost wish we had recorded it as a podcast (but then we couldn’t release it because we also talked about some secret things 🤫).
He sent me this article, and I have to share a highlight:
“Ah yes,” he said, “in your system a dispute between businesses is resolved by attorneys paid by the hour representing each side, sometimes taking the dispute to the courts which normally takes months and accumulation of hourly attorney fees.”
“In Russia,” he continued, “disputes are usually resolved by common sense. If a dispute is about very significant money or property, then the two sides would typically send representatives to a dinner. Everyone attending arriving would be armed. Facing the possibility of a bloody, fatal outcome both sides always find a mutually agreeable solution. Fear provides the catalyst for common sense.”
Mafia reasoning. Bully logic.
The person cited is totally oblivious to the fact that this is a system where those who are stronger and/or better politically connected will always win out over those who are weaker and/or less connected, and where regular citizens have no real recourse against these people.
Whoever is singing the praises of this system as being “common sense” is surely on the winning side…
For more on just how corrupted Russia is, I recommend the book ‘Red Notice’ by Bill Browder. It’s a real page-turner. 📕
♠️♥️♣️♦️ Got this in the mail a couple days ago:
They feel great in the hand and look great up close. The gold foil is cooler in person than on the photos… (The Beatles one is a gift for my parents. Please don’t tell them 🤐)
I guess I’ve stumbled on a new ‘affordable luxury’ category ¯\_(ツ)_/¯
🎭 I always want more informed-skeptical people in my life.
I need fewer shallow-cynics, though…
📝 I don’t think I’ve filled my quota on Obsidian lately, so here’s a 4-part podcast series about the app and its various plug-ins and themes:
Obsidian In-Depth (Part 1) (if you like it you can find the other parts in that podcast’s feed)
💚 🥃 Now at 4.83% paid supporters to 95.17% free subs, getting closer to the 5% where I said I’d do a podcast AMA. Thanks to the new supporters!
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Investing & Business
Microsoft Q4 Highlights (yea yea, Fiscal Q2..)
Apparently, the whole world was listening to the Microsoft Q4 call live just to hear the guidance, so it’s probably not worth highlighting it here, but there was some other interesting stuff in there:
Our Azure Arc customer base has tripled year-over-year. We are now helping thousands of organizations, from BP to Rabobank, unify their on-premise, hybrid and multi-cloud infrastructure.
3x in a year is legit. Looks like MS’ early focus on hybrid cloud vs AWS is still paying off nicely years later.
Cosmos DB […] Data volumes and transactions increased over 100% year-over-year.
In AI, we have one of the most powerful supercomputers in the cloud, and we're using it not only to train new models but to deliver them as platforms to our customers.
Our new Azure OpenAI Service is in preview, and that brings together advanced language models with the enterprise capabilities of Azure. GitHub Copilot is using this capability to help developers write better code. More broadly, we continue to see strong usage across our Cognitive Services with over 30 million hours of speech transcribed last quarter, up nearly 2x compared to a year ago.
The whole “we train AI models and make them available to customers for a fee or as part of a product”, and maybe customers can do some domain-specific/first-party data training on top to make the models perform better for their specific use-case, it reminds me of what Nvidia is doing with some of its models (language, vision, recommenders, self-driving, etc).
Seems like a good way to democratize these ML/AI tools, because not every company will be able to roll their own from scratch even if they have access to the raw computing power in the cloud.
GitHub Copilot is particularly cool — I’m not entirely sure how well it works today, but give it a few years to keep improving, and the idea of making developers — a scarce resource — more productive and write better code has a ton of leverage.
Teams surpassed 270 million monthly active users this quarter [...] Monthly usage of third-party applications and custom-built solutions has grown 10x in the last 2 years, with new and updated apps this quarter from Atlassian, monday.com, SAP and Workday.
270m MAUs… Is that a lot?
Interesting comment on the PC segment:
We've seen a structural shift in PC demand. More than ever, people are turning to PCs to exercise their agency and unleash their creativity, whether it's meeting in virtual reality or for remote work, writing code or collaborating in documents, livestreaming video or playing games or for graphic design and engineering design. As new use cases are born every day and existing ones see a resurgence, we are experiencing a PC renaissance with increase in time spent on PCs and PCs per household.
It remains to be see what is temporary from the pandemic, and what is a longer-lasting change (because over 2+ years, a lot of people can form habits that will last beyond the conditions that caused them).
There are now more than 1.4 billion monthly active devices running Windows 10 or Windows 11
…and a bunch more on older versions. Millions are probably still on Windows XP. Someone out there is still getting horribly tortured by Windows ME — cruel and unusual! 🟦
Windows gets little attention now, and while it’s not my OS of choice, it’s still a *huge* platform, especially when it comes to gaming, which is an area where MS has been increasing focus in a big way. 🎮
Just 1 year since the launch of coupon and price comparison features in Edge, we already have surfaced more than $800 million in savings.
As an Edge user (my younger, anti-M$Windoze self would be so embarrassed that I’m on the successor to IE, but whatever, I just use the tools I think are best and try not to let ego get in the way, and I find Edge a little better than Chrome), I can say that I’ve been pleasantly surprised the few times that I was buying something, and during the checkout my browser popped a coupon it auto-detected and I saved a few bucks.
Over the past 12 months, our total advertising revenue, inclusive of LinkedIn, surpassed $10 billion ex TAC. And with our acquisition of Xandr, we will bring to market new advertising solutions that combine our deep audience understanding and customer base with Xandr's large-scale data-driven platforms.
How much they pay for traffic acquisition costs (TAC) matters, but any way you slice it, this is a big business.
On the security front:
And all up, the number of customers that use our advanced security solutions accelerated this quarter to over 715,000.
More than half have 4 or more workloads, up 75% year-over-year, underscoring our end-to-end differentiation. On average, customers save 60% compared to multi-vendor solutions. As a result of our customers' trust, our security business revenue surpassed $15 billion over the past 12 months, up nearly 45% year-over-year.
First, this puts into context Crowdstrike’s ˜14,500 customers. This is 2% of Microsoft’s.
I’m assuming that what they call workloads here are basically modules/products, so that’s pretty impressive.
🔥 A $15bn TTM business growing 45%… 🔥
That’s like a mini-Azure engine they got there, tucked in a corner of that giant company.
Game Pass has more than 25 million subscribers across PC and console.
18 million have played Forza Horizon 5 to date, and more than 20 million have played Halo Infinite, making it the biggest Halo launch in history.
And with our planned acquisition of Activision Blizzard announced last week, we're investing to make it easier for people to play great games wherever, whenever and however they want
Wherever, whenever, however… The whole ‘Netflix for Games’ angle.
During the Q&A, Nadella said: “the economics of gaming franchises is also radically becoming much more software-like” (in other words, more Microsoft-like)
Random 🛀, but I wonder what Microsoft’s market cap would be today if they owned one of the 2 mobile OSes (say they had won that space instead of Google, and it was iOS and MS).
Apple to turn iPhones into Payment Terminals?
Apple is planning a new service that will let small businesses accept payments directly on their iPhones without any extra hardware [...]
The company has been working on the new feature since around 2020, when it paid about $100 million for a Canadian startup called Mobeewave that developed technology for smartphones to accept payments with the tap of a credit card. The system will likely use the iPhone’s near field communications, or NFC, chip that is currently used for Apple Pay. [...]
The company is expected to release the first beta version of iOS 15.4 in the near future, which is likely to see a final release for consumers as early as the spring. (Source)
The hardware is only one of multiple things that companies like Square (am I supposed to call them Block now? This is so stupid..) are offering.
But through sheer ubiquity and low-friction, having this option built-in has the potential to turn Apple into a player in the space, especially if they have good execution on the software/service side (which isn’t a given, and may not be a high priority inside the company).
On one hand & on the other… A tale of two cities… etc
Facebook’s Cryptocurrency Venture to Wind Down, Sell Assets
Facebook’s ambitious effort to bring cryptocurrency to the masses has failed.
The Diem Association, the consortium Facebook founded in 2019 to build a futuristic payments network, is winding down and selling its technology to a small California bank that serves bitcoin and blockchain companies for about $200 million
Google Cloud is hiring a legion of blockchain experts to expand its business
‘2021 US retail spending was $6.6 trillion, up 18% from 2020’
Looking at this presentation by Jasong Golberg and Scot Wingo, some numbers jump at me..
While overall is +18%, food & beverage was +4% and clothing was +48% (some rebounding).
Near the end there’s a few slides showing that in the US, healthcare as a share of spending went from about 5.5% in 2000 to about 8.5% in 2020. That’s a huge increase, it’s not a new complaint, but something must really be done to bring healthcare costs under control.
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Science & Technology
Coal consumption around the world…
Got the graph from a HILARIOUS article that wins the “duh” award 🏆:
Europe’s coal utilities aren’t on track to reach their emissions-reductions goals in time to achieve net-zero status by 2050, according to a new study by climate groups.
None of the 21 companies analyzed have plans to realize all of the key milestones needed to attain the goal
You mean the stalling tactics of promising to quit heroin, any day now, but not yet, later, always later, worked with regulators?
Meanwhile, maybe if Germany wasn’t shutting down 13 baseload zero-emission nuclear power plants for political reasons, there wouldn’t be such an energy crunch that makes it all that much harder to get rid of coal, or to stand up to Russia (the only military aid they sent to Ukraine was helmets 🪖 🤦♀️). Oy vey
Fascinating 101 on Wireless Communications (it builds up from very simple to kind of 🤯)
Everything is backwards…
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The Arts & History
Let’s make a bowl out of Brazilian Cherry
I’ve always enjoyed these “how its made” videos showing how random industrial objects are manufactured.
With Youtube and Tiktok, there’s plenty of craftspeople also showing their process. It’s very relaxing to watch them made knives, teapots, whatever.
Here’s a nice wooden bowl. You wouldn’t think about it much if you saw the finished product, but once you know where it came from, it changes the object, IMO.
"The Beatles one is a gift for my parents. Please don’t tell them". Your parents don't read the NL?? You gotta recruit them as paying subs:)
Re: the Russia story if you have a mechanism where might always wins you end up in a pretty horrible place, but that isn't to say a complicated rule of law requiring extensive use of attorneys is perfect, as those with more resources have and advantage and there is a tremendous productivity drag. Better arbitration and more trust seem to work best.