WinInsider

While Microsoft is pleased with robust sales of new PCs that come loaded with Windows XP, the company has been less than satisfied with the rate at which large companies are installing its latest operating system.

"In the area of deployment, I don't think that's met my expectations," Kevin Johnson, Microsoft's group vice president for worldwide sales and marketing, told CNET News.com in a recent interview.

For Sun, it's Business 101: They need the money. Even with the $1.6 billion, Sun announced yet another big loss of between $750 million and $810 million for its last quarter and laid off 3,300 more people, amounting to 9 percent of its work force. Sun is one sick company.

Sun, it seems to me, has decided that the cure is not Linux or open source. Instead, Sun hopes to find its answers in getting closer to Microsoft.

You see, Microsoft and Sun do have two things in common. Linux and open source are eating their lunch, and they're not sure what to do about it. Of course, Sun is the company that's really feeling that pain now. Sun is losing SPARC and Solaris customers every day to AMD/Intel and Linux providers. But Microsoft didn't become Microsoft by underestimating the competition.

The updates, a continuation of the Redmond, Wash., company's efforts to enhance the security and reliability of its products, will give Windows Server 2003 administrators tighter control over which machines can connect to their networks and how those PCs behave once connected, according to officials.

One of the biggest modifications expected for the server operating system is a system known as ACI (Advanced Client Inspection), which checks the health of PCs attempting to connect to a network.

BusinessWeek's Seattle bureau chief, Jay Greene, sat down with William H. Gates III, Microsoft's chairman, and CEO Steven A. Ballmer to discuss innovation, competition, and the company's future.

Gates on Microsoft's growth prospects
If you want growth, don't go to the big guy. Go to the small guy. If growth is your story, you're looking in the wrong place. Now, if you're looking for innovation... we're more of a change agent for the way business is done, the way people work, the way people do things at home. We're 100 times more interested in [change] than we are [in] growth percentages or something like that.

Microsoft said on Friday that it is aiming to release Longhorn in the first half of 2006--a move that will require the company to scale back some of its more ambitious plans for the next version of Windows.

Microsoft has been reluctant to pin down a date for the launch of the Windows update, though Chief Software Architect Bill Gates said recently that 2006 was a likely target. Even now, there is no public target for Longhorn's release, Sullivan said, but acknowledged the company's internal goal of shipping it by the middle of 2006.

Microsoft plans to cut features from Longhorn and roll them into a future release of Windows, code-named Blackcomb, Jim Allchin, vice president of Microsoft's platform group, told CNET News.com last month.

Looks like a 'Shorthorn' release is officially off the table. But a new 'Windows XP Premium' bundle is in the works, as is a scaled-back version of the WinFS file system. Microsoft executives have been reticent to say more on its Windows client plans beyond that. But BusinessWeek has examined some alleged internal Microsoft e-mails and video clips pertaining to Longhorn's future.

One alleged e-mail from a senior Microsoft Windows executive, dated March 4, claims the company has decided to curtail its Windows file-storage system (WinFS) plans by allowing the file system to work on individual PCs with Longhorn client, but holding off on allowing WinFS to work over a corporate network until a later Windows release.

Microsoft has created a special software license for Windows 98 and Windows 2000 that allows charities and schools to use second-hand PCs without breaking the company's end-user license rules.

As pressure increases on businesses to recycle or refurbish their old PCs, a greater number of used systems are finding their way into the hands of charitable organizations and schools. The catch is that, because the computers were sold with corporate licenses, it is effectively illegal for the charities to make use of the computers without falling afoul of Microsoft's license agreement.

Microsoft is shifting two veteran executives to newly created positions within the business unit that oversees its security initiatives. The appointments of Gordon Mangione and Rich Kaplan as corporate vice presidents in the Security Business and Technology Unit underscore the effort that Microsoft is making on the security front, an executive with the business unit said yesterday.

Microsoft wants to get to new programmers early. A new low-cost MSDN subscription for high school students and teachers will be available starting this summer. The $299 fee covers Visual Studio.Net Academic Edition, Visual Studio 6.0 as well as access to "e-learning," documentation, training and support. That fee covers all students, all teachers and all school computers. Students enrolled in at least one related for-credit course can also load the software on their personal computers.

Leaked emails from Microsoft suggest that the software giant is going to cut back on a few crucial features, a Business Week report says, but I'm not quite sure I see it that way. According to the emails, for example, Microsoft will still implement the WinFS storage engine in Longhorn, but it will only work on the local system, and not across networks. Furthermore, Microsoft Office 12, which was previously going to target only Longhorn, will also work with previous Windows versions as well. I don't see these as huge retreats at all, and in fact, I think one could make an argument that we're going to be seeing a lot of Longhorn technology early, rather than late.