Cheap Revolution

Microsoft's Ozzie Touts 'Cheap' Tech Revolution

Microsoft's chief software architect dislikes the limelight but his role is crucial to shaping and coordinating the company's far flung product and services plans.

That's why it seemed a little odd for Ray Ozzie, who took over the job from the retiring Bill Gates two years ago, to hold forth on his vision of where the software behemoth is going to a group of financial analysts Wednesday at the Bernstein Strategic Decisions conference in New York.

"I'm more kind of the man behind the curtains so to speak, but I spend a lot more time hands-on with the product groups," Ozzie said – never mind the subtle pun on his name and the wizard with a similar moniker.

Ozzie is passionate about what he does, particularly regarding pet projects like Live Mesh, search, and the company's emerging software-plus-services initiative. However, despite the obvious interest from his audience, he didn't spend much time talking about the company's recently dropped bid for Yahoo (NASDAQ: YHOO) – referring to the deal's potential as an "accelerator" for Microsoft's strategic vision for search.

"We view Yahoo as an accelerator to the ad platform, potentially to the user engagement, and so on. We'd love to still discuss possibilities with Yahoo, but beyond that I don't have anything to talk about," said Ozzie.

That jives with what Gates and CEO Steve Ballmer have said recently -- that the failed attempt to buy Yahoo was only part of a strategy – not a strategy in and of itself.

Ozzie has literally seen it all. He started programming mainframes back in 1968, he told the audience. Later, he went on to create Lotus Notes, which was eventually bought out by IBM, and then started Groove, which Microsoft purchased in 2005.

Much of where Microsoft (NASDAQ: MSFT) and the rest of the industry is headed revolves around what he refers to as the "cheap" revolution.

"What's going on right now is really based on the confluence of cheap storage, cheap computing, and probably more than anything cheap, ubiquitous communications amongst businesses, or homes and businesses, and data centers," he said.

That has enabled entirely new business models and changed the game, to abuse a cliché.

"I know it's kind of hard to think of being in the early days in search," Ozzie told the audience, adding that there's still plenty of room for innovation. For instance, he cited Microsoft's announcement last week that it will pay consumers to use its search service.

"With Cashback you've seen that there is room for innovation in business model, and I think there are many, many different ideas that different people will have over the next few years in terms of innovation in business models that will help the end user, that will help the advertiser."

However, search is only one part of the equation. Also important is user engagement as well as having a good ad platform.

The cheap revolution and the cloud

But the cheap revolution points in other directions as well, including towards computing "in the cloud" – that is, in data centers that users, whether business users or consumers, don’t have to know about in order to take advantage of. Enter another favorite project that was instigated by Ozzie called software-plus-services.

The idea, he said, is to provide those services that are appropriate "in the cloud." For instance, Coca-Cola recently signed up to move all of its e-mail accounts – some 75,000 total – over to Microsoft's Exchange Online service.

"They're using the fact that these online services are available as a catalyst for that decision, and so that represents new opportunity, new growth opportunity for us," Ozzie added.

Another aspect of the cheap revolution is that users are developing a "mesh" of devices that they use and they want them all to be able to communicate with each other transparently and seamlessly.

"You hear us say software plus services, because we believe that the real opportunities moving forward are PC plus phone, PC plus mobile Internet device, Web plus PC, as opposed to just everything in a browser," Ozzie said.

Indeed, just last month, Ozzie announced what the company terms "Live Mesh," a technology and business strategy to provide those services – partly in the cloud and partly on the devices – and at the center of that mesh is the individual.

"The Web is really the hub of a device mesh, and a mesh of people," Ozzie added.

Boom In Home

Gates Sees Boom Ahead in Home, Business Touchscreens

You wouldn't have known that Microsoft Chairman Bill Gates is retiring in six weeks as the legendary tech executive and pioneer continues expounding on his vision of the future in keynotes around the world.

Gates, who is slated to retire from full-time duty at Microsoft in just over a month, gave the opening presentation Wednesday at the start of Microsoft's annual CEO Summit in Redmond, Wash.

Before an audience of Global 1000 CEOs from 26 countries, Gates waxed eloquent about technical innovations he sees reshaping the worlds of home and business.

He spent at least as much time, however, emphasizing what can be done today using Microsoft's existing products and technologies.

Gates himself founded the event in 1997 to present his vision of computing's growing integration with business and daily life in a low-key forum to the leaders of the world's largest enterprises. If Microsoft's continued growth since that time is any indicator of the summit's success, it was a shrewd move.

This year, Gates predicted that technologies such as Microsoft's (NASDAQ: MSFT) Surface computer, with its multitouch user interface, will quickly spread as costs fall rapidly and the technology's capabilities increase -- moving from in-store kiosks and hotel lobbies to become ubiquitous in homes and businesses.

In fact, the flashiest demo by far that Gates presented was a whiteboard-sized Surface-like computer screen with a multitouch display.

"We will also have that in a vertical plane," like a whiteboard, Gates said, but he added that he sees the technology penetrating much further into everyone's lives. "All the surfaces [on walls and desks] will eventually have a low-cost screen display capability in both the office and the home," he added.

Gates demonstrated moving items, including documents, photos, and presentations around on the screen and paging through them using two hands at once, thanks to the screen's multitouch capabilities.

"You can train people to use this pretty quickly," Gates said. "Our Office group is working on how to use this."

Gates did not say whether Microsoft would actually sell the whiteboard devices itself, although it has chosen to take that route with the Surface. The company delivered the first units of its Surface computer to AT&T for use in its phone stores last month.

As usual for his keynote presentations, Gates also made some more wide-ranging predictions about the future. For example, he said he sees the adoption of unified communications nearly eliminating PBXs within the next five years.

He also made oblique references to Microsoft's recently-announced Live Mesh technology but never mentioned it by name. Live Mesh is Microsoft's new online connectivity and synchronization service in the computing "cloud" that the company aims to use to unify all of a user's data and information. It was introduced three weeks ago.

Users will be able "to delegate tasks off to the mega datacenters that we and others are building," Gates said.

Gates also talked up social computing technologies, such as personal profile pages, which he sees becoming increasingly adapted for use inside corporations to help information workers to find others with the skills and expertise they need.

Multitouch computing, however, remained at the center of Gates' vision of the future.

"Surface will happen much quicker than people think," he added. "We believe [devices like Surface] will be absolutely pervasive."

Gates even gave partial credit to Apple's iPhone for innovations leading the trend towards multitouch interfaces. Both the iPhone and the Surface fit into a category of emerging technologies that Gates calls "natural interface," which also includes speech recognition and pen-based computing.

Gates' presentation wasn't all about prognostication, however. Several of the demos he showed were examples of how Microsoft's own internal management processes have changed from the company adopting its own technologies.

Those technologies include SharePoint collaboration tools tied to Microsoft's business intelligence and performance management product -- Office PerformancePoint Server -- to improve the effectiveness of senior management.

He also demonstrated other current technologies, including the enterprise search tools the company acquired when it bought out FAST last month. The features provide search capabilities without requiring users to type query terms, by drawing inferences from what else the user has up on their screen at the time.

Gates also pointed to Microsoft's use of unified communications technologies -- the central premise of which is that all communications, whether voice, video, e-mail, or instant messaging, will be available from any device at any time.

The annual CEO Summit is at least partly held to give Gates and Microsoft the chance to socialize with the global executives who sign the checks of their CIOs, thus helping in some small part to assure future sales.

Besides the chance for Microsoft's elite to rub shoulders with so many chief executives -- and vice versa -- the event also includes workshops with several big names in the business world.

Participants this year including business consultant Ram Charan, journalists Tom Friedman, Suzy Welch, Maria Bartiromo and Michael Kinsley, as well as former GE CEO Jack Welch and Berkshire Hathaway CEO Warren Buffett, a close friend of Gates's.
It also features a gala formal dinner at the Gates' estate and a yacht excursion.

Gates continues to follow a frantic pace of speaking appearances -- delivering a speech on Thursday in Tokyo and Friday in Jakarta -- even as his tenure as a full-time Microsoft employee draws to a close.

As of the end of June, Gates will cease his day-to-day role at the company, although he will remain chairman of the board and its largest shareholder.

He passed off his duties as chief software architect to the nearly-as-legendary Ray Ozzie, the father of Lotus Notes, two years ago.

A Microsoft spokesperson in an e-mail that Gates would participate in next year's CEO Summit, but couldn't say in what capacity he would appear.

In Mesh Vision

Microsoft Details Its 'Mesh' Vision

Microsoft has taken the wraps off an early version of its new Live Mesh online connectivity and synchronization service.

The announcement, which includes the release of a "limited" technology preview of Live Mesh, was made in a blog post by Amit Mital, general manager of Live Mesh Tuesday night. Mital is also scheduled to show Mesh off late in the day Wednesday during a presentation at the Web 2.0 Expo in San Francisco.

The announcement has been expected for some time, and pundits have been weighing in with predictions on precisely what Live Mesh would provide in recent days and weeks.

Live Mesh is Microsoft's vision of a personal interconnected world. In that world, all devices can communicate with each other -- called the "device mesh" in Microsoft's lexicon -- and synchronize all kinds of data among devices -- dubbed the "social mesh" -- via communications capabilities, management functions, and storage services provided "in the cloud."

"We examined many of the ways the Web is becoming more central to us -- both workstyle and lifestyle," Mital said in his blog post. "Devices are how we interact in this new 'Web connected' world and we use a variety of them, including PCs, laptops, media devices, phones, digital picture frames, game consoles, music players and the list grows."

The idea is that all of a user's devices should be able to connect into a centralized service in the cloud that will provide unified management and synchronization of devices, data, and applications in a seamless and transparent (to the user) fashion.

If the company executes well and it takes off, Live Mesh has the potential to provide the kinds of services that would make Microsoft's software-plus-services initiative more than just renting business apps over the Web or using a browser-based Live service to manage photos online, according to one analyst.

"My initial impression is one of encouragement bordering on excitement," Jonathan Yarmis, vice president of disruptive technologies at analyst firm AMR Research, "The problem they're trying to solve is one that many of us experience," he said, noting that at that moment he was carrying a laptop, a mobile phone, a BlackBerry, an MP3 player, and a GPS unit.

A notable initiative

Live Mesh is one of the most notable initiatives so far to come on deck during Ray Ozzie's short tenure as Microsoft's chief software architect -- a role that he took over from chairman Bill Gates nearly two years ago.

In fact, Ozzie described the central tenants of Live Mesh this week in a memo outlining how Live Mesh fits into Microsoft's software-plus-services vision.

"To individuals, the concept of 'My Computer' will give way to the concept of a personal mesh of devices -- a means by which all of your devices are brought together, managed through the web, as a seamless whole," Ozzie's memo said. "After identifying a device as being 'yours,' its configuration and personalization settings, its applications and their own settings, and the data it carries will be seamlessly available and synchronized across your mesh of devices," he added.

Though acknowledging that the technology preview released Wednesday is early code, the company did not provide a timeline for commercial delivery of Live Mesh. However, Ozzie did reveal that Live Mesh will become a part of Microsoft's Windows Live.

Additionally, given Ozzie's -- and Microsoft's -- penchant for taking a platform orientation, it should not surprise veteran Microsoft watchers that Live Mesh will also provide a comprehensive platform for developers.

"This vision is being realized today in our .NET family of runtimes including .NET Framework and Silverlight, supported by Expression Studio for designers and Visual Studio for developers, enabling developers to leverage their skills across all these environments," Ozzie's memo said.

Additionally, Live Mesh is aiming to support a common set of application programming interfaces, or APIs.

"The Live Mesh platform exposes a number of core services including some Live Services that can all be accessed using the Live Mesh API; these include storage (online and offline), membership, sync, peer-to-peer communication and newsfeed," Mital said in his blog post.

"The programming model is the same for the cloud and all connected devices, which means a Live Mesh application works exactly the same regardless of whether it’s running in the cloud, in a browser, on a desktop, or on a mobile device," Mital continued. A software developers kit will be available "in the near future," he added.

Initially, the technology preview will only support Windows XP and Vista, and for the first few months, only English. In the near future, Microsoft plans to add support for the Mac and mobile devices, Mital said.

That leaves several unanswered questions, not the least of which is when Live Mesh will actually become available. But AMR Research's Yarmis suggested patience may be needed.

"It's really early on ... it's incomplete device support and incomplete functionality [in the preview] so it's as much of a tease as it is a solution," Yarmis added. "In terms of the vision, it's got a long way to go, but you've got to start somewhere."

However, Yarmis thinks this might just be the right solution at the right time.

"We've spent all this time trying to solve this at a client level but now we're seeing someone say, 'No, it has to be done at the architectural level.'"

New XP

Meet Microsoft's New Embedded OS Windows XP

Microsoft on Wednesday debuted a new version of its customizable operating system for embedded applications -- but perhaps a little surprisingly, it's not based on Windows Vista.

Instead, Windows Embedded Standard 2009, as it's called, is based on Windows XP Service Pack 3 (SP3), which was released earlier this spring.

The announcement came at the company's annual North American Tech-Ed developers conference in Orlando, Fla., during a keynote speech by Kevin Dallas, general manager of the Windows Embedded Business Unit.

"New features in Windows Embedded Standard 2009 [enable] OEMs to build embedded devices that combine seamlessly into existing enterprise infrastructure, including the latest Microsoft desktop and server technologies," Dallas said in a statement.

Beyond its benefits to the embedded systems market, though, the move is yet another example of how XP has show it still has plenty of life left despite the emergence of Windows Vista. Recent developments would seem to suggest even that the more Microsoft tries to put XP out to pasture, the more demand for the seven-year-old operating system grows.

Embedded systems are typically built into hardware devices -- in products as diverse as digital cameras, medical devices, gas pumps, point of sale (POS) systems and automotive robots. Given the scope of the product segment, it's quietly become a major area of focus for Microsoft.

In April, the company said it was changing its embedded system naming conventions, beginning with the release of Embedded Standard 2009, which had been set for this week.

Along with Wednesday's demonstration, Microsoft (NASDAQ: MSFT) delivered a community technology preview (CTP) of the new system for immediate download. Final release of Embedded Standard 2009 to customers is due in the fourth quarter.

When it's ready, Windows Embedded Standard 2009 will replace the company's existing offering, Windows XP Embedded, according to a Microsoft spokesperson.

One outstanding question remains, however. Where does the news leave Windows Vista?

"We're working on Vista Embedded but haven't announced anything," Olivier Bloch, Microsoft's Windows Embedded evangelist, Bloch declined to comment further on the company's plans.

Among the new features that will be provided in Embedded Standard 2009 is support for Microsoft's Silverlight cross-browser, cross-platform, and cross-device media streaming player, which competes with Adobe's Flash player.

In scenarios such as building a smart digital video recorder (DVR) or constructing a kiosk with an embedded operating system, the new Silverlight capabilities could help set those devices using Embedded Standard 2009 apart from competitors.

With Silverlight support, "Windows Embedded Standard 2009 will be able to provide a richer user interface," Bloch said.

The update will also include XP SP3's Network Access Protection (NAP) -- a network quarantine and remediation technology included in Vista and Windows Server 2008. Additionally, it will feature support for the .NET Framework 3.5 as well as Remote Desktop Protocol 6.1, the company said in a statement.

Several of the changes and additions coming in Embedded Standard 2009 clearly establish its focus on connectivity with the rest of the Windows networking world, according to one analyst.

But the core functionality of Embedded Standard 2009 owe a great deal to its use of XP SP3 as its heart. Chiefly, adopting XP helps by offering the OS the benefits of a small footprint -- in terms of the systems resources it requires to run -- and, ironically, its age, which speaks to the system's long-term stability and reliability.

"It will go on lower-performance systems than Vista would run on," Rob Enderle, principal analyst for The Enderle Group, "Plus, XP is a product that people have been comfortable with for the last seven years."

Vista, in contrast, requires a much higher-end computer and has been around only a year and a half. Vista Service Pack 1 only shipped this spring.

"Given that Vista hasn't been all that successful [in non-embedded markets], it makes sense for Microsoft to go with XP," Enderle said.

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