Beyond Binary

Windows enthusiasts were buzzing on Tuesday over a Microsoft blog posting that makes it seem as if a beta version of Windows 7 should be ready by next month.

In a blog posting on Microsoft's Technet site, Keith Combs suggests those wanting to get their hands on the beta version should register to attend one of a dozen or so upcoming MSDN developer conferences.

That blog, and another Microsoft blog, make it clear that attendees will get a DVD with Windows 7 beta 1 on it. Some of the events are in December and the bloggers make it clear that those attending the earliest events won't get their DVD at the conference. In the comments section of his blog, though, Combs said the DVDs should be ready by mid-January.

"My understanding is that the DVD will not be ready for the first few show dates but will be mailed to each attendee," Combs said. "We are targeting to have the DVDs in the materials from 1/13/2009 on."

Microsoft handed out a pre-beta version of Windows 7 to attendees at the Professional Developer Conference in late October and the Windows Hardware Engineering Conference (WinHEC) in early November.

In a statement late Tuesday, Microsoft said only that it is still targeting early 2009 for the broader beta.

"As we said at the PDC, we expect to deliver beta 1 in early 2009 and we continue to be on track to deliver against that development milestone," Microsoft said.

Microsoft is still trying to sort things out following a glitch on Friday that prevented people from getting a promised 40 percent cash back on purchases made on HP.com via Microsoft's Live Search Cashback program.

A crush of traffic led to a glitch that apparently led to a number of problems. Some shoppers were credited with only 3 percent cash back, rather than the promised 40 percent. Microsoft has said all those who made purchases through Live Search during the Black Friday promotion would get the higher rebate.

But some folks were unable to make their purchase at all on Friday. A Microsoft spokesperson told CNET News in a statement Monday that the HP promotion would be restarted in the coming days. However, that statement appears to have been premature.

In a blog post late on Tuesday, the software maker offered a much more vague statement.

"We're working actively to determine next steps for any specific HP promotions," according to the post, which was attributed to Rajat Taneja, Microsoft's general manager of worldwide commercial search. "We regret that we don't have more specific details at this time, but we can point customers to other Live Search cashback merchants with great deals on HP products, including eBay, which is currently offering 20 percent cashback."

The glitch was an unfortunate blow to Microsoft, shifting what could have been a banner day for Live Search cashback into another online black eye for the company.

Microsoft said on Tuesday that it is ready for broader testing of Windows Vista Service Pack 2, the second collection of fixes for the latest version of the operating system. In addition to bug fixes and performance tweaks, Service Pack 2 adds support for Blu-ray, Bluetooth 2.1, and Windows Search 4.0, the latest version of Microsoft's desktop search technology.

In a blog posting, Microsoft VP Mike Nash said that while Microsoft is offering the customer preview program to all interested parties, not everyone should download SP2 in test form.

"The (test version) is intended for technology enthusiasts, developers, and IT Pros who would like to test Service Pack 2 in their environments and with their applications prior to final release," Nash said. " For most customers, our best advice would be to wait until the final release prior to installing this service pack.

Microsoft announced in late October that it was starting limited testing of the update.

Nash said Vista SP2 is on track to arrive sometime before the end of June. "As of today, we are tracking to ship Windows Vista SP2 in the first half of 2009," Nash said.

(Credit: The new Windows Live Home page bears more than a passing resemblance to social sites like Facebook.)

Microsoft has started to roll out a series of changes, outlined in November, that give Windows Live a more social networking-like feel.

Windows Live staples such as Spaces, Events, and the home page get a new look, while Microsoft is also putting special emphasis on group, profile, and photo pages.

"Essentially we're launching 'the new face of Windows Live' on the web today," Microsoft's Brandon LeBlanc said in a blog posting.

The changes, which are being rolled out over the next 24 hours, also include a bump in the limit for Microsoft's SkyDrive online storage, which now offers 25GB of storage and improved photo slide shows on the Web.

Also new is the ability to import contacts directly from Facebook to Windows Live.

Take a look and let me know what you think of the makeover. Does it make Windows Live look young and hip, or like an actress that's had one too many face-lifts?

Microsoft is taking its container approach to data centers a step further, making the building housing the data center itself a module.

In a blog posting on Tuesday, Microsoft detailed what the "generation four" data centers will look like.

"This is a significant step forward, and one that Microsoft believes will reshape how companies build data centers and support cloud computing," a Microsoft representative said in a statement.

The generation four concept "builds on the innovation at Microsoft's Chicago data center, which houses shipping containers packed with up to 2,500 servers each," the representative said. "A container facility helps ensure that we don't overbuild server capacity, while allowing the company to reduce the time to build a data center from 24 to 12 months."

The new approach goes a step further, building the center itself out of prefabricated mechanical, electrical, and security components, as well as the containerized servers. Such facilities can be deployed in just three to six months and expanded when demand grows.

Microsoft says the new approach will cut capital costs by 20 percent to 40 percent.

"In short, we are striving to bring Henry Ford's Model T factory to the data center," Microsoft's Mike Manos said in the blog posting. "We intend to have our components built in factories and then assemble them in one location (the data center site) very quickly. Think about how a computer, car or plane is built today."

For those that are in to data centers, check out the blog. it goes into just a ton of detail. I've also embedded a video that Microsoft did.

Meanwhile, I'm working on some separate posts for this week on some of the vendors that are powering Microsoft's efforts.

Microsoft on Monday apologized for glitches on its Live Search Cashback site, which frustrated online shoppers looking to scoop up Black Friday deals.

Amid heavy volume on Friday, consumers encountered a range of problems from site sluggishness to seeing the wrong amount of cash back show up in their accounts.

The problem was particularly acute with shoppers who were looking to take advantage of a promotion with Hewlett-Packard that offered buyers a 40 percent discount when visiting HP.com through Microsoft's Live Search Cashback. Some shoppers, however, reported seeing only a 3 percent cash back amount posted to their account.

"We deeply regret customer inconvenience with respect to the outage," Microsoft said in a statement provided to CNET News. "The spike in traffic in combination with a technical glitch led to the outage. The promotion will restart in the next day or so. Again, we apologize for our customers' inconvenience."

A Microsoft representative said the company is in the process of going back to make sure the proper cash back amount is credited.

Live Search Cashback was launched in May as a way for Microsoft to try to boost its share of commerce-related search queries. Instead of taking in revenue on a pay-per-click model, Microsoft gets advertisers to agree to pay in the form of a certain percentage of any resulting sale. For now, anyway, Microsoft is giving that entire amount back to consumers as "cash back."

Separately, Microsoft said on Monday that some users will be able to get cash back instantly on eBay purchases, as opposed to having to wait the 60 days that is standard on Live Cashback.

Blockbuster and Microsoft are working together on an effort to use Live Mesh as a means to give consumers a way to reach their video content from a variety of devices.

A Microsoft representative said on Monday that Microsoft's Live Services team is working with Blockbuster on "building some demo Mesh apps."

It's the latest tie-up between the companies. Blockbuster is already one of the early customers for Microsoft's Exchange Online hosted e-mail service.

Live Mesh debuted in April, but at the time was largely limited to PC and Web file synchronization. However, Microsoft said at the time it launched Live Mesh that it would be opened to third parties to write their own Web-based and PC-based applications. Microsoft did just that at its Professional Developers Conference.

The Dallas Morning News has more details on the effort, including a line on just how far the company hopes to take things.

"Eventually, we'll give customers instant access to any movie on any device with an Internet connection and a screen," Blockbuster Chief Information Officer Keith Morrow told the paper. "More immediately, we could use this technology to reach into airports. Travelers could quickly download movies from Blockbuster kiosks to their portable media players."

Updated 6:15 AM PST November 30

According to one report, Yahoo and Microsoft may once again be working on a search deal.

The Times of London reported this weekend that Microsoft is in talks to acquire Yahoo's search business for $20 billion. According to the paper, former AOL CEO Jonathan Miller and fomer Fox Interactive President Ross Levinsohn are set to head the effort.

"Senior directors at Microsoft and Yahoo are understood to have agreed the broad terms of a deal, but there is no guarantee that it will succeed," The Times said in its report.

Microsoft declined to comment on the report. It is worth noting that as of Friday, the market capitalization of Yahoo in its entirety was just shy of $16 billion. Microsoft was once willing to pay far more to get Yahoo, but a lot has changed since the early part of the year.

Since Microsoft made its last offer for Yahoo, Yahoo and Google have announced and abandoned a search deal, Yahoo's shares have plummeted to single digits, and the company has said it would replace Jerry Yang as CEO.

In the days following the Yang announcement, Microsoft CEO Steve Ballmer indicated that the company was decidedly not interested in a full acquisition of Yahoo but said that some sort of search partnership remained "an interesting possibility." CNET had earlier reported Microsoft's continuing interest in such a deal.

Update:Kara Swisher of D: All Things Digital talked to Ross Levinsohn, who the Times of London said would be involved in the $20 billion deal. He told her the report was "total fiction," and sources from Yahoo and Microsoft denied such a deal was in the works. Of course, this series of denials doesn't mean that a search deal between Yahoo and Microsoft isn't a real possibility in the near future.

With so many people pointing out the external challenges and internal missteps from Microsoft, it is easy to pile on criticism.

One longtime watcher of the company, Directions on Microsoft, has a new report out looking at five big things the software maker has done right.

The analysis is on the Internet and worth a read.

Directions on Microsoft points to the company's appeal to developers, its focus on software, its reliance on others to sell its products, along with the fact it targets technology for the masses and takes the long view.

For sure, these are the things that have helped the company survive past missteps and address other competitive threats as well. But, through most of the past challenges, Microsoft has been able to largely keep the same business model, something it probably won't be able to do in this next wave of difficulties.

I have no doubt Microsoft will be able to deliver its software as a service and find ways to make money. But whether it will be able to make the same kinds of money in terms of both revenue and profits is a key question.

For more on the man leading the current wave of change, Steven Levy's Wired piece on Ray Ozzie is also definitely worth checking out, as is CNET News' Dan Farber's take on the piece.

In case you have not noticed by the less frequent posts, I'm off this week (well, sort of off anyway). Happy Thanksgiving to all.

SAN FRANCISCO--One might think that as a CIO, it would be tough to have someone else running all of your desktops and many of your servers.

Not so, says Randy Benz, CIO of Energizer. For more than three years, Energizer has handed off much of those duties to Microsoft. And he'd be fine with Microsoft running just about everything, save perhaps for the company's iconic battery-powered bunny.

"If I never run another server in there for the rest of my life, I'm as happy as can be," Benz said over lunch last week following the launch of Microsoft Online, essentially the company's effort to turn the Energizer experiment into a business.

Energizer CIO Randy Benz said he's happy to have Microsoft running his servers. That gives his workers time to do other things, like offer specialized computer training for workers.

(Credit: Energizer)

Initially, Microsoft is offering to host only a few of its server products--Exchange and SharePoint, although over time businesses will gain the option to run most of Microsoft server products as a service running from inside the software maker's data centers.

So, one might reasonably ask what Benz and his team are doing if they aren't running all the servers and managing desktops?

For one thing, his group now offers a much broader range of computer training for Energizer workers. Beyond just teaching how to use specific products, Benz said Energizer now has classes for different types of workers focused on their particular role. One recent creation is a specific program just for road warriors.

"It cuts across products," Benz said.

Of course, businesses that don't want to handle the more mundane IT tasks have had other options for a while, such as more conventional outsourcing in which a third-party company comes in and handles things like help desk and server management.

The problem, Benz said, is it typically doesn't save much money. Any efficiencies the outsourcer gets because of its expertise are offset by its profit margins.

By having Microsoft run its software from its own data centers, though, Benz figures that it will have enough scale to actually be more cost effective.

Not everything that Microsoft has been doing with Energizer is going to be offered broadly. But, Benz said, that has more to do with the fact that some of the things aren't good businesses for Microsoft, as opposed to the fact they didn't work out for Energizer.

"There's nothing we've done that I'm disappointed in," he said. Rather, he is looking to what he can hand over next. The two companies recently added a hosted business intelligence offering, something that isn't yet part of the services Microsoft is offering broadly.

Benz also knows the managed service route isn't for all customers. Even though it resembles outsourcing, he said it is actually more suited to customers that want to be on the cutting edge. Having Microsoft manage their software means that Energizer is always running the latest versions, for better or worse.

One of the areas the company is looking at keenly, Benz said, is Microsoft's plan to offer Web-based versions of Office applications, the company licenses the full version of Office for every PC, but limits the number of PCs it gives out accordingly. Having a lower cost Web-only option for workers that only need light editing abilities might mean more workers get access to technology

"It may be a breakeven for us but we are reaching more of our people more appropriately," he said. "We'll revisit it when the products are out."

Microsoft has said it will have technology preview versions of the Office apps will be available later this year, but hasn't said when the product will be formally released or when the business version might be available. For consumers, the Office Web apps will be part of Office Live, while businesses will be able to provide access as part of Microsoft's SharePoint server software.