WinInfo Daily UPDATE, April 12, 2004

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In the News

- Microsoft Works Out Longhorn Schedule for First Half of 2006
- Microsoft's EU Appeal Set for June as South Korean Antitrust Case Opens
- Microsoft Settles InterTrust Lawsuit

==== In the News ====

by Paul Thurrott, [email protected]

Microsoft Works Out Longhorn Schedule for First Half of 2006

Months of customer complaints have finally had an effect on Microsoft. This week, the company acknowledged that it will deliver Longhorn, the next major Windows release, on a fixed schedule, ending years of vague delivery dates and glacial development. The slow move to a concrete timetable started last month when Microsoft Chairman and Chief Software Architect Bill Gates--who in June 2000 stepped down as CEO specifically to have more of a hands-on role with Longhorn--said that conjectures about a 2006 release for the product were "valid." This week, however, internal company documentation corroborated by Microsoft representatives pins the Longhorn release date to "the first half of 2006." And the oft-delayed beta 1 release (originally due in late summer 2005) will ship in mid-February 2005, according to the documentation I've seen.
The Longhorn schedule has been the subject of conjecture because the time span between the release of the last major Windows version, Windows XP, and the expected release date of Longhorn has increased dramatically. Some of this conjecture is just Windows-enthusiast nonsense. But the interest in Longhorn's schedule is understandable. More than 150 million new PCs are sold each year, most of them running XP, so the installed Windows base has grown significantly in recent years. XP hasn't sold particularly well at retail, however, despite steady free improvements to the software during the past 3 years. And, more importantly, many of Microsoft's crucial enterprise customers aren't upgrading to XP despite the fact that they have licenses to do so and would have more secure systems if they upgraded.
To rejuvenate enthusiasm for XP, Microsoft briefly considered an interim XP release (code-named Oasis) that the company would have released as part of the XP Reloaded marketing campaign scheduled for this year. Eventually, however, Microsoft decided to continue to roll out free Windows features, such as a major new Windows Media Player (WMP) update, without releasing a new Windows version. So XP Reloaded will concentrate on the WMP update, XP Service Pack 2 (SP2), and other major XP changes that are due later this year.
Microsoft also concedes that the company will remove some features from Longhorn, if necessary, to meet the new schedule. This decision is in keeping with the maturation of Longhorn from a freewheeling set of research-oriented projects to a more stable, customer-focused product. "There may be specific features that will be scaled back," Windows Lead Product Manager Greg Sullivan said. "It's a matter of scaling back by degrees. In some cases, the scenarios \[we're concentrating on\] won't be as all-encompassing." Internal Microsoft documentation suggests that the cuts won't be serious, and the company will still deliver all the major technology initiatives it's promised thus far, including the database-backed WinFS storage engine, the Avalon presentation layer, and the Indigo communications services.
So which Longhorn features will Microsoft cut? According to a "BusinessWeek" article, the deleted features include a WinFS tool that would have aggregated content on a local network. However, the company is retaining similar features for the local system and for the Internet--features that will be more valuable for typical users. Presumably, a more network-friendly version of WinFS could ship in Longhorn Server, due 60 to 90 days after the Longhorn client ships, or in Blackcomb, the Windows release that will follow Longhorn.
Microsoft has also scaled back plans for a Longhorn-specific Microsoft Office release, and Microsoft Office 12 will run on other volume Windows versions in addition to Longhorn. "Microsoft knows that customers have different roll-out needs," a Microsoft representative told "We'll be working to ensure they can use the next version of Office with other recent versions of Windows as well."
All of this information points to a not-so-subtle shift in the way Microsoft presents Longhorn to the world. Clearly, the company's "we'll ship when it's ready" message hasn't resonated with its enterprise customers, who have demanded more tangible information about the product and a tighter schedule as they eye their expiring subscription licensing agreements. Nevertheless, Microsoft needs to finish some other releases before Longhorn can move to the proverbial front burner. After the company completes XP SP2 next month, it will concentrate on Windows Server 2003 SP1 and Windows 2000 SP5, two major security-related enterprise updates that will include some of the Springboard security features from XP SP2. That both updates are due by late 2004 suggests that the mid-February beta 1 date for Longhorn isn't entirely coincidental or artificially pushed back. Even an industry giant like Microsoft has difficulty focusing on so many major products at one time.

Microsoft's EU Appeal Set for June as South Korean Antitrust Case Opens

European Union (EU) courts will decide by June 8 whether Microsoft can appeal its historic antitrust defeat, according to EU rules governing the appeal schedule. At that time, the courts will also hear Microsoft's request to stay the EU's decision that Microsoft ship a version of Windows without Windows Media Player (WMP) and give its competitors technical information to help them create products that can integrate with the company's server products. A ruling on that request should take place between July and September.
Depending on the outcome of these decisions, Microsoft's European antitrust odyssey could continue until late in the decade. The EU is also considering another antitrust case against the company for alleged abuses in Windows XP, which would only prolong the European legal battles. The course of the new investigation might very well hinge on the court's stay ruling: If Microsoft is denied the stay and has to release a modified Windows version this year, the EU could proceed quickly. Otherwise, we can expect the new investigation to move more cautiously, as the current case did.
Meanwhile, an ISP in South Korea called Daum Communications filed an $8.8 million antitrust lawsuit against Microsoft today, alleging that Microsoft broke fair trade rules by bundling Windows Messenger Instant Messaging (IM) software with Windows. With 35 million registered users, Daum is South Korea's largest Internet portal. "Microsoft is using its monopolistic status in the computer operating system market, expanding its monopoly into the instant messaging market to drive out its competitors and disrupt fair trade," President and CEO Jae-woong Lee said. Microsoft has yet to reply to the charges.

Microsoft Settles InterTrust Lawsuit

Microsoft announced today that it has settled a 3-year-old InterTrust Technologies patent-infringement lawsuit for $440 million. Under terms of the agreement, InterTrust will receive rights to design and publish reference-technology specifications related to Digital Rights Management (DRM) and security, and Microsoft will have rights to a "comprehensive license" of InterTrust's patent portfolio. The settlement ends all litigation between the two companies.
The agreement comes at an important time for Microsoft, which is pushing its DRM technology to consumers, content providers, and enterprises. DRM digitally establishes a user's rights to purchased or subscriber-obtained digital content. For example, if you purchase a song from an online store, the file's DRM protection could determine whether you can burn the song to a blank CD, share it among other PCs, or listen to it on a portable audio device. DRM is key to the future of digital-content delivery, whether that content is an eBook, music, video, or sensitive corporate documents. InterTrust's patents specifically address antipiracy technology, which is a key component of DRM.
"Licensing InterTrust's patent portfolio reaffirms Microsoft's commitment to the importance of intellectual property rights as well as our commitment to our customers to stand behind our products in these emerging technology areas," Marshall Phelps, Microsoft's corporate vice president and deputy general counsel for intellectual property, said. "One of our goals with this and our broader intellectual property (IP) licensing program is to provide peace of mind for our customers and partners by letting them know that patent licensing is our responsibility. Doing an effective job at managing the IP in our software differentiates our products and builds confidence that Microsoft has the rights necessary to build innovative solutions."
InterTrust first sued Microsoft in April 2001 and briefly attempted to halt the distribution of Windows XP, which shipped later that year with integrated, DRM-enabled digital-media capabilities. At the time, InterTrust officials said that Microsoft pursued a $100 million investment in the company between 1998 and 2000, then mysteriously halted talks and released its own DRM technology that closely mirrored InterTrust's patented intellectual property.

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