WinInfo Daily UPDATE, February 13, 2004

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In the News
- Microsoft Confirms Partial Win2K, NT 4.0 Source-Code Leaks

Short Takes
- Debunking the Rumors: XP SP2 Won't Be XP Second Edition or XP Special Edition
- Debunking the Rumors: Windows Server Longhorn Won't Include BizTalk Orchestration
- Gates Heads to Pretrial Questioning
- Microsoft Patents XML-Script-Automation Technique
- France Says Vive La Open Source
- Microsoft Gives Thailand New XP Version; Just Don't Call It XP Lite
- Windows 2003 and Match.com Sitting in a Tree, K-I-S-S-I-N-G ...
- Microsoft Cancels Mythica
- Frivolous Lawsuit of the Week
- Hey, Remember Those Microsoft Business Units That Made Money Last Quarter?
- Dell Profits Up 24 Percent
- No WinInfo Daily UDPATE on Monday
- Editor's Note

==== 1. In the News ====
by Paul Thurrott, [email protected]

Microsoft Confirms Partial Win2K, NT 4.0 Source-Code Leaks
Yesterday morning, one of my Microsoft contacts popped open an Instant Messaging (IM) window and asked me whether I'd seen something he discovered online. He then showed me part of the Windows 2000 source code called WINVER.C, which was dated March 8, 1989. Within minutes, I was examining this and other source-code snippets, including one Windows NT architect David Cutler wrote. Within hours, the word was out: Partial source-code listings for Win2K and NT 4.0--the crown jewels of software code that are used to assemble those OSs into actual working software--had been leaked to the Internet. The IT world was suddenly abuzz with the potential ramifications of the leak.
Microsoft finally acknowledged the leak. "On Thursday, Microsoft became aware that portions of the Microsoft Windows 2000 and Windows NT 4.0 source code were illegally made available on the Internet," the company wrote in a statement issued late yesterday. "It's illegal for third parties to post Microsoft source code, and we take such activity very seriously. We are currently investigating these postings and are working with the appropriate law enforcement authorities. At this point it does not appear that this is the result of any breach of Microsoft’s corporate network or internal security. At this time there is no known impact on customers. We will continue to monitor the situation."
The Win2K portion of the source code is almost 700MB and includes more than 30,000 files but is reportedly just part of the code a person would need to assemble the bits into a working OS, assuming that person could also somehow conjure up the appropriate build procedure. (Microsoft says that the 30,000 files that have leaked are about 15 percent of the full source code.) And although the buzz about this leak will be huge for a few days, just about everyone should realize that the leak was inevitable. In recent years, Microsoft has opened its source code to educators, governments, and IT professionals in a bid to remove any latent fears about the company hiding suspicious functionality in its proprietary systems. Furthermore, experts who have already viewed the source code say that much of it appears to be code for Microsoft Paint, the free imaging application that ships in various Windows versions.

==== 2. Short Takes ====
An often-irreverent look at some of the week's other stories, by Paul Thurrott, [email protected]

Debunking the Rumors: XP SP2 Won't Be XP Second Edition or XP Special Edition
Several people wrote me this week after they heard that Microsoft plans to roll Windows XP Service Pack 2 (SP2) into a new XP release called XP Second Edition or XP Special Edition. I spoke with a Microsoft representative who has direct responsibility for XP; he told me that isn't the case and that XP SP2 will be delivered in a manner similar to other service packs. One aspect of SP2's delivery that's still up in the air, however, is retail packaging: The company is still mulling over whether to replace retail boxed copies of XP with new versions that include SP2 by default.

Debunking the Rumors: Windows Server Longhorn Won't Include BizTalk Orchestration
Several reports this week noted that Microsoft plans to add Microsoft BizTalk Server 2000's business-process-orchestration features to the next Windows Server version, which will allegedly be part of the Longhorn wave of products. However, I spoke with BizTalk representatives this week, and they told me that those reports aren't accurate. Instead, Microsoft is considering pushing some of BizTalk's workflow-integration technology into the core server OS because the technology can be generalized for use with other processes. "Orchestration features from BizTalk are not being discussed, contrary to reports," Steven Martin, BizTalk lead product manager, told me. "But whatever happens, it's not a done deal yet; it's just a discussion. If they did build our workflow-integration features into Windows Server, a future version of BizTalk would then run on top of that."

Gates Heads to Pretrial Questioning
Microsoft Chairman and Chief Software Architect Bill Gates will submit to pretrial questioning from Burst.com and Sun Microsystems lawyers in preparation for two separate antitrust trials the software giant is facing. This week, US District Judge J. Frederick Motz ordered Gates to make himself available for 3 hours of questioning, although Judge Motz didn't set a date. Burst.com is suing Microsoft for abusing its market power to muscle into new markets for Internet-based audio distribution. Sun is suing Microsoft for harming the development of its Java software-development platform.

Microsoft Patents XML-Script-Automation Technique
For months, open-source backers have been circulating rumors that Microsoft was attempting to patent its XML technologies, thereby negating the interoperable benefits of moving to that format. This week, the company confirmed their worst fears, although the patent Microsoft received isn't nearly as damaging to the cause as it could have been. Instead, the company received a patent for unpacking multiple scripts contained within an XML file or--to use the wording in the actual patent--"systems, methods and data structures for encompassing scripts written in one or more scripting languages in a single file. The scripts of a computer system are organized into a single file using Extensible Language Markup (XML)." To curb any potential criticism, Microsoft issued the following statement: "Microsoft, like other software companies, frequently files patents to protect innovative ideas. In the area of XML, Microsoft has contributed significant resources to develop XML as an industry standard and it has partnered with many companies to promote the standard's broad industry success. While the XML standard itself is royalty free, nothing precludes a company from seeking patent protection for a specific software implementation that incorporates elements of XML. This does not, in any way, change the royalty-free nature of the XML standard itself." And it certainly doesn't mean that Microsoft is "patenting XML," so relax.

France Says Vive La Open Source
The French government revealed this week that it plans to use desktop-based open-source software (OSS) as part of its Project ADELE, a 3-year plan that will result in the computerization of the country's governmental administration. Backed by celebrities such as Jerry Lewis and yep--you guessed it--Frank Stallone, France will migrate as much as 15 percent of its PC desktops to OSS based on Linux, compared with its 100 percent reliance today on proprietary software, mostly from Microsoft. Nevertheless, France isn't exactly dumping Microsoft: The country plans to use its economies of scale to get a better deal on its next large-scale Microsoft software license.

Microsoft Gives Thailand New XP Version; Just Don't Call It XP Lite
Numerous reports this week have suggested that a special XP version Microsoft made for the Thailand government will lead to a new version of the OS that some people are calling XP Lite. Those reports aren't true, Microsoft says. Instead, the company says it's simply meeting the needs of unique markets. In Thailand's case, Microsoft gave the country a version of XP that strips out certain unnamed components and includes a bundled copy of Microsoft Office XP Standard Edition. But the real kicker is the price: The XP bundle will cost Thailand just $38 per desktop, a far cry from the $725 or so that the bundle would set back consumers in the United States. Microsoft did admit that it isn't yet developing any custom Windows versions for other countries but that the company will examine such requests on a case-by-case basis.

Windows 2003 and Match.com Sitting in a Tree, K-I-S-S-I-N-G ...
Microsoft issued a somewhat humorous press release this week in which it touted the benefits of Windows Server 2003 and Visual Studio .NET 2003 for the development of Match.com, a dating service that's now ramping up for Valentine's Day traffic. "We partnered with Microsoft because we knew they'd be there to support us," Match.com Chief Technology Officer (CTO) Mike Presz said in a statement that sounded suspiciously similar to a testimonial a customer might give on, say, Match.com. Well, here's to many romantic nights between Match.com and its technology.

Microsoft Cancels Mythica
This week, Microsoft canceled development of the game Mythica after the company became embroiled in a legal fight with Mythic Entertainment, which (ahem) makes games just like Mythica. "Our goal with Mythica was to create a truly innovative massively multiplayer online role-playing game," Microsoft said in a statement. "While the game looked ready to deliver advancements to the genre, after careful evaluation of the \[gaming\] landscape, \[we\] have decided to ... \[make\] fewer investments in this genre. After a rigorous review of current and future projects, the decision was made that Mythica would not be one of the projects we would continue to invest in." I'm sure the lawsuit had nothing to do with that decision.

Frivolous Lawsuit of the Week
And speaking of lawsuits, with all the various lawsuits Microsoft finds itself involved in--both as the accuser and the accusee, I could probably highlight a different silly lawsuit every week and never run out of material. I'm too lazy to do that every week, but here's a frivolous lawsuit for this week. TV Interactive Data (TVI--and no, I haven't heard of the company, either) has sued Microsoft for infringing on a patent that it says covers the AutoPlay feature in Windows. AutoPlay, as you probably know, lets Windows automatically trigger specific functionality when removable storage and other devices are connected to the PC; for example, when you turn on a scanner, you might see a Camera and Scanner Wizard that lets you scan pictures. TVI says it has patents that cover a "host device equipped with means for starting a process in response to detecting insertion of a storage media" and a "method for starting up a process automatically on insertion of a storage media into a host device." Microsoft, naturally, says that TVI's patents are invalid, but Microsoft might try to settle the case. Perhaps AutoPlay could present the following options when Microsoft gets sued: Would you like to a) settle the case, b) pursue litigation, or c) sell your company to Microsoft?

Hey, Remember Those Microsoft Business Units That Made Money Last Quarter?
Last month, Microsoft reported that its MSN and Windows Server and Development Tools business units made money in the previous quarter, but this week, the company had to restate some financial records and those business units have now posted a loss. The changes happened because of a new stock-compensation plan Microsoft rolled out recently that ended up costing the company more money than expected. So MSN now lists a $79 million loss for the most recent quarter, and the Windows Server and Development Tools Business Unit got whacked with a $204 million loss. Microsoft reported the changes this week in a US Securities and Exchange Commission (SEC) filing, which also featured revised figures for the company's other business units. But fear not; Windows and Office are still making the rest of the PC industry look silly by comparison.

Dell Profits Up 24 Percent
And speaking of quarterly profits, PC maker Dell reported a 24 percent increase in profits for its most recent quarter, when it made $749 million on sales of $11.51 billion. The company also noted that PC sales rose a whopping 25 percent during the quarter, whereas its operating margin was relatively unchanged at 18.2 percent. Dell innovates in several ways, but its most impressive gains might very well be in operating processes. According to CEO Michael Dell, the company will use a variety of methods to cut operating costs by $1.5 billion this year. For example, Dell now uses machines rather than human beings to box computers.

No WinInfo Daily UDPATE on Monday
Because of the Presidents' Day holiday in the United States, we won't publish WinInfo Daily UPDATE on Monday. See you Tuesday!

Editor's Note
Yesterday we asked you for feedback about our recent decision to omit WinInfo Daily UPDATE's Table of Contents. Almost 250 of you took the time to send an email response. By an almost three-to-one margin, you said that you find the Table of Contents useful and want us to bring it back. But some of you like the shorter version of the newsletter and said you didn't miss the Table of Contents. Because we want to accommodate all our readers' needs, we've decided to bring back the Table of Contents--in a condensed version. Thank you for your thoughtful comments.

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