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Longhorn Comes Up Short

Longhorn Packs Some Punch

What will Longhorn offer users? The Journal was among the media outlets reporting that one feature, called Avalon, will still be in the 2006 release. Avalon "will enable PCs to display icons and other elements on a computer screen in three dimensions. The other, called Indigo, can help software developers build new types of Internet-commerce services and software for sharing and accessing information over networks."

But are those new features enough to entice customers? No, according to one analyst quoted by the Seattle Post-Intelligencer: "[F]or some companies, the remaining features in Longhorn may not be enough to spur purchases without the previously expected file features, said Alan Davis, an analyst at Seattle-based McAdams Wright Ragen, which manages $2 billion and owns Microsoft shares. He said the move could make some people wait to upgrade until the company incorporates the advanced file system later. WinFS was intended to create new connections and relationships among otherwise distinct programs and files. One effect would have been to let computer users search for files across different programs, rather than searching programs individually, as is commonly the case now."
The Seattle Post-Intelligencer: Microsoft Cuts Key Longhorn Feature

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Much Ado About Nothing?

One analyst gave Microsoft a break. "Microsoft's shift will have an effect on developers in that some parts of the new Windows technology are likely to be adopted sooner than expected, analysts said. But as with PC makers, the effect won't be dramatic, because the product was still remote, Jupiter analyst Michael Gartenberg said," CNET reported. "At this point it's all very theoretical," Gartenberg said. "Longhorn was an extremely ambitious project from day one. It's not the first time Microsoft has announced feature sets for an operating system and in the end had to scale back their plans a little bit."
CNET's News.com: Developers React To Longhorn Delay

And InfoWorld reported that "[w]hile the WinFS delay may be a loss, the promise to offer key Longhorn technologies for current operating systems and a commitment to deliver Longhorn in 2006 are important gains, analysts and users said." "'This is a smart move,' said Dave Burke, a senior software developer at LLI Technologies Inc., an engineering and construction company in Pittsburgh. 'Maybe individual presentation and communication subsystems don't generate the hype of Longhorn, but to developers who live in the real world of incremental technological evolution, this is welcome news.'"
InfoWorld: Longhorn's Loss May Be Some Users' Gain

Another analyst said 2007 is the make-or-break year for Microsoft: "Rob Enderle, principal analyst with the Enderle Group, said ... he believes it will be crucial for Microsoft to have the new technology ready for the next version of Windows Server software, due out in 2007. That's because servers tend to hold much more data, making advanced searching and sorting capabilities more necessary."
The Associated Press via The San Jose Mercury News: Next Windows Version Due In 2006, Without New Storage System

Golden State Headache

Microsoft has more legal woes to worry about, this time it's claims that the company employed monopolistic business practices in California. According to The Los Angeles Times, it's all about the money: "After watching computer users wring as much as $1.8 billion out of Microsoft Corp., local governments want their piece. Six California counties and cities, including Los Angeles and San Francisco, sued the world's biggest software company Friday for allegedly using its monopoly in personal computer software to overcharge them."
Los Angeles Times: Microsoft Is Sued by Local Governments (Registration required

According to the Associated Press, "The local governments are asking a judge to make the case a class action on behalf of all California cities and counties. If a judge approves the lawsuit as a class action and Microsoft is found liable, the Redmond, Wash., company could be liable for many millions of dollars, perhaps billions."
The Associated Press via Information Week: California Cities and Counties Sue Microsoft For Antitrust

More, from CNET: "The lawsuit follows successful class actions against Microsoft in several states, including a $1.1 billion award to California consumers. The same law firm that argued that civil action is representing California counties and cities in the latest legal maneuver. The lawsuit, which could recoup millions of dollars for the California government, also comes as the state took out loans to compensate for a $15 billion budget shortfall Microsoft had not seen the complaint against the company, but a representative said Microsoft's policies have been fair."
CNET's News.com: California Sues Microsoft For Antitrust ľAgain

Tuning In Redmond

Microsoft is finally launching its Internet music service as it seeks to compete head-to-head with the likes of Apple's iTunes service and other pay-for-play music sites. "The MSN Music store is slated to open in trial form Thursday, according to Grace Welch, a spokeswoman for the company. Welch declined to disclose details," Leslie Walker of The Washington Post wrote in her Web Watch column yesterday. "But it appears likely that Microsoft will follow the example set by Apple Computer when it comes to licensing rights, allowing purchasers to play songs purchased on up to five computers and burn the same playlist to audio CDs up to seven times. Apple Computer's iTunes music store is still the most popular on the Internet, though it has many imitators."
The Washington Post: At Last, Microsoft Starts The Music (Registration required)

The New York Times today reported on Microsoft's track record of rolling out services to compete with other companies: "Microsoft, taking a trail blazed by others -- then trying to dominate the market -- is a familiar tune. With the opening on Thursday, Microsoft will land itself in a market that Apple Computer pioneered more than a year ago with its iTunes online music store, in much the same way that it took on Netscape in the Web browser business and Sony in the market for console game machines. As a storefront on the MSN online service, Microsoft's music service will offer song tracks for downloading to personal computers and portable music players."
The New York Times: Can Microsoft Stomp iTunes With A Store Of Its Own? (Registration required)

The Boston Globe reported that even though Microsoft is entering the online music pay-for-play business late, the "company will bring some strong assets to the music-download competition, notably the hundreds of millions of visitors to its MSN stable of consumer websites. Microsoft has long sought to boost transaction revenue from those sites, and the digital music business model pioneered by Apple has proved irresistible."
The Boston Globe: Battle Brewing on the Digital Music Front

Seattle-based RealNetworks might stand to lose the most as Microsoft's Internet music service comes out of the gates. "Josh Bernoff, a market research analyst at Forrester, told the Times: "Given how fragmented the market is, MSN's eight million subscribers could quickly allow Microsoft to grab second place, Mr. Bernoff said. That spot has been held for the last few weeks by RealNetworks, a longtime Microsoft adversary that has both a music download store and a subscription-based streaming music service."

Quiz a Microsoft Exec

Tom Richey, head of Microsoft's homeland security efforts, will be online with me tomorrow at 11 a.m. ET to talk about trends and Microsoft's current work with government agencies and customers. You can submit questions now or during the chat.

I Like My Cubicle Just Fine, Thank You

Here's yet another a sign that the tech sector isn't going gangbusters: More tech workers are staying put in their jobs than at any time in the past two decades. USA Today reported: "Just 8.9% of tech workers willingly left their jobs last year, says an Aon Consulting survey of 595 of the world's best-known tech firms, including Microsoft, Cisco Systems and Intel. It was the third year in a row that voluntary turnover dropped. 'It's as low as I've seen it, and I've been tracking these numbers since the early '80s,' says study author John Radford. The numbers do not include workers who are laid off, Aon says. Last year, 11.2% of the workforce left jobs involuntarily, compared with 20.3% in 2001, when the tech bubble burst." Tech workers might migrate soon though. "Joseph Strate of San Francisco staffing firm RGA Associates says companies shouldn't become complacent about keeping good employees. Right now, 'Not everybody recognizes that we are out of (the recession) and are holding on to what they've got,' he says. That will change with each positive economic indicator, he says."
USA Today: Tech Workers Stay Put As Economy Perks Up

Flat Screen Growth Hardly Flat

The flat-screen business is booming. In a front-page article today, The Wall Street Journal reports: "With consumers grabbing up more flat-panel TVs, the makers of flat screens -- all located in Taiwan, South Korea and Japan -- are racing to finish new factories and stake a position in what will become their biggest and most lucrative market. Ten such factories are now under construction and will cost a total of about $20 billion to build and equip. From a small segment of the computer-peripherals business, flat-screen production has grown into a sizable industry at the center of a global struggle for high-tech dominance. The industry is spending tens of billions of dollars building manufacturing capacity. In contrast to the role Asian high-tech companies have traditionally played as the low-cost builders of other people's innovations, the region's flat-screen makers sit at the lucrative center of technical and product development, influencing the design of electronic products just as chips do."
The Wall Street Journal: Once a Footnote, Flat Screens Grow Into Huge Industry (Subscription required)

The Washington Post yesterday weighed in with a somewhat-related package of articles on the digital TV revolution: "Digital, high-definition television can be a complex enough business in its own right. But the shift from analog to digital now also means a shift from fat to flat -- instead of traditional cathode-ray tubes, new sets employ plasma, liquid-crystal display, digital light processing or other technologies to cut down on the bulk of the set. Sales of all digital sets are up, fueled by steadily decreasing prices. According to the Consumer Electronics Association, 2.8 million such televisions were shipped during the first half of this year, the vast majority of them high-definition sets."
The Washington Post: To Be Picture-Perfect, A Choice of 3 (Registration required)

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