For those reading on this site, here's a good one.
nytimes.com
May 21, 1998
After Windows 98: The Future According to
Microsoft
By KATIE HAFNER
The fight between the Microsoft Corporation
and the Department of Justice has placed
Windows 98, the upgrade to the Windows
95 operating system, under a microscope. But in
the fast-paced world of software development,
Windows 98 is already yesterday's news -- it may
be shipping now, but it went into development
nearly three years ago.
At a news conference on Monday, the day the
Government filed an antitrust lawsuit against the
company, Bill Gates, the Microsoft chairman,
defended his company's "right to innovate on
behalf of consumers" while vowing to "continue
to create great software."
So what is Microsoft working on? What it decides
to pursue will depend on how it sees the future.
For instance, whether personal computers will
stick around, or whether they will merge with
television or telephone or automobile technology,
will affect the future of the so-called first screen,
which computer users see when they boot up a
computer. The content of the first screen is hotly
disputed between Microsoft and its adversaries,
the Justice Department and the state attorneys
general -- will a Microsoft first screen enable the
company to control access to the Internet? But the
issue will take an entirely different shape if, say,
PC's are eventually supplanted by small mobile
devices, a market where Microsoft currently has
no particular stronghold. The future comes
quickly, and any company like Microsoft has to
look beyond today's issues.
The company is planning many products, some that are directly involved with
Internet access and others that go far afield. In consumer electronics,
Microsoft is working hard to reach a simple goal: putting its technology
everywhere. Products designed to help the company attain that goal include
dashboard-mounted computers for cars, interactive stuffed animals and
computers that can see. Some are on the market now. Others are expected in
coming months. Still others are at least a decade away -- if all goes well, and
it often doesn't.
To develop new technologies, Microsoft has reached into its deep coffers: a
cash balance of $12.3 billion. The company has acquired companies with
promising technologies, bought a significant stake in others and recruited
some of the world's leading researchers.
The company is pulled in two directions: toward selling operating system
software for PC's and toward following consumers as they move away from
the PC into new areas like television-based Web surfing.
Microsoft has good reason to defend Windows, an operating system that runs
on 92 percent of the new PC's sold. In the Microsoft fiscal year that ended
last June 30, the company's so-called platforms business, which includes the
core operating system sales, generated $5.97 billion in revenues, more than
half of the company's total revenues of $11.4 billion.
"Operating systems are what the company was built on," said David
Readerman, an analyst at Nationsbanc Montgomery Securities. "It's the
foundation of the company."
At the same time, very fast, inexpensive microprocessors and wireless data
networks are making it increasingly clear that there is little reason for a user
to be chained to a desk by a bulky PC.
For more than two years, Microsoft has sought to translate its dominance of
the PC market into control of gateways to the Internet. Such control would
give Microsoft the upper hand in the rapidly growing area of Internet
commerce. In many of Microsoft's research efforts, even those that range far
from the desktop, the company's blending of operating system software with
Internet access is evident.
Part of the company's strategy calls for expanding the distribution of its
software to various low-cost devices like its Web TV set-top box, which
delivers Internet services on a television screen.
"We're trying to create a computing world
that complements the traditional PC," said
Craig Mundie, a Microsoft senior vice
president who runs what he called the
company's "non-PC" division.
Future versions of the $200 Web TV box, for
example, are expected to contain a
consumer-electronics version of Windows,
called Windows CE, that has already made its
way into handheld computers and is
beginning to show up on still smaller palmtop
devices like the Philips Nino and the Everex
Freestyle.
Microsoft is also locked in a battle with Sun
Microsystems over the software for
interactivity and Internet access that will
reside in television cable boxes. Sun is the
developer of Java, a programming language
primarily intended for use with the Web. Java
represents a threat to Microsoft because
programs written in Java can run on different
kinds of machines. Windows-based
programs, on the other hand, must hew to
the demands of the Microsoft operating
system.
For devices running Windows CE, Microsoft
circumvented Sun and licensed software to
run Java programs from Hewlett-Packard. In
the PC market, Microsoft has created its
own, slightly mutant version of Java. Sun
says both moves undermine its control of the
language.
For the hour each day that the average
American driver spends in a car, Microsoft is
developing the Auto PC, which will allow
users to listen to their e-mail messages and
surf the Web as they drive. The safety
concerns surrounding such systems have
placed a premium on research into
technologies like speech recognition, a
favorite topic of Gates's these days. Using
voice commands, the driver can get e-mail, dial a cellular phone or get
directions to a restaurant. Of course, the product runs on Windows CE.
The Auto PC, available from the Clarion Corporation of America this fall, will
also include a voice-operated CD player and AM-FM radio.
Nissan and Ford are looking into incorporating Auto PC technology into cars.
Of course, just how well these systems work, and whether drivers actually
want such a thing in their cars, remains to be seen.
Microsoft's blue-sky projects are less sharply focused on the Internet. The
company spends some $150 million a year on six-figure salaries for a legion
of research scientists.
That is just a fraction of the $2.7 billion the company spends annually on
research and development overall. But in recent years, Microsoft has quietly
built a basic research laboratory to rival the Bell Laboratories of old. The
company has hired 300 top researchers from universities and corporations
around the world and plans to hire an additional 300 by the end of the decade.
Their fields range from computer graphics to more obscure, theoretical
disciplines like statistical physics. The work of many of these scientists offers
no immediate apparent gain for Microsoft, but the company is looking well
beyond short-term benefits.
Gates has often said the company's goal is to build computers that see, listen
and learn.
"We're working on a whole variety of problems and a whole variety of time
scales," said Nathan Myhrvold, Microsoft's chief technology officer and the
person who oversees Microsoft research.
High on Microsoft's list of research priorities is teaching computers to see.
Computer vision and image recognition are technologies that computer
scientists have worked on for years. It is only relatively recently that
companies like Microsoft have begun to think about computer vision for
consumer applications.
"If you can have the computer sense its surroundings in a reasonable way,
there's an awful lot you can do," Myhrvold said.
For example, the company is working on prototypes of video game
technology that can help determine a player's mood. Furrowed brows
(frustration, perhaps?) or wandering eyes (boredom?) can cause the game to
change its behavior. "It can't tell directly what you're thinking, but it can tell
when someone is getting bored in a video game and pick up the pace,"
Myhrvold said. Vision systems can also track a user's eyes and fill a screen
first in the spot where the eyes are focused.
Of course, these plans may well not come to
fruition. They are areas of interest, not
guaranteed to lead to products ready for sale.
For all the money Microsoft spends on
research, it has yet to produce breakthroughs
as remotely revolutionary as, say, Bell Labs'
invention of the transistor. The company has,
in fact, fallen behind others in speech
recognition, and outsiders question the
usefulness of technologies like image
recognition.
In a lengthy memorandum he wrote seven years ago, Myhrvold outlined a
plan for a wireless digital wallet that would act as, among other things, a
communications device, fax machine, scheduler, pager, notepad, credit card,
checkbook and personal ID. It did not materialize. If he had that memo to
write over again, he said, acknowledging his misplaced optimism, he would
date the predictions 2004.
Simplicity is another byword at Microsoft these days. At the news conference
on Monday, Gates pointed to the company's work on simpler ways to use
computers, saying it was a high priority.
Simplicity is a concept seldom associated with Microsoft, yet the company
recently assembled a team to build a prototype operating system, based on the
Windows NT system, that will "dramatically simplify" PC's, said Jim Allchin,
a Microsoft senior vice president and the company's new simplicity czar. Up
to now, Windows NT has been sold to corporate users, but the company is
working on a version of the operating system aimed at consumers.
Then there is tomorrow's generation of PC users, those who are still toddling
today. In the past year, Microsoft has produced a line of stuffed dolls called
Actimates. Based on popular public television characters like Barney, Arthur
and Arthur's little sister, D. W., the dolls talk, play games and sing when
prompted. Press Barney's toe, and he sings one of 17 songs in his repertory,
including the dreaded "I Love You." Squeeze D. W.'s foot, and she starts a
counting game.
The toys also react to television programs, mimicking an actual couch
companion by singing and counting along with the program and making
chirpy side remarks like "That's a big orange carrot!" Although the toys,
which sell for about $100, try the patience of many parents, they have
aroused the interest of child development experts who see them as a leap
forward in interactive play.
The Actimates are fascinating for the glimpse they offer into Microsoft's
approach to new technology design. First, they represent a new kind of user
interface -- the dolls are the interface. "People have asked about 3-D
interfaces for a long time," Myhrvold said. "These things truly are a 3-D
interface."
Erik Strommen, a developmental psychologist who headed the design team
for the Actimates, said they also signaled a new way of building computers.
For years, Strommen said, engineers have approached the computer as a tool.
The new approach, which has emerged in the last five years, represents what
Dr. Strommen and others call a social approach to building computers: the
technology as a partner or collaborator in the work, rather than a tool.
If more devices like the interactive Barney begin to emerge, Microsoft's
operating system would become more invisible to consumers. A sticker
saying "Microsoft Inside" might become necessary if the software became
packaged out of sight in things like plush dolls or electronic organizers.
Such credit is important to the company, said Tom Rhinelander, an analyst at
Forrester Research in Cambridge, Mass. While the 3Com Corporation wants
consumers to know about its Palm Pilot, "it doesn't care if you don't know
about the Palm OS," he said, but the opposite is true of Microsoft. At
Microsoft, he explained, "they want everybody to know about their operating
system."
But at this point, given the unwanted attention the Government has given to
Windows 98, a less visible operating system might not seem like such a bad
thing after all.
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