Microsoft

Microsoft has postponed, at least for a short time, making the beta of Windows 7 publicly available.

The move comes as Microsoft has struggled to keep its Windows 7 Web site up on Friday.

"Due to very heavy traffic we're seeing as a result of interest in the Windows 7 Beta, we are adding some additional infrastructure support to the Microsoft.com properties before we post the public beta," Microsoft said in a blog posting, which was itself hard to get to as of 1:20 p.m. PST. "We want to ensure customers have the best possible experience when downloading the beta, and I'll be posting here again soon once the beta goes live. Stay tuned! We are excited that you are excited!"

Meanwhile, the company appears to have also pulled the code off a direct link that some were using to get the software on Friday.

The company has said it is aiming for several million testers of the beta version, the availability of which was announced Wednesday night by Steve Ballmer in his keynote speech at the Consumer Electronics Show. Microsoft has been aiming to have the final version ready to be on PCs for this year's holiday shopping season, but Windows boss Bill Veghte said it is still too soon to say whether the company will make that time frame. Officially, Microsoft has promised that it will be out before the three-year anniversary of Vista's January 2007 mainstream launch.

Update, 1:55 p.m. PST: Tom Warren at Neowin.net says the direct link that itposted earlier Friday is still working.

Microsoft's Windows Web site will be the place to go to get the Windows 7 beta later on Friday. At the moment though, many users are encountering just error messages when they try to reach the site.

This was the message I got--"HTTP Error 503. The service is unavailable." Is anyone out there getting through?

I have some calls in on this and will let you know what I hear back.

Microsoft's Bill Veghte said the company is aiming to have several million testers for the beta version. Microsoft has talked about having just a single beta of the product, followed by a release candidate version and then a final release. The company has been aiming to get it out this year, although Veghte said it could still come out either this year or early next year.

Update at 9:05 a.m. PST: Microsoft recommends going directly to this link.

Update at 9:25 a.m. PST: All the sites appear to be working for me, though the beta still isn't up, but should still go up later in the day, I am told.

Microsoft CEO Steve Ballmer delivers the CES keynote speech Wednesday.

(Credit: Corinne Schulze/CNET Networks)

LAS VEGAS--Microsoft CEO Steve Ballmer arrived at the Consumer Electronics Show with his usual optimism, but he also brings a clear sense of reality: The tech industry is in for some rough times.

"The fact of the matter is, this is not a downturn, this is a bit of a reset. Those are quite different and we're trying to really suss through what we think that means for us," Ballmer said in an interview here with CNET News Thursday, a day after delivering the keynote address at the conference.

Ballmer talked about what the "reset" will mean for Microsoft, as well as lessons learned from Vista and Microsoft's move to put Office on the Web. When it comes to what worries him most, most days it's still Google, although he concedes he has had to spend more time recently on economic issues and making sure Microsoft makes the adjustments it needs to. He wouldn't go into detail on what (and who) Microsoft plans to cut, but it is clear that some changes are coming.

The following is an edited version of that interview:

CNET News: Obviously, Microsoft didn't necessarily get everything it might have hoped for in terms of the critical response for Vista. What are you guys planning to do differently with Windows 7?

Ballmer: Well, I think we made some choices in Vista to improve security at the kind of expense, if you will, of compatibility. With Windows 7, we're able to build compatibly off of Vista and really sort of just tune, if you will, the user interface, the performance, and at the end of the day, it'll be what the users think of the product that we're building, and we'll start getting beta feedback this week.

Q: How hard are you pushing the team to get Windows 7 out this year?

Ballmer: I'm not pushing the team hard, the team is pushing itself. They set some goals and objectives and of course we'll ship the product when it's--as I said last night--both right and ready and when we know when that is, we'll share that.

Microsoft will issue a patch on Tuesday for Windows vulnerability that could allow a hacker to gain control of a computer remotely, the company said in an alert on Thursday.

Microsoft also plans to host a Webcast at 11 a.m. PST as part of Patch Tuesday, which comes the second Tuesday of every month. There will be just one security update.

The vulnerability is considered critical for Windows 2000, Windows XP, Windows Server 2003, and moderate for Windows Vista and Windows Server 2008, Microsoft said.

The software maker will also release nonsecurity updates on Windows Update and Windows Server Update Services, as well as an updated version of the Microsoft Windows Malicious Software Removal Tool.

LAS VEGAS - Bill Veghte may not be as well known as his boss at Microsoft, Steve Ballmer. But as the head of the company's Windows business, Veghte is one of the key executives to the future of the company.

At the Consumer Electronics Show here Wednesday, Veghte sat with CNET News senior writer Ina Fried for a wide-ranging interview, touching on everything from the planned release of Windows 7 to future of Microsoft's gee-whiz touch technology. The following is a condensed and edited version of that interview:

Bill Veghte, Microsoft's senior vice president for the Windows Business

(Credit: Microsoft)

Q: It's fair to say that you guys would like to have Windows 7 out in time for the holidays?
Veghte: We will ship it when the quality is right, and earlier is always better, but not at the cost of (ecosystem support), and not at the cost of quality.

In the past, one of the tools that Microsoft and other companies used to help manage that transition is some sort of technology guarantee: if you buy Vista after this point, you'll get 7 for free. My understanding is that you guys are planning something similar with 7?
Veghte: Certainly we want to make sure that Windows customers have an easy transition to Windows 7, and over the years we've provided a variety of offerings to customers...guarantee is one of them. And while we have nothing to announce today, we're certainly evaluating the options to make sure that we can help and support our customers in that transition.

One of the things with Windows 7, some of the cool features, particularly multitouch, require the hardware makers to build hardware that has the necessary things to take advantage of that. What is Microsoft doing to make sure that it's more than just a couple showcase machines that have touch?
Veghte: One of the things that we've worked very hard on in this release is engaging with the hardware vendors, taking their feedback, highlighting those opportunities, and then in the high quality releases doing deep engineering cooperation across the organization. Michael Dell, for example, went on record saying Dell worked with Microsoft for many, many years many releases of Windows, and this is one of the best, deepest cooperations that we've ever had...The beta is a big milestone, because we sort of unveil a lot of the capabilities that were not there in the developer release.

Do you have a goal in terms of how many people you want to try out this beta?
Veghte: Traditionally several million people is a good number. Several million means you can take all the feedback. It's important that as people are thinking about whether they download the beta, they actually use it (and share) that information with us. But if we have a couple million active beta testers, then we're going to be in great shape. This release is all about listening to customers, and we certainly have features and capabilities that you're familiar with, and now in the beta, a couple million people banging on it over the next couple of months.

What is the consumer pitch for Windows 7?
Veghte: You know, I get really excited about Windows 7 for a couple of different reasons. One is that it takes a set of everyday tasks that I do all the time, and it makes them faster and simpler. The second reason that I get excited about Windows 7 is there's a set of things that I expect my computer to do the way I want it to do, whether it be around reliability or security or battery life or performance or (controlling) messages popping up. And in Windows 7 on each one of those dimensions there's a set of improvements that we hope to deliver.

The next piece is in every release of Windows you have the opportunity to enable a set of scenarios or capabilities that are not (well-served now)...Like by providing touch support in Windows, whether you're a (third-party developer) or a hardware developer, you'll think about, "Do I touch-enable my notebook or do I touch-enable my application?" That's going to enable a whole set of new capabilities and interaction models for people.

Since we're at the Consumer Electronics Show here, the number of -- the amount of music, photos and video that is increasingly in my household, my PC, my wife's PC, you know, it's all over the place, and I just want one library one library of all of the Veghte photos or all the Veghte music. I don't really care about the physical location. And in Windows 7 we've taken that, through the combination of the new explorer, the PlayTo capabilities, the library construct, and made it much easier for people to manage, store, share their digital content.

The popular sentiment, or what I've heard most often from people who have played with 7, is this is Vista done right. What's your reaction to that?
Veghte: The next release is always (going to be better) and that's called innovation. And so we've got to satisfy a set of customers in Windows Vista now, we've got people announcing exciting new license numbers in terms of the continued growth of Windows Vista, but the investments in the innovation that we did in Windows Vista architecturally are enabling a set of capabilities that we couldn't do.

Many businesses have not jumped to Vista. What's the business message going to be around 7?
Veghte: When I think about the conversations with business customers, they want not only things that we do for end users, but they want great manageability and security. And clearly two years after the delivery of Windows Vista, we've demonstrated a higher degree of manageability and security.

Is it disappointing that it hasn't translated better?
Veghte: No, but in some fashion -- that's why I look at it and say, from a marketing perspective we did make that statement. We said Windows Vista is the most secure desktop OS release we've ever done. By virtue of the release of Windows Vista, we were going to have lots and lots of people going after it. And under that, Windows Vista has stood up very, very strongly... When I think about the conversation with CIOs or with businesses, in this era, this modern desktop era, you want security, you want manageability at a different level than you want it in 1999. And as such, Windows Vista meets that bar and Windows 7 builds on it...And we have to protect the investments that customers are making today in Windows Vista.

Have you changed your marketing approach because of the economy?
Veghte: Can I broaden the question a little bit? When you think about the economic situation, what does that mean to the Windows?

Sure.
Veghte: Windows PCs have always represented a great value relative to other companies in the marketplace, both in terms of the whole range of price points and all the capabilities that you get out of the box.

Given the economic situation, as shareholders would expect us to tighten our belt, but with the things that are most important, and customers would expect us to do that while continuing to innovate. And this is why even in this touch economic situation it's exciting to be able to look at the product pipeline we've got with Internet Explorer 8, Windows 7 and Windows Live...and the next generation of Windows Live, and look at all of the advances that we're offering to customers. A Windows PC is an unbelievable entertainment investment.

It's reasonable to think though that you guys might be spending less on ads and other marketing.
Veghte: The expectation is that the dollars we spend on advertising today will go further than it did (before). But the Windows business is pretty core to Microsoft, it's core to the Microsoft brand, so we will continue to invest in support of Windows.

Do you think the same holds true when we look at things like headcount?
Veghte: Windows is core to the success of the company. I'm certainly looking at how we can be more efficient, and given the mission in our advertising spending that we just talked about, efficient in where we apply our headcount and efficient, but not at the risk of jeopardizing the opportunity that we have, and the opportunity in these economic conditions.

Do you think Microsoft will have do more than you have in the past in terms of reacting to the economy?
Veghte: I think certainly Bill's philosophy and Steve's philosophy has been to take a long term view. The long term view is (stick with) the investments we make in R&D, and then patiently and steadily and tenaciously deliver on that opportunity.

Obviously a lot of the marketing that you guys rolled out as part of the new ad campaign is pretty deliberately trying to say this is what Windows is, and really this is what Windows is vis-à-vis Apple. Where do you see the competitive landscape having shifted from where it was say a few months ago?
Veghte: In the fall we did two things: One is we were clear on what Windows represents... to be clear on what Windows stood for, and give people, Windows customers the opportunity to be proud of who and what (they stand for) in rolling out the tag line, saying "I am a PC." Now, you can decide whether that's competitive context or not. I choose to sort of think about it as we need communicate what Windows stands for, and we need to give our customers the opportunity to celebrate who and what they've chosen.

Microsoft's history with Windows is taking things, concepts, technologies, and making them accessible to the average user. And your competitor, Apple, you know, typically gets a lot of credit for innovating. Are there things that Microsoft is doing in the desktop OS that you believe you aren't getting credit for?
Veghte: I think the important thing for us is making sure that we're serving our customers well. You look at how we've listened and the things that we've picked up on and delivered in Windows 7 or Windows Live Wave 3 or Internet Explorer 8, it's I think a set of everyday tasks, that's huge innovation. I think it's huge innovation when you realize that on average over a third of the time people have four or more windows open. If I can dramatically simplify that, that's innovation...And so when I look sort of against the backdrop of history and sort of the current economic landscape, I think we've got -- we have a tremendous value proposition to bring to market.

Windows 7 is going into public beta, Microsoft head Steve Ballmer announced at the Consumer Electronics Show in Las Vegas late on Wednesday.

The first beta version of the successor to Windows Vista is immediately available as a downloadable disk image to MSDN, TechBeta, and TechNet subscribers, while the general public will get to test-drive the new operating system starting Friday.

Windows 7 is expected to hit shelves toward the end of this year or the start of 2010, according to Microsoft's broad roadmap for operating system releases, which specifies a three-year gap between releases. The new OS first made an appearance in October, when a "pre-beta" version was given to attendees of Microsoft's Professional Developer Conference (PDC) 2008.

Windows 7 looks like Vista but is more suited to multitouch interaction with the PC.

(Credit: ZDNet UK)

Prior to Ballmer's Wednesday announcement, ZDNet UK talked to Microsoft's UK Windows chief, John Curran, in London. Curran, who called the beta release "feature-complete," said Windows 7 would appeal to business users and IT professionals because of its enhanced security and because the new OS does not require new hardware investments above those required by Vista.

"(The encryption feature) BitLocker was a key enhancement in Vista, but Windows 7 takes that a step further," Curran said. "BitLocker To Go is the new feature. If you take a traditional USB drive and then turn on BitLocker, you can either put in a password or lock (the USB drive) using a smart card."

A USB drive encrypted using BitLocker To Go will be usable on a PC running Windows 7, Vista, or XP--although an XP machine will only be able to read the drive after downloading software to allow this.

"Any hardware that runs Vista, you can have confidence it will run Windows 7 the same or better without a hardware upgrade," Curran said. He also claimed that, as the new OS is "fundamentally built on Vista," most Vista-compatible applications will also be compatible with Windows 7. The exceptions would be applications that are highly operating-system-specific, such as antivirus or file-management software.

Curran described Windows 7 as "designed and optimized for the mobile PC, whether it is a Netbook or a laptop", and claimed the new OS would work even on current Netbooks such as those using a 1.6GHz Intel Atom CPU.

A key feature for business users, Curran said, would be DirectAccess. This feature, also included in Windows Server 2008 R2, lets mobile workers access their corporate networks without the need for a VPN. It also lets IT professionals remotely manage laptops, even if the machines are too small to allow for the incorporation of a smart card reader.

Curran also said power-management enhancements in Windows 7 made the operating system suited to mobile computing. "Windows 7 does some clever things in terms of power management," he said. "The screen automatically dims after 30 seconds (of disuse) but, if you flick the touch pad with your finger to keep (the PC) awake, it will wait longer until the next time it auto-dims. It will adjust its behavior according to your needs."

It is not yet clear how many sleep modes will be included in Windows 7--many saw the number in Vista as too great and too confusing--but one certain addition is that of "wake to wireless," adding to the current "wake to LAN" mode.

Another enhancement for business users, Curran said, would be found in Windows 7's search functionality. Whereas Vista's integrated search covers the client PC in question, the new "syndicated search" allows search across a corporate network or even across Sharepoint.

Curran also said that Windows 7 was smaller than Vista, in terms of the amount of space it takes up on the hard drive, and that performance had been "tweaked across the board."

In its appearance, Windows 7 closely resembles Vista. Two significant exceptions are the size of the buttons in the taskbar at the bottom of the screen--these are now larger so as to be more usable in the OS's built-in multitouch mode--and the lack of the sidebar. The sidebar in Vista contained the widgets, but in Windows 7 these mini applications can be spread across the desktop in a similar way to widgets in the Android mobile operating system. As Android seems set to make its way into Netbooks, it is likely that Google's operating system will become a direct competitor to Windows 7 in that market segment.

The taskbar in Windows 7 also includes another visual enhancement over Vista, in that it will automatically display multiple tabs for a browser or multiple documents for applications such as Word.

Asked whether businesses should ignore Vista in favor of the upcoming Windows 7, Curran claimed that "the road to Windows 7 is through Vista."

"If you are running XP today, my best advice is to move to Vista today," Curran said. "Most businesses will wait for the first service pack for Windows 7 (before deploying it), but some will test Vista and (realize) they can get benefits (over XP) here today." Curran's words echoed those of Ballmer in October, when the Microsoft chief said he accepted that some companies would skip Vista, but recommended that they try Vista anyway due to the compatibility between Vista and Windows 7.

Curran refused to say whether Windows 7 would launch with the same level of marketing campaign that went into the release of Vista. He also said Microsoft had not yet decided on the minimum hardware specification for Windows 7, nor the number of versions in which it would be made available. He did, however, insist that Microsoft was "committed to an enterprise edition" of the operating system.

David Meyer of ZDNet UK reported from London.

Microsoft Research on Thursday is releasing software that gives musicians, both casual and professional, a new way to speed up song development. Called Songsmith, the $29.99 application creates musical accompaniment based on whatever is sung into the computer's microphone.

In order to do this, the software processes the pitch and tone of what's recorded and lets users hear how it might sound if they had a little backup in the form of a virtual piano, drums, and keyboard. Microsoft is expecting them to use the new track either as inspiration for further song development or as a simple way to create karaoke-quality recordings for friends and family members.

The software lets users change the feel of a song completely using various sliders that adjust mood, volume levels, tempo and what instruments are being used. Users are also able to purchase additional instruments from Garritan for a small fee that can drastically change the way a track sounds. Each purchased instrument comes wrapped in a special installer that automatically adds it to Songsmith. Dan Morris of Microsoft Research tells me there may eventually be a marketplace for other sample providers, although for now the software is using it exclusively because of its the only compatible format.

Songsmith lets you simply sing into your computer's microphone to hear what it would sound like if you had a back-up band.

(Credit: CNET Networks)

Songsmith is starting out as a digital download only, and will be available from Microsoft's recently launched digital downloads store front. Morris says there are no current plans to make the software part of a larger suite of music oriented products from Microsoft. Competitor Apple has offered a slightly similar feature in its Garageband software that gives you virtual band mates that can accompany you as you record music with an in-line microphone, however each of the instruments must be programmed by the user.

One interesting thing to note is that the technology is fully capable of providing automated accompaniment in near real-time. Morris says the only hurdle there is that the programming does all its magic by seeing where users are going with a melody and compensating accordingly. Morris also says a Web based version of the software could be possible later on down the line, although development in that area has been slowed down due to latency and recording quality bottlenecks.

Embedded below are before and after clips of what Songsmith is capable of. As mentioned before, to change the sound of this song users simply need to adjust a slider or two.

LAS VEGAS--As he takes the stage Wednesday, Steve Ballmer has a mighty big task ahead of him.

Not only is he taking over Consumer Electronics Show keynote duties from Bill Gates, he is also aiming to convince the tech world that Microsoft is serious about defending its turf on the PC as well as making headway on the Web, television and phone. Oh yeah, and then there's that whole economy-melting-down thing.

Ballmer hasn't arrived in Sin City empty handed, however. In perhaps the biggest announcement of the night, he will announce Microsoft is ready with a beta version of Windows 7 and he will show off some of its key consumer features.

Microsoft will also announce new deals for Windows Live that will see Microsoft's search engine become the default on PCs from Dell as well as touting a deal with Verizon Wireless that leaked earlier in the day. The company is also counting on two Halo game releases this year to help keep the Xbox 360 going in the right direction.

But Microsoft faces considerable competition in each of the areas Ballmer is discussing. On the PC front, a resurgent Apple has increased its share. In search, Google continues to dominate. In the phone market, Apple's iPhone has grabbed much of the spotlight, not to mention significant market share. Google also has joined the fray, while longtime competitors such as Research in Motion and Palm are trying to maintain their slices of the pie as well.

And then, of course, there's the substantial financial headwind. Ballmer is expected to express his usual optimism--despite the global financial outlook--and discuss the company's commitment to research and development in both good times and bad. That said, Microsoft is clearly not immune from the problems that led Intel Wednesday to announce that fourth-quarter revenues were down 23 percent from the same quarter a year ago.

On the PC side, Microsoft is looking to turn the page from Vista to its successor, Windows 7. Microsoft isn't talking about any new features of Windows 7, saying it talked about all of the key features at the Professional Developer Conference last year. Instead, it will attempt to demonstrate what features like improved home networking really mean for the average household.

As for the beta of Windows 7, Microsoft said it will be immediately available for technical beta testers and those in Microsoft's TechNet and MSDN developer programs and will be made publicly available on Friday. The company still isn't officially committing to a final release in time for this year's holiday season, although the company is clearly still aiming for that.

Ballmer will also discuss Windows Live. In addition to the global PC deal with Dell and the five year U.S. deal with Verizon Wireless, Microsoft has expanded its relationship with Facebook to allow users to see within their Windows Live homepage certain of their buddies' Facebook updates. The company is also stripping the beta tag off many of its Web-based and downloadable Windows Live products.

On the phone side, Ballmer is expected to talk about the improved mobile browser Microsoft released at the end of last year, but the company is not talking yet about when to expect a serious upgrade to the Windows Mobile operating system, which has grown rather long in the tooth. Microsoft has made reference to an interim Windows 6.5 release that could serve as a bridge until the more significant overhaul of the operating system--Windows Mobile 7--makes its delayed debut.

On the automotive side, Microsoft is announcing a new version of its Ford Sync entertainment system that uses voice recognition software from its Tellme acquisition.

While that's the main news of the show, check out our live blog to get some live quotes, our commentary, as well as updates on any celebrity guests or funny videos that are often the hallmark of Microsoft's keynotes.

See also: Windows 7 beta: First impressions

A long time ago, Bob Muglia worked on a Microsoft project designed to offer a variety of services in the cloud. That effort, known as Hailstorm, didn't exactly go gangbusters, and Muglia's career took a detour.

Bob Muglia

But both Muglia and Hailstorm are back. On Monday, Microsoft elevated Muglia to divisional president, a recognition of the success he has enjoyed as head of Microsoft's server software business.

As for Hailstorm, the name is gone, but many of the concepts are back, as part of the Windows Azure platform that Microsoft announced in October. Last month, I had a chance to talk with Muglia about Windows Azure, the cloud in general, as well as the economy. Here are some edited excepts from my conversation:

Is this supposed to be a slow-motion rollout with Azure?
Muglia: The way I sort of describe it is, it'll be phased--there's a whole broad set of services. You'll see some of those services go to production next year; exactly what and when, we're still working through. People are able to begin to develop right now, of course, on it, but it will happen over a period of time.

And the other thing right now is, people are still very much kicking the tires. We have quite a bit of tire kicking going on, a lot of people provisioned on the services right now, and so far, things have been going well.

What are the kinds of things that you think people will want to run in Azure?
Muglia: In terms of the classes of applications, I think you'll see two initial ones, though it's fair to say that people may have an interest in running in this environment any application they would want to run on-premises. But the initial ones I think would be your Web-style applications, which tend be Internet-connected and need geodistribution.

The other class that I think is really interesting is anything that involves working in partnership with others: supply chain sorts of applications, business-to-business, Electronic Data Interchange, those sorts of classes of applications in which you need to connect multiple organizations, and you need to deal with authentication, and you need to deal with network connectivity.

Today it's very complex with virtual private networks and password management, and a whole nasty set of problems to deal with, and Azure has some built-in services to simplify those things, including a service bus to go through firewalls and connect things over the Internet--again, any system to allow people to authenticate. Those are basics that are fundamental, that everyone will really need in this kind of environment.

So, I think you'll see those sorts of things emerge initially, but then you could just imagine all sorts of things. You could imagine people using it for (high-performance computing) applications. That's an area we're looking at, and we certainly are having conversations with a number of academic and other organizations.

In terms of the movement toward the Microsoft-hosted versions of its server products, are there some interesting things that you have come across, as you've had to do the work to get ready for that?
Muglia: There's a ton. I mean, one is, you need to move so that everything works across the Internet, which is just the right thing to do, anyway. Another thing you see is the need to have what we call multitenancy. So, to get scale on these things, you can't be dedicating even a virtual machine to a company. You need to be able to support many users, many organizations within a single instance of an application, and so that's an attribute.

There's a whole set of really interesting regulatory things that you hit when you go across the world attached to this. Turns out, some of our products, like unified communications, have VoIP (voice over Internet Protocol) capabilities. Well, you go and take that to many countries of the world, and the call those telephone companies. They call you a telco, and all of a sudden, there's a conversation about being regulated like a telco, you know, in some countries around the world. That may or not be pleasant.

There are issues about data and where data can reside and not reside, and so that's why when you spread geographically around the world, there's a wide variety of new issues that open up that are quite, you know, quite interesting--billing issues, because obviously, there are different issues with the way the banking systems in different countries work.

Let's talk about the economy. What are you seeing when you talk with customers?
Muglia: People are afraid. I mean, I think we're all a bit afraid, at some fundamental level, because we don't know--no one knows where this is going to land in the long run.

No one really is clear as to how far the contraction is going to go and how long it's going to happen, and then there's a lack of clarity also as to how we get through this. Are we going to be tight six months of the year, then boom!? Well, maybe. That would be kind of a good viewpoint of things right now. Or is it going to be a longer period of time, with a medium period of time with sort of a slow growth.

I sort of always come back to a belief that the fundamentals will drive all of these things, and ultimately, it means that people have to produce things that others value that helps to drive the overall society forward and, you know, generate something that is of sustainable long-term value. Ultimately, one of the key things is, how can we make companies and individuals more productive and able to work together better?

So, I guess I have two questions somewhat related to that. One is, how about for you? As a business manager, obviously, you manage a fairly large business. What are the things that you might have done, had the economy continued, that you're not doing now? What are some of the things that remain priorities, and what are some of the things that you're going to let happen slower?
Muglia: Well, certainly, there's no question that Microsoft's not immune to the circumstances. There's no question about that. So we have slowed our growth. We are still growing as a company, and (the server and tools business) will grow overall this year, though I admit that we did most of our growth in Q1. We actually were incredibly successful in bringing a lot of folks on in Q1, so we would have had to slow (hiring) under any circumstances because we're outachieving our plan, but we've slowed considerably.

So if you take some of the areas in the database space, like some of these areas around business intelligence and data analysis, we're actually investing in some of those areas. But we're taking resources off some things that don't have the same kind of results and long-term potential for us to have returns, one of which was pretty public recently: OneCare, where we, you know, decided to refocus that effort into a much more narrowly focused free antimalware offering instead of providing a broader suite.

Are there other things about which you, as a business leader, are saying, this is going to have to wait a little or move slower?
Yeah. I mean, there certainly are. I think that we've looked inside, at what we're doing really in almost every one of our groups. If you look at almost every one of the things that we're doing and say, OK, there's a set of things we want to do in management, let's tighten the belt a little bit, as to where we're going. Yet we're continuing to invest in this whole virtualization and management space, coherence with Azure, all those sorts of things we're continuing to invest in.

So in each one of our business areas, we've looked at how we could reallocate and refocus, and then across the board, we've made some fairly fundamental shifts like we did with OneCare.