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Week in review: Microsoft's amends

The software giant tries to reduce the heat from the Justice Department and federal regulators, but also has to light a fire of its own to get its most ambitious project under way.

Microsoft tried to reduce the heat from the Justice Department and federal regulators, but the company also has to light a fire of its own to get its most ambitious project off the ground.

The software giant touted the ways it is complying with a November antitrust settlement during a conference call, but analysts say it is little more than Windows dressing. A Microsoft lawyer focused on four August milestones as part of Microsoft's compliance progress on the deal, which still awaits the approval of a federal judge.

In general, the settlement seeks to force Microsoft to treat PC makers and developers evenhandedly and disclose more of the underlying technology behind its software. However, critics charge that the company is using the settlement to raise prices.

The first milestone came Aug. 1, when Microsoft put into place new Windows licensing agreements. On Tuesday, the comapny began licensing 113 communications protocols used by the Windows OS to work with the Windows Server products. On Aug. 28, Microsoft will release 272 previously undisclosed application programming interfaces used to ensure that third-party software works well with Windows.

To settle a privacy complaint with the Federal Trade Commission, Microsoft agreed to make sweeping changes to its Passport authentication system. The settlement addresses allegations that Passport collects too much information, uses unfair or deceptive practices, and fails to adequately protect the privacy or security of personal information, particularly of children.

Passport is Microsoft's online authentication system, which allows customers to use single sign-in to access multiple Web services. Passport is essentially an electronic "wallet" that collects and stores an ID, password and other personal information such as a shipping address or credit card number.

But critics have assailed the plan on several fronts, particularly privacy and security, and the FTC agreed on some points.

The service is a cornerstone for .Net, Microsoft's slowly evolving Web services strategy that apparently faces an even tougher problem: explaining the meaning of .Net to consumers, corporate executives and investors.

"We still get people saying to us, 'What is .Net?'" Gates said. "It's one of those great questions that people can say, 'Yes, it's come into focus at the infrastructure level,' but a little bit where we go beyond that has been unclear to people." Two years and billions of dollars in development--Microsoft's public handling of .Net could stand as a case study in what not to do in a high-profile marketing campaign. The bungled marketing moves are even more egregious considering the importance Microsoft originally attached to the .Net initiative as the company's bet-the-business strategy.

Cool chips
Microsoft isn't the only one trying to reduce heat. Chipmakers have the same thing in mind too.

IBM is stepping up its efforts to curb computers' growing appetite for power by partnering with the Defense Advanced Research Projects Agency (DARPA) to create computers that use less power. DARPA, which is the U.S. Defense Department's central research and development organization, will give IBM about $2 million to help fund IBM's Low Power Center research lab.

Reining in computer power consumption is important for reasons ranging from reducing the cost of ownership to increasing computer reliability, especially in hot climates. Despite technology's tradition of faster computers requiring greater power consumption, about 25 percent of a company's data-center budget goes to providing electricity to run and cool computers.

Intel is changing gears on energy consumption too. Banias, the chipmaker's energy-efficient processor designed primarily for notebooks, will debut at three speeds when it arrives next year--but megahertz won't be its selling point. Banias will come out at 1.4GHz, 1.5GHz and 1.6GHz and initially be targeted at "thin and light" notebooks.

With those speeds, Intel will have to overcome a marketplace obstacle that it helped create: buyers who judge a chip by its clock speed. At 1.6GHz, Banias will be far slower in terms of raw speed than Pentium 4 notebook chips, which will hit 2.2GHz in the fourth quarter of this year, but its performance will actually be better than its numbers might indicate because it will complete more work per clock cycle than the Pentium 4.

Notebooks using the chip will consume roughly 25 percent less energy, company executives have said, thus increasing battery life. Whole subsections of the chip will shut down when not in use to conserve battery power.

Energy conservation in PCs? What's next? How about an environmentally friendly computer.

Japanese PC maker NEC plans to introduce to the U.S. market the PowerMate, an environmentally friendly all-in-one PC that features a 15-inch flat-panel screen and a 900MHz Transmeta Crusoe processor.

The computer's flat-panel screen does not contain lead, as most typical cathode ray tube monitors do, and its motherboard is constructed with lead-free solder. The plastic--an NEC invention called NuCycle--that's used to create the chassis of the PC is 100 percent recyclable. And the PowerMate also consumes comparatively little electricity.

Linux love fest
Linux sales lost some ground to Windows last year, but they're expected to climb in coming years as distributors of the alternative operating system create new revenue streams. Linux sales declined nearly 5 percent in 2001 to $80 million, but are expected to grow to a $280 million market in 2006. Meanwhile, Windows sales climbed 11 percent to more than $10 billion last year.

"The Linux operating system market, from a revenue perspective, accounts for one half of 1 percent of the total operating system revenue each year, or roughly two days' worth of Microsoft's operating system revenue," on analyst said. "On the second day of January, Microsoft had generated more operating system revenue than the Linux community (will for the entire year)."

Despite those daunting figures, IBM and Hewlett-Packard have begun making the case that the comparatively young operating system is worthy of real-world use. Big Blue will announce next week at the LinuxWorld Conference and Expo that two major customers, Deutsche Telekom and Air New Zealand, are using the Linux operating system on IBM mainframes, while an HP customer, L-3 Communications, is using Linux to run airport baggage scanning systems.

Such "customer win" announcements are a critical phase in the effort of making a new technology a part of the mainstream computing industry. With the exception of Microsoft, most of the computing industry's largest companies now actively support Linux. The last sellers of the high-end computers called servers moved into the Linux camp when Sun Microsystems reversed course earlier this year.

Also of note
Future television sets sold in the United States must include digital receivers that may include anti-piracy technology...Record and music executives who take advantage of the hacking provisions of a proposed U.S. bill could face stiff penalties if they travel to countries that outlaw computer break-ins...Aiming to spur adoption of FireWire in consumer electronics, Apple Computer will give away software that helps device makers add the high-speed port to their products...U.K. chip designer ARM Holdings is readying its first silicon designs that will bring console-class 3D graphics to mobile phones...Blockbuster is quietly testing a new DVD subscription-rental program, aimed directly at undercutting competition from Web-based mail-order service Netflix.

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