Rick Rashid, head of Microsoft Research, introduces TechFest 2009 (Credit: CBS Interactive)

Microsoft holds a philosophy — that the need to monetise shouldn't get in the way of great ideas. This is the basis of its Research department, established in 1991, which is free to chase and build dreams, in the hope that something amazing will be born.

Once a year, a fair is held at the ominously named One Microsoft Way, Redmond, where other Microsoft staff — called Technology Transfer teams — visit to see what the Research department has come up with. Some projects will grab the company's attention, and have elements incorporated in an upcoming product. Others will be taken whole, branded and packaged to become part of the Microsoft portfolio.

Some will go back to the drawing board, to either develop further or start something new.

It's a commitment to discovering something new which has occasionally drawn ire, since running Microsoft Research in fiscal year 2008 cost Microsoft a staggering US$8.2 billion. Still, it maintains that core research is the way to move forward, and how it's managed to stay in the business this long, while competitors have frittered away.

Microsoft Research operates in six labs worldwide — Redmond, Washington; Bangalore, India; Beijing, China; Cambridge, Massachusetts; Cambridge, United Kingdom; and Silicon Valley, California.

While TechFest has been running since 2000, journalists have only recently been invited along. This year's TechFest contained a lot of iterative technology — either version 2.0 from the previous year, or things already shown at PDC. Unfortunately we were only allowed to see a limited number of projects — the rest are simply deemed as far too important intellectual property for anyone to get a whiff of before release.

In 2009, Microsoft's focus seemed to be both on how we can harness social networking, and the expansion of its Surface and Seadragon-based technology. Here's a few of the more interesting projects that grabbed our attention.

(All images courtesy of Craig Simms/CBS Interactive)

Rick Rashid introduces TechFest 2009. Microsoft Research has been running for 18 years, and Rick has seen a lot of changes come and go in that time.

Interactions with an Omni-Directional Projector
The most visually impressive demonstration was shown off inside a dome, much like a planetarium, along with a projector capable of creating an image to fill an entire hemisphere.

WorldWide Telescope was displayed to the oohs and aahs of onlookers, with the demonstrator using mid-air hand gestures to control panning and zooming. While he was putting his hands in front of the projector to demonstrate this (hence casting a shadow), anywhere near the globe was fine — as it was ringed with infrared sensors to pick up the hands. The projector also used a non-visible light spectrum, meaning that although the images were shown on the screen, there was no visible beam of light.

A voice command was used in tandem with a hand gesture to switch between applications, in which WorldWide Telescope was switched out with a 360-degree camera outside the sphere.

A monitor outside the dome showed the infrared sensors picking up hand gestures.

The yellow dots around the lens are the infrared sensors used for detecting gestures. The lens itself emits light in the non-visible spectrum range, meaning there's no visible beam, only the projected image.

WorldWide Telescope was put to great use, emulating a planetarium. It was much more impressive than our still camera could capture. The huge hand puts a damper on things too.

Flipping to the 360-degree camera outside gave us a virtual field of view that could potentially be used in video conferencing in the future. The image fed into the projector is actually massively distorted to compensate for the curvature of the hemisphere.

An application for mobile phones, Dion has the potential to undo Facebook in terms of interaction with close friends. By adding "buddies" to the Dion application, the phones can interact via Bluetooth whenever they are nearby. For example, when your phone is near your housemate's, you could set it up to auto-send a message or image to remind them to pay the rent. Or, somewhat sneakily, that housemate could set up a warning to know when you're in the vicinity so they could avoid you.

It's also socially aware — you could set up an event while certain friends are present, and Dion will arrange all the invitations and reminders, interacting with everyone's phones. If you're attending and the event occurs, any photos taken from your phone can be uploaded to Windows Live, automatically tagged and shared amongst friends. If anything, it promises to create a tighter knit community of friends, and may even interact with Facebook should it be taken any further.

The program doesn't necessarily need Bluetooth — it could use the phone network or Wi-Fi to achieve the same thing, auto switching to whichever is the best solution. For example, after the photos are taken at an event, the auto upload may only commence once your phone enters Wi-Fi range in your house.

We assume the final interface will be a lot better — but if it's based on Windows Mobile, maybe not.

Windows Live integration using Dion.

Our first reaction upon seeing this was "finally!" The second was: "why isn't this in a router yet?" HomeWatcher is an application that measures broadband usage in a shared situation, can control the bandwidth available to each machine in the household via sliders, and lets you look at past usage patterns. It was displayed in two forms at TechFest — one as a Windows application, the other as a touchscreen. We'll take either, so long as we can easily throttle traffic to specific machines without having to engage in proxies or other arcane server arts.

Family Archive
An alternative way to manage the huge wad of digital images we store today, Family Archive is something we can see as an application to be included in Microsoft's Surface bundle, rather than stand-alone tech.

The user is presented with a top-down view of a room. Images can be imported from a camera or mobile phone, and are then applied to three-dimensional, polaroid-esque images which can be dragged around the room via the touchscreen, zoomed and rotated, drawn on or labelled non-destructively, and finally, can be stored in big virtual cardboard boxes. To do so, the user simply drags the photos into the box, and can then seal and label it just by drawing on them. You can also tip the box over, spilling photos everywhere if need be. Finally, you can store the box in the "basement" if you find you're running out of space in the room. It's a neat concept that makes photo management much better than simply digging through folders of arcanely named files.

You can also place a physical object on the screen (the demonstrator had a pair of little wooden clogs), where a photo can be taken of it from above by a standard digital camera. The computer then removes the background from the photo, and generates a 3D-esque equivalent object on-screen, complete with drop shadow. It looks a little bit odd when dragged about compared to the photos (as it's not a truly 3D entity), but allows you to digitise your holiday souvenirs and store them with your other memories.

In this shot, you can see the basement through the semi-transparent floor. You can reach the basement by massively zooming in, using a pinching movement with your fingers.

While Microsoft showed off back-of-device touchscreens last year, the new focus is using this to enable smaller and smaller screens, as the display is no longer obscured by the finger. The touch-based watch phone may become a not-so-laughable reality in the future.

The finger shown behind the screen is simulated.

Shown off at PDC 2008, SecondLight was on the demo floor again — essentially a Surface computer, the screen itself is a switchable diffuser — switching between opaque and transparent at 60Hz. Two projectors are mounted under the screen — one sends the image to the Surface which can be manipulated by touch, while the other shines through when the screen is transparent — if a user then lays another object on top of the surface (like a sheet of paper), a completely different image is shown. It brings to the fore some interesting applications, such as games or even keeping notes for a presentation.

Here you can see the twin projectors being used in the demonstration.

The image of the cow is trapped on the surface, while an alternate image shines through. You can just spot the alternate image being displayed on the piece of paper above it.

Laying a piece of paper on top shows a completely different image being projected.

Image-based advertising
We can hear the groans already — expect this to become pervasive soon enough. This technology allows advertising to identify an appropriate part of an image and attach to it. It's potentially lucrative for services such as Google Earth. The image above gives you an idea of what we're talking about, and what you'll be hoping Adblock Plus or Ad Muncher gets rid of in the future.

An interesting search engine that looks specifically for people linked to either a person or a topic, using Guanxi, SixDegress and news sources. We're not sure yet how useful this could be, especially given that many people have the same name. We're sure there's a Bill Gates out there that isn't the owner of Microsoft, and consequently many HR people who have done some online research before employing have been disappointed that the guy only used to pump petrol.

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