Forget the point-release tomfoolery: The next Windows version--
code-named Longhorn--is going to rattle some cages and change perceptions about Microsoft's role as industry innovator. Originally envisioned as a stepping stone to the Windows .NET world that Microsoft was promising with the more distant Blackcomb release, Longhorn suddenly took on a much grander role late last year. Although the company has been trying to keep information about Longhorn secret for fear of stalling Windows XP sales, details about Longhorn have been slipping out for months. And this week, "FORTUNE" magazine revealed what we've long suspected: When Bill Gates stepped down from his CEO post, he did so to focus on software, and that software is Longhorn.

"We'd been talking about doing a lot of things separately for a long time, but the mood was like, 'Hey, this incremental stuff is okay, but let's do something more dramatic,'" Gates recently said of Longhorn. "And \[Microsoft CEO\] Steve \[Ballmer\] said, 'That means synchronizing the release.' And I said, 'Isn't that risky?' And Steve said, 'But isn't it obvious we should do this?'" Gates calls the suddenly complex Longhorn "\[the equivalent of\] many moon shots."

So what makes up Longhorn? The secure-PC initiative--code-named Palladium--that we discussed in Monday's WinInfo Daily UPDATE is part of it. Longhorn will require a complete overhaul of the Windows OS, both the server and desktop versions, Gates says, not to mention most of the company's other software as well. Equipped with Longhorn, as "FORTUNE" reports, "Your PC will keep track of how you work, whom you talk to, what sites you look at, how you make documents and whom you share them with, which data on the network are yours--making all those things easier."

"My biggest thing is getting knowledge workers to install this version of Windows and say, 'Wow!' in two dimensions," Gates says. "As in 'Wow, they took the pain away! They fixed the stuff that was always crummy!'--like it was hard to update the software, to move files between different systems, to understand what these error messages meant, etc. And as in 'Wow, I can get new value out of my PC by taking it to meetings and taking notes on it. I'm doing annotations, or when I call somebody my screen comes alive, and we're looking at the article or contract or budget we're working on, and if I want to add somebody into the call, I just go to my screen, pick the name, and all that phone stuff just happens--the guy is there and looking at the same document.' And then, having all your stuff available anywhere on any device you own."

Although the software implementation details are still vague, Gates says that Longhorn will:

- consolidate Windows storage so that documents, contacts, email, Instant Messaging (IM) buddy lists, calendar, and other data are all stored in the same way and can easily be searched together. The number one question Longhorn will answer, Gates says, is "Where's my stuff?"

- protect users from distractions by screening phone calls and email.

- track you down when you're out of the office and forward calls and email to you automatically.

- arrange conference calls and online meetings.

- let consumers easily set up Web sites and email lists to keep people they care about informed and up-to-date.

- securely access users' important work data from home by using any connected device.

- read digital versions of magazines and other publications online that look exactly like the printed versions.

Gates says that there are 10 major Longhorn scenarios, including People, Annotation, Real Time Communications, Storage, Authentication and Security, and New Look. Separate teams at the software giant are working on each scenario. Gates is overseeing the entire project and meeting frequently with each team. Longhorn, he says, represents at least 50 percent of his workload.

Given the breadth of these advancements, it's no wonder that Longhorn has slipped from its original early 2003 target date to an expected mid-2004 launch. You didn't really think a little point release was going to take that long to develop, did you?