By the time you read this, Microsoft will have hosted its annual Worldwide Partner Conference (WPC) in July in Washington D.C. The nation's capital will be roasting in summer heat waves. Does Microsoft have any product announcements to match?

Update on SP 1 for Windows Server 2008 R2 and Windows 7

I've written about SP1 for Windows Server 2008 R2 and Windows 7 and how the release provides major functional updates to Server 2008 and mostly hot-fix rollups to Windows 7. But the biggest news for SP1 might be the timing.

Though Microsoft planned to deliver SP1 in October 2010—or one year after the general availability of both products—an interoperability glitch on Server 2008 has caused a delay. And it's a major delay: Now SP1 will ship in early 2011, possibly as late as April 2011.

My sources told me that it was mostly a timing issue because of TechEd Europe 2010 in November and normal business slowdowns in December. But I suspect there might be something a bit more calculated in the delay. Microsoft is trying to push the notion that its corporate customers don't need to wait for SP1 before deploying Windows 7.

By delaying SP1, the software giant is sending a further signal that there's no reason for customers to wait. According to what I've seen, however, corporate adoption of Windows 7 is proceeding very slowly—not quite the snail's pace that dogged Windows Vista, but slowly. (However, consumer uptick on Windows 7 is at a record pace, luckily for Microsoft.)

 Meanwhile, I was surprised to discover that corporate uptick on the Windows Server products is even slower. The majority of Windows Server installations worldwide are of the 32-bit Windows Server 2003, not Server 2008 or Server 2008 R2.

In fact, many customers are actually exercising their downgrade rights to install Windows 2003 today, because—get this—they have concerns about 32-bit software compatibility. This tells me there's a huge disconnect when it comes to customers understanding where modern Windows Server versions are in terms of compatibility and capabilities.

There's a huge difference between Windows 2003 and Server 2008/2008 R2, and I'm confused why more than a small percentage of customers would choose older, less capable, and less efficient (and thus, ultimately more expensive) systems over something superior.

Windows 8

It's time to start the conversation around Windows 8. According to my sources at the software giant, we can expect the first private beta of Windows 8 in mid 2011, less than a year from now.

That feature-complete version of the product will be followed by a public beta in the second half of 2011, then the final release in the first half of 2012. Microsoft plans to deliver Windows 8 to customers in mid 2012, about two years from now. The goal is to make the holiday selling season, something it was unable to do with Windows 7.

For now, of course, Microsoft has Windows 7 to sell, and it plans to offer interim updates to that product through such things as Windows Live Essentials 2011 (currently in public beta) and Internet Explorer 9 (which could possibly hit Beta 1, a public release, by the time you read this). IE 9 will also be included in Windows 8 and, given the schedule, you can expect a Windows Live Essentials 2012 to ship concurrently with Windows 8, or soon thereafter.

Of course, people want to know about Windows 8 and what features Microsoft will include. But Microsoft's Windows Division, led by Steven Sinofsky, is more interested in making sure it can deliver what features it does promise. So the plan was to hold off on announcing anything until the first, mid-2011 beta.

One can only imagine their surprise then, when internal Microsoft documents pertaining to Windows 8 leaked online in mid 2010. And while none of these documents constitutes a promise about which features will be included in Windows 8, they do provide an interesting look at the features Microsoft is currently considering.

These include an online apps store called the Windows Store, a new application model that will combine the best of high-end Windows capabilities with web technologies to create "tailored web applications"; support for new and advanced digital media functionality; an improved backup utility; dramatically faster, appliance-like startup/shutdown/resume/start times; integrated support for location and other sensors, and more.

We're in the early days yet, so let's not get too excited. But when you consider which technologies did and did not gain traction over the past few Windows releases, I think these directions for Windows 8 make plenty of sense. I'm eager to find out more. 

Small Business Server vNext

One of the most frequently asked questions I get these days is about Small Business Server and whether Microsoft plans to release a version based on Windows Server 2008 R2. I've been sitting on this information for months, almost bursting at the seams to explain what's happening. And now, finally, I can do so. Yes, Virginia, Microsoft is indeed developing an R2-based version of Small Business Server (SBS). In fact, it's building two.

The first, currently code-named Windows Small Business Server "7" (since Windows Server 2008 R2 is the server version of Windows 7), will be a traditional SBS offering. It will come in a couple of SKUs or product editions and these will be traditional, on-premises server products. No surprise here: You'll get Windows Server 2008 R2, Exchange Server 2010, SQL Server 2008 R2, and so on.



I've complained that Microsoft's adherence to this old-school product type has blinded it to the needs of its smaller customers—its Essential Business Server (EBS) product line, basically an upscale version of SBS for the midmarket, was unceremoniously killed after less than a year of availability because of this disconnect between the software giant and its customers' needs. But now Microsoft is listening: SBS will ship in a second product type, code-named Aurora, that's much closer to how I envisioned future SBS versions.

So instead of being a traditional SBS offering, Aurora is what Microsoft calls a "Solution Server." It's based on the R2 code base, yes, but doesn't offer any on-premises server tools beyond networking, security, and storage. Mostly, it's about hooking into cloud services, and when you consider that Microsoft offers stellar hosted versions of Exchange, SharePoint, Communications Server, and more, this strategy starts to really make sense.

Although Microsoft's product plans are still in flux, the company sees Aurora as a solution for the very smallest of small businesses, those with up to 25 PCs. (SBS "7" serves up to 75 PCs.) In fact, it's going to market Aurora as "a super simple server for the very small business." You can install local servers on Aurora, but none of the traditional SBS servers come with the product.

If you're familiar with the next version of Windows Home Server, code-named Vail, then it might help to think of Aurora as a small-business, domain-based version of that product. That is, Aurora is super-simple, offers automated PC backups (both image-based and traditional file backups), and sits largely unattended in a back room somewhere.

Aurora servers can't join an existing domain, but you can create a domain. It utilizes the Drive Extender technology from Vail, so you can simply add drives and configure them to join a single, huge storage space that's unencumbered by drive letters or any of the complexity from RAID or related technologies. (SBS "7" won't include Drive Extender.

But I've been told that future versions of Windows Server, as well as Windows 8, will include Drive Extender.) Aurora will be sold and serviced primarily through Microsoft's partners, so expect some announcements around this product at the WPC this year.

Windows InTune Updates

We discussed Windows InTune previously. It's aimed at the mid-market, is only semi-managed (in that it doesn't require Active Directory but respects Group Policy-based policy settings), and is based loosely on the company's traditional, on-premises System Center offerings. InTune was made available, briefly, as a public beta a few months back but demand overwhelmed Microsoft's capacity and the program was quickly shut down.

Well, good news: A new round of public beta availability will be announced at the WPC in July. Microsoft told me that it will deliver the final version of InTune by April 2011. But I still have some questions, both around the target market (Why isn't this being offered to small businesses? It would be a great companion service for Aurora) and the pricing and licensing. Stay tuned.

Microsoft Layoffs

My sources at Microsoft tell me that the recent exodus of top-level management in the company's Entertainment and Devices division was involuntary. The reason is simple: After beating Palm in the PDA and early smartphone markets, Microsoft got lazy, and Windows Mobile development ground to a halt. This provided Apple with the impetus to enter the market, and now Windows Mobile has ceded market share to iPhone for three years in a row.

So the management team was kicked out. A new team was put in place to develop Windows Phone, which should ship in October/November of this year. Windows Phone is great, but it's years too late. And Microsoft's early release of the Windows Phone-esque KIN in May was such a disaster that it was killed several weeks later.

These missteps make shareholders jittery. So Microsoft will announce some layoffs to prove, in effect, that it's taking the situation seriously. I'm told that the total number of people laid off will number in the hundreds. And let's be clear: Microsoft's net employee count will continue to go up, since it's still hiring at a rate of 1,500 to 2,000 new employees each month.

So is Microsoft serious about correcting the mistakes that doomed its consumer efforts? If anything, Microsoft has only proven that it's not able to move as quickly as its competition. This, I think, is the biggest problem Microsoft will face in the years ahead.