Microsoft Adds Windows 7 to Channel's Mix

In a speech at the CES trade show, Microsoft's CEO Steve Ballmer says a trial version of the new operating system is being made available to developers. Consumers can download it on Friday.


As if channel partners don't have enough to contend with in the Windows Vista and Windows XP operating system rivalry, there's now a new kid on the block: Windows 7.

Trial versions of what Microsoft (NASDAQ:MSFT) Chief Executives Steve Ballmer called the "best Windows ever" are being released this week. Channel developers gained access to their downloadable version Wednesday and consumers are expected to get a trial look-see on Friday.

The new features in Windows 7 are designed to make the operating system interact more fluidly with peripherals by opening up a start page when a device is plugged in for the first time. The new operating system will also make it easier to find and retrieve files from other machines or a network. Ballmer didn't announce a specific ship date for Windows 7, although it is expected to ship sometime later this year.

Ballmer made the announcement during a speech at the Consumer Electronics Show (CES) in Las Vegas. Throughout his talk, Ballmer focused on the convergence of "the three screens" – that is PCs, phones, and the TV -- as well as the cloud. "They're evolving into a seamless ecosystem," Ballmer said, adding that computers will soon, "in the next couple of years, be able to hear you and see you.

"Screens and displays will literally be everywhere and PCs, phones, TVs, and other devices will become a single experience," he said.

Search Engine Gains

Ballmer also announced two search engine deals that saw Microsoft beat out rival Google (NASDAQ:GOOG). The first involved a Dell agreement to load Microsoft's search engine on its new computers. The second was a five-year deal with Verizon Wireless to install Windows Live search software on most of its wireless phones.

Both the Windows 7 and Verizon Wireless announcements are important strategic milestones for Microsoft. In fact, both could be viewed as key moves in Microsoft's business strategy to keep the company vital as well as profitable.

Windows 7 represents what may be Microsoft's last chance to win back customers – both consumers and corporate – who were turned off by all of the problems involving around Windows Vista. Indeed, so many IT shops shunned Vista that Ballmer was finally driven to tell them that it's okay with him if they want to wait for Windows 7

The Verizon Wireless agreement, meanwhile , provides a rare glimmer of success for Microsoft's  search and mobile strategies. Microsoft has struggled to win a tiny third-place position in the overall search marketplace, well behind both Google and Yahoo (NASDAQ: YHOO). Additionally, the company is also behind in the mobile arena. The latest release of Windows Mobile, version 6.1, is far behind competitors' offerings, with only a minor update to version 6.5 coming any time soon.

In one fell swoop, Microsoft's deal with Verizon Wireless officially announced on Wednesday night, may breath new life into both search and mobile for the software titan. Not only is Verizon Wireless poised to become the nation's largest wireless carrier later this week when it closes its acquisition of Alltel, but it apparently backed away from a rumored deal with Google last summer in favor of Microsoft. Verizon Wireless is a joint venture between Verizon (NYSE: VZ) and Vodafone (NYSE: VOD).

Users will access Live Search via a device's home screen, by downloading an application or through Verizon Wireless’ Mobile Web service. That's a big advantage for Microsoft, one analyst said.

"It does give Microsoft a leg up [on Google and Yahoo Search] for the more casual user," said Charlene Li, industry analyst and founder of Altimeter Group." By sheer convenience and placement, they're [users] going to get exposure to Microsoft Search," Li added.

(Stuart Johnston of contributed to this article.)

TAGS: Google,Microsoft,wireless,Verizon,operating systems

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