Trilight Zone

[tricore]

Microsoft Chairman Bill Gates is in an odd position for this year's Consumer Electronics Show. He can actually talk about soon-to-be-shipping products, rather than vaporware.

For 2007, Microsoft has real products--Windows Vista and Office 2007, for starters--shipping in just a few weeks. The shipping stuff will be a refreshing change for Gates, but a challenge, too. He may be smart and hugely successful, but he lacks finesse.

I expect Gates' keynote to be stark contrast to Apple CEO Steve Jobs' Macworld keynote on Jan. 9. Jobs could make Apple-branded bread sound like the greatest, most-appealing invention. "Taste the music!"

Like other years, I expect Gates will drone on, again, about the digital lifestyle. If he does, he will have a point. Microsoft talks about the home and work lifestyles and how they are converging, which is absolutely the right perspective. I wouldn't be shocked to see more "better together" stuff, like last year, but with real products that will soon be available. In fact, I'll use this approach as the framework, or story, for what Microsoft could announce or what the company should announce:

* D`oh, Windows Vista. Gates and his keynote helpers are sure to spend loads of time talking about Microsoft's new flagship operating system and why it embraces the digital lifestyle. I wouldn't be shocked to see plugs for genuine software or Anytime Upgrade.

The latter feature would mean a whole lot more if Microsoft announced a "family license," akin to what Apple offers with Mac OS X. Microsoft should deliver a lower-cost, multiple PC license for Vista--enabled by Anytime Upgrade--but I don't expect it (pssst, my sources say Microsoft is considering such an option for the future).

Entertainment will be a big point of emphasis, particularly high-definition stuff and moving content round and about (yes, we've heard this story during previous CES keynotes). The venue would be the right place for Microsoft partners to showcase new Vista computers. If manufacturers can't sell the computers yet, they should at least be able to talk about them. Who knows? Maybe Microsoft will have an Acer Ferrari or two to give away. Ultra-Mobile PC is a good candidate for Vista debut, too.

I would be shocked if there isn't at least a mention of Vista-supporting applications or hardware drivers. Microsoft would do well to explain the status of missing pieces, like RAW converters from Canon and Nikon (or Media Transport Protocol-supporting cameras touted at CES two years ago).

* Windows Home Server. There have been rumors that Microsoft will announce some kind of home server next week. As of this posting, my understanding is that Microsoft has a home server announcement in the works for CES. Microsoft would co-brand the device with at least one partner: HP.

I can think of almost no good reasons to develop such a product. Consumers don't centrally manage their stuff. They tend to leave it where they create it. According to an August JupiterResearch report, 52 percent of U.S. online consumers "do not back up entertainment files to an external storage source."

A home-based server or NAS (network-attached storage) device could make sense if Microsoft wanted to provide a central repository for content services or license management (such as for that Windows Vista family pack). The device would have to: fetch and store licensed content, whether music, movies or games; make the content easily available across the home network; and stream the content (via Windows Media Connect) to other devices in the home.

Such a product wouldn't need the power of Windows Server, though. Windows Vista or Windows Vista Embedded would be more than enough. All the networking and rights management plumbing necessary for a home server is already part of Windows Vista.

That's what a home server should be. That's not the plan, as I understand it. My sources say the product will run a slimmed-down version of Windows Server 2003, minus some enterprise features and with a simpler user interface.

* Windows Live. Microsoft really needs to talk about its fledgling services strategy next week, if for no other reason than to dispel rumors that Live is dead. It would be a mistake to miss the opportunity.

One of the projects brewing inside Microsoft is something called Windows Live Drive, and it's rumored to be formally unveiled next week. I've got no confirmation, but CES would be the right venue for Live Drive.

The idea of external storage in the sky--or cloud, as Microsoft calls it--isn't exactly fresh. Microsoft is a latecomer. Bigger concern: If people aren't locally backing up their data, why on earth would they want to clog up their Internet connections doing so?

Live Drive would make more sense as a central repository for Windows Live services and limited, local backup. People could use Live Drive to store all their precious digital assets and make them easily available across Microsoft (and even some partner) services, such as Mail, Messenger and Spaces. Live Drive could even tap into the home server. That's what Microsoft should do.

* Xbox 360. Microsoft missed that 10 million consoles sold mark, but there will be plenty to talk about. Retail sales data puts year-old Xbox 360 ahead of newcomers Sony PlayStation 3 and Nintendo Wii.

I would listen carefully to whatever Gates says about Xbox Live and the Xbox Live Marketplace. Right now, the service is largely independent of Windows Live, but surely Microsoft executives are smart enough to recognize the benefits of closer ties. Zune Marketplace is a first step in that direction, as Microsoft's "Points" currency is evidence. The company already plans to expand Points to other Windows Live services.

What Microsoft should do is create some synergy between Windows Live Drive and Xbox Live, which would extend services and content--whether personal or purchased--from the desktop to the cloud to the living room. Such an approach would embrace Xbox's real role, which is no longer as a game console but as a home entertainment device.

* Zune (no smirks, please). Sure, NPD says iPod walloped all other MP3 players during the holidays, but that was totally expected. CES is the right venue for Microsoft to discuss the future of Zune. I would watch to see demos on how Zune fits in with Microsoft's broader entertainment strategy. Heck, I like my Zune. Apple's iPod only seems like the only choice around.

* Windows Mobile 6. Pure speculation on my part, but it's time for Microsoft to talk about next version of Windows Mobile. The venue is right, as it was in the past.