Funny interview with Steve Ballmer in the New York Times. Excerpt:

Q. What was the lesson learned in Windows Vista? After all, it wasn’t supposed to ship more than five years after Windows XP.

A. No. No, it wasn’t. We tried to re-engineer every piece of Windows in one big bang. That was the original post-Windows XP design philosophy. And it wasn’t misshapen. It wasn’t executed, but it wasn’t misshapen. We said, let’s try to give them a new file system and a new presentation system and a new user interface all at the same time. It’s not like we had them and were just trying to integrate them. We were trying to develop and integrate at the same time. And that was beyond the state of the art.

Q. In the future, will the software model change? Will the Internet, for example, be the way most software is distributed?

A. That will happen. It’ll happen from us. It’ll happen from everybody.

Q. Doesn’t that mean that software product cycles are going to be much shorter, months instead of years?

A. Things will change at different paces. There are aspects of our Office Live service, for example, that change every three months, four months, six months. And there are aspects that are still not going to change but every couple of years. The truth of the matter is that some big innovations — and it’s a little like having a baby — can’t happen in under a certain amount of time. And, you know, Google doesn’t change their core search algorithms every month. It’s just not done…

John Markoff has an interesting piece in the New York Times about the frenzied efforts within Microsoft to get Vista ready to ship. The article has some interesting statistics. For example, it quotes the Gartner Group as claiming that Windows runs on 845 million computers worldwide and Office on more than 450 million.

Markoff claims that

it was the vast scale of the Windows testing program that saved the software development projects. Over the summer, the company began an extraordinary bug-tracking effort, abetted by volunteers and corporate partners who ran free copies of both Windows and Office designed to send data detailing each crash back to Microsoft computers.

The Office package, for example, has been tested by more than 3.5 million users; last month alone, more than 700,000 PC’s were running the software, generating more than 46 million separate work sessions. At Microsoft, 53,000 employee computers are running test versions.

Vista has also been tested extensively. More than half a million computer users have installed Vista test software, and 450,000 of the systems have sent crash data back to Microsoft.

One interesting question is how Microsoft manages to cope with the torrent of data that comes back from all these test versions. Markoff says that The test data from the second beta release of Vista alone generated 5.5 petabytes of information — “the equivalent of the storage capacity of 690,000 home PC’s”.

Later… James Miller points out that the last calculation — which is the work of the New York Times, not me — implies that the average home PC has a hard disk of 8GB capacity, which seems implausible. If we assume that the average PC now has 80GB of hard disk space, then 5.5 petabytes equates to 68,500 PCs. Looks like a decimal point went missing somewhere.

According to today’s Guardian, Tesco is moving into software…

First Wal-Mart. Now Microsoft. There is, it seems, no global giant that Tesco is not prepared to take on.

While a new division of the UK’s biggest grocer is currently working on a £250m plan to open 150 supermarkets in the mighty Wal-Mart’s US backyard, the supermarket chain is also about to launch a range of own-brand software that will compete head on with the company whose products are loaded into 95% of the world’s computers.

Tesco is aiming to substantially undercut Microsoft, offering software titles for less than £20. It claims to be the first retailer to offer a range of own-label software, taking the same approach to the world of technology as grocers have traditionally taken to baked beans and soap powder. The initial range includes an office suite, two security/anti-virus products, a personal finance tool, CD/DVD burners, and a photo editing product. Microsoft Office sells for up to £300.

The Tesco software will be available in more than 100 Tesco stores from this month, with plans to roll out the range across the UK over the coming year. It will complement Tesco’s entry into the computer hardware market earlier this year…

Hmmm…. This may be less exciting than it appears. The software will be provided by an outfit called Formjet, a Cambridge-based organisation which “acquires territorial rights to ‘alternative’ software products, and markets, sells, distributes and supports these products in place of the vendor in the UK”. The office software Tesco will be selling is a suite written by Ability. It retails already in the UK for £29. So basically, this isn’t about Tesco getting into software, just about Tesco selling other people’s software, much as it sells other companies’ baked beans. Still, it’ll be interesting to see if the supermarket giant’s formidable marketing power can dent the MS Office monopoly in the UK.

This morning’s Observer column…

Well, the long wait is nearly over. Microsoft’s elephantine parturition has produced an heir. Last week the company distributed ‘Release Candidate 1’ (RC1) of Vista, the new incarnation of Windows, to about 5 million favoured customers. Think of it as the final beta of the software. Microsoft says it is still on course to deliver a version to corporate customers in November, followed by a consumer release to high-street dealers in January.

Microsoft also released details of US pricing for the new operating system. The ‘Home Basic’ version will cost $199. ‘Home Premium’ comes at $239. ‘Vista Business’ is priced at $299. And ‘Vista Ultimate’ weighs in at a whopping $399. Security vulnerabilities come free with all versions. There is also to be a ‘Vista Starter’ edition which will be marketed to people in poor countries in a futile attempt to stop them pirating Vista Ultimate and selling it on the streets of Shanghai, Bangkok and Singapore for a dollar a pop…

Microsoft has announced the US pricing regime for the latest incarnation of Windows:

Niall Kennedy, a self-confessed “RSS syndication geek” who was hired by Microsoft a few months ago to spearhead the company’s leap into the world of syndication, is leaving Redmond on August 18. Here’s why.

I joined Microsoft in April excited to change the world and build an Internet-scale feed platform to power the experience of Microsoft’s hundreds of millions of users as well as opening up the feed experience to outside developers to leverage in their own applications. The opportunity presented to me was extremely unique and a way to change how the world interacts with syndication technologies such as RSS, RDF, and Atom. The launch of Windows Live and Ray Ozzie’s vision of Internet services disruption made me believe Microsoft was serious about the space and not being left behind in yet another emerging industry as they had been with the web browser and search.

The Windows Live initiative got off to a huge start, with lots of new services created and an “invest to win” strategy in the new division. There were so many new programs created and headcount opening up Microsoft told Wall Street it would be spending $2 billion more than anticipated in the short-term to cover these new costs including over 10,000 new hires over the last fiscal year.

The stock plummeted on the announcement Microsoft did not have its costs under control. Microsoft’s market cap lost close to $59 billion in the six weeks after I joined and second quarter financials were released, more than the GDP of Ecuador and over half the market cap of Google. What do you do when the market responds to your 6 month-old online services strategy by reducing your valuation by 1.5 Yahoos? Windows Live is under some heavy change, reorganization, pullback, and general paralysis and unfortunately my ability to perform, hire, and execute was completely frozen as well….

From Good Morning Silicon Valley…

Some of Microsoft’s closest friends are warning the company in public what they surely must have been telling it privately — that the long-awaited and long-delayed Vista update of Windows still needs a lot of work. And if that’s true, Microsoft is impaled on the tines of a Morton’s Fork.

Robert McLaws, a .NET developer and Vista beta tester and blogger lays out a picture of a still-unstable Beta 2 version vs. a deadline crunch that just invites mistakes. “I’ve been defending Microsoft’s ship schedule for Windows Vista for quite some time. Up to this point, I’ve been confident that Vista would be at the quality level it needs to be by RC1 [Release Candidate 1] to make the launch fantastic. Having tested several builds between Beta 2 and today, I hate to say that I no longer feel that way. Beta 2 was a disappointment on many levels. It was nowhere near as stable as it should have been, and was a huge memory hog.” McLaws advises pushing the launch from January (see “Don’t you know Lunar New Year is the new Christmas?”) to the end of February, adding a Beta 3 version and taking the inevitable heat. “Don’t defend it, just announce it. There’s no point in trying to put a PR spin on it, because nobody is going to listen anyways. Let your thousands of beta testers cheer you for making the right decision, and tell Wall Street to go to hell,” he writes. Among those bobbing in agreement was Robert Scoble, until recently Microsoft’s voice in the blogosphere. “If this ships [to the factory] in October, I will recommend not installing it and waiting for the first service pack. There’s no way the quality will be high enough to trust it if it ships early. I hope Microsoft takes the time to do this right.”…

And if, like me, you were wondering what Morton’s Fork was, well here’s the Answers.com explanation:

Morton’s Fork is an expression that describes a choice between two equally unpleasant alternatives, or two lines of reasoning that lead to the same unpleasant conclusion. It is analogous to the expressions “between the devil and the deep sea” or “from the frying pan to the fire”.

The expression originates from a policy of tax collection devised by John Morton, Lord Chancellor in 1487, under the rule of Henry VII. His approach was that if the subject lived in luxury and had clearly spent a lot of money on himself, he obviously had sufficient income to spare for the king. Alternatively, if the subject lived frugally, and showed no sign of being wealthy, he must have had substantial savings and could therefore afford to give it to the king. These arguments were the two prongs of the fork and regardless of whether the subject was rich or poor, he didn’t have a favourable choice.

Hmmm… I’d have said Hobson’s Choice if I’d been writing the piece.

Later… The learned Bill Thompson writes:

The fork is a more appropriate metaphor than Hobson’s choice since it’s not that Microsoft has no choice – as the good innkeeper would have it – but that it is going to suffer whether or not it delays shipping. A real dilemma – a thesis that has two solutions :-)

He’s right, as usual.