Beyond Binary

Microsoft has shown Windows 7 running on Netbooks ever since it introduced the operating system last fall. However, helping consumers get it on their notebooks has proven more tricky.

(Credit: Ina Fried/CNET)

Microsoft is considering offering Windows 7 on a thumb drive to allow Netbook owners to more easily upgrade their machines, a source tells CNET News.

The move, which is still under consideration, is one of several things Microsoft has looked at to try to make it convenient to upgrade machines that don't come with a CD or DVD drives.

Microsoft executives have said that they recognize that upgrading Netbooks poses a challenge and are exploring ways that the company can make it easier. In an interview on Thursday, Senior Vice President Bill Veghte said that Microsoft had nothing to announce on that front.

The challenge of getting Windows 7 on to older Netbooks threatens to cast a shadow over the technical work Microsoft did to get Windows 7 running on Netbooks. Its predecessor, Windows Vista, proved ill-suited to Netbooks forcing Microsoft to continue selling Windows XP as its answer to the low-cost notebook phenomenon.

Although a USB flash drive could offer the simplest way to move a Netbook to Windows 7, there are other options. Buyers with an external drive could hook up that to their Netbook, while another option would be an upgrade through a service such as Best Buy's Geek Squad. Microsoft also sells a downloadable version of Windows today, so, in theory it could do the same with Windows 7, allowing buyers to put the OS on their own thumb drive.

Matt Bonin, a merchant director at Best Buy, said this week that the company is aiming to work with Geek Squad to develop services to streamline Windows 7 upgrades. As for Netbooks, he said the company recognizes the challenge they present and said the store already offers services to load other types of software, such as antivirus programs.

Complicating matters further is the fact that most Netbooks are running Windows XP. Those moving from Windows XP can buy an upgrade version of the software, but must back up their data, do a clean installation of the operating system and then reload their applications.

The same goes for all XP owners, as well as users looking to move from a higher-end version of Vista to a lower-end version of Windows 7 and all users in Europe trying to upgrade to Windows 7 using the browser-less "E" version--the only one Microsoft plans to offer there.

Microsoft plans to charge PC makers the same for the business version of Windows 7 as it did for Windows Vista, while cutting the price of Windows 7 Home Premium as compared to its predecessor, a top Windows executive told CNET News on Thursday. That matches a similar move for the boxed copy of the software.

Microsoft's pricing plans for Windows 7, which will be available October 22 on both new PCs, has been the source of considerable tension between the PC makers and the software maker, both of which are trying to grapple with both declining demand and falling prices for traditional PCs.

(Credit: Microsoft)

In an interview on Thursday, Senior Vice President Bill Veghte acknowledged that there has been tension between Microsoft and the PC makers over pricing, but said that is always the case when Microsoft readies a new version of its operating system.

"They'd love to have everything at dramatically lower prices," Veghte said, of the computer makers.

On the mainstream consumer side, Microsoft is only offering only one version--Windows 7 Home Premium, whereas with Windows Vista, Microsoft offered both a basic and premium version. Veghte says he understands that, from the PC makers perspective, Microsoft took away an option for low-cost PCs. In part, he said, that's why Microsoft decided to charge a price for Windows 7 Home Premium that was more than Vista Basic, but less than Vista Home Premium.

"We took a blended approach," he said. "It wasn't like I am trying to jack up the prices."

For Windows 7 Professional, as Microsoft did on the retail side, the software maker will charge PC makers essentially the same as it did for Windows Vista Business. However, he said, buyers are getting more with Windows 7 because the professional version also includes the consumer media features, something that wasn't the case with Vista.

PC makers, though, have continued to see both average selling prices and profit margins under continued pressure.

Veghte said Microsoft, too, has seen the amount of money it gets for each copy of Windows drop in recent years.

"Our average selling price has been declining as well," Veghte said. "It's not like we have sat there at the (same) price points the last five years."

For his part, IDC analyst Richard Shim said the fact that PC makers are complaining about price--and not the product itself--is a positive sign for Windows 7.

"If the only thing the market is squabbling about is price, that's a good thing for Microsoft," he said.

One of the biggest changes Microsoft did make in response to PC maker concern, was to lift a restriction on the Windows 7 Starter edition it is selling for use in Netbooks. Initially, Microsoft planned to restrict Starter-based PCs to running no more than three applications at a time.

Microsoft also agreed not to charge PC makers for a program in which, starting tomorrow, buyers of Windows Vista PCs can get an upgrade to Windows 7. That enables PC makers to offer the upgrades for free, or only the cost of shipping, without losing money.

Veghte said lifting the Starter restriction was important to computer makers and consumers and something that Microsoft could live with. The three-application limit began with Windows XP Starter Edition, which was aimed at first-time computer users and sold only on new PCs in emerging markets.

"It clearly was not winning any popularity contests," he said of the limit. "I don't think it fundamentally changes the business approach."

It does, though, pave the way for Windows 7 Starter to become the dominant operating system on Netbooks, Shim said. IDC forecasts that the Netbook market will shift largely from Windows XP to Windows 7 next year, but Shim said that much of that will be the lower-priced Starter Edition.

That means, Microsoft's Windows 7 revenue could be in for a hit if traditional notebook and desktop sales don't pick up. The upside, Shim said, is that Microsoft will benefit when sales do pick up, even if it is next year.

"Even if they only hit a single or double with the launch, they can get some extra bases in the coming years," he said.

Microsoft's top Windows business executive said Monday that for all his excitement about Windows 7, he doubts the release of the operating system will lead to a significant spike in PC sales.

Bill Veghte

(Credit: Microsoft)

"History would tell us that generally as you ship a Windows release into the market...the bump is very modest," Microsoft senior vice president Bill Veghte said in a "fireside chat" at the UBS Global Technology and Services Conference. "You will see a little bit, but it is modest."

Veghte announced last week that Microsoft plans to ship Windows 7 on Oct. 22. The company will also have a program in the coming weeks through which those who buy a new PC with Windows Vista will get a free or low-cost upgrade to Windows 7. A leaked memo from Best Buy suggests that the program will kick off at the end of this month.

On the business side, Veghte said that there is "very good enthusiasm around Windows 7," but that will not be the biggest factor in the decision by corporations about when to upgrade their computers.

"It will get drowned by the macroeconomic environment," he said in the speech, which was Webcast on Microsoft's investor Web site. "As the macro environment comes back, people will have to buy new PCs. People aren't using PCs any less."

Veghte was pressed on whether Windows 7 will help Microsoft see improvement in the average selling price of Windows, which has taken a big hit because of the rise of Netbooks, a low-cost notebook PC variant.

"It's pretty hard to tell," Veghte said. "I think in this economic environment it is very hard to see us at the mix we had (during Windows XP and the beginning of Windows Vista). As we come out of the economic downturn it's a very interesting question."

Veghte was also asked about Microsoft's recent cost-cutting effort and said it is something the company hasn't done in the 19 years he's been there. He said every expense has been questioned as to whether it is essential.

"It has been line by line," Veghte said. "As a culture we've got to go through and really make the hard trade-offs. I think it's a wonderful thing for the company, for the culture."

As for whether Microsoft will offer a cheaper upgrade for Windows Vista users, Veghte didn't give a specific answer, but did say Microsoft wants to make sure that the upgrade path is "very smooth" from a pricing perspective.

Microsoft confirmed on Monday that it is planning to release Windows 7 this year, in time for the holiday shopping season.

"We are tracking well to a Windows 7 holiday," Microsoft Senior Vice President Bill Veghte said in an interview. Veghte plans to make a similar statement in a speech Monday at Microsoft's TechEd event in Los Angeles. As recently as January, Veghte was saying publicly that such a release was not a sure thing.

Images: A peek at Windows 7 release candidate

At the event, Microsoft is also announcing it plans to wrap up work on an update to its server operating system--Windows Server 2008 R2--at the same time it finishes Windows 7 on the desktop side. Microsoft issued a release candidate for the server operating system last month, alongside the near-final version of Windows 7.

For months now, Microsoft's official position has been that Windows 7 would ship by January 2010--the three-year anniversary of Windows Vista's mainstream launch. However the software maker has been aiming and planning for a 2009 release all along, as we noted last fall.

Computer makers have been indicating privately--and in a few cases publicly--that things have remained on track. But, with memories of Vista's delays fresh in its mind, Microsoft continued to hedge its bets.

Early feedback from the Windows 7 release candidate, which came out late last month, convinced Microsoft it could commit to a 2009 launch, Veghte said.

Veghte said Microsoft has seen the needed step-function drop in the number of crashes being experienced with the release candidate as opposed to the beta version.

"You know pretty quickly if you've got any big gotchas," he said. "You can get a pretty good sniff pretty quickly."

Equally important, Veghte said the company has seen the needed level of partner support. He noted that the first couple of companies have gotten Windows 7 logo certification. Among that first group are some graphics chip vendors--a big change from Vista in which limited graphics support was among the many compatibility headaches experienced by early adopters.

Veghte did not provide a specific time for launch or when the code would be finalized. However, he said that typically the ecosystem needs anywhere from nine to 14 weeks from the product being declared final to be ready for launch.

At TechEd, Veghte also plans to show a demo of how Office 2010 will take advantage of some of Windows 7's features. For example, Office will make use of a feature called "Jump Lists," which allow users to quickly take action directly from the taskbar at the bottom of the screen. From Outlook's Jump List, for example, users will be able to start a new message, create a contact, or schedule a meeting with two clicks.

Those that have both products will also be able to drag an Office file from a Jump List directly into an e-mail, a big time-saver.

A technical preview of Office 2010 will kick off in July, with those at TechEd among the first to get to try out the software.

LAS VEGAS - Bill Veghte may not be as well known as his boss at Microsoft, Steve Ballmer. But as the head of the company's Windows business, Veghte is one of the key executives to the future of the company.

At the Consumer Electronics Show here Wednesday, Veghte sat with CNET News senior writer Ina Fried for a wide-ranging interview, touching on everything from the planned release of Windows 7 to future of Microsoft's gee-whiz touch technology. The following is a condensed and edited version of that interview:

Bill Veghte, Microsoft's senior vice president for the Windows Business

(Credit: Microsoft)

Q: It's fair to say that you guys would like to have Windows 7 out in time for the holidays?
Veghte: We will ship it when the quality is right, and earlier is always better, but not at the cost of (ecosystem support), and not at the cost of quality.

In the past, one of the tools that Microsoft and other companies used to help manage that transition is some sort of technology guarantee: if you buy Vista after this point, you'll get 7 for free. My understanding is that you guys are planning something similar with 7?
Veghte: Certainly we want to make sure that Windows customers have an easy transition to Windows 7, and over the years we've provided a variety of offerings to customers...guarantee is one of them. And while we have nothing to announce today, we're certainly evaluating the options to make sure that we can help and support our customers in that transition.

One of the things with Windows 7, some of the cool features, particularly multitouch, require the hardware makers to build hardware that has the necessary things to take advantage of that. What is Microsoft doing to make sure that it's more than just a couple showcase machines that have touch?
Veghte: One of the things that we've worked very hard on in this release is engaging with the hardware vendors, taking their feedback, highlighting those opportunities, and then in the high quality releases doing deep engineering cooperation across the organization. Michael Dell, for example, went on record saying Dell worked with Microsoft for many, many years many releases of Windows, and this is one of the best, deepest cooperations that we've ever had...The beta is a big milestone, because we sort of unveil a lot of the capabilities that were not there in the developer release.

Do you have a goal in terms of how many people you want to try out this beta?
Veghte: Traditionally several million people is a good number. Several million means you can take all the feedback. It's important that as people are thinking about whether they download the beta, they actually use it (and share) that information with us. But if we have a couple million active beta testers, then we're going to be in great shape. This release is all about listening to customers, and we certainly have features and capabilities that you're familiar with, and now in the beta, a couple million people banging on it over the next couple of months.

What is the consumer pitch for Windows 7?
Veghte: You know, I get really excited about Windows 7 for a couple of different reasons. One is that it takes a set of everyday tasks that I do all the time, and it makes them faster and simpler. The second reason that I get excited about Windows 7 is there's a set of things that I expect my computer to do the way I want it to do, whether it be around reliability or security or battery life or performance or (controlling) messages popping up. And in Windows 7 on each one of those dimensions there's a set of improvements that we hope to deliver.

The next piece is in every release of Windows you have the opportunity to enable a set of scenarios or capabilities that are not (well-served now)...Like by providing touch support in Windows, whether you're a (third-party developer) or a hardware developer, you'll think about, "Do I touch-enable my notebook or do I touch-enable my application?" That's going to enable a whole set of new capabilities and interaction models for people.

Since we're at the Consumer Electronics Show here, the number of -- the amount of music, photos and video that is increasingly in my household, my PC, my wife's PC, you know, it's all over the place, and I just want one library one library of all of the Veghte photos or all the Veghte music. I don't really care about the physical location. And in Windows 7 we've taken that, through the combination of the new explorer, the PlayTo capabilities, the library construct, and made it much easier for people to manage, store, share their digital content.

The popular sentiment, or what I've heard most often from people who have played with 7, is this is Vista done right. What's your reaction to that?
Veghte: The next release is always (going to be better) and that's called innovation. And so we've got to satisfy a set of customers in Windows Vista now, we've got people announcing exciting new license numbers in terms of the continued growth of Windows Vista, but the investments in the innovation that we did in Windows Vista architecturally are enabling a set of capabilities that we couldn't do.

Many businesses have not jumped to Vista. What's the business message going to be around 7?
Veghte: When I think about the conversations with business customers, they want not only things that we do for end users, but they want great manageability and security. And clearly two years after the delivery of Windows Vista, we've demonstrated a higher degree of manageability and security.

Is it disappointing that it hasn't translated better?
Veghte: No, but in some fashion -- that's why I look at it and say, from a marketing perspective we did make that statement. We said Windows Vista is the most secure desktop OS release we've ever done. By virtue of the release of Windows Vista, we were going to have lots and lots of people going after it. And under that, Windows Vista has stood up very, very strongly... When I think about the conversation with CIOs or with businesses, in this era, this modern desktop era, you want security, you want manageability at a different level than you want it in 1999. And as such, Windows Vista meets that bar and Windows 7 builds on it...And we have to protect the investments that customers are making today in Windows Vista.

Have you changed your marketing approach because of the economy?
Veghte: Can I broaden the question a little bit? When you think about the economic situation, what does that mean to the Windows?

Sure.
Veghte: Windows PCs have always represented a great value relative to other companies in the marketplace, both in terms of the whole range of price points and all the capabilities that you get out of the box.

Given the economic situation, as shareholders would expect us to tighten our belt, but with the things that are most important, and customers would expect us to do that while continuing to innovate. And this is why even in this touch economic situation it's exciting to be able to look at the product pipeline we've got with Internet Explorer 8, Windows 7 and Windows Live...and the next generation of Windows Live, and look at all of the advances that we're offering to customers. A Windows PC is an unbelievable entertainment investment.

It's reasonable to think though that you guys might be spending less on ads and other marketing.
Veghte: The expectation is that the dollars we spend on advertising today will go further than it did (before). But the Windows business is pretty core to Microsoft, it's core to the Microsoft brand, so we will continue to invest in support of Windows.

Do you think the same holds true when we look at things like headcount?
Veghte: Windows is core to the success of the company. I'm certainly looking at how we can be more efficient, and given the mission in our advertising spending that we just talked about, efficient in where we apply our headcount and efficient, but not at the risk of jeopardizing the opportunity that we have, and the opportunity in these economic conditions.

Do you think Microsoft will have do more than you have in the past in terms of reacting to the economy?
Veghte: I think certainly Bill's philosophy and Steve's philosophy has been to take a long term view. The long term view is (stick with) the investments we make in R&D, and then patiently and steadily and tenaciously deliver on that opportunity.

Obviously a lot of the marketing that you guys rolled out as part of the new ad campaign is pretty deliberately trying to say this is what Windows is, and really this is what Windows is vis-à-vis Apple. Where do you see the competitive landscape having shifted from where it was say a few months ago?
Veghte: In the fall we did two things: One is we were clear on what Windows represents... to be clear on what Windows stood for, and give people, Windows customers the opportunity to be proud of who and what (they stand for) in rolling out the tag line, saying "I am a PC." Now, you can decide whether that's competitive context or not. I choose to sort of think about it as we need communicate what Windows stands for, and we need to give our customers the opportunity to celebrate who and what they've chosen.

Microsoft's history with Windows is taking things, concepts, technologies, and making them accessible to the average user. And your competitor, Apple, you know, typically gets a lot of credit for innovating. Are there things that Microsoft is doing in the desktop OS that you believe you aren't getting credit for?
Veghte: I think the important thing for us is making sure that we're serving our customers well. You look at how we've listened and the things that we've picked up on and delivered in Windows 7 or Windows Live Wave 3 or Internet Explorer 8, it's I think a set of everyday tasks, that's huge innovation. I think it's huge innovation when you realize that on average over a third of the time people have four or more windows open. If I can dramatically simplify that, that's innovation...And so when I look sort of against the backdrop of history and sort of the current economic landscape, I think we've got -- we have a tremendous value proposition to bring to market.

LAS VEGAS--It's not clear whether Microsoft is just trying to be overly cautious, but top Windows executive Bill Veghte said the company is telling PC makers that Windows 7 might or might not be ready in time for this year's holiday season.

"I'm telling them that it could go either way," Veghte told CNET News in an interview Wednesday. "We will ship it when the quality is right, and earlier is always better, but not at the cost of ecosystem support and not at the cost of quality.

Veghte also said that the economy is factoring into his marketing plans for Windows, which is in the middle of an advertising push initially estimated at several hundred million dollars over several years.

"Given the economic situation, as shareholders would expect us to tighten our belt, but with the things that are most important, and customers would expect us to do that while continuing to innovate," he said. "The expectation is that the dollar we spend on advertising today will go further than it did in July...and the Windows business is pretty core to Microsoft, it's core to the Microsoft brand, so we will continue to invest in support of Windows."

Asked whether he thought the same applied to the unit's staffing level, he said Windows is core to the success of the company," but added that he's "certainly looking at how we can be more efficient, and given the mission in our advertising spending that we just talked about, efficient in where we apply our headcount and efficient, but not at the risk of jeopardizing the opportunity that we have."

Microsoft is attempting a challenging task with its positioning of Windows 7. The company is trying to make the case that the product won't break things that work with Vista, but at the same time trying to convince users its a worthy upgrade.

Bill Veghte, the senior vice president of the Windows business put it this way in a speech to investors on Wednesday:

Bill Veghte, Microsoft's senior vice president for the Windows Business

(Credit: Microsoft)

"It's a minor release when it comes to incompatibilities," he said, adding that most applications and hardware that worked with Vista should work just fine in Windows 7. At the same time, Veghte tried to make the case that Windows 7 will nonetheless be a significant step forward.

"There are plenty of great things in there that make it much more significant than a service pack," Veghte said. In addition to improving some of the annoyances of past releases, such as slow boot time, Veghte pointed to new features that make it easier to connect to both home and business networks.

"In Windows 7 there's a capability called Direct Access," Veghte said, that allows users to more easily connect to their corporate network. "You no longer have to VPN in," he said.

Windows 7 also adds an improved taskbar for managing multiple windows as well as support for multitouch--assuming one buys a touch-screen computer. But it is clear that one of Microsoft's biggest challenges with Windows 7 will be to convince users that it is an important upgrade.

With Windows 7, Microsoft is adding support for multitouch, demonstrated last month at the WinHEC conference.

(Credit: Ina Fried/CNET News)

One indication of just how neatly Microsoft is trying to thread this needle is the fact that the server unit is saying its version of Windows 7 will be a minor release. The product that had been code-named "Windows 7 Server" is getting the designation Windows Server 2008 R2. The "R2" designation has in the past been used for very minor updates to Microsoft products.

Veghte was asked about things like how many versions of Windows 7 there will be and about pricing, but offered no new detail there. The company released a pre-beta version of Windows 7 for developers at two conferences earlier this year, with a broader beta scheduled for early next year, followed by a release candidate. There are some indications that January may be the timing for the beta.

As for the final release, Microsoft's internal goal has been to get it out next year, although its public target has been for release within three years of Vista's January 2007 mainstream launch. Veghte appeared to give even more wiggle room on Wednesday, though, saying its goal was a release to manufacturing (as opposed to a formal launch) by January 2010.

Note: The dates in the last paragraph were off by a year when I first posted but have since been corrected.

Update 4:10 p.m., with additional comments from CEO Steve Ballmer.

Windows unit head Bill Veghte said on Thursday that Windows 7 development remains on track.

The company has officially said it would ship by January 2010, but top executives have also said from time to time that it would be done by the end of 2009.

"The product is tracking very, very well," Veghte said. "We are committed and looking good, relative to our commitment--(shipping Windows 7) three years from general availability of Windows Vista."

Microsoft has released few details on the product, largely assuring customers that it would be making big architectural changes and that it will have a new multitouch user interface.

Video: Multi-Touch in Windows 7

Most of Veghte's talk, as expected, was on Windows Vista and how Microsoft sees a large perception gap. Veghte showed the Mojave Project, first detailed here, in which users predisposed against Vista reacted favorably when shown Vista when it was presented under the guise of being a new version of Windows, code-named Mojave.

Even outside focus groups, Veghte said that not only are customers buying the operating system, but more are liking it, pointing to recent internal figures showing that 89 percent of users said they were "satisfied" or "very satisfied" with the product. Some 83 percent said they would recommend Vista to a friend or family member, Veghte said.

He also demoed Internet Explorer 8, which he said would be released in final form later this year. An early beta was shown off at the Mix '08 trade show in the spring.

Update: In the closing Q and A session, CEO Steve Ballmer was asked what Windows 7 would look like, but declined to offer any new details saying to do so would be a "no-win" situation.

"It's going to look great; It's going to be quite compatible," he said, to some laughter. "If I wanted to start selling Windows 7 today, we'd start selling windows 7 today. Then you'd complain."

He did reiterate what has already been said, saying that Windows 7 is designed to avoid making big changes. "The design point is compatible form the get-go in large measure," he said.

REDMOND, Wash.--After months of searching for ways to defend its oft-maligned Windows operating system, Microsoft may just have found its best weapon: Vista's skeptics.

Spurred by an e-mail from someone deep in the marketing ranks, Microsoft last week traveled to San Francisco, rounding up Windows XP users who had negative impressions of Vista. The subjects were put on video, asked about their Vista impressions, and then shown a "new" operating system, code-named Mojave. More than 90 percent gave positive feedback on what they saw. Then they were told that "Mojave" was actually Windows Vista.

"Oh wow," said one user, eliciting exactly the exclamation that Microsoft had hoped to garner when it first released the operating system more than 18 months ago. Instead, the operating system got mixed reviews and criticisms for its lack of compatibility and other headaches.

To be sure, the focus groups didn't have to install Vista or hook it up to their existing home network. Still, the emotional appeal of the "everyman" trying Vista and liking it clearly packs an emotional punch, something the company has desperately needed. Microsoft is still trying to figure out just how it will use the Mojave footage in its marketing, though it will clearly have a place.

The Mojave project is likely to be just one of many efforts designed to resuscitate Vista's image as well as lend strength to the Windows platform among stepped-up competition from Apple and Google. In an interview Wednesday, Windows unit business chief Bill Veghte told CNET News that he wants to see his unit try new things to get the message across.

"We have a huge perception opportunity," he said, offering a glass half-full assessment of things. "We are going to try a bunch of stuff."

The image improvement effort, known internally as FTP, has many components. Well-publicized are the hundreds of millions that Microsoft plans to spend on a broad campaign buttressed by edgy ads from Crispin Porter and Bogusky. But Veghte wants the company pushing on multiple marketing fronts.

With small businesses, for example, Microsoft earlier this month launched the "Assurance" campaign. In that effort, Microsoft is offering free Vista-related technical support, a move that will add millions of dollars to Microsoft's telephone support costs. The point, Veghte said, is that businesses want to see Microsoft standing behind its product.

Veghte is convinced, like others at Microsoft, that despite early technical challenges, Vista's problems are primarily ones of perception.

Much of that perception, Microsoft belatedly acknowledges, stems from Apple's successful and unchallenged anti-Vista campaign. But, after stewing over the ads on many of his morning runs, Veghte decided that it was time to strike back, even without a new version of Windows to tout. Apple, he said, has "crossed a line" from fact into fiction.

Others at Microsoft have been sounding a similar note. Marketing vice president Brad Brooks told partners earlier this month that Microsoft was "drawing a line in the sand," while Steve Ballmer promised in a memo to employees Wednesday that after doing some hard technical work on Vista that it was now time for Microsoft to "tell our story."

"In the weeks ahead, we'll launch a campaign to address any lingering doubts our customers may have about Windows Vista," Ballmer wrote. "And later this year, you'll see a more comprehensive effort to redefine the meaning and value of Windows for our customers."

What gives the Mojave project its power, though, is the fact that it isn't Ballmer or someone else at Microsoft saying that Vista has gotten a bad rap. It's everyday people.

With scenes reminiscent of both Apple's "real people" campaign of a few years back as well as classic commercials from Folgers and others, the Mojave project could prove a formidable weapon.

The Mojave project is remarkable both for its humble origin as well as the speed with which it was pulled off. The idea started barely two weeks ago in an e-mail from Microsoft's David Webster to several superiors, including Veghte. Given the green light, Microsoft started videotaping responses just last week, in San Francisco. The preview Veghte gave to CNET News on Wednesday was the first time the footage had been shown outside the company and its contractors.

The footage could get a public airing as soon as next week or even at Thursday's financial analyst meeting, although plans were still in flux as of late Wednesday night. Veghte will come under increased scrutiny now that his boss, division president Kevin Johnson, is leaving the company. For the time being, Veghte and Windows engineering chief Steven Sinofsky will both report to Ballmer, who has called the work on Windows the company's top priority.

The need for the campaign is clear. Apple has been making inroads, as well as headlines with its anti-Vista push. Although Microsoft dominates in corporations and in overseas markets, Apple has been grabbing a significant share of the consumer market in the U.S., pushing its overall domestic share as high as 8.5 percent last quarter, a significant rise from even a year ago.

Microsoft is already at work on Windows 7, the next version of the operating system. But Veghte said the company can't wait for a new product to start firing back.

"I've got to start having that discussion in the marketplace," Veghte said. "I've got to start driving that now. People feel guilty (about Vista). It's wrong."

Microsoft hasn't said a ton about Windows 7, but it has talked about both a new multitouch interface as well as reassuring customers, particularly businesses, that it won't be making the kinds of dramatic changes under the hood that were made with Vista.