Beyond Binary

It's been a busy year for Bob Muglia.

Microsoft's server and tools boss shipped an update to Windows Server, got promoted to division president, and prepared Microsoft's operating system in the clouds--Windows Azure--for its commercial launch.

Bob Muglia

(Credit: Microsoft)

In what has become a bit of a year-end ritual, Muglia sat down with CNET for a year-end interview. We hit on a range of topics, from the future of Windows Server, to why his bank won't be moving to Windows Azure any time soon, to the changing life of an IT manager, to Microsoft's consumer future. (Spoiler alert: Muglia thinks it is bright.)

Here's an edited transcript of our interview:

A few years out, how much does Windows Server, the server operating system, start to resemble Windows Azure?
Muglia: Well, making them as similar as possible is clearly the goal, and the goal is to take all the things that we do in Windows Server and make those capable to be done in Windows Azure, and then take the learning we have in Windows Azure and bring it back to Windows Server.

We just took the step of bringing the Windows Azure team, Amitabh (Srivastava) and his group, and putting that in my organization.

Now, what we also did as a part of that, is we merged the Windows Azure and Windows Server teams together. I just talked to Amitabh and he's really excited about the synergies that he can build across the organization and making these things as similar as possible.

In our own services, obviously we choose the hardware, and so there's a more limited set of things that work together. In some senses that gives us a bit of agility on the services side, because we can make something work in one very particular way, but what we've got a long term history of doing is understanding how to do that, and then abstracting that out to work in a much more general purpose way, to work with the hardware that our customers have.

One of the things we're looking at is how do we take the ideas that we're bringing to market in the form of Windows Azure service, and then build those into Windows Server and make them available to our on-premises customers and our hosters.

Do you expect there to be sort of an interim option? I wouldn't be surprised to see you guys do something in the intermediate term where you have the traditional Windows Server that runs on any hardware, you have Azure very customized for your data center, but then make a version of Windows Azure that they can write Azure apps for, but run in their own data centers.
Muglia: We're looking at those sorts of options. I think the trick to the thing is to understand what are the workloads that are most appropriate for doing that, and how would we structure that, and honestly we're still looking at that.

There are some interesting thoughts in that sense, and you can see how, for example, in a high-performance computing environment, where people could use hundreds or thousands of computers in one cluster, you know, Azure is really very, very helpful for something like that. But we're still looking at understanding exactly how we might bring some of those things to market.

I know you're the enterprise guy, but I thought I would give you the opportunity to come to the rescue of your consumer colleagues. One of the analysts pretty prominently said in The New York Times that it's kind of "game over" for Microsoft on the consumer side, particularly phones. I'm curious your thoughts on this.
Muglia: Well, I read your blog. You did, generally speaking, come to our defense. I mean, it's probably a fair thing to say that we understand the nerd. I think we understand more than the nerd, but it's certainly true that we do a good job with that audience, and that's actually my customer in a lot of senses, because I've got the developers and the IT pros.

You know, I feel like as a company we have a lot of focus on the consumer, and are doing a lot of great things that are quite revolutionary to consumers, and we're going to continue to do it. I mean, obviously if you look at what's happened even with Windows 7 and the success of Windows 7, most of the short term success has been in the consumer marketplace. The business marketplace is going to happen, but business moves slower than the consumer does.
Obviously we've had products like Xbox that have been very successful with consumer, and I think the new Zune work has been really fantastic, and obviously Bing has been really great.

I also think that people are going to be very pleasantly surprised to see the work we're doing in phones, and that will become visible next year. So, I think even in areas where there's been some concern, there is some really substantive, very, very innovative work coming down the line.

It seems a little weird to be saying this, but we're almost at 2010. Are there things in technology that you thought would have happened by now that haven't yet happened?
Muglia: Well, I certainly thought that the 787 would have flown by now. I hear it's supposed to fly Tuesday or Wednesday, though, so that's a good thing. I'm glad to hear that.

I think, if you had asked me in 2000, "Would we be further along on reading on devices than we are now?" I would have said we would be. And we're really starting to see that now with some very special purpose readers, but I would have thought it would have hit across more general purpose devices by now. So, that's probably been one thing.

You know, I think that that's related to how fast tablets or slates or whatever you might want to call them might have taken off. I might have thought that would have gone a little faster than it has. Those two are somewhat related with each other.

But those things always kind of come at different speeds, and I'm pretty confident both of them will become very important as we move forward.

If you could show the world as it is now to your 2000 self, what do you think would be most surprising?
Muglia: We've shifted to a world where all kinds of media are delivered digitally.

You think about what's happened with newspapers and magazines and things, I guess I wouldn't have predicted that shift would happen as dramatically. Not that it's delivered digitally, I think we would have expected that, but the kind of reporting and the real-time nature associated with it.

And I guess, similarly, some of the way social networks have developed, and the impact that they have had on the way people communicate. I find it so fascinating as an example to see the impact that Facebook has on what's happening in other countries like Iran, and getting information out, those sorts of things. You know, I'm not surprised by them, but I certainly wouldn't have predicted them back then.

So, probably your 2000 self might be surprised that in 2009 you're in touch with more people from your high school than you were in 2000?
Muglia: Right, exactly, things like that, exactly. That's a perfect way to say it.

Obviously, your focus is the IT world, and I'm curious, how different is the life of an IT manager? How much has changed in the last decade for what they do on a day-to-day basis?
Muglia: I actually think it's quite different for an IT manager. I think IT managers used to be expected to build the systems and do everything, and now I think they're much more focused on providing the infrastructure for the business teams and the people within business to do things.

One other thing that's missing at least from Microsoft at the end of this decade, as compared to the beginning is Bill Gates at least in a full-time sense. As one of the people kind of at the top of the technical ranks, I'm curious how have you noticed his absence in the last 18 months since he's left full-time work?
Muglia: I watched while Bill was here how his role shifted over a period of time. There was a period of time when the company was at a size and scope where Bill really was able to do the direction, the technical direction of very large parts of the company.

During the 1990s, we grew to a point where that was just not possible for a human being to do, although Bill's capacity is far beyond most. And so over time, Bill shifted into much more of an advisor role, and he provided advice and guidance.

While Bill's advice was always incredibly useful, he did a great job of also building a lot of people within the company that could also think in a similar sort of way to him. I mean, I'd like to think that I learned a lot from Bill and I'm able to do some of the things that Bill would have done.

I view part of my job is to take up and do many of the things that Bill did, and to do it in my area. My area of scope is broad but it's to a level that I think I can still do that effectively.

But I think what's happened is we now have a hierarchy of people. You've got Ray doing some significant cross-group things, and then you've got people like myself or Steven Sinofsky or folks in Stephen Elop's world, J Allard, all playing subset roles of what Bill used to do.

For a long time, Microsoft and you talked about this notion of autonomic computing. One of the things that conveyed was the sense that the IT would just sort of manage itself. Now you guys talk more about Dynamic IT. It seems like some of the idea that it's just going to magically happen has been moved from the notion.
Muglia: Let's just sort of kind of go back and talk about the time from where all those things sort of emerged in the 2002, 2003 sort of time. People sometimes called things autonomic computing, they sometimes called it utility computing. You know, our name for it was always Dynamic IT. It actually started out as the Dynamic Systems Initiative, and we sort of broadened it a bit with Dynamic IT a few years ago.

And the idea being that operational resources should be largely self-managing, and the process, the lifecycle of developing an application should be connected from the point of requirements, definition, through development, all the way to operations. That vision has not changed. We said it was a 10-year vision in 2003, and it will probably take us 10 years to really fully fulfill it. I think every year, as we release new products, we take substantive steps forward.

Now, the thing I didn't understand back then is that all of this would lead so naturally to the cloud application model, and that's what we've kind of put in place over the last year or two. I would very clearly say that is the next thing.

When you think about some of the biggest trends in the coming few years, I imagine cloud computing is a big one?
Muglia: Yeah. The thing that to me is so exciting about that is the impact I think it's going to have on business, most importantly allowing people to write applications more rapidly that really meet the needs of tier one enterprise apps, and do so at a fraction of the cost, both from a hardware perspective and from an operational perspective.

So, the kinds of things that would have required a mainframe in the past.
Muglia: Absolutely. Obviously we built software for very high-end systems. I mean, being straight and honest, that's not the main thing that our software is used for. We have a fairly small number of our systems running on these big $100,000 plus machines. But it's an important segment of the market, and clearly UNIX has a significant segment there, and the mainframe is a significant segment there.

When I talk to the Windows Azure guys, and I talk the software architecture that they've put in place in terms of having isolation units and understanding how to contain failures, and then I look at the way we are building the next generation data center systems, built inside these containers, I recognize that a container is essentially the mainframe of the future. The difference is that it's thousands of times more powerful than a mainframe at a fraction of the cost.

Do you have a sense of how many people are actually doing real cloud computing today, what percentage of businesses, and what that might look like in the next two or three years?
Muglia: I think Forrester has done some work that it's a really small number of people, like 4 percent of folks that are actually deploying things right now. So, it's still very nascent. But we expect a really large number of folks to start to (use cloud computing) over the next 12 to 18 months.

We're right at that inflection point where people are going to begin to start building real applications and begin deploying those applications into their environment, both for internal use and for their external customers. Certainly if you go out three to five years, we expect it to become very mainstream.

One of the constant debates is when people ask how much work will be done in a company's own data centers as compared to some sort of public cloud like Microsoft is running with Azure. Do you have a sense of where that mix might be a couple years from now or five years from now?
Muglia: I think certainly over the next five years we'll still see more work done in-house than in a public cloud. I mean, you'd have to move an awful lot of work out in order to shift that.

The question will be what is the cost and the effect, and at one level how much can this be done for people in a public cloud environment at a lower cost, and what level of security and trust can be established so that people feel comfortable moving their workloads to the cloud. I don't expect my bank will be moving their core financial systems to a public cloud environment in a five-year horizon, and that's probably a fine decision on their part.

I want to make, enable, and build the technology infrastructure to allow people to move their most sensitive data into the cloud so that some day it will become possible for a bank to do that, but I think it will take a little while for it to actually happen.

Last week, Microsoft bought a company called Opalis that specializes in software to manage data centers. Is this a big company? What made you interested in them?
Muglia: It's a moderate sized company. I'm really excited about this acquisition. I mean, what they do is something that's called "run book automation," and what they've done is they've built a very strong base of understanding of how to automate tasks that are happening within the data center.

And by the way, that's quite heterogeneous in its nature. Although they run fully on Windows, they're not limited and restricted to data center tasks that happen simply in Windows, but they can reach out and work with Linux and UNIX systems, et cetera.

Being able to automate a set of tasks is one of the key things that's going to be necessary to simplify the operations of any of these data center environments, and Opalis is a fantastic acquisition for us because they bring a ton of expertise and real world customer experience in that space. We think our customers will see value from this literally from day one.

With Microsoft's Windows Mobile unit having run in slow motion for the past several years, it doesn't surprise me that there are calls for the company to get out of the phone business.

The more interesting question raised in this New York Times blog, to me, is whether Microsoft flat out just doesn't get the consumer.

That, to me, is a much broader issue for Microsoft, given the fact that more and more parts of computing--even enterprise software--are taking their lead from consumer trends--think Facebook, Gmail and Twitter.

Microsoft certainly has its challenges on this front, and no business illustrates those challenges more clearly than the phone business, where Microsoft has squandered an early position in smartphones and now faces a massive task to catch up to Apple, Research In Motion, and even upstart Google, which has not been at the game nearly as long.

Luckily for Redmond, I don't think it is that they don't get the consumer at all. Products like Surface and Windows 7 and Zune HD show that Microsoft is thinking about the consumer experience and does have some sense of what appeals to the average user.

So it's not that Microsoft totally doesn't get the consumer. Rather, I would argue, the consumer it understands best is the nerd, as opposed to the mainstream user. That's why, from my way of thinking, its products tend to start as niche products for gearheads and work their way toward the average consumer.

And Microsoft's nerd focus isn't always a bad thing, particularly in the enterprise where it is nerds who tend to be making the decision. Windows has fared pretty well against the Mac, although the PC's lower cost also has a hand in that.

What's happened on the mobile side, though, shows that the focus of power is shifting. It's only a matter of time before similar trends more deeply affect the corporate desktop, whether it is e-mail, collaboration, or social networking.

The consumer business also represents a huge opportunity on its own for Microsoft. When it comes to connected entertainment, for example, Microsoft has what should be a big advantage. Because of its size and breadth, Microsoft's software powers multiple living room devices (Xbox, Windows Media Center, and Mediaroom digital TV) as well as devices that delver media onto phones, cars, and other portable devices.

And of course, a huge part of the battle has moved off of the PC or any single device and onto the Internet. That explains Microsoft's huge investment in Bing, but also its other online moves, including offering Office via the browser, and projects like Live Mesh that aim to bring together our myriad gadgets.

There is still a huge win to be had for the first company to allow people access to their media seamlessly in all these places. The best experience right now, I would argue, is taking one's iPod or iPhone with them into all of these different locations. That's a good experience, but not as good as being able to buy content once and have it automatically show up, on-demand in all of these places.

The company has shown glimmers of hope in some areas, though clearly there is more change that needs to happen. Its new retail stores, though similar to Apple, show Microsoft knowing how to highlight its coolest side. There are more products coming out with memorable names like Silverlight and fewer with mouthfuls like Windows XP 64-bit Edition for 64-bit Extended Systems.

There are pockets of understanding, particularly in the entertainment unit, which is developing things like the eminently cool Project Natal. But, then, as The New York Times blog points out, there is the Windows Mobile unit where it seems the phone has been ringing for years and Microsoft has yet to answer the call.

What's your take. Is it game over? Or does Microsoft have enough quarters in its pockets to learn how to play the table after all?

Microsoft said Wednesday it has reposted a tool to the Internet that aids installing Windows 7 on Netbooks and computers without an optical drive.

The software maker pulled the Windows 7 USB/DVD Download tool off its Web site last month after it was pointed out that the software appeared to use open-source code licensed under the GNU Public License (GPL v2). Microsoft later apologized and said that the code did in fact use GPL code. Microsoft said it would repost the tool and make it open source under the terms of the GPL.

Microsoft posted the open-source version of the tool on Wednesday, although it took longer than the company had originally anticipated.

"As we previously explained, the testing and localization took longer than we expected, but the project is now hosted on CodePlex.com, Microsoft's Open Source software project hosting repository," Microsoft open-source community manager Peter Galli said in a blog posting.

Also, the whole effort to get Windows 7 onto a Netbook now takes longer as several other pieces of code that had been included with the tool are now separate downloads.

When Microsoft announced the Windows 7 Family Pack option, it said that the three-user bundle of Windows 7 Home Premium would be available only for a limited time.

That time, it appears, is drawing to a close. As noted by WindowsITPro, supplies are drying up fast.

(Credit: Amazon.com)

"The Windows 7 Family Pack was introduced as a limited time offer while supplies last in select geographies," Microsoft said in a statement. "Response has been very positive and in some cases, the offer has sold out. "

The company wouldn't say how many copies have sold or how many it allocated for the family pack option. It also said it has no current plans to extend the offer.

Microsoft's own online store appears to be sold out, though those in Orange County, Calif. or Scottsdale, Ariz. could check out the retail spots.

Amazon itself is sold out, although some other sellers are offering it on Amazon's site, but at prices well above its suggested price.

Computer users had been asking Microsoft since the days of Vista and longer to offer a discount to those trying to outfit more than one PC with the latest version of Windows. Microsoft finally confirmed in July that it would have a family pack option.

When it announced full details later that month, though, Microsoft said that the $149 package would be available "while supplies last." At the time I pressed them for more details and the company would not say how many copies it planned to sell nor how long the offer would last.

Apple, by contrast, has offered its Mac OS X family pack since 2002. That version covers up to five computers in a household.

Microsoft is teaming with Live Nation to use a music-themed site to tout Windows 7.

(Credit: Screenshot by Ina Fried/CNET)

Borrowing a tactic it has used to tout Internet Explorer, Microsoft on Tuesday launched a music tie-in to help promote Windows 7.

Dubbed Section 7, the site offers discount concert tickets and is being done in conjunction with music promoter Live Nation. Among the things the site features are $7 concert tickets and $7 merchandise for select artists.

"Section 7 offers music lovers a host of insider benefits, including exclusive ticket buying options, discounts, and opportunities to meet their favorite artists, fan clubs, great deals on tickets, merchandise and more," Microsoft said in an e-mail.

The first 37,000 people who sign up also get a voucher for a free pair of tickets to a concert at a Live Nation club or theater.

Microsoft says it is trying to "simplify the music experience one concert at a time." That seems a stretch, but hey, free concert tickets sounds pretty good. Locations are limited, though, so not everyone will have a local option.

Steven Sinofsky may not be talking about Microsoft's future Windows plans, but the Windows Server team appears to see more value in letting customers know its road map.

In at least two slides apparently shown at the Professional Developers Conference in Los Angeles this week, Microsoft suggests that a major release update to Windows Server is due around 2012, with one of the slides confirming the Windows 8 code name.

I've asked both the desktop and server teams for more context on the slides, which were noted this week by blogger Stephen Chapman. A similar slide cropped up--that time in Italian-- in August.

For his part, Sinofsky sat completely stone-faced when I asked him in our interview Wednesday where Microsoft was at relative to Windows 8--later noting that he hadn't even used the word Windows next to the numeral 8.

"I didn't say any of the words--Windows 8--those were all your words," he said

The 2012 time frame would roughly coincide with Windows Server's plans of having a minor release every two years or so and a major release every four years. It released Windows Server 2008 R2, a minor update, earlier this year as the desktop team released Windows 7.

In recent years, Microsoft has tended to line up its desktop and server releases fairly closely, although in this case the desktop OS was probably a more significant release than its server counterpart.

LOS ANGELES--While some have criticized Steven Sinofsky for being tight-lipped, the Windows boss insists that he is being prudent, not secretive.

"Everybody wants to know what's coming and what's next." But, he said, talking too soon, too early is actually a bad thing that just leads to frustration.

"You reacting to some nightly developer build isn't really productive to anybody," Sinofsky said in an interview at this week's Professional Developers Conference.

Sinofsky says that people don't want to show up to a restaurant and watch a potato being peeled and taste it half-cooked. For the same reason, he prefers to not talk about things until they are well, fully baked.

"It's hard to imagine what else you want to see while it's in progress," Sinofsky said. "I don't want to see the daily cuts of a movie. I want to see what the director thought at the end."

As a result, Microsoft didn't show Windows 7 until last year's Professional Developers Conference, just a year before the product was released. That's in sharp contrast to the prior version of Windows, which was first shown as Longhorn back in 2003. It ultimately suffered through numerous delays and significant changes before being released as Vista.

Windows boss Steven Sinofsky said his Windows philosophy boils down to a single word--responsibility. "There's not another project in software to work on that a billion people use and we take that really, really seriously."

(Credit: Ina Fried/CNET)

From early indications, Sinofsky would appear to be on to something. While Vista was largely panned by critics and shunned by businesses, Windows 7 has thus far had strong early sales and gotten high marks from reviewers.

It's some of the same philosophy Sinofsky took in his earlier days, when he led development of Microsoft's Office franchise.

"Normal people have stuff to do," he said.

That's also why he doesn't really look for public feedback until the software is largely done.

"We don't want feedback on a screenshot," he said.

Sinofsky shifted from Office to Windows in March 2006 and earlier this year added responsibility for the business side of Windows as well, becoming the unit's president.

He said his philosophy toward Windows really boils down to a single word--responsibility. "There's not another project in software to work on that a billion people use and we take that really, really seriously in the hallways of our dev team," he said.

Sinofsky also isn't one to be swayed by emotional arguments for or against a feature. If you want his attention--show him the numbers. He said he wants feedback, but he wants that feedback to "be based on data and not assertions or opinions or anecdotes."

During his PDC talk on Wednesday, he referred to the other approach as "testosterone-based engineering."

"It turns out we did a lot of things by that method," Sinofsky said. Often times, decisions on which features to include in the next version of a product were made that way. People, Sinofsky said, would basically just ask their friends.

"Let me get this straight," Sinofsky said. "You are going to ask your 10 friends who all go to Fry's and build their own gaming machines and that's going to be the way we decide which features go in the product?"

That, he said, "seems a little homogeneous. It seems a little limited in its reliability."

But these days, Microsoft has a better option, gathering lots and lots of data from real-world use. Quite often, he said, the data will show things that might not be intuitive to Redmond's engineers.

As an example, he showed a graph at the conference that showed the huge variety of graphics resolutions that Windows users were operating at, including a significant number with VGA-resolution displays. Folks in Redmond initially assumed they didn't really need to worry about such low-resolution screens.

True to form, Sinofsky was emphatically silent when my questions drifted toward the future. I asked whether we might see a beta of Internet Explorer 9 at Mix and he literally just sat there silent until I asked the next question.

Later on in the interview, the mere mention of Windows 8 got the same stone-faced glare.

"I won't ask you what's in Windows 8, but can you talk at all (about it)? You mentioned that you are a few weeks into designing IE 9," I said. "Are you a similar amount into Windows 8?"

Silence. More silence.

"I didn't say any of the words--Windows 8--those were all your words," he said. "Next."

Sinofsky did have some interesting things to say when I asked for his take on competitors like Google and Apple.

"You have to take it very seriously," he said of the competitors. "That's always, always true in the software world. In the software world it doesn't take a lot to have a dramatic shift in how people perceive you or how they act. It's just very important no matter what your perceived or real or measured share is at one moment, it doesn't take a lot to change it down the road."

Windows 7 isn't just getting good reviews, it's also selling well, CEO Steve Ballmer told shareholders Thursday.

Delivering opening remarks at Microsoft's shareholder meeting, Ballmer said that Windows 7 was off to a "fantastic start."

"We've already sold twice as many units as any OS in a comparable time frame," Ballmer said. "Windows 7 is simply the best PC operating system that we or anyone else has ever built."

Microsoft CEO Steve Ballmer delivers a point at the company's Worldwide Partner Conference in July.

(Credit: Microsoft )

By last week, Windows 7 accounted for 4 percent of Web-accessing devices, according to Net Applications; it took Vista more than seven months to reach that level.

Addressing the overall economy, Ballmer reiterated that things seem to have stabilized.

"The economy has, at least for now, leveled off," he said.

The meeting is still going on and has just entered the question-and-answer session and I'll update this post if anything interesting comes up. So far, though, it's been mostly about local and legislative matters, rather than technological issues.

Microsoft vs. Apple
There was one fun one from a shareholder who noted that young people tend to gravitate toward Macs and that Apple seems to be outmarketing Microsoft.

"You've got a real bad image out there," the shareholder said. "You sure don't have that younger generation."

Ballmer acknowledged that there are "certainly always opportunities for improvement."

"We all watch television," he said.

That said, Ballmer noted that "96 times out of 100, worldwide, people choose a PC with Windows."

He added that even in the toughest market--the high end of the U.S. consumer market--Windows is chosen 83 times out of 100.

"That doesn't let us rest on our laurels," Ballmer said. "Apple has picked up a couple tenths of a percent of market share."

But those couple tenths matter, he agreed. He said the downturn in the economy has actually bolstered Windows' competitive position. "People understand that Macintoshes are quite a bit more expensive."

Another questioner asked why Microsoft can't better compete against Apple's iPhone and other smartphones.

"Certainly our objective is to have the leading position," Ballmer said. "I think we have a lot of opportunity to improve...Undoubtedly we've got our work cut out for us."

He did say that Microsoft has put a lot of smart people on the task.

"We've got our heads down to do our best," Ballmer said.

LOS ANGELES--As a software guy, Windows division president Steven Sinofsky readily admits that he had little idea of all that goes into building a laptop.

Like many at Microsoft, he tended to think of products as done once the software was finalized. During the past couple of months, though, he has gotten a much better idea, as his Windows team went through the process of designing and building a Windows 7 laptop in conjunction with Acer.

Steven Sinofsky, surprised the PDC crowd on Wednesday, announcing that paid attendees would get a free notebook that Microsoft helped design.

(Credit: Ina Fried/CNET)

That laptop made its debut on Wednesday, as Microsoft handed out the devices to paid attendees of the Professional Developers Conference here. It's quite a little laptop, built around an 11.6-inch swiveling touch screen that works as either a tablet or traditional notebook.

Sinofsky wanted to give attendees at this week's PDC a computer that would really show off Windows 7's capabilities, including a touch screen and top-of-the-line wireless. Oh, and it should be light. And have a glossy screen. And not cost too much.

"They look at you like, 'what are you building'?" Sinofsky said in an interview with CNET.

Sinofsky said it's kind of like remodeling a kitchen. "You start off by saying I want these cabinets this counter top and this kind of a sink and all of a sudden you've got this kitchen you can't afford and don't have the time to build. That's pretty much the first phase of building a laptop."

In the end, Sinofsky had to make a few compromises, but the process itself was an important one for the Windows team, Sinofsky said. While PDC attendees got the laptops, his team got a better appreciation for the full process of designing and building a Windows PC.

"That was part of the learning, really making sure we can walk in their shoes," Sinofsky said.

The Windows team quickly learned about some of the trade-offs that computer makers have to make, as well as some of the hidden costs. At one point, Sinofsky said, he wanted to cut out Bluetooth in order to add GPS capabilities.

There were two problems with that, though. First, taking off Bluetooth would actually cost money. It was already part of the wireless chipset and the standard chassis had a blue indicator light built-in already, meaning that it would cost more to cover up that light.

Unboxing the free PDC laptop (photos)

And with Sinofsky's ideal laptop already containing multiple flavors of Wi-Fi, Ethernet, wide-area networking and three audio paths, there just wasn't room for GPS.

"They were like, look we're running out of room here," Sinofsky said.

Other things Sinofsky did get. Although most laptops with touchscreens have matte finishes, Sinofsky said "We really wanted a glossy screen."

Sure enough, the PDC has a glossy touchscreen.

That's just a part of what Sinofsky talked about in our interview on Wednesday. Look for more from our chat in the coming days.