Beyond Binary

Microsoft's Mark Bolger demonstrates the Surface's multitouch user interface.

(Credit: Ina Fried/CNET News.com)

The long-awaited software developer kit for the Surface tabletop computer will be made available to those attending Microsoft's Professional Developer Conference at the end of the month.

Microsoft made that pledge on its PDC Web site, as part of a listing for a session focused on writing Surface applications.

"Hear about the unique attributes of Microsoft Surface computing, dive into vision-based object recognition and core controls like ScatterView, and learn how the Surface SDK aligns with the multitouch developer roadmap for Windows 7," Microsoft said, in promoting the session. "Attendees will receive access to the Microsoft Surface SDK."

Microsoft has been promising for some time to open up Surface development beyond the select group of companies that have been working with early launch partners such as AT&T and Starwood hotels.

The company has also promised multitouch will be a part of the Windows 7 interface, but has yet to detail how that will work.

Updated at 1:20 p.m. PDT with closing stock prices.

Tech stocks took another beating on Monday, although shares recovered somewhat in the final two hours of trading.

The Dow Jones Industrial average was down more than 700 points in mid-day trading, but recovered to close at 9,955.50 points, down 369.88 points, or 2.6 percent. The Nasdaq, meanwhile, dropped below 1,800 points, before closing at 1,862.96, down 84.43, or 4.3 percent. The CNET Tech Index closed Monday at 1,267.87 , down 63.1 points, or 4.7 percent.

Several major indexes, including the Dow and Nasdaq, traded at multiyear lows during the session, while the CNET Tech Index was at its lowest point since 2006.

SAP, which warned on Monday that its third quarter sales fell below estimates as business spending on software dropped, saw its shares off more than 15 percent, changing hands near the close at $39.76, down $5.89, or nearly 13 percent.

AMD, Palm, and RIM were all down double digit percentages for part of the day, though all the stocks managed to pare those losses significantly before trading closed. Google shares closed at $369.14, down $17.77, or 4.6 percent. Microsoft shares closed at $24.91, down $1.41, or more than 5 percent.

Yahoo shareholders, meanwhile, have even more reason to resent management that rejected Microsoft's $33-per-share offer. Yahoo shares closed Monday at $15.19, down 81 cents, or about 5 percent.

Apple was among the rare companies to end in positive territory, closing regular trading $98.14, up $1.07, or 1 percent.

I talked about the stock drop on today's CNET News Daily Debrief, above.

(Credit: Susan Dove/CNET Networks)

Microsoft wants SQL Server to scale new heights, and it is hoping an add-on code-named Kilimanjaro will help.

Microsoft VP Ted Kummert, earlier this year as he made good on a pledge to dye his hair orange if the engineering team got SQL Server 2008 out by the company's revised deadline. He's holding the team's mock-up of what his hair might look like.

Due out in the first half of 2010, Kilimanjaro improves SQL Server 2008 with a series of business intelligence enhancements to the database. Microsoft, stressed though, that Kilimanjaro is not the next version of SQL Server, which is due out two to three years after SQL Server 2008. SQL Server 2009 was released earlier this year.

"You should think about this as new capabilities, not a refresh or upgrade," said Microsoft Vice President Ted Kummert, who heads the SQL Server team. Microsoft has not said how Kilimanjaro will be sold. The goal of Kilimanjaro is to make it so more workers in a company can create business intelligence features like charts and so forth.

Microsoft, which is making the Kilimanjaro upgrade at a business intelligence conference in Redmond, Wash., also plans to show its efforts at integrating its Datallegro acquisition with Windows Server and SQL Server.

The Datallegro acquisition will allow SQL Server to go from databases that are in the tens of terabytes to ones in the hundreds of terabytes or even a petabyte of data, Kummert said. The first integrated product, known as "Project Madison," is due in the first half of 2010.

Although Microsoft is showing the demo at the BI conference, Kummert said the data warehouse itself, which consists of a 100 terabyte database with over a trillion rows of data, is running at Datallegro's offices in Aliso Viejo, Calif.

"Moving that much storage is a bit problematic," he said.

With Microsoft having, at the very least a "hiring chill," we decided to check in with other big tech giants on their hiring plans.

It's a little hard to get a clear picture of what other companies are doing--in part because so many have already announced plans to cut jobs. Intel's workforce is down thousands from where it was a couple years ago. Hewlett-Packard has already said it plans to shave 24,000 jobs as part of its EDS purchase, while Dell and others have also been cutting back.

Yahoo, already under pressure from competitor Google and the ugly saga of Microsoft's attempt to acquire the company, said Friday that it is bracing itself for a weaker advertising market.

"We believe it's imperative we align our cost structure with today's economic realities," said Yahoo spokesman Brad Williams. "We've been looking at ways to streamline our processes and bring more efficiencies to how we work as an organization," he said, and the company hired Bain & Co. to "help us identify opportunities for improvement."

He wouldn't confirm that layoffs are part of the plan, but payroll is a major expense, and most employees know how to read the tea leaves when they hear the word "streamline."

Though Yahoo is under pressure itself, Williams said the economy and the advertising market led to the current analysis. "The collapse of the credit markets...accelerated what had been a pretty uncertain market," he said.

For its part, Google said "We continue to hire talented people across functions for our offices worldwide." Of course, the real question is at what pace they continue that hiring.

In a meeting with reporters Wednesday, Chief Executive Eric Schmidt supplied a big dose of caution about whether there might be effects from the broader economic issues.

"It's a very dynamic situation. There is evidence credit is a problem for certain sectors. We have not yet seen any impact from it," Schmidt said. But, he added, "We might. All bets are off. Nobody knows."

Many expect TV and print advertising to be hit harder, but that doesn't mean online ads are immune. Even if individual ads or campaigns are profitable, the ad market can be hurt when customers tighten their purse strings and advertisers reduce spending.

Most other companies didn't have much new to say on a Friday afternoon, but it's fair to say that every company has got to be taking a second look at those 2009 numbers. Anyway, here's what several big names did have to say on the matter.

Dell: Dell spokesman David Frink said the company is certainly monitoring things, but had nothing new to announce. "But as you know, we've got a well publicized effort under way to reduce costs," Frink said. Dell has cut 8,500 workers from its ranks in the last four quarters. That said, Frink said Dell "will selectively hire in areas that are important."

HP: "Workforce rebalancing is a continual activity across our businesses and geographies to ensure that resources are aligned with the opportunities in the market," HP said in a statement. "We expect that our overhead costs, which include IT, real estate and shared support functions, will decline more from (fiscal 2007 to fiscal 2009) than they did from (fiscal 2005 to fiscal 2006)."

IBM: "We haven't announced any freeze," an IBM representative said. As of right now, nothing has changed at IBM. We continue to hire in key skills areas."

McAfee: "McAfee has not changed its hiring process and continues to make strategic investments in its personnel," A company representative told CNET News. "We continue to add to our headcount. McAfee has grown significantly over the past quarters."

Microsoft: "Microsoft will continue to grow and add thousands of new jobs this year, but given the current economic environment, we are taking the prudent step of reviewing our hiring plans and will make some adjustments as appropriate," spokesman Lou Gellos said in a statement. "We are optimistic about our prospects for growth and will continue hiring the talent we need to ensure our ongoing success."

Intel: Declined to comment, citing a pre-earnings announcement quiet period.

Apple: Declined to comment, also citing a pre-earnings quiet period.

Oracle: Declined to comment.

CNET News' Charles Cooper, Stephen Shankland, and Robert Vamosi contributed to this report.

Microsoft on Friday said it is reviewing its hiring plans amid the economic uncertainty, but denied a report that it has instituted a companywide hiring freeze.

IDG News Service reported Friday that Microsoft had instituted a hiring freeze, citing a source who had seen a company memo. A source close to the company said that report is not correct, but said Microsoft did send out guidance this week that it plans to tighten up hiring amid signs of a weakening economy. The company still expects to add jobs overall, however.

CEO Steve Ballmer spoke last week of a certain "buoyancy" within the tech industry despite economic uncertainty, but also said that neither Microsoft nor the industry would be immune to a broad slowdown.

In comments this week in Europe, Ballmer sounded a slightly more cautious tone on the economy. Microsoft also urged Congress to pass the economic bailout bill after the House voted it down on Monday.

Update: IDG News Service has updated their post with a Microsoft spokesperson denying there is a companywide freeze.

"It is not true that we have instituted a hiring freeze," Microsoft spokesman Lou Gellos is quoted as saying. "What is true is that we are evaluating hiring as we always do and we might make projections that are different than perhaps we had at the beginning of the year....This year we expect lots of growth and that we will hire lots of people. I think the nuance is in the fact that in light of the economy it's important that we do the prudent thing and evaluate projects that we're working on."

Update 2: So much for buoyancy. Microsoft said "the current global economic situation has created a tough business environment for many companies" and added that since no company is immune to this, it is "imperative" for Microsoft to be fiscally responsible.

In a statement, Gellos said: "Microsoft will continue to grow and add thousands of new jobs this year, but given the current economic environment we are taking the prudent step of reviewing our hiring plans and will make some adjustments as appropriate," Gellos said. "We are optimistic about our prospects for growth and will continue hiring the talent we need to ensure our ongoing success."

The idea of a full-on hiring freeze at Microsoft seems impractical given the company's online services push, in particular. The company is already in the process of building and equipping a number of massive data centers as well as hiring more engineering talent in its effort to catch Google.

The company had 91,000 employees as of its last public statement. Ballmer was asked a question at the Churchill Club event last week and the reporter suggested that Microsoft now had more than 100,000 employees. Ballmer said he didn't think that was the case.

In the wake of Thursday night's vice presidential debate, we return to the important question only you the voters (or you, the underage reader, or you the foreign reader, or you the felon) can answer. Since we started with Barack Obama in the Crave presidential gadget poll before turning to John McCain, we'll give first jabs...er dibs, to Gov. Sarah Palin.

Got any ideas other than the options mentioned in our highly scientific poll? Let us know in our talkback section below. And if you have suggestions for next week's Joe Biden poll, be sure to send them my way at ina dot fried at cnet dot com.

Bowing to continued demand, Microsoft has again extended the life of Windows XP.

Three months after Microsoft stopped selling new copies of Windows XP, the software remains a top seller on Amazon.com.

(Credit: Amazon.com)

Although the largest PC makers can't sell XP anymore (except for ultra-low-cost machines), they can sell Vista Ultimate and Vista Business machines with XP discs in the box, or even Vista machines that are "factory downgraded" to Windows XP.

That option was supposed to go away early next year, as Microsoft was going to stop supplying Windows XP media after January 31. However, the company now says it will offer the discs through July 31, giving the option a six-month extension. (Update: PC makers will also be able to sell the factory downgraded machines online as well.)

In a statement provided to CNET News, Microsoft tried to put the best face on the move.

"As more customers make the move to Windows Vista, we want to make sure that they are making that transition with confidence and that it is as smooth as possible," Microsoft said. "Providing downgrade media for a few more months is part of that commitment, as is the Windows Vista Small Business Assurance program, which provides one-on-one, customized support for our small-business customers."

CEO Steve Ballmer said on Thursday in France that 180 million copies of Vista have been sold, but he noted that businesses continue to move at their own pace. When asked about whether companies should move to Vista or wait for Windows 7, even Ballmer said it depends on the business.

"So, my point isn't to encourage you to do it immediately; of course, we'd love you to do it immediately," Ballmer said. "My real advice is to do it in the natural rhythm of your PC upgrade cycle...Most of you will not upgrade the software on existing hardware. Some will. Most of you will actually choose to buy new machines when you move forward, and so we should work with you in that context."

The less major computer makers, known as system builders in Microsoft parlance, are still able to sell XP machines without having to do the Vista downgrade thing. That option is set to end Jan. 31 and Microsoft says that date isn't being extended.

Microsoft stopped selling Windows XP on June 30, though it continues to be available as retail supplies last. It has been a top seller on Amazon for some time, and several versions of XP are still among the retailer's top 25 best-selling software titles.

The six-month extension for XP discs was noted earlier by The Register, a tech news site.

Updated 3:45 p.m. PDT, with additional Microsoft comment.

Microsoft has indicated for some time that it sees a Zune future in the cell phone arena, but the company has been hard to pin down on just what its plans there are.

There would seem to be two main scenarios--the rumored ZunePhone, or just making Zune software for Windows Mobile or other phone operating systems. A magazine interview with CEO Steve Ballmer suggests that Microsoft at least plans the latter approach.

Asked why the Zune is important to Microsoft, Ballmer told the magazine that it was about more than just the device itself.

"Now, we built the Zune hardware with the Zune software--and what you'll see more and more over time is that the Zune software will also be ported to and be more important not just with the hardware but on the PC, on Windows Mobile devices, etc.," Ballmer said.

Asked for clarification, a Microsoft representative provided the following statement.

"We've always said that software and services is a key focal point for Zune and it does make sense to extend the Zune experience to other devices," the representative said. "In terms of specific timing we have nothing to announce at the moment."

Microsoft CEO Steve Ballmer on Thursday promised it won't be long before the world gets to meet what he is calling "Windows Cloud"--something that acts like Windows but operates over the Internet.

"Just as we have an operating system for the PC, for the phone, and for the server, we need a new operating system that runs in the Internet," Ballmer said Thursday in a speech before France's CIGREF (Club Informatique des Grandes Entreprises Françaises). "I bet we'll call it Windows something. We're going to announce it in four weeks. We might even have a trademark by then. So, for today I'll call it Windows Cloud. And Windows Cloud will be a place where you can run arbitrary applications up in the Internet that runs .NET."

CEO Steve Ballmer

(Credit: Microsoft )

Ballmer first mentioned the "Windows Cloud" name in a speech in London earlier this week. Microsoft is expected to unveil "Windows Cloud" (whether it bears that name or not) at its Professional Developers Conference, which takes place the last week of October in Los Angeles.

Microsoft has already unveiled its Live Mesh, a consumer-based service that synchronizes data across multiple devices. The software maker has promised that application developers will also be able to write Mesh-based applications and that the tools to do so will be detailed at the PDC. Windows Cloud appears to go significantly beyond that, however.

The move into cloud computing, Ballmer said, will require a shift in Microsoft's overall developer tools, Ballmer said on Friday. "Part of that means putting .Net in the browser, which we've done with our Silverlight technology," Ballmer said, according to a transcript posted on Microsoft's Web site. "And yet I don't think the whole world lives in a browser. PC applications have better user interface, and you can integrate them more. Browser applications run on non-Windows machines, and they're easier to manage. We need to bring the benefits of both of those things together on Windows, and through our Silverlight technology permit the targeting of other systems."

Ballmer also talked about desktop Windows at the event, first addressing Vista and then talking briefly about its successor, Windows 7.

"Windows Vista is a product where we made some very conscious choices for some very good reasons that have been very painful," Ballmer said. However, he said that the company has now shipped about 180 million copies of the operating system.

"Deployments in large corporations are now ramping up quite nicely across the world, but in the enterprise I would say we are still earlier."

He then promised that Windows 7, as the company has been saying, will be compatible with Vista.

"No more breaks," Ballmer said. "So, any work we're doing together with you or you're doing on your own to test your applications for Vista compatibility will also apply to Windows 7. We hope you choose to deploy with Vista, but all of that work is good, important work for the long term."

Microsoft plans to release a pre-beta version of Windows 7 to developers attending the PDC.

He also said that Vista has lived up to its target of being, statistically speaking, the most secure version of Windows to date.

Ballmer also talked about the shifting expectations people have for software, pointing to the MySpace generation as one that expects people to have social capabilities built-in to their software.

"The young people you hire today, they grow up on MySpace, Facebook, and instant messaging," Ballmer said. "They grow up with a fundamental notion that applications have knowledge of other people. In order for business applications to go that direction, we need to provide fundamental platform operating system services that really provide what I might call the social web or the social graph."

Microsoft's effort to woo Internet searchers with financial incentives strikes one Wall Street analyst as a "desperate move" that will make little headway.

On Wednesday, Microsoft announced SearchPerks, a frequent-flier-like program that gives searchers one "ticket" for every search they do via Microsoft's Live Search engine.

To Collins Stewart analyst Sandeep Aggarwal, though, SearchPerks is just another sign that Microsoft lacks a "Plan B" strategy to gain share against Google without buying Yahoo.

"Our preliminary reaction is that SearchPerks will likely result (in) a sub-standard outcome," Aggarwal wrote in a report Thursday. "In our view, attempts like this one can in fact hurt Microsoft's reputation in the eyes of end-users and advertisers."

Speaking of Yahoo, its shares have hit new lows, trading around $16.50 recently--half of the $33 per share that Microsoft was willing to pay at one time. Some say a combination of the economy and a lack of alternatives mean that Yahoo will eventually find its way into Microsoft's arms, though the software maker has not been offering any warm words for Yahoo of late.

In any case, Aggarwal still says people should buy Microsoft's shares, despite his lack of enthusiasm for SearchPerks.

"Though organic efforts to ramp up Microsoft's online business are not enough, we like the shares especially given its market-dominating software franchise, strong balance sheet, and $40 billion (stock) buy-back program," he wrote.