Beyond Binary

Microsoft on Tuesday said it is resuming two major Windows updates that had been halted because of a conflict with one of its own software products.

A week ago, Microsoft delayed the release of Windows XP Service Pack 3 because of a problem that could lead to data loss when running the XP update in conjunction with its Microsoft Dynamics Retail Management System program. It also halted automatic updates to Windows Vista Service Pack 1 because of a similar issue.

The software maker on Tuesday said it is releasing XP Service Pack 3 for Web downloads, and resuming automatic updates to Vista Service Pack 1, after developing a filter that will prevent machines running Dynamics RMS from getting either update.

The filter is not a fix for the incompatibility, though Microsoft said it is working on that as well.

"A fix for this issue is currently in testing at Microsoft and with customers, and we hope to make it publicly available this month," the company said in a statement. "Until then, Microsoft is advising Microsoft Dynamics RMS customers to not install either service pack."

Those already running Dynamics RMS with one of the Windows updates should contact customer support, it said.

A compatibility glitch with the latest versions of Windows has thrust the spotlight onto a little-known product from Microsoft's Dynamics line for midsize businesses.

Microsoft said on Tuesday that it was delaying the availability of Windows XP Service Pack 3 and halting automatic updates to Vista Service Pack 1 because of problems with Microsoft Dynamics Retail Management System.

Just what is Dynamics RMS?

It's software that enables specialty retailers to handle cash register functions, process payments, and automate purchasing, inventory and other back-end processes, said Michael Griffiths, the group product manager for the retail part of the Dynamics business.

Dynamics RMS is used to manage about 38,000 different store locations, he said.

Perhaps its most notable customer is the NFL's Dallas Cowboys, who use it to handle all of their merchandising activities, in conjunction with Microsoft's Dynamics AX product.

Microsoft acquired Dynamics RMS as part of its 2002 acquisition of Southern California-based Sales Management Systems, and it last updated the product in January 2007.

Griffiths said the Dynamics team discovered the issue as part of its testing and realized that the problem could lead to data loss.

"The key issue is, there is a potential for data loss within the RMS solution itself, which is obviously something we wanted to make sure we address immediately," Griffiths said.

He didn't offer a specific reason why the company didn't catch the issue sooner. "It just happened this was the time and place when we did find the issue," he said.

Microsoft confirmed Tuesday that it has stopped automatic updates of Vista to Service Pack 1 in the wake of a newly discovered glitch.

The problem, which has also halted the availability of Windows XP Service Pack 3, prevents Microsoft Dynamics Retail Management System from working with either operating system update.

"We are temporarily holding any additional automatic distribution of Windows Vista SP1," Microsoft said in response to an inquiry from CNET News.com. The company said it will continue to make Vista SP1 available for manual download. Microsoft had just started pushing out the Vista service pack last week via automatic updates.

"While we are recommending that customers running Microsoft Dynamics RMS should not install SP1, there are many other customers who can benefit from installing Windows Vista SP1 immediately, so we are maintaining availability via (Windows Update)," Microsoft said. "We are delaying the release of Windows XP SP3 and holding any additional automatic distribution of Windows Vista SP1 as a precaution and to help ensure that our customers have a great experience with Windows."

The company has not yet described the problem, beyond saying it is a "compatibility issue." I have also asked for data on how the problem was discovered, why it took until XP SP3 to find it, and how many users run Dynamics RMS.

Microsoft on Tuesday said it is delaying the release of Windows XP Service Pack 3 because of a newly uncovered glitch.

The software maker said there is a "compatibility issue" between the XP service pack and Microsoft Dynamics Retail Management System, a retail chain management program for small and midsize businesses.

Microsoft finalized the code for Windows XP SP3 last week and had planned to make it broadly available starting Tuesday.

"In order to make sure customers have the best possible experience, we have decided to delay releasing Windows XP SP3 to Windows Update and Microsoft Download Center," the company said in a statement.

The glitch also exists between Microsoft Dynamics RMS and Windows Vista Service Pack 1, though that product has already been broadly released. Microsoft started pushing out Vista SP1 last week via Automatic Updates.

"To help protect our customers, we plan to put filtering in place shortly to prevent Windows Update from offering both service packs to systems running Microsoft Dynamics RMS," Microsoft said. "Once filtering is in place, we expect to release Windows XP SP3 to Windows Update and Download Center."

Microsoft advised those running Microsoft Dynamics RMS to not install either service pack. The company said a "fix is currently in testing and will be available as soon as that process is complete."

When it comes to software piracy, Microsoft may just be aiding the enemy.

Microsoft has been counting on gains against unlicensed software to boost revenue from the Windows unit, which accounts for a huge chunk of overall profits and sales. However, one of the company's own decisions could make its antipiracy battle more difficult.

With Windows Vista, Microsoft took an extremely tough stand on piracy. Computers that were not properly activated within a short period of time went into a virtually unusable state known as "reduced functionality mode."

In the newly released Service Pack 1, however, Microsoft is softening its stance somewhat. The reduced functionality mode is gone, and in its place, a series of warnings and visual indications that a computer is not running a genuine copy of Windows.

I would argue, though, that having an unusable copy of Windows is a far greater deterrent than having one that simply labels its user a pirate. Microsoft has maintained that the new approach will be just as effective and is more palatable to customers and partners. Color me skeptical.

But, will the changes automatically lead to an uptick in overall piracy rates? That's a more complicated question.

On its face, it would seem the answer would be a clear "yes."

However, there are a couple of other factors to keep in mind. First, Windows XP is pirated far more than Vista (at least 2 to 1, according to Microsoft). Also, Microsoft did close several notable hacks to its Vista protection scheme with SP1. So while the price for piracy is arguably lower, Microsoft has closed a few loopholes that let pirates bypass the security features altogether.

Time will tell whether Microsoft's technical changes will have an impact on the broader piracy issue. Enforcement is also key, with Microsoft CFO Chris Liddell noting that a couple of legal actions can make a big difference in any given quarter, suggesting true gains (or losses) from piracy require looking at a longer time horizon.

What is clear is that piracy rates remain a critical issue for Microsoft, which needs to continue growing its Windows revenue and profits to help fund its advertising battle against Google.

Microsoft had seemed to be making major headway against piracy, surprising analysts and itself in the September quarter by gaining 5 percentage points of growth through piracy reductions. Last quarter, though, Microsoft actually saw piracy rates head upward, reversing what had been a particularly positive trend for the company.

Microsoft now expects its gains for the year to be just a percentage point or two, though it believes it can continue to see improvements next year as well.

"Piracy is a tough battle and an area where we will need to continue investing," said Colleen Healy, Microsoft's general manager of investor relations.

Microsoft said on Wednesday that it is beginning automatic distribution of Windows Vista Service Pack 1, the first major update to the year-and-a-half-old operating system.

The company finalized the Vista update in February, but has held off until now pushing it directly to individuals.

Starting Wednesday, the company will start sending it to Vista users who have Windows' automatic update feature turned on. However, the company cautioned that not everyone will get SP1 immediately.

"While Microsoft is beginning automatic distribution today, it's important to note that customers might not see the update download right away since Microsoft is distributing the service pack in phases to ensure a seamless download experience," the company said in a statement.

Vista SP1 was made available for download to customers last month. Service Pack 1 doesn't add much in the way of new features, but rather is a collection of changes designed to fix bugs and improve performance, as well as address competitive concerns raised by Google over Vista's desktop search system. Microsoft also changed how its antipiracy mechanism works with SP1.

The release of Vista SP1 via automatic update is the second milestone this week for the Windows team. On Monday, Microsoft announced it had finished work on Windows XP Service Pack 3. That product will be available for download next week, Microsoft said, but won't start being pushed out via automatic updates until summer.

Microsoft on Tuesday released another version of Windows XP Service Pack 3, but the software remains in the testing phase.

Unlike Windows Vista Service Pack 1, which was finalized in February and made available broadly last week, Microsoft has yet to give the final go-ahead for XP SP3.

"Windows XP SP3 RC2 Refresh was made publicly available today via Microsoft Download Center," Microsoft said in a statement. "We've made this release candidate available in order to receive further user feedback prior to the release of Windows XP SP3."

ZDNet's Mary Jo Foley states that she had heard that Microsoft planned to release it this week in final form, but changed its mind.

There's not too much different in the "refresh" from the RC2 version released last month, according to a TechNet posting. "Beyond fixes for common Windows Update issues, and the inclusion of support for HD Audio, there are no substantial differences between this beta release (build 5508) and XP SP3 RC2 (build 3311)," Microsoft stated.

For its part, Microsoft said the final release is still slated for some time in the first half of the year, with the standard caveat that its timing will depend on customer feedback.

Meanwhile, computer makers are supposed to stop selling machines with XP come June, although this deadline is likely to be extended.

April is apparently coming early this year.

Microsoft has abruptly changed its tune on when Service Pack 1 will start showing up on retail shelves. Microsoft said it has started shipping the full retail versions of the product as of Tuesday (in addition to making it available for download). That means that Amazon.com is indeed going to be able to start sending out copies on Wednesday, as it had billed on its Web site.

As of Monday, Microsoft told CNET News.com that retail boxed copies would not be available until "as soon as April." Apparently that information was inaccurate.

"Initially, we targeted April as a conservative estimate for Windows Vista SP1 retail availability for full packaged product," Microsoft said in a new statement on Tuesday. "We were actually able to ship sooner than originally anticipated--today, in fact. Customers should expect to see Windows Vista SP1 (boxed copies) online and on store shelves as soon as retailers can make them available--in Amazon's case, starting tomorrow."

As far as when SP1 shows up preloaded on new PCs, Microsoft apparently still thinks that will take until next month in most cases.

"We released Windows Vista SP1 to manufacturers on February 4," Microsoft said. "Since then, retailers have been working to build PCs with Windows Vista SP1 and make them available to consumers as soon as possible. Based on what we understand from our partners in retail and OEMs, April is our best estimate for availability for PCs with SP1. However, there will be certain exceptions based on individual companies' distribution models."

Well, Amazon was at least half right. As the retailer predicted, Microsoft did make Windows Vista Service Pack 1 available for download on Tuesday via Windows Update and on its Web site.

Still unclear is when it will start being available on retail shelves. Amazon said it will start shipping boxed copies with SP1 included on Wednesday, while Microsoft said it will be at retailers "as soon as April." I've asked for further clarification on the disparity, but have yet to hear back.

Meanwhile, in a posting on the Windows Vista blog, Microsoft also went into a little more detail on a previously disclosed driver problem that may prevent some drivers that work in Windows Vista from working with Service Pack 1. Microsoft also posted a list of potentially problematic drivers.

Microsoft said some drivers have already been updated to fix the incompatibility.

"We're working with the providers of the remaining devices to get updated versions of the drivers to our customers as well," Microsoft product manager Nick White said on the Vista blog. "In the meantime, Windows Update will recognize PCs with drivers that may be problematic and postpone offering SP1 to those PCs until it has installed corrected drivers or other applicable updates. Either way, Windows Update works to detect whether or not your system is ready for SP1 and not offer it to you until the time is right."

So, you may or may not be able to get SP1 starting today. For those whose systems are able to get SP1, the update is available in five languages: English, French, Spanish, German, and Japanese.

As for other means of getting SP1, Microsoft plans to start pushing out Service Pack 1 next month to Vista users who have automatic updates turned on. As for when new PCs will start carrying it, that is still a bit unclear, with Microsoft noting that it takes time for PC makers to update their assembly lines, but also saying they can use the new code "when they are ready." Microsoft finalized Vista Service Pack 1 back in February.