Microsoft

These days, getting a PC for $1,200 is no big deal. Even two PCs for that price is pretty run of the mill.

Starting on Thursday, though, Best Buy will offer for that price a "PC Home Makeover" that includes three PCs--a laptop, desktop and Netbook--as well as a monitor and router. Even in-home Geek Squad set-up is included.

It's one of those screaming deals, that Windows Vice President Tami Reller was referring to when she spoke with CNET News last week. The deal is set to be officially announced on Thursday, although details of the offer were noted on Best Buy's Web site.

The package includes an HP Slimline desktop (model s5212y), an 18;.5-inch monitor, HP mini Netbook as well as a "media-savvy" laptop (model G60-535DX) along with a Netgear 802.11-G router and in-home setup of each of the components.

Microsoft's price advantage vis-a-vis Apple is among the things the company is looking to highlight as it launches Windows 7 on Thursday.

Ahead of Windows 7 launch, Apple on Tuesday announced a fall lineup that includes refreshed Mac Mini, MacBook, and iMacs, but keeps Apple in largely its traditional price range.

PC makers meanwhile, are showing off Windows 7 models ranging from inexpensive Netbooks to high-end gaming models that can fetch several thousand dollars. The notebook category, in particular, is broadening with products that are both cheaper and less pricey than traditional notebooks and yet feature bigger screens than a Netbook.

Nearly every PC maker also has at least one touch-screen all-in-one, with many offering touch-screen laptops as well.

CNET News is live in New York and we'll have tons of stuff from here, including live coverage of the festivities Thursday with CEO Steve Ballmer. Plus, if you still have lingering questions, let me know and I'll try to get answers.

Amazon.com will offer release-date delivery on Windows 7 software and preorders on Windows 7 PCs, the online retailer announced on Monday.

(Credit: Microsoft)

According to Amazon, customers who preorder Windows 7 will receive the operating system on October 22, its launch day. The company is also offering more than 250 computers from HP, Dell, Acer, and other PC vendors that come preinstalled with Windows 7. Those computers are available for preorder on the site.

Amazon followed its announcement with details surrounding Windows 7's success so far. Windows 7 was a bestseller on Amazon for two weeks following its original preorder availability earlier this year, according to the company. Amazon also said that, so far, Windows 7 has attracted more orders than both Windows Vista and Windows XP combined at the same point in their availability.

A key reason why Windows 7 was so attractive to buyers during that period was likely the operating system's steeply discounted pricing. Starting in June, Windows 7 Home Premium was available for $49, a whopping $70 less than its retail price of $119. Windows 7 Professional was on sale for $99, half of its suggested price.

Now that the program has expired, Amazon is currently offering Windows 7 versions for preorder at their suggested prices.

Updated at 1:37 p.m. PDT to include information on PC preorders.

Demand has risen among businesses seeking better ways for its employees to communicate and work together, especially in this virtual world. To address that need, Hewlett-Packard and Microsoft announced plans at Interop Las Vegas on Tuesday to expand their existing partnership to offer enhanced communication tools and services to customers.

Frontline Partnership, the collaboration between HP and Microsoft, was set up 20 years ago to ensure that products from both companies would work together. A new four-year expansion of that partnership will spend up to $180 million to develop new tools and technologies for Unified Communications and Collaboration (UCC). UCC is an industrywide initiative designed to help business employees communicate and work with each other more effectively, both inside and outside the office.

HP and Microsoft plan to invest in new UCC products and services and to join forces on sales and marketing. They see the initiative as a way for businesses to cut down on costs, especially for travel and telecom. "Together, we are offering the extensive breadth of capabilities of our respective technologies to deliver a truly unified communications and collaboration solution to help our customers improve business productivity," said Stephen Elop, president of Microsoft Business Division.

Products that will be touched by the expanded Frontline effort include Microsoft's Office SharePoint Server, Exchange Server, and Office Communications Server, as well as HP's ProCurve networking gear and dx9000 TouchSmart Business PC.

The demand for UCC is expected to continue growing. A February 2009 report from market research firm Forrester sees the UCC market hitting $14.5 billion among businesses in North America, Europe, and Asia Pacific by 2015, a growth rate of almost 36 percent each year. However, the report noted that customers want to see the benefit and return on investment before committing the money and resources.

HP and Microsoft face stiff competition from other firms vying to provide UCC tools for customers. Last year, IBM said that it would invest $1 billion in this area over the next three years. Networking giant Cisco is also seen as eager to compete with Microsoft in key areas, notably UCC.

Windows 7 pricing is potentially an obstacle to Windows 7 adoption for some users, though in just about every other aspect the operating system is beating Vista, according to a Dell marketing executive.

"If there's one thing that may influence adoption, make things slower or cause customers to pause, it's that generally the ASPs (average selling price) of the operating systems are higher than they were for Vista and XP," Darrel Ward, director of product management for Dell's business client product group, said in a phone interview, referring to the various versions of the Windows 7 operating system that are expected to appear.

Ward continued. "In tough economic times, I think it's naive to believe that you can increase your prices on average and then still see a stronger swell than if you held prices flat or even lowered them. I can tell you that the licensing tiers at retail are more expensive than they were for Vista."

In the business market, Windows 7 Professional is expected to be more expensive than Windows Vista Business, the version that Professional is replacing, he said.

Some schools and smaller businesses may not be early adopters due to price. "Schools and government agencies may not be able to afford (the additional cost). Some of the smaller businesses may not be able to enjoy the software as soon as they'd like," Ward said.

Pricing aside, Ward said momentum behind Windows 7 is big compared with Vista. "When Vista came out we didn't have the motivation to do the types of services that we're doing now. We didn't have the clear customer demand for such services," he said. "We do have a visible number of customers, large and small, who are actually waiting for Windows 7 and who have already put plans in place to target the transition to Windows 7, they're asking Dell for help. That demand and this opportunity is stronger than it has been in the past," Ward said.

And Dell is already getting its service organization in gear for Windows 7. "Our professional service organization is beginning to structure service offerings specifically designed to help customers migrate their images, their applications, and their management infrastructure, security capabilities and so forth."

More than half of Dell's business customers are still using Windows XP and these customers will eventually have to upgrade, according to Ward. "XP cannot live forever," he said.

To help users migrate from XP to Windows 7, Dell supports the upcoming operating system's XP mode. "It's one of the things that Microsoft is doing that we think is helpful. Putting an instance of XP virtual machine in the higher end SKUs (models). This is another alternative for compatibility. We'll fully support that in our product and consulting services." he said.

Driver readiness is good, with some exceptions. "Driver readiness--it looks pretty healthy compared to the past. (There are) some things that haven't been worked out. The WHQL (Windows Hardware Quality Lab) drivers for AMT VPRO is a little behind," he said, referring to Intel's Active Management Technology, which allows remote access to PCs for security, maintenance, and management.

Generally, however, Windows 7 is much further along than Vista was at this stage, he said. "But if you look at the ecosystem enabling for Windows 7, it is much further along that it was at the same time for Vista," he said.

Business Productivity Online Suite

(Credit: Microsoft)

Microsoft on Monday said that Hewlett-Packard's EDS unit and other partners have agreed to help sell its collection of hosted online services.

EDS, Accenture, and others will help sell what Microsoft calls its Business Productivity Online Suite--a collection of products that Microsoft hosts in its data centers. The products include Exchange, SharePoint, Office Communications Server, and Live Meeting.

Microsoft launched the collection of services last November, but has been saying it also wants partners to help sell the services.

Dutch system integrator Wortell said it likes Microsoft's services because they offer both the opportunity for higher sales plus a way to reach customers that don't have a lot of money to invest in building their computing infrastructure. Microsoft's online services allow those businesses to offer features like full corporate e-mail at a lower upfront cost.

"For us, (it) means that we don't have to worry about infrastructure," Burlage said in an e-mail interview. "It allows us to focus on what's really important." Wortell CTO Danny Burlage said in an e-mail interview.

Microsoft said that it, in fact, won't be able to restart a Black Friday promotion with HP.com that many were unable to take advantage of because of glitches with the Live Search Cashback program.

In a blog posting on Friday, Microsoft said that, although it is working to give those who ordered products their promised 40 percent discount, those who were not able to place an order are, essentially, out of luck.

"There have been lots of questions on whether the 40 percent off HP promotion on Black Friday will be restarted," Microsoft said in the posting. "While we were hoping to be able to do that, we are sorry to report that it will not be restarted."

A Microsoft representative had indicated earlier this week that the promotion would be restarted, although a statement on Tuesday indicated that might not occur.

While this is bad for bargain hunters, it may end up being worse for Microsoft, which is trying to use the Live Search Cashback program as a way to build awareness and loyalty for its search product.

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.

MOUNTAIN VIEW, Calif.--"Innovation" has been thrown around so often in technology circles that to some, it's a four-letter word.

At one tech company, innovation can mean bringing a dazzling new product to store shelves. At another, it can translate to a tiny new button on a Web site. That's why, executives say, the word itself has been overused and devalued.

Still, new cutting-edge products mean everything to a successful tech company.

Executives from eBay, Hewlett-Packard, Microsoft, and others were here at SDForum's first Corporate Innovation and Research Fair on Friday to talk about their techniques for staying creative. Each company has its own style, with some strategies that overlap. But they all acknowledged it's not easy to innovate, especially considering that large corporate cultures can be a curse to fresh ideas.

Max Mancini, eBay's senior director of Platform and Disruptive Innovation, went so far as to say that Silicon Valley venture capitalists wouldn't make so much money on start-up investments if tech companies were better at developing new products.

"Venture capital firms thrive on inefficiencies in large organizations," said Mancini, who spoke at the gathering held at the Computer History Museum.

His counterpart at HP added to the idea by saying that demands from Wall Street and senior management can stifle innovation. "If you're a larger company, there's high probability you have creative people (in your organization). But creative people get impatient," said Rich Friedrich, director of HP's Enterprise Systems and Software Lab.

That means that these companies either must invest billions in research and development units, or bake in policies to ensure that people dream up new products. Google, of course, asks engineers to spend 20 percent of their time on pet projects. Microsoft, in contrast, employs more than 800 researchers in labs around the world.

A bottom-up style
Roy Levin, Microsoft's director of research in Silicon Valley, said that one reason the labs have proven helpful to Microsoft, including bringing products like Windows Media to consumers, is their bottom-up style. The labs' researchers pick projects themselves and collaborate with each other. They're also not beholden to profit-and-loss goals or managers, he said.

"Every time you introduce (managerial) hierarchy, you introduce barriers to collaboration; and collaboration is key," Levin said.

But once a technology is ready, transferring it to a product group or bringing it to market can be highly difficult, he said. That's why so-called technology transfers are "a contact sport," he said. Researchers must travel a lot to get new ideas and prototypes in front of the right people, Levin said.

eBay's Mancini said that the auction company does two big things to promote creativity. The first is operating a technology platform that mirrors the eBay framework so that its engineers can experiment with new tools. That way, developers can test products outside of the company's rigid software development process, he said.

The other method is to invite third-party developers into the fold through application programming interfaces. He said that in the last year developers have created an estimated 12,000 applications for eBay, producing as many as 60 percent of the listings on the site. "That's innovation we probably couldn't afford," he said.

"Innovation is about the ecosystem, either removing barriers internally or allowing third parties to help meet the needs of your customers in ways you can't afford to do (or have the time to do)," Mancini said.

Similarly, HP's Friedrich said that one of his company's strategies is to partner with outsiders on projects. "All of the innovative people don't work for your company," he said.

HP, for example, teamed up with DreamWorks years ago to work on technology for life-like animation and "cloud" services that were used to produce the movie Shrek. Last week, HP also teamed up with Intel and Yahoo to create six large-scale computing centers that would allow outsiders to test technology.

Cloud services are one of several areas of research for HP, which invests about $3.6 billion annually in R&D, Friedrich said. It's also looking at projects in sustainability and managing data. On a broader level, HP is trying to shift the company from a hardware maker to a software company; and it's doing that largely through acquisitions.

Oracle's Marie-Anne Neimat, vice president of development for embedded databases, also pointed to acquisitions as a way to evolve, beyond Oracle's multibillion dollar annual investment in R&D.

"It's new blood," she said.

Finally, some technology companies have turned into venture capitalists, too.

Ike Nassi, SAP's executive vice president of research for the Americas and China, said it recently started a venture capital incubator. It solicits ideas from internal employees and external start-ups; and if it's a good idea, SAP will help form a new business unit, fold the start-up into an existing product line, or spin it out as a new company, he said.

"If you have an interesting idea and don't want to go the VC route, we provide seed funding," Nassi said.

That's similar to other technology companies. Intel, Google, Motorola, Amazon, and Comcast run venture capital units either formally or informally.

What about the word innovation?

"It's completely devalued," Nassi said. "The thing we need to look at is managing risk--whether placing an investment on this versus that, and what's the payoff of that investment."