Windows XP Reloaded muddies the SP2 waters

XP Service Pack 2 will bring some much-needed security focus to the OS, but Microsoft still seems unsure about the revenue and roadmap implications

Right now, Microsoft wants to talk about the wisdom of Windows XP users, personal and corporate, upgrading to the forthcoming Service Pack 2 (SP2) for Windows XP. The security-focused SP2 is now at Release Candidate 1 (RC1), with RC2 due at the end of May and the final version expected later in the summer.

However, at an SP2 workshop in London yesterday, the assembled journalists kept raising the inconvenient (for Microsoft) question of exactly what 'XP Reloaded' (an internal code name that Microsoft heartily wishes had never been leaked) is or is not.

The 'XP Reloaded' moniker has certainly muddied the waters in a big way. On the one hand, 'Windows XP Service Pack 2' sounds like a dull-but-worthy collection of patches, but actually isn't. In fact, SP2 is much more akin to a point release, containing a lot of new code, mostly security-related, some of which may cause compatibility problems with some applications. Microsoft will be aggressively giving it away, not only to downloaders but also through retail channels and even through the mail -- postage and packing charges to be decided.

By contrast, 'Windows XP Reloaded' sounds like an interim release, but actually isn't. At the workshop, Paul Randle, Windows client product manager in the UK, said that Microsoft will give more details on XP Reloaded 'in a couple of weeks', but stressed that 'it's not a new version of the OS'. It is, according to the company at last week's Windows Hardware Engineering Conference, a marketing campaign to revitalise consumer interest in the operating system -- undoubtedly with the intention of revitalising revenue along the way. So what's the score?

The score is this, it seems. SP2 is designed to improve security for the existing XP user base, and Microsoft is sufficiently keen to achieve a high take-up rate that it's planning an extensive campaign to get the message over to businesses and consumers: according to Paul Randle, there will be "no escape" from the company's "at least a year long" SP2 onslaught. Not only that, there is no product activation involved, so users of pirated copies of XP will be able to enhance the security of their systems. And when SP2 hits the retail shelves later this year, the box will carry a soap-powder-style flash stating that Windows XP now has added 'Advanced Security Technologies'.

So it looks as if Microsoft has finally been shamed into taking XP security seriously enough to produce the major revision it needs -- and because it's a security matter, the company hasn't got the brass neck to charge for it. But if it's introducing a major revision that won't bring in the bucks, how will it keep revenues up before Longhorn finally emerges?

The company has two chances to chivvy us along, one for consumers and one for corporates. For corporates, many of whom are doggedly sticking to Windows 2000 and Windows 9x, SP2 will be the only way to get the security enhancements. Microsoft says it has no plans to back-port the SP2 security enhancements to Windows 2000, so if you or your company want those 'Advanced Security Technologies', you need to go to XP.

As well as the revenue from that, there's another bonus for Microsoft. It hates having to support old operating systems -- especially when they'll never be able to run the many exciting digital rights management systems and advanced applications that it's desperate to sell us all over the next year or so.

XP Reloaded -- or whatever it subsequently gets called -- takes up the slack from the consumer point of view. It too will push security: it will also most likely promote Microsoft's new broadband media and expected online music shop, possibly with a new-PCs-only version of the software called XP Premium. Whether that will be enough in a market already plump with online music stores and personal media devices is unclear: iTunes' major revenue contribution to Apple has been as an iPod sales device -- not the perfect model for Microsoft.

The exact composition of the XP Reloaded deal will be revealed in due course, but it will presumably need to at least encompass the SP2 bundle, which looks like this: security enhancements, in the areas of network protection, email/Web security, execution protection and OS maintenance; an upgrade to XP Tablet PC Edition (code-named Lonestar); Windows Media Player 9 Series; a Bluetooth update; Movie Maker 2.1; a new wireless networking client and DirectX 9.0b. Some of the security enhancements will break some existing applications, but Microsoft says it won't be running a logo programme to mark those that are tested to work with the new operating system -- if you're worried that this may matter, you should be testing as much as possible as soon as possible.

Lonestar, or Windows XP Tablet PC Edition 2005 to give it its official name, will introduce an automatically resizing in-place Tablet Input Panel (TIP) that follows the stylus around the Tablet PC's screen. You will also be able to convert handwriting to text on the fly, and will get better integration with Office 2003 and OneNote.

So, here is the Windows XP weather forecast: we can expect an extended flurry of Service Pack 2-related marketing, with the mist around XP Reloaded clearing shortly. Microsoft knows it's making a complicated mid-course revision of its roadmap, and that its once-captive market is increasingly unwilling to shell out for essential upgrades. We may not be the only ones staring nervously into the fog.

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