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Gartner analyst David Smith on Tuesday said that Microsoft is back on the road to a long-term vision, but still faces many challenges before arriving at its destination. After being derailed for several years during which the Redmond, Wash.-based company was dealing with troublesome issues including the anti-trust case, browser war with Netscape, and Java, Microsoft is back to taking dead aim at a unified storage model and working its way higher up into the enterprise, Smith said. But, Smith continued, the company still faces more challenges than ever, including increasing threats to its desktop monopoly, datacenter-class scale, security, and Microsoft's own branding choice of .Net.

Microsoft is considering charging for additional security options, and acknowledges that it didn't move on security until customers were ready to pay for it. The company "may offer new security abilities on a paid basis," said Microsoft Chief Technical Officer Craig Mundie. The possibility is under consideration within Microsoft's security business unit, recently set up under its own vice president, Mike Nash. The idea is still only hypothetical, but represents an acknowledgement that Microsoft sees security not just as a necessary condition to reassure existing and future customers, but also as a potential source of revenue.

Microsoft is introducing a new member into its family of Office products, for designing, editing, and viewing XML documents, the company's chief executive officer will announce Wednesday. Called XDocs, the application is being described as a word processor for XML (Extensible Markup Language) content, says Scott Bishop, a product manager with Microsoft's Office group. It will support industry-standard XML, not a Microsoft flavor of the technology. Microsoft CEO Steve Ballmer will detail XDocs during a keynote presentation at Gartner's Symposium/ITxpo conference in Lake Buena Vista, Florida.

Microsoft announced today that it will ease the copy protection features in Windows XP Media Center Edition (XP MCE), the new XP version for digital media enthusiasts that will ship with Hewlett-Packard (HP) media center PCs beginning this month. Previously, the company had architected XP MCE to let consumers back up television programming recorded with the product's digital video recording (DVR) feature to playback only on the PC that made the recording. But under the new policy, XP MCE recordings can be copied to recordable DVD and played back on any PC running XP Service Pack 1 (SP1) and Windows Media Player 9 (WMP 9). DVD players featuring support for the new Windows Media Video (WMV) 9 codec will also be able to playback the backup DVDs, the company says.

Microsoft Corp. on Wednesday will announce XDocs, the working code name for the latest addition to its Office desktop productivity family. Steve Ballmer, CEO of the Redmond, Wash., software company, will use the Gartner ITxpo in Orlando, Fla., to announce this latest Office application.

Microsoft officials are promoting XDocs as a smart client like Office. "Think of it as a hybrid information gathering tool for organizations that blends the benefits and richness of a traditional word processing program with the data capturing ability and rigor of a forms package into the XDocs templates," Scott Bishop, an Office product manager, told eWEEK. There are two components to XDocs: the designer, which allows users to create templates and schemas; and the editor, which allows information to be inputted and viewed.

Microsoft today introduced new security and mobile workforce software while mapping an 18-month strategy taking a holistic view of IT systems. First, the Redmond, Wash., giant said it will offer customers user identification technology from RSA Security to block fraudulent attempts to tap into corporate networks. "Our joint customers now have the option of incorporating stronger authentication technology into their applications," Timothy Powers, an RSA spokesman told internetnews.com. Under a new license, Microsoft will integrate RSA's SecurID agent, which prompts users for two authenticating factors at sign-on, into its offerings. The first product to have the feature built-in will be Microsoft's Internet Security and Acceleration (ISA) Server 2000, which handles firewall and Web cashing services for enterprises.

Intel is working on a major overhaul of the Pentium 4 chip, which sources say will debut in the first half of 2005. Code-named Nehalem, the chip will embody a new architecture that will substantially differ from the current Pentium 4, according to sources. Concepts in the current chip line will be found in Nehalem, but it will contain new, and largely unknown, features such as improved power management that will mark it as a distinct evolutionary step, similar to the changeover from the Pentium II to the Pentium III.

In the meantime, Intel is also working on updates to the Pentium 4. In the second half of 2003, the company will release "Prescott," a Pentium 4 variant that will feature a new security system and "strained silicon," a chipmaking method that speeds up transistors.

Microsoft and RSA Security announced on Tuesday an alliance that will include the software giant's licensing of RSA's identity authentication software. RSA shares were up 58 cents, or 23 percent, to $3.15 in morning trading. Microsoft plans to integrate a component of RSA's SecurID two-factor authentication software into applications, including upgrades to its Internet Security and Acceleration Server 2000, the companies said. SecurID, which helps ensure that only authorized people gain access to a company's network or systems, requires people to identify themselves using two unique factors, such as a password and a digital certificate.

Microsoft will consolidate Commerce Server, BizTalk Server and Content Management Server into one set of technologies code-named "Jupiter" that will be released in two stages in 2003 and 2004, the company disclosed Tuesday during the opening keynote of the MEC 2002 conference in Anaheim, Calif. "The 'Jupiter' vision aims to enable the connected business by bringing Microsoft's current e-business servers together into a more unified environment," Microsoft explained in a statement.

The current versions of the products are Commerce Server 2002, BizTalk Server 2002 and Content Management Server 2001. Microsoft announced this week that Content Management Server 2002 will ship by the end of the year.

Sketching the rough details of its vision for a connected business environment around Web services, Microsoft revealed a new e-business server project, code-name Jupiter, and gave more details around its vision for real-time computing in the enterprise. Speaking here at the Microsoft Exchange Conference, Paul Flessner, senior vice president of the .Net Enterprise Server Group, extolled the value of a connected business, directly linking lower TCO and higher revenue and productivity with the ability to connect applications, systems, customers, and partners. Microsoft has been driving toward connectivity through Web services and its .Net technologies, he said.